Concord Medical Reports Financial Results for the First Half of 2022
2022 First Half Highlights
- Total net revenues were
RMB144.3 million (US$21.5 million ) in the first half of 2022, representing a 25.2% decrease from total net revenues ofRMB192.9 million in the same period last year. Total net revenues included the net revenues from the hospital business ofRMB82.9 million (US$12.4 million ) and the net revenues from the network business ofRMB61.4 million (US$9.1 million ). - Gross loss was
RMB88.7 million (US$13.2 million ) in the first half of 2022, compared to the gross profit ofRMB2.4 million in the first half of 2021. The gross loss margin was 61.5% for the first half of 2022, compared to the gross profit margin of 1.2% for the same period last year. - Net loss attributable to ordinary shareholders in the first half of 2022 was
RMB114.7 million (US$17.1 million ), compared toRMB90.3 million in the same period last year. - Basic and diluted loss per share for Class A and Class B ordinary shares[2] in the first half of 2022 were both
RMB0.87 (US$0.13 ), compared toRMB2.53 , respectively, in the same period last year. - Non-GAAP[3] net loss in the first half of 2022 was
RMB270.0 million (US$40.3 million ), compared to non-GAAP net loss ofRMB163.0 million in the same period last year. Non-GAAP basic and diluted loss per share for Class A and Class B ordinary shares in the first half of 2022 were bothRMB0.93 (US$0.14 ), compared toRMB2.46 in the same period last year. - Adjusted EBITDA[4] (non-GAAP) was negative
RMB194.3 million (US$29.0 million ) in the first half of 2022, compared to negativeRMB127.7 million in the same period last year.
Dr.
"The good news is, however, the recent performance of our
"Our
"Our network business is currently on track. We will accelerate the completion of existing orders and execute our market expansion as planned. Let's look forward to the good performance of Concord Medical for the full year of 2022."
2022 First Half Financial Results
Net Revenues
Hospital Business
Net revenues from the hospital business were
Network Business
Net revenues from the network business were
Cost of Revenues
Hospital Business
Cost of revenues of the hospital business in the first half of 2022 was
Network Business
Cost of revenues of the network business was
Gross (Loss)/Profit and Gross Margin
Hospital Business
Gross loss from the hospital business was
Network Business
Gross profit from the network business was
Operating Expenses
Selling expenses were
General and administrative expenses were
Capital Expenditures
Comparing to
Accounts Receivable
As of
Bank Loans and Other Borrowings
As of
[1] This announcement contains translations of certain RMB amounts into |
[2] The Company adjusts for the accretion of mezzanine equity in the calculation of loss attributable to ordinary shareholders of the Company used in the loss per share for Class A and Class B ordinary shares calculation. |
[3] Non-GAAP net loss and non-GAAP basic and diluted loss per share for Class A and Class B ordinary shares are defined as their most directly comparable GAAP measures excluding the impact of share-based compensation expenses. |
[4] Adjusted EBITDA is defined as net income/(loss) plus interest expenses, net, income tax expenses, depreciation and amortization, share-based compensation expenses and other adjustments. Other adjustments include foreign exchange gain, net, and other income (expense), net. |
About Non-GAAP Financial Measures
To supplement the consolidated financial statements presented in accordance with United States Generally Accepted Accounting Principles ("GAAP"), Concord Medical uses certain non-GAAP measures. The Company presents certain of its financial information that is adjusted from results based on GAAP to exclude the impact of share-based compensation expenses, such as non-GAAP net loss and non-GAAP basic and diluted loss per share for Class A and Class B ordinary shares. The Company believes excluding share-based compensation expenses from its GAAP financial measures is useful for its management and investors to assess and analyze the Company's core operating results, as such expense is not directly attributable to the underlying performance of the Company's business operations and do not impact its current cash earnings. Concord Medical also believes these non-GAAP measures excluding share-based compensation expenses are important in helping investors to understand the Company's current financial performance and future prospects and to compare business trends among different reporting periods on a consistent basis. In addition, Concord Medical also presents the non-GAAP measure of adjusted EBITDA, which is defined in this announcement as net income/(loss) plus interest expenses, net, income tax expenses, depreciation and amortization, share-based compensation expenses and other adjustments. Other adjustments include foreign exchange gain, net and other income/(expense), net. Furthermore, adjusted EBITDA eliminates the impact of items that the Company does not consider to be indicative of the performance of the network business and hospital business. The Company believes investors will similarly use adjusted EBITDA as one of the key metrics to evaluate its financial performance and to compare its current operating results with corresponding historical periods and with other companies in the healthcare services industry. The presentation of these additional measures should not be considered a substitute for or superior to GAAP results or as being comparable to results reported or forecasted by other companies. The non-GAAP measures have been reconciled to GAAP measures in the attached financial information.
