CCBC second quarter 2013 revenues increase 30.5% to RMB128.5 million

Published on November 19, 2012 at 11:46 PM · No Comments

China Cord Blood Corporation (NYSE: CO) ("CCBC" or the "Company"), China's leading provider of cord blood collection, laboratory testing, hematopoietic stem cell processing, and stem cell storage services, today announced its preliminary unaudited financial results for the second quarter and first half of fiscal year 2013, which ended September 30, 2012.

Second Quarter of Fiscal 2013 Highlights

  • Revenues for the second quarter of fiscal 2013 increased by 30.5% to RMB128.5 million ($20.4 million) from RMB98.4 million in the prior year period.
  • New subscriber sign-ups and accumulated subscriber base were 18,491 and 274,705, respectively.
  • Gross profit increased by 32.3% to RMB101.4 million ($16.1 million) from RMB76.7 million in the prior year period.
  • Gross margin was 78.9%, compared to 77.9% in the prior year period.
  • Operating income increased by 24.7% to RMB47.0 million ($7.5 million) from RMB37.7 million in the prior year period, after taking into account the increased management and staff related costs.
  • Interest expense amounted to RMB14.1 million ($2.2 million), which was largely attributable to the convertible note issued to KKR China Healthcare Investment Limited ("KKR"), compared to RMB1.2 million in the prior year period.
  • Net income attributable to shareholders increased by 6.2% to RMB24.7 million ($3.9 million) from RMB23.2 million in the prior year period.
  • Operating cash flow for the quarter amounted to RMB142.5 million ($22.7 million).

First Half of Fiscal 2013 Highlights

  • Revenues for the first half of fiscal 2013 increased by 31.1% to RMB243.8 million ($38.8 million) from RMB185.9 million in the prior year period.
  • New subscriber sign-up reached 34,951 and accumulated subscriber base expanded to 274,705.
  • Gross profit increased by 33.3% to RMB192.3 million ($30.6 million) from RMB144.3 million in the prior year period.
  • Operating income increased by 33.5% to RMB91.4 million ($14.6 million) from RMB68.5 million in the prior year period.
  • Interest expense amounted to RMB24.3 million ($3.9 million), compared to RMB1.7 million in the prior year period.
  • Net income attributable to shareholders amounted to RMB55.8 million ($8.9 million), compared to RMB63.3 million in the prior year period.
  • Operating cash flow for the first half of fiscal 2013 was RMB279.4 million ($44.5 million).

"Coming off of robust growth in our financial performance and yet another record in new subscriber numbers, we concluded the first half of fiscal 2013 with notable achievements and records," stated Ms. Ting Zheng, Chief Executive Officer of China Cord Blood Corporation.  "A high mark of 18,491 in new subscriber numbers, which is our highest increase for any single quarter, reflects our continued commitment to optimize our marketing strategy to deepen penetration and enhance our subscriber base.  Our management team's execution capabilities have also been demonstrated by positive performance in such areas as revenue, operating income and built-up cash flow streams resulting from greater volume of upfront customer payments.  These achievements have not only established a solid foundation for the Company to generate long-term sustainable growth, but also provide a platform for the Company to grasp timely opportunities for geographical expansion."

Ms. Zheng further commented, "We are very pleased to have recently received valuable support from KKR and our major shareholder, Golden Meditech Holdings Limited ("Golden Meditech"), who share CCBC's vision for growing the Company in China and throughout the Asia-Pacific region.  Both KKR and Golden Meditech bring valuable management resources and strategic perspectives that fit the Company's expansion plans.  Under the leadership of Mr. Yuen Kam as our newly appointed Chairman and with his extensive experience in China's healthcare industry, the management team and I believe that the present synergies will help drive the Company towards further operational growth and strategic development."

Second Quarter Fiscal 2013 Financial Results

REVENUES.  Revenues increased by 30.5% to RMB128.5 million ($20.4 million) in the second quarter of fiscal 2013 from RMB98.4 million in the prior year period, driven mainly by a significant increase in new subscriber sign-ups during the quarter and expansion in our accumulated subscriber base.  

Revenues generated from storage fees increased to RMB30.3 million ($4.8 million), up 22.7% from RMB24.7 million in the prior year period.  In light of the significant increase in new subscribers, revenue from storage fees accounted for a lesser of 23.6% of total revenues, compared to 25.1% in the prior year period.  

Revenues generated from processing fees were RMB98.2 million ($15.6 million), up 33.2% from RMB73.7 million in the prior year period, reflecting 18,491 new subscriber sign-ups this quarter, a 33.0% annual increase and a 12.3% sequential increase in new subscriber sign-ups.  Revenues generated from processing fees accounted for 76.4% of total revenues, compared to 74.9% in the prior year period.

GROSS PROFIT.  Gross profit for the second quarter of fiscal 2013 increased by 32.3% to RMB101.4 million ($16.1 million) from RMB76.7 million in the prior year period, benefiting from economies of scale.  Gross margin was 78.9%, compared to 77.9% in the prior year period.

OPERATING INCOME.  Operating income for the second quarter increased at a slower pace to RMB47.0 million ($7.5 million) compared to RMB37.7 million in the prior year period.  Operating margin was slightly down to 36.6%, compared to 38.3% in the prior year period, as a result of an increase in management and staff related costs, as well as an increase in depreciation expenses as we begin to depreciate part of the new facility in Guangdong.  Depreciation and amortization expenses for the second quarter were RMB8.3 million ($1.3 million), compared to RMB7.1 million in the prior year period.  

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