Cordlife braces itself for 25-30% slide to FY23 net profit amid mishandling scandal

SINGAPORE – Private cord blood bank Cordlife Group on Feb 27 said it is anticipating a 25 to 30 per cent slide to its net profit for the financial year ended Dec 31, 2023.

Disclosing this in a profit guidance ahead of the release of its financial results on or before Feb 29, the mainboard-listed group added that the earnings impact could be greater if findings of

ongoing investigations into its cord-blood unit mishandling

returned positive.

Since late 2023, Cordlife had been mired in a scandal, which has brought the Ministry of Health (MOH) to order the company on Nov 30, 2023, to stop the collection, testing, processing and storage of any new cord blood and human tissue for up to six months.

The suspension came after MOH found that seven of Cordlife’s 22 cord blood storage tanks had been exposed to temperatures above the acceptable limits of minus 150 deg C, and that these “temperature excursions” had happened at different times, some dating back to November 2020.

On Jan 17, the company said since MOH’s discovery, it has started sending donated cord blood samples from the affected tanks under investigation to a third-party laboratory for viability testing, in batches.

On Feb 27, Cordlife said it gathered that there will likely be a material drop in profit for FY2023 following a preliminary assessment of the period’s draft unaudited financial results.

However, the group said it is unable to assess the impact of the investigations on the FY2023 results.

“If the results of the testing confirm that any of the affected tanks are adversely affected by the temperature excursions, such results may have a further adverse impact on the unaudited FY2023 results,” it added.

Shares of Cordlife closed up 7.1 per cent, or $0.02, at $0.30 on Feb 27, before the announcement.

THE BUSINESS TIMES