About Concord Medical
Safe Harbor Statement
This announcement contains forward-looking statements. These forward-looking statements can be identified by words or phrases such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar expressions. Forward-looking statements are inherently subject to uncertainties and contingencies beyond the Company's control and based upon premises with respect to future business decisions, which are subject to change. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. The Company does not undertake any obligation to update any forward-looking statement, except as required under applicable law.
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Consolidated Balance Sheets |
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|
|
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RMB |
RMB |
US$ |
||||
ASSETS |
||||||
Current assets |
||||||
Cash and cash equivalents |
157,386 |
74,984 |
11,195 |
|||
Restricted cash, current portion |
1,387 |
475 |
71 |
|||
Accounts receivable |
127,899 |
89,329 |
13,336 |
|||
Prepayments and other current assets |
257,019 |
339,847 |
50,738 |
|||
Inventories |
38,085 |
69,825 |
10,425 |
|||
Net investments in direct financing leases, current portion |
2,699 |
3,518 |
525 |
|||
Total current assets |
584,475 |
577,978 |
86,290 |
|||
Non-current assets |
||||||
Restricted cash, non-current portion |
138 |
- |
- |
|||
Property, plant and equipment, net |
3,145,025 |
3,223,423 |
481,244 |
|||
Right-of-use assets, net |
619,536 |
610,156 |
91,094 |
|||
Net investment in direct financing leases, non-current portion |
4,796 |
3,448 |
515 |
|||
|
581,877 |
581,877 |
86,872 |
|||
Intangible assets, net |
657,837 |
643,123 |
96,016 |
|||
Deposits for non-current assets |
224,866 |
231,399 |
34,547 |
|||
Long-term investments |
390,625 |
421,012 |
62,855 |
|||
Other non-current assets |
20,776 |
18,565 |
2,772 |
|||
Total non-current assets |
5,645,476 |
5,733,003 |
855,915 |
|||
Total assets |
6,229,951 |
6,310,981 |
942,205 |
|||
LIABILITIES AND EQUITY |
||||||
Current liabilities |
||||||
Accounts payable |
102,508 |
107,815 |
16,096 |
|||
Accrued expenses and other liabilities |
382,177 |
348,882 |
52,086 |
|||
Operating lease liabilities, current |
20,484 |
23,272 |
3,474 |
|||
Short-term bank and other borrowings |
136,510 |
166,468 |
24,853 |
|||
Long-term bank and other borrowings, current portion |
162,842 |
167,418 |
24,995 |
|||
Total current liabilities |
804,521 |
813,855 |
121,504 |
|||
Non-current liabilities |
||||||
Long-term bank and other borrowings, non-current portion |
2,178,596 |
2,517,458 |
375,847 |
|||
Deferred tax liabilities |
184,424 |
187,346 |
27,970 |
|||
Derivative liability |
5,863 |
6,162 |
920 |
|||
Operating lease liabilities, non-current |
214,225 |
214,525 |
32,028 |
|||
Other long-term liabilities |
98,601 |
94,925 |
14,172 |
|||
Total non-current liabilities |
2,681,709 |
3,020,416 |
450,937 |
|||
Total liabilities |
3,486,230 |
3,834,271 |
572,441 |
|||
Contingently redeemable noncontrolling interests |
3,680,782 |
- |
- |
|||
EQUITY |
||||||
Class A ordinary shares |
68 |
68 |
10 |
|||
Class B ordinary shares |
37 |
37 |
6 |
|||
|
(7) |
(8) |
(1) |
|||
Additional paid-in capital |
1,936,552 |
1,928,495 |
287,917 |
|||
Accumulated other comprehensive loss |
(29,496) |
(71,385) |
(10,657) |
|||
Accumulated deficit |
(3,277,270) |
(3,391,922) |
(506,401) |
|||
|
(1,370,116) |
(1,534,715) |
(229,126) |
|||
Noncontrolling interests |
433,055 |
4,011,425 |
598,890 |
|||
Total equity/(deficit) |
(937,061) |
2,476,710 |
369,764 |
|||
Total liabilities, mezzanine equity and equity/(deficit) |
6,229,951 |
6,310,981 |
942,205 |
|
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Consolidated Profit & Loss |
|||||
(in thousands, except for number of shares and per share data) |
