SINGAPORE: The embattled cord blood bank, Cordlife, has reported a significant net loss of S$1.6 million (US$1.2 million) for the third quarter, marking a stark contrast to the net profit of S$1.4 million it achieved during the same period last year, according to a press release issued on Thursday (Nov 14).
This downturn was primarily attributed to substantially lower contributions from Singapore, the group’s key revenue generator, which was able to operate for only 15 days during the quarter, further impacting its financial performance.
In a striking blow, the company’s revenue for the third quarter, which concluded on September 30, plummeted by 31 per cent to S$10.1 million, down from S$14.7 million a year earlier, indicating operational challenges ahead.
Cordlife, recognized as Singapore’s longest-running private cord blood bank, continues to face considerable obstacles, having recorded sizeable losses for the first half of the fiscal year.
The company’s financial struggles were evident as it posted a staggering loss of S$12.35 million for the first half of the year, contrasting sharply with a net profit of S$2.2 million during the same timeframe last year.
In terms of nine-month performance, Cordlife reported a cumulative net loss of S$13.9 million, a notable decline from the S$3.6 million profit recorded in the previous year. Revenue during this period also fell dramatically by 55.1 per cent, amounting to S$19.3 million compared to S$43 million a year prior.
After enduring a months-long suspension due to mishandling of cord blood units, Cordlife was finally granted approval to resume its cord blood banking services in a limited capacity from September 15, allowing it to collect, test, process, and store a maximum of 30 units of new cord blood each month, valid from September 15, 2024, to January 13, 2025.
These restrictions were implemented to protect customers’ interests, as outlined by the Ministry of Health (MOH) in August, emphasizing the importance of maintaining high operational standards.
A comprehensive investigation into the company’s practices has led to the arrest of nine individuals thus far, adding to the scrutiny surrounding Cordlife’s operations.
On Thursday, the company reiterated its commitment to fully resuming its Singapore operations and emphasized the efforts it is making to enhance its overall service quality.
Cordlife has taken significant steps to upgrade its processing and storage facility in Yishun by bolstering its laboratory and technical personnel and reinforcing its operational protocols to ensure compliance and safety.
Group executive director Chen Xiaoling expressed optimism, stating Cordlife has emerged as a “stronger group with more robust capabilities and stronger operating procedures,” and underscored the company’s dedication to implementing strict operating protocols while working diligently to earn back the full trust of all stakeholders.
Group chief executive Ivan Yiu noted, “Having met MOH’s criteria to resume our cord blood banking services in a controlled manner in Singapore, we are confident the group is on the path to rebuilding our business foundation to drive business recovery.”
How important is the Singapore market to Cordlife’s overall financial health as discussed in the interview?
**Interview with Dr. Jane Tan, Financial Analyst and Industry Expert**
**Editor:** Thank you for joining us today, Dr. Tan. We’ve just seen Cordlife report significant financial losses for the third quarter. What do you make of their performance this time around?
**Dr. Tan:** Thank you for having me. Cordlife’s financial results certainly reflect a challenging landscape. A net loss of S$1.6 million for the third quarter is alarming, especially compared to last year’s profit of S$1.4 million during the same period. The primary reason for this downturn seems to be linked to their operational limitations, particularly the reduced contribution from Singapore.
**Editor:** Indeed, operating for only 15 days during the quarter must have severely impacted their revenue. How critical is Singapore to Cordlife’s overall business?
**Dr. Tan:** Singapore is definitely the cornerstone of Cordlife’s operations. It accounted for a significant portion of their revenue. The fact that they could operate for just 15 days means they missed out on a substantial volume of potential clients and, consequently, revenue. That definitely skews their quarter performance and poses serious risks for the company moving forward.
**Editor:** They’ve also reported a cumulative net loss of S$13.9 million for the year so far. What does this trend indicate about the company’s financial health?
**Dr. Tan:** The cumulative losses indicate that Cordlife is experiencing deep-rooted issues beyond just this quarter. A drop in revenue by 55.1 per cent year-on-year is concerning. It suggests that the company may need to reevaluate its operations, market strategies, and possibly consider restructuring to recover from these significant losses.
**Editor:** What steps do you think Cordlife should take to navigate these challenges?
**Dr. Tan:** They should focus on assessing their operational efficiencies and explore ways to enhance their service offerings. They may also need to consider diversifying their market presence beyond Singapore. Additionally, communicating transparently with stakeholders about their recovery plans would be crucial to regain investor confidence.
**Editor:** Thank you, Dr. Tan, for sharing your insights on Cordlife’s financial situation. It will certainly be interesting to see how they respond to these challenges moving forward.
**Dr. Tan:** Thank you for having me. It’s a pivotal time for Cordlife, and I hope to see them rebound soon.
