BEIJING, Sept. 22,
2023 /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, 2023[1].
2023 First Half Highlights
- Total net revenues were RMB284.5
million (US$39.2 million) in
the first half of 2023, representing a 97.2% increase from total
net revenues of RMB144.3 million in
the same period last year. Total net revenues included the net
revenues from the hospital business of RMB158.7 million (US$21.9
million) and the net revenues from the network business of
RMB125.8 million (US$17.3 million).
- Gross loss was RMB37.4 million
(US$5.2 million) in the first half of
2023, compared to the gross loss of RMB88.7
million in the first half of 2022. The gross loss margin was
13.2% for the first half of 2023, compared to 61.5% for the same
period last year.
- Net loss attributable to ordinary shareholders in the first
half of 2023 was RMB91.0 million
(US$12.5 million), compared to
RMB114.7 million in the same period
last year.
- Basic and diluted loss per share for Class A and Class B
ordinary shares in the first half of 2023 were both RMB0.69 (US$0.10),
compared to RMB0.87 in the same
period last year.
- Non-GAAP[2] net loss in the first half of 2023 was
RMB210.3 million (US$29.0 million), compared to non-GAAP net loss
of RMB270.0 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 2023 were
both RMB0.69 (US$0.10), compared to RMB0.93 in the same period last year.
- Adjusted EBITDA[3] (non-GAAP) was negative
RMB148.4 million (US$20.5 million) in the first half of 2023,
compared to negative RMB194.3 million
in the same period last year.
[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 RMB7.2513 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,
2023.
[2] 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.
[3] 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/(loss), net, other (expense)/income,
net, gain on disposal of equity method investment and gain on
disposal of long-lived equipment.
|
Dr. Jianyu Yang, Chairman and Chief Executive Officer of
Concord Medical, commented, "Concord Medical has delivered an
outstanding performance in the first half of 2023, with both its
hospital business and network business achieving nearly 100% growth
in terms of revenue. Although the hospital business is still in its
ramp-up period, its profitability is expected to improve as revenue
gradually increases. On the other hand, Concord Medical's flagship
hospital, Guangzhou Concord Cancer Center ("Guangzhou Hospital"),
has completed the patient treatment clinical trials for its proton
therapy equipment for the upcoming official launch of the proton
center. Our network business is currently on track, and we will
expedite the completion of existing orders while executing our
market expansion plan as scheduled. We are confident that Concord
Medical will continue to deliver great performance throughout
2023."
2023 First Half Financial Results
Net Revenues
Hospital Business
Net revenues from the hospital business were RMB158.7 million (US$21.9
million) in the first half of 2023, representing a 91.5%
increase from net revenues of RMB82.9
million in the first half of 2022, mainly due to (1)
gradually development and ramping up of Guangzhou Hospital and (2)
business recovery of our three medical institutions located in
Shanghai, which were negatively
affected by COVID-19 pandemic in the first half of 2022.
Network Business
Net revenues from the network business were RMB125.8 million (US$17.3
million), representing a 104.9% increase from net revenues
of RMB61.4 million in the first half
of 2022, mainly because the business recovery of medical solutions
since the relief of restrictive policies during the COVID-19
outbreaks.
Cost of Revenues
Hospital Business
Cost of revenues of the hospital business in the first half of
2023 was RMB204.4 million
(US$28.2 million), representing a
13.8% increase from cost of revenues of RMB179.7 million in the first half of 2022,
mainly because the increase of consumables and maintenance cost,
lease cost and staff cost along with the development of hospital
business.
Network Business
Cost of revenues of the network business was RMB117.5 million (US$16.2
million), representing a 120.4% increase from RMB53.3 million in the first half of 2022,
generally in line with the increase in the net revenues from
medical solutions.
Gross (Loss)/Profit and Gross Margin
Hospital Business
Gross loss from the hospital business was RMB45.7 million (US$6.3
million) in the first half of 2023, compared to RMB96.8 million in the same period last year. The
gross loss margin of the hospital business for the first half of
2023 was 28.8%, compared to the gross loss margin of 116.8% for the
same period last year. The improvement in gross loss margin of the
hospital business was primarily because the increase in revenue
generated from our hospital business outpaced the increase in
corresponding costs along with the ramping up of our medical
institutions and their business recovery from the impact of
COVID-19 outbreaks.