|||||
|
|
||||
RMB |
RMB |
US$ |
|||
(Unaudited) |
(Unaudited) |
(Unaudited) |
|||
Revenues, net of business tax, value-added tax and related |
|||||
Hospital |
64,150 |
82,865 |
12,371 |
||
Network |
128,737 |
61,397 |
9,166 |
||
Total net revenues |
192,887 |
144,262 |
21,537 |
||
Cost of revenues: |
|||||
Hospital |
(94,855) |
(179,686) |
(26,826) |
||
Network |
(95,652) |
(53,311) |
(7,959) |
||
Total cost of revenues |
(190,507) |
(232,997) |
(34,786) |
||
Gross (loss) / profit |
2,380 |
(88,735) |
(13,248) |
||
Operating expenses: |
|||||
Selling expenses |
(13,665) |
(26,416) |
(3,944) |
||
General and administrative expenses |
(172,623) |
(130,466) |
(19,478) |
||
Operating loss |
(183,908) |
(245,617) |
(36,670) |
||
Interest expense |
(25,906) |
(68,325) |
(10,201) |
||
Foreign exchange gain, net |
18,489 |
33,881 |
5,058 |
||
Interest income |
2,551 |
3,562 |
532 |
||
Income from equity method investments |
9,088 |
5,488 |
819 |
||
Other income/(expense), net |
2,662 |
(850) |
(127) |
||
Loss before income tax |
(177,024) |
(271,861) |
(40,589) |
||
Income tax expenses |
5,331 |
9,677 |
1,445 |
||
Net loss |
(171,693) |
(262,184) |
(39,144) |
||
Net loss attributable to noncontrolling interests |
(81,363) |
(147,532) |
(22,026) |
||
Net loss attributable to |
(90,330) |
(114,652) |
(17,118) |
||
Loss per share for Class A and Class B ordinary shares |
|||||
Basic |
(2.53) |
(0.87) |
(0.13) |
||
Diluted |
(2.53) |
(0.87) |
(0.13) |
||
Weighted average number of class A and class B ordinary shares |
|||||
Basic |
131,053,858 |
131,053,858 |
131,053,858 |
||
Diluted |
131,053,858 |
131,053,858 |
131,053,858 |
||
Other comprehensive loss, net of tax of nil |
|||||
Foreign currency translation, net tax of nil |
6,234 |
(41,890) |
(6,254) |
||
Total other comprehensive loss, net of tax |
6,234 |
(41,890) |
(6,254) |
||
Comprehensive loss |
(165,459) |
(304,074) |
(45,398) |
||
Comprehensive loss attributable to noncontrolling interests |
(81,363) |
(147,532) |
(22,026) |
||
Comprehensive loss attributable to Concord Medical Services |
(84,096) |
(156,542) |
(23,372) |
Reconciliations of non-GAAP results of operations measures to the |
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(in RMB thousands, except per share data unaudited) |
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For the six months ended |
For the six months ended |
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Non- |
Non- |
|||||||||||
GAAP |
GAAP |
GAAP |
GAAP |
|||||||||
Measure |
Adjustment |
Measure |
Measure |
Adjustment |
Measure |
|||||||
Operating loss |
(183,908) |
8,647 |
(175,261) |
(245,617) |
(7,861) |
(253,478) |
||||||
Net loss |
(171,693) |
8,647 |
(163,046) |
(262,184) |
(7,861) |
(270,045) |
||||||
Basic loss per share for Class B ordinary |
(2.53) |
0.07 |
(2.46) |
(0.87) |
(0.06) |
(0.93) |
||||||
Diluted loss per share Class B ordinary |
(2.53) |
0.07 |
(2.46) |
(0.87) |
(0.06) |
(0.93) |
||||||
(*) The only adjustment compensation. |
Reconciliation from net income to adjusted EBITDA(*) (in RMB |
|||
For the six months ended |
For the six months ended |
||
|
|
||
Net loss |
(171,693) |
(262,184) |
|
Interest expenses, net |
23,355 |
64,763 |
|
Income tax expenses |
(5,331) |
(9,677) |
|
Depreciation and amortization |
38,476 |
53,732 |
|
Share-based compensation |
8,647 |
(7,861) |
|
Other adjustments |
(21,151) |
(33,031) |
|
Adjusted EBITDA |
(127,697) |
(194,258) |
|
EBITDA margin |
-66 % |
-135 % |
|
(*) Definition of adjusted EBITDA: Adjusted EBITDA is defined as net loss plus interest expenses, net, income tax expenses, |
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SOURCE
For more information, please contact: Concord Medical Services Holdings Limited, Investor Relations, +86 10 5903 6688, ir@ccm.cn; Zhongchen Zhang, zhongchen.zhang@ccm.cn