BEIJING, Nov. 18, 2015 /PRNewswire/ -- Concord Medical Services Holdings Limited (“Concord Medical” or the “Company”) (NYSE: CCM), a leading specialty hospital management solution provider and operator of the largest network of radiotherapy and diagnostic imaging centers in China, today announced its unaudited consolidated financial results for the third quarter ended September 30, 2015[1].
Third Quarter 2015 Highlights
- Total net revenue increased by 7.7% from RMB143.2 million in the third quarter of 2014 to RMB154.3 million ($24.3 million) in the third quarter of 2015, including net revenue from the network business of RMB148.5 million ($23.4 million) and net revenue from Concord Cancer Hospital (formerly known as Fortis Surgical Hospital) of RMB5.8 million ($0.9 million).
- Gross profit was RMB61.9 million ($9.7 million) in the third quarter of 2015, compared to RMB74.1 million in the third quarter of 2014.
- Net income attributable to ordinary shareholders in the third quarter of 2015 was RMB22.3 million ($3.5 million), which includes the Net loss attributable to shareholders of Concord Cancer Hospital of RMB13.3 million ($2.1 million), compared to RMB34.5 million in the third quarter of 2014.
- Basic and diluted earnings per American Depositary Share (“ADS”)[2] in the third quarter of 2015 were RMB0.50($0.08) and RMB0.49($0.08), respectively, compared with RMB0.77 and RMB0.72 in the third quarter of 2014.
- Adjusted EBITDA[3] (non-GAAP) was RMB48.8 million ($7.7 million) in the third quarter of 2015, compared to RMB88.2 million in the third quarter of 2014.
Dr. Jianyu Yang, Chairman and Chief Executive Officer of Concord Medical, commented, “During the third quarter of 2015, we achieved several important strategic milestones. First, we actively expanded our free-standing radiotherapy and diagnostic centers in China. The first free-standing radiotherapy center, Datong Meizhong Jiahe Cancer Hospital is at the final stage of equipment installation and internal decoration. It is expected to open and receive and treat patients by early 2016. We also have a strong pipeline of free-standing centers which will open to patients gradually. We are very glad to see that our strategic transformation is making solid progress. Secondly, Concord Cancer Hospital has received the approval from Singapore Ministry of Health to operate under the new name and will provide oncology as its main service, including medical oncology and surgical oncology. Our team is currently working with The University of Texas MD Anderson Cancer Center (“MDACC”) to install the medical protocol and hire a qualified medical team to be in compliance with MDACC standards. We expect to see patient inflow improvement in 2016. Finally, Concord Medical has acquired an additional equity interest in the management company of MDACC Proton Therapy Center (“MDACC PTC”) and become the majority shareholder of the management company of MDACC PTC. As a result, the company also acquired an additional interest in the MDACC Proton Therapy Center.
Additionally, the Company plans to list its indirectly wholly-owned subsidiary, CMS Hospital Management Co., Ltd, on the National Equities Exchange and Quotations (“NEEQ”) in China, which is also known as the New Third Board in China. This is an effort to fully unlock the value in our business. We have submitted the listing application to the NEEQ and we expect the listing to be approved by the end of 2015.
Looking forward, Concord Medical is making concrete progress to establish a leading cancer hospitals network in China. Our premium cancer hospitals in Beijing, Shanghai and Guangzhou are all expected to start construction in 2016. Once completed, these hospitals are expected to become prime destinations for cancer treatment and diagnostics and our patients are expected to receive MDACC-standard Multiple Disciplinary Treatment (“MDT”). “
2015 Third Quarter Financial Results by Segment
Network Business
Net revenue from the network business increased by 3.7% to RMB148.5 million ($23.4 million) in the third quarter of 2015 from RMB143.2 million in the third quarter of 2014. The increase was primarily attributable to improvement in product mix, especially increased contribution from Cyber Knife centers in the network.
As of September 30, 2015, the Company operated a network of 127 centers in 53 cities in China and had entered into agreements to establish one additional center. The Company closed two radiotherapy centers in the third quarter of 2015.
Cost of revenueof the network business was RMB83.5 million ($13.1 million) in the third quarter of 2015, compared to RMB69.1 million in the third quarter of 2014. The increase was mainly due to the increased high-value medical consumable expenses and maintenance expenses for the network.
Gross profitfrom the network business was RMB65.0 million ($10.2 million) in the third quarter of 2015, compared to RMB74.1 million in the third quarter of 2014. The gross profit margin of the network business for the third quarter of 2015 was 43.8%, compared to 51.7% for the third quarter of 2014.
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