Network Business
Gross profit from the network business was RMB8.3 million (US$1.1
million), compared to the gross profit of RMB8.1 million in the first half of 2022. The
gross profit margin of the network business for the first half of
2023 was 6.6%, compared to the gross profit margin of 13.2% for the
same period last year. The decrease in gross profit margin of the
network business was primarily due to (1) the expiration of
agreements with certain management and technical support customers
and less ongoing software development projects for our software
development services, which resulted in the decrease in our revenue
generated from management and technical support, while we still
incurred relatively stable fixed costs, and (2) the cooperation
with new customers at the initial stage with higher cost.
Operating Expenses
Selling expenses were RMB26.4
million (US$3.6 million) in
the first half of 2023, compared to RMB26.4
million in the first half of 2022. Selling expenses as a
percentage of net revenues was 9.3% in the first half of 2023,
compared to 18.3% in the first half of 2022.
General and administrative expenses were RMB150.2 million (US$20.7
million) in the first half of 2023, of which employee
benefit expenses were RMB69.7 million
(US$9.6 million). In the same period
of last year, general and administrative expenses were RMB130.5 million. The increase was mainly
attributable to the increase in provisions for allowance for
doubtful accounts of accounts receivable and other receivables
included in prepayments and other current assets. General and
administrative expenses as a percentage of net revenues was 52.8%
in the first half of 2023, compared to 90.4% in the first half of
2022.
Capital Expenditures
Comparing to RMB184.0 million in
the first half of 2022, capital expenditures were RMB46.5 million (US$6.4
million) in the first half of 2023, mainly due to the
decrease in construction fees and medical equipment payment for our
hospital business.
Accounts Receivable
As of June 30, 2023, accounts
receivable was RMB98.1 million (US$13.5
million), representing a 24.7% decrease from accounts
receivable of RMB130.3 million as of
December 31, 2022. The average period
of sales outstanding for accounts receivable (also known as days
sales outstanding) was 158 days in the first half of 2023.
Bank Loans and Other Borrowings
As of June 30, 2023, the Company
had bank loans and other borrowings totaling RMB3.0 billion (US$415.2
million).
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/(loss), net, other (expense)/income, net, gain on disposal of
equity method investment and gain on disposal of long-lived
equipment. 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,
|
|
|
|
2022
|
|
June 30,
2023
|
|
RMB
|
|
RMB
|
|
US$
|
|
(Audited)
|
|
(Unaudited)
|
|
(Unaudited)
|
ASSETS
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
Cash and cash
equivalents
|
158,283
|
|
243,382
|
|
33,564
|
Restricted cash,
current portion
|
1,060
|
|
21,203
|
|
2,924
|
Accounts receivable,
net
|
130,271
|
|
98,109
|
|
13,530
|
Prepayments and other
current assets, net
|
385,351
|
|
445,453
|
|
61,431
|
Inventories
|
84,835
|
|
