Cordlife has posted net loss of $11.57 million for its 1QFY2024 ended March, compared to a net profit of $1.15 million in the same preceding quarter.
In its Nov 30 filing last year, Cordlife revealed that seven of its cryogenic storage tanks based in Singapore have been exposed to temperatures outside of their normal temperature range from November 2020 to date.
On April 8, the company offered a refund of annual fees received from the start of its “temperature excursions”, as well as a waiver of subsequent fees for all active clients of Cordlife who have stored cord blood units in one of the cryogenic storage tanks and dry shipper deemed by to be at high risk of being adversely affected by the temperature excursions.
This resulted in a revenue reversal of approximately $9.7 million, which included the recognition of $0.5 million in contract liabilities relating to future storage obligations for affected clients. Consequently, Cordlife recorded revenue of approximately negative $240,000 in 1QFY2024.
Excluding the reversal, the company’s revenue for 1QFY2024 would have been approximately $9.4 million, a decline of 33% y-o-y due mainly to the suspension in its Singapore's operations.
Excluding the financial impact of the refunds, the company’s net loss for 1QFY2024 stood at $1.9 million.
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On May 28, the Ministry of Health (MOH) issued a notice to Cordlife to stop the collection, testing, processing and storage of any new cord blood for up to a further three months with effect on and from June 15, unless approved sooner by the MOH. This further suspension is expected to continue to have a negative financial impact on the company.
While the operations of overseas subsidiaries have not been directly impacted by the suspension, the publicity surrounding the suspension has inadvertently affected sentiment and has affected the company’s financial performance.
“We will continue to update the relevant authorities and fulfil all requirements, so as to resume operations as soon as possible. With a stronger foundation, we look forward to a recovery of Cordlife’s business soon,” says group CEO Ivan Yiu.
Shares in Cordlife closed 0.7 cents lower or 4.76% down on June 11 at 14 cents.
