Cordlife Group on Friday posted a 59.8 per cent drop in net profit to S$13 million for its fiscal year ended June 30, 2016. This was a drop from S$32.5 million a year ago.
Revenue rose 3.5 per cent to S$59.6 million in FY2016, mainly due to more client deliveries, partly as a result of the consolidation of StemLife as a subsidiary in December 2015.
But Cordlife, which provides cord blood and cord lining banking services, saw its bottom line hit by a lower fair value gain on its investment in the US-listed China Cord Blood Corp (CCBC) of S$4.5 million in FY2016, versus S$10.4 million a year ago. The fair value changes are recognised directly in the profit or loss. Cordlife's major investor Golden Meditech has since bought its shares in CCBC last year.
The group also saw fair value changes on derivatives fall 80.5 per cent to S$2.5 million, versus S$12.9 million a year ago.
The company made headlines in March this year for the sudden resignation of Jeremy Yee as CEO of Cordlife.
It later surfaced that the board's decision not to renew Mr Yee's employment contract, whose terms included an annual payout of up to 10 per cent of company profits, and its dissatisfaction over the growth pace of the firm's core business were key factors that led to his sudden resignation.
Looking ahead, Cordlife said that it is still looking to expand its geographical footprint, introduce new consumer healthcare products and forge collaborative networks and strategic alliances.
The group said that it continues to raise market awareness of its cord blood and umbilical cord lining business and diagnostic services in its existing markets, and has stepped up marketing efforts in Indonesia and the Philippines and increased educational marketing initiatives in Singapore and Hong Kong.
"Barring any unforeseen circumstances and excluding fair value gain or loss on investment properties and any other one-off items, the group expects its core business to remain profitable for FY2017," it said.
Cordlife did not declare any dividend this year. A year ago, it had paid out S$0.01 per share.
Its shares ended unchanged at S$1.24.
This article was first published on Aug 27, 2016.
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