42,691
|
|
5,887
|
Total current
assets
|
759,800
|
|
850,838
|
|
117,336
|
Non-current
assets
|
|
|
|
|
|
Property, plant and
equipment, net
|
3,259,145
|
|
3,262,114
|
|
449,866
|
Right-of-use assets,
net
|
594,897
|
|
593,014
|
|
81,780
|
Goodwill
|
575,427
|
|
575,427
|
|
79,355
|
Intangible assets,
net
|
353,766
|
|
340,121
|
|
46,905
|
Deposits for
non-current assets
|
8,932
|
|
4,645
|
|
641
|
Long-term
investments
|
437,874
|
|
423,059
|
|
58,343
|
Other non-current
assets
|
15,093
|
|
20,852
|
|
2,876
|
Total non-current
assets
|
5,245,134
|
|
5,219,232
|
|
719,766
|
|
|
|
|
|
|
Total
assets
|
6,004,934
|
|
6,070,070
|
|
837,102
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
Accounts
payable
|
146,748
|
|
131,587
|
|
18,147
|
Accrued expenses and
other liabilities
|
419,881
|
|
414,746
|
|
57,195
|
Income tax
payable
|
818
|
|
1,696
|
|
234
|
Operating lease
liabilities, current
|
35,916
|
|
42,606
|
|
5,876
|
Short-term bank and
other borrowings
|
168,601
|
|
213,186
|
|
29,400
|
Long-term bank and
other borrowings, current portion
|
343,982
|
|
526,528
|
|
72,612
|
Derivative
liability
|
5,290
|
|
5,562
|
|
767
|
Total current
liabilities
|
1,121,236
|
|
1,335,911
|
|
184,231
|
Non-current
liabilities
|
|
|
|
|
|
Long-term bank and
other borrowings, non-current portion
|
2,471,427
|
|
2,271,445
|
|
313,247
|
Deferred tax
liabilities
|
112,577
|
|
105,647
|
|
14,569
|
Operating lease
liabilities, non-current
|
199,953
|
|
201,145
|
|
27,739
|
Other long-term
liabilities
|
84,084
|
|
67,980
|
|
9,375
|
Total non-current
liabilities
|
2,868,041
|
|
2,646,217
|
|
364,930
|
Total
liabilities
|
3,989,277
|
|
3,982,128
|
|
549,161
|
EQUITY
|
|
|
|
|
|
Class A ordinary
shares
|
68
|
|
68
|
|
10
|
Class B ordinary
shares
|
37
|
|
37
|
|
5
|
Treasury
stock
|
(7)
|
|
(7)
|
|
(1)
|
Additional paid-in
capital
|
1,930,633
|
|
2,026,075
|
|
279,409
|
Accumulated other
comprehensive loss
|
(27,766)
|
|
(45,137)
|
|
(6,225)
|
Accumulated
deficit
|
(3,766,931)
|
|
(3,857,916)
|
|
(532,031)
|
Total Concord
Medical Services Holdings Limited shareholders'
deficit
|
(1,863,966)
|
|
(1,876,880)
|
|
(258,833)
|
Noncontrolling
interests
|
3,879,623
|
|
3,964,822
|
|
546,774
|
|
|
|
|
|
|
Total
equity
|
2,015,657
|
|
2,087,942
|
|
287,941
|
|
|
|
|
|
|
Total liabilities
and equity
|
6,004,934
|
|
6,070,070
|
|
837,102
|
Concord Medical Services Holdings Co., Ltd.
Consolidated Profit & Loss
(in thousands, except for number of shares and per share
data)
|
|
|
|
|
|
|
|
June
30,
2022
|
|
June 30,
2023
|
|
RMB
|
|
RMB
|
|
US$
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
Revenues, net of
business tax, value-added tax and related
surcharges
|
|
|
|
|
|
Hospital
|
82,865
|
|
158,707
|
|
21,887
|
Network
|
61,397
|
|
125,806
|
|
17,349
|
Total net
revenues
|
144,262
|
|
284,513
|
|
39,236
|
Cost of
revenues:
|
|
|
|
|
|
Hospital
|
(179,686)
|
|
(204,433)
|
|
(28,193)
|
Network
|
(53,311)
|
|
(117,503)
|
|
(16,204)
|
Total cost of
revenues
|
(232,997)
|
|
(321,936)
|
|
(44,397)
|
|
|
|
|
|
|
Gross
loss
|
(88,735)
|
|
(37,423)
|
|
(5,161)
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
Selling
expenses
|
(26,416)
