PRIVATE cord-blood bank Cordlife expects to post a loss for the 2024 fiscal year due to the financial fallout from lapses discovered in the storage of its cord-blood units two years ago.
In a bourse filing on Tuesday (Feb 18), the company said that the expected loss, which is based on a preliminary assessment of its draft, unaudited results for the financial year ended Dec 31, is mainly due to the suspension of its operations in late 2023.
At the time, the Ministry of Health suspended Cordlife for six months due to lapses in the storage of its cord-blood units. The company was barred from collecting, testing, processing and storing any new cord blood and human tissues between December 2023 and September 2024. It was also prohibited from providing new types of tests to patients in Singapore during this period.
Cordlife said that its expected loss for FY2024 is also due to the conditional resumption of its cord-blood banking service between Sep 15, 2024, and Jan 13, 2025. During this period, the company was not allowed to collect, test, process or store more than 30 units of new cord blood each month.
There was also a negative financial impact from the company having to provide refunds and waive the annual fees of all affected customers whose stored cord-blood units were deemed by the authorities to be stored in high-risk tanks. Cordlife also had to recognise contract liabilities relating to future storage obligations for all its active clients in the high-risk tanks.
The company had previously disclosed that the various refunds and waivers would result in a decrease of about S$9.7 million in its revenue and profit before tax.
While Cordlife expects its revenue stream for its Singapore business to improve with the full resumption of its operations since Jan 14, it said that the pace of recovery and the outlook for FY2025 remains uncertain. It added that there is “no assurance” that the company can resume profitability in FY2025.
It is due to report its unaudited financial results for FY2024 by Mar 1, 2025. It urged shareholders and potential investors to exercise caution when dealing in the shares of the company.
Shares of Cordlife ended S$0.001 or 0.7 per cent higher at S$0.152 before the announcement on Tuesday.
