BEIJING, Sept. 23,
2022 /PRNewswire/ -- Concord Medical Services
Holdings Limited ("Concord Medical" or the "Company") (NYSE: CCM),
a healthcare provider specialized in cancer treatment, research,
education and prevention by establishing proton centers and cancer
hospitals and operating an extensive network of radiotherapy and
diagnostic imaging centers in China, today announced its unaudited
consolidated financial results for the six months ended
June 30, 2022[1].
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 of RMB192.9 million in
the same period last year. Total net revenues included the net
revenues from the hospital business of RMB82.9 million (US$12.4
million) and the net revenues from the network business of
RMB61.4 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 of RMB2.4 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 to
RMB90.3 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 to RMB2.53, 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 of RMB163.0 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 both RMB0.93 (US$0.14),
compared to RMB2.46 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 negative
RMB127.7 million in the same period
last year.
Dr. Jianyu Yang, Chairman and
Chief Executive Officer of Concord Medical, commented, "In the
first half of 2022, our business was affected by the resurgence of
COVID-19 pandemic caused by the highly contagious Omicron variant.
In particular, our three medical institutions located in
Shanghai temporarily closed since
April 2022 for approximately two or
three months, respectively. Our network business was also
restricted by the COVID-19 resurgence, which affected the progress
of order completion in the first half of 2022.
"The good news is, however, the recent performance of our
Shanghai Meizhong Jiahe Cancer Center ("Shanghai Outpatient
Department") has gradually returned to the level before the
COVID-19 pandemic. Shanghai Meizhong Jiahe Medical Image Diagnosis
Limited ("Shanghai Imaging Center"), which is located in the
Shanghai Xinhongqiao International Medical Park (the
"Xinhongqiao Park"), will also usher in new business opportunities.
We expect that the gradual opening of the other medical
institutions with differentiated expertise in the Xinhongqiao Park
will drive patients to our Shanghai Imaging Center for high-quality
diagnostic imaging services and contribute to our revenue.
"Our Guangzhou Concord Cancer Center ("Guangzhou Hospital"),
which commenced operation in June
2021, is in the ramp-up period with improving operational
performance evidenced by several operating indicators, such as the
occupancy rate of patient beds, and the number of outpatient and
inpatient visits. Notably, the proton center of Guangzhou Hospital
is expected to start clinical trials in the second half of 2022,
reaching a new milestone."
"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 RMB82.9 million (US$12.4
million) in the first half of 2022, representing a 29.2%
increase from net revenues of RMB64.2
million in the first half of 2021, mainly due to the launch
and ramp-up of Guangzhou Hospital since June
2021.
Network Business
Net revenues from the network business were RMB61.4 million (US$9.1
million), representing a 52.3% decrease from net revenues of
RMB128.7 million in the first half of
2021, mainly because the delivery and acceptance process of our
medical solutions was negatively affected by the COVID-19
outbreak in the second quarter of 2022.
Cost of Revenues
Hospital Business
Cost of revenues of the hospital business in the first half of
2022 was RMB179.7 million
(US$26.8 million), representing an
89.4% increase from cost of revenues of RMB94.9 million in the first half of 2021, mainly
because the labor cost increased for Guangzhou Hospital, which has
been in operation since June
2021.
Network Business
Cost of revenues of the network business was RMB53.3 million (US$8.0
million), representing a 44.3% decrease from RMB95.7 million in the first half of 2021,
generally in line with the decrease in the net revenues from
medical solutions caused by the COVID-19.
Gross (Loss)/Profit and Gross Margin
Hospital Business
Gross loss from the hospital business was RMB96.8 million (US$14.4
million) in the first half of 2022, compared to RMB30.7 million in the same period last year. The
gross loss margin of the hospital business for the first half of
2022 was 116.8%, compared to the gross loss margin of 47.8% for the
same period last year. The decrease in gross profit margin of the
hospital business was primarily attributable to (1) the substantial
labor cost for Guangzhou Hospital, which was still at the ramp-up
stage with comparatively low utilization rate, and (2) the decrease
in revenue generated from our medical institutions in Shanghai because of the regional resurgence of
COVID-19 pandemic in the first half of 2022.
Network Business
Gross profit from the network business was RMB8.1 million (US$1.1
million), representing a 75.6% decrease from RMB33.0 million in the first half of 2021. The
gross profit margin of the network business for the first half of
2022 was 13.2%, compared to the gross profit margin of 25.6% for
the same period last year. The decrease in gross profit margin of
the network business was primarily attributable to the decrease in
gross profit margin of medical solutions in the first half of
2022.
Operating Expenses
Selling expenses were RMB26.4
million (US$3.9 million) in
the first half of 2022, representing a 93.3% increase from
RMB13.7 million in the first half of
2021. Selling expenses as a percentage of net revenues was 18.3% in
the first half of 2022, compared to 7.1% in the first half of 2021.
The increase in selling expenses was mainly due to the increases in
marketing expenses and travel related expenses as a result of the
opening of our Guangzhou Hospital since June
2021.