|
|
(26,362)
|
|
(3,635)
|
General and
administrative expenses
|
(130,466)
|
|
(150,240)
|
|
(20,719)
|
|
|
|
|
|
|
Operating
loss
|
(245,617)
|
|
(214,025)
|
|
(29,515)
|
Interest
expense
|
(68,325)
|
|
(84,374)
|
|
(11,636)
|
Foreign exchange
gain/(loss), net
|
33,881
|
|
(2,444)
|
|
(337)
|
Gain on disposal of
long-lived equipment
|
-
|
|
62
|
|
9
|
Interest
income
|
3,562
|
|
5,800
|
|
800
|
Income from equity
method investments
|
5,488
|
|
10,099
|
|
1,393
|
Other
(expense)/income, net
|
(850)
|
|
13,623
|
|
1,879
|
Gain on disposal of
equity method investment
|
-
|
|
37,498
|
|
5,171
|
|
|
|
|
|
|
Loss before income
tax
|
(271,861)
|
|
(233,761)
|
|
(32,236)
|
Income tax
expenses
|
9,677
|
|
23,417
|
|
3,229
|
Net
loss
|
(262,184)
|
|
(210,344)
|
|
(29,007)
|
|
|
|
|
|
|
Net loss attributable
to noncontrolling interests
|
(147,532)
|
|
(119,359)
|
|
(16,460)
|
Net loss
attributable to Concord Medical Services Holdings
Limited
|
(114,652)
|
|
(90,985)
|
|
(12,547)
|
|
|
|
|
|
|
Loss per share for
Class A and Class B ordinary shares
|
|
|
|
|
|
Basic
|
(0.87)
|
|
(0.69)
|
|
(0.10)
|
Diluted
|
(0.87)
|
|
(0.69)
|
|
(0.10)
|
|
|
|
|
|
|
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
|
(41,890)
|
|
(17,371)
|
|
(2,396)
|
Total other
comprehensive loss, net of tax
|
(41,890)
|
|
(17,371)
|
|
(2,396)
|
Comprehensive
loss
|
(304,074)
|
|
(227,715)
|
|
(31,403)
|
Comprehensive loss
attributable to noncontrolling interests
|
(147,532)
|
|
(119,359)
|
|
(16,460)
|
Comprehensive loss
attributable to Concord Medical Services
Holdings Limited's
shareholders
|
(156,542)
|
|
(108,356)
|
|
(14,943)
|
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,
2022
|
|
June 30,
2023
|
|
|
|
|
|
|
Non-
|
|
|
|
|
|
Non-
|
|
|
GAAP
|
|
|
|
GAAP
|
|
GAAP
|
|
|
|
GAAP
|
|
|
Measure
|
|
Adjustment
|
|
Measure
|
|
Measure
|
|
Adjustment
|
|
Measure
|
Operating
loss
|
|
(245,617)
|
|
(7,861)
|
|
(253,478)
|
|
(214,025)
|
|
-
|
|
(214,025)
|
Net
loss
|
|
(262,184)
|
|
(7,861)
|
|
(270,045)
|
|
(210,344)
|
|
-
|
|
(210,344)
|
Basic loss per share
for
Class A
and
Class B
ordinary
shares
|
|
(0.87)
|
|
(0.06)
|
|
(0.93)
|
|
(0.69)
|
|
-
|
|
(0.69)
|
Diluted loss per
share
for
Class A and
Class B
ordinary
shares
|
|
(0.87)
|
|
(0.06)
|
|
(0.93)
|
|
(0.69)
|
|
-
|
|
(0.69)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(*) 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,
2022
|
|
June 30,
2023
|
Net
loss
|
(262,184)
|
|
(210,344)
|
Interest expenses,
net
|
64,763
|
|
78,574
|
Income tax
expenses
|
(9,677)
|
|
(23,417)
|
Depreciation and
amortization
|
53,732
|
|
55,537
|
Share-based
compensation
|
(7,861)
|
|
-
|
Other
adjustments
|
(33,031)
|
|
(48,739)
|
Adjusted
EBITDA
|
(194,258)
|
|
(148,389)
|
EBITDA
margin
|
-135 %
|
|
-52 %
|
|
|
|
|
(*) 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/(loss),
net, other (expense)/income, net, gain on disposal of equity method
investment and gain on disposal of long-
lived
equipment.
|
View original
content:https://www.prnewswire.com/news-releases/concord-medical-reports-financial-results-for-the-first-half-of-2023-301936027.html
SOURCE Concord Medical Services Holdings Limited