General and administrative expenses were RMB130.5 million (US$19.5
million) in the first half of 2022, of which employee
benefit expenses were RMB75.7 million
(US$11.3 million). In the same period
of last year, general and administrative expenses were RMB172.6 million. The decrease was mainly because
(1) the employee benefit expenses of Guangzhou Hospital's medical
staff were recognized in general and administrative expenses before
the formal operation of the Guangzhou Hospital, which were
subsequently recognized in cost of revenues after the formal
operation since June 2021, and (2)
the network business reduced as a result of the negative impact of
COVID-19. General and administrative expenses as a percentage of
net revenues was 90.4% in the first half of 2022, compared to 89.5%
in the first half of 2021.
Capital Expenditures
Comparing to RMB414.4 million in
the first half of 2021, capital expenditures were RMB184.0 million (US$27.5
million) in the first half of 2022, mainly due to (1) the
decrease in construction fees and medical equipment payment for our
hospital business, and (2) the reduced demands of procuring
equipment for our network business as a result of the COVID-19
outbreak.
Accounts Receivable
As of June 30, 2022, accounts
receivable were RMB89.3 million
(US$13.3 million), representing a
30.2% decrease from accounts receivable of RMB127.9 million as of December 31, 2021. The average period of sales
outstanding for accounts receivable (also known as days sales
outstanding) was 286 days in the first half of 2022.
Bank Loans and Other Borrowings
As of June 30, 2022, the Company
had bank loans and other borrowings totaling RMB2.9 billion (US$426.0
million).
[1] This announcement
contains translations of certain RMB amounts into U.S. dollars at
specified rates solely for the convenience of the reader. Unless
otherwise noted, all translations of RMB into U.S. dollars are made
at a rate of RMB 6.6981 to US$1.00, the noon buying rate in New
York City for cable transfers payable in RMB, as certified for
customs purposes by the Federal Reserve Bank of New York on June
30, 2022.
|
[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
Concord Medical Services Holdings Limited is a healthcare
provider featuring a full cycle of premium oncology services
including cancer diagnosis, treatment, education and prevention.
The Company focuses on providing multidisciplinary cancer care in
all aspects of oncology healthcare services in its cancer hospitals
and equipping them with technologically advanced equipment such as
the state-of-the-art proton therapy system. The Company is striving
to improve the quality and accessibility of cancer care through its
network of self-owned cancer hospitals and clinics as well as
partnered hospitals across China.
For more information, please see http://ir.ccm.cn.
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.
Concord Medical
Services Holdings Co., Ltd.
|
Consolidated Balance
Sheets
(in thousands)
|
|
|
December 31,
2021
|
|
June 30,
2022
|
|
|
RMB
(Audited)
|
|
RMB
(Unaudited)
|
|
US$
(Unaudited)
|
|
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
|
|
Goodwill
|
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
|
|
Treasury
stock
|
(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)
|
|
Total Concord
Medical Services Holdings Limited shareholders'
deficit
|
(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
|
|
Concord Medical
Services Holdings Co., Ltd.
|
Consolidated Profit
& Loss
|
(in thousands,
except for number of shares and per share data)
|
|
|
|
|
|
|
|
June 30,
2021
|
|
June 30,
2022
|
|
RMB
|
|
RMB
|
|
US$
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
Revenues, net of
business tax, value-added tax and related
surcharges
|
|
|
|
|
|
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 Concord Medical Services Holdings
Limited
|
(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
outstanding:
|
|
|
|
|
|
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
Holdings Limited's shareholders
|
(84,096)
|
|
(156,542)
|
|
(23,372)
|
Reconciliations of
non-GAAP results of operations measures to the
nearest comparable GAAP measures (*)
|
(in RMB thousands,
except per share data unaudited)
|
|
|
|
For the six months
ended
|
|
For the six months
ended
|
|
|
June 30,
2021
|
|
June 30,
2022
|
|
|
|
|
|
|
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 A and
Class B
ordinary
shares
|
|
(2.53)
|
|
0.07
|
|
(2.46)
|
|
(0.87)
|
|
(0.06)
|
|
(0.93)
|
Diluted loss per
share
for Class A and
Class B
ordinary
shares
|
|
(2.53)
|
|
0.07
|
|
(2.46)
|
|
(0.87)
|
|
(0.06)
|
|
(0.93)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(*) The only
adjustment
is share-based
compensation.
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation from
net income to adjusted EBITDA(*) (in RMB
thousands, unaudited)
|
|
|
For the six months
ended
|
|
For the six months
ended
|
|
June 30,
2021
|
|
June 30,
2022
|
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,
depreciation and amortization, share-based compensation expenses
and other adjustments. Other adjustments include foreign
exchange gain, net and other income/(expense), net.
|
View original
content:https://www.prnewswire.com/news-releases/concord-medical-reports-financial-results-for-the-first-half-of-2022-301631876.html
SOURCE Concord Medical Services Holdings Limited