Financial Statements And Related Announcement - First Quarter Results

Financials Archive

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Condensed interim consolidated statement of profit or loss and other comprehensive income

Condensed interim statements of financial position

Review Of Performance

COMPARING 3 MONTHS ENDED 31 MARCH 2026 ("3M2026") AGAINST 3 MONTHS ENDED 31 MARCH 2025 ("3M2025")

Income Statement

Revenue

In 3M2026, the Group recorded revenue of S$9.0 million compared to S$9.6 million in 3M2025, representing a decrease of 6.1%. The decrease in revenue was mainly attributable to the absence of new collections in Singapore during the period; weaker performance in Indonesia; and reduced contributions from Philippines, which were partially offset by improved performance in the rest of the regional markets.

During the period, the Group discontinued its non-core business diagnostic business in Indonesia as part of ongoing efforts to streamline operations and focus on core activities. The diagnostic segment contributed approximately 9.4% of the Group's revenue in the current period, and its discontinuation is not expected to have a material impact on the Group's overall financial performance.

Gross profit and gross profit margin

The Group recorded gross profit of S$5.2 million in 3M2026 as compared to S$5.4 million in 3M2025, representing a decrease of 2.9%, in line with the lower revenue recorded during the period. Notwithstanding the decrease in gross profit, gross profit margin improved to 57.9% in 3M2026 from 56.0% in 3M2025. This was mainly attributable to a larger reduction in cost of sales relative to the decline in revenue, reflecting improved ongoing cost optimization efforts.

Selling and marketing expenses

Selling and marketing expenses decreased by 19.6% or S$0.7 million in 3M2026 compared to 3M2025. The decrease was mainly attributable to lower marketing and promotional activities in Singapore during the period, in line with the absence of new collections, as well as ongoing cost optimization initiatives across other markets.

Administrative expenses

Administrative expenses increased by 2.5% or S$0.1 million in 3M2026 compared to 3M2025, the increase in administrative expenses was mainly attributable to higher professional fees incurred in Singapore in relation to consultancy services engaged to support rectification and operational improvement initiatives.

Finance income

Finance income decreased by S$204,000 from 3M2026 to 3M2025 mainly due to the decrease in fixed deposit interest rates and a reduction in funds placed in fixed deposits.

Finance costs

Finance costs relate to lease liabilities which amounted to S$28,000 in 3M2026 (3M2025: S$54,000). The decrease in finance costs was largely due to certain leases ending during 3M2026 as compared to 3M2025.

Loss before income tax from operations

As a result of the foregoing, the loss before income tax from operations amounted to S$1.7 million for 3M2026 as compared to the loss before income tax from operations of S$2.0 million in 3M2025.

Share of profit of associate

In 3M2026, the Group recognised the share of profit of associate of S$20,000 compared to S$323,000 recognised in 3M2025. The lower contribution was mainly due to the significant decline in birth rates in Thailand, which adversely affected the associate's performance.

Tax

In 3M2026, the Company recognised a tax expense of S$19,000, mainly due to current quarter tax expenses recognised by profit-making entities.

In 3M2025, the Company recognised a tax credit of S$53,000, largely due to the recognition of deferred tax asset for the provision of refunds of annual fees for the High-Risk Tanks, offset by the recognition of tax expenses in other countries.

The effective tax rate is negative in 3M2026 and 3M2025, due to loss before tax largely contributed by Singapore.

Balance sheet

Cash and cash equivalents, unpledged and pledged fixed deposits ("fixed deposits") and short-term investments

As at 31 March 2026, the Group maintained a strong balance sheet, with cash and cash equivalents, fixed deposits and short-term investments of S$58.1 million (31 December 2025: S$61.0 million). Investments mainly comprise short-term investments in money market funds.

The decrease in cash and cash equivalents of S$1.9 million from S$15.2 million as at 31 December 2025 to S$13.3 million as at 31 March 2026 was mainly due to cash used in operating activities of S$1.2 million, cash used in investing activities of S$0.1 million and cash used in financing activities of S$0.4 million.

Net cash used in operating activities of S$1.2 million was mainly attributable to the operating loss before working capital, partially offset by non-cash adjustments, including depreciation and amortisation of S$0.9 million, as well as interest received of S$0.5 million during the period.

Net working capital outflow of approximately S$0.4 million comprised the following:

• decrease in trade receivables of approximately S$0.1 million;
• decrease in contract assets of approximately S$0.8 million;
• increase in other receivables, deposits and prepayments of approximately S$0.6 million;
• decrease in inventories of approximately S$0.1 million;
• decrease in trade and other payables of approximately S$1.0 million; and
• increase in contract liabilities of approximately S$0.1 million.

The decrease in current and non-current fixed deposits and short-term investments of S$1.1 million was mainly due to a net transfer of S$0.1 million from term deposits to cash and cash equivalent, as well as a translation loss of S$1.0 million on fixed deposits in the subsidiaries largely due to weakening of the Indian Rupee against the Singapore Dollar.

Property, plant and equipment

As at 31 March 2026, the Group recorded S$17.5 million on its balance sheet for property, plant and equipment (31 December 2025: S$14.9 million). The increase was mainly due to additions of approximately S$3.6 million, which mainly comprised the renewal of leased laboratory units of S$3.5 million renovation works and construction-in-progress of S$0.1 million in Hong Kong. These increases were partially offset by depreciation of S$0.8 million recognised in 3M2026.

Investment properties

As at 31 March 2026, the Group recorded S$4.5 million on its balance sheet for investment properties (31 December 2025: S$4.5 million).

Intangible assets

Intangible assets comprise client contracts, brand and goodwill acquired in business combinations and computer software. As at 31 March 2026, the Group recorded S$28.3 million of intangible assets on its balance sheet (31 December 2025: S$28.4 million). The decrease was mainly due to amortisation of S$0.1 million during 3M2026.

Deferred tax assets

As at 31 March 2026, the Group recorded deferred tax assets of S$0.4 million (31 December 2025: S$0.4 million). The deferred tax assets comprise prior year tax losses carried forward as a result of the transitional adjustments arising from the adoption of FRS115 in the Hong Kong subsidiary and unutilized merger and acquisition allowance relating to acquisitions made by the Company in previous years, as well as temporary differences for the provision of refunds of annual fees for the High-Risk Tanks.

Investment in associate

Investment in associate comprise a 39.61% stake in Thai Stemlife Co., Ltd through Stemlife Berhad.

Contract assets, non-current

Non-current contract assets represent all service revenues arising from the performance obligations identified under installment payment plans in the cord blood, cord lining and cord tissue banking contracts that have yet to be billed to clients. Upon billing, the billed amount will be receivable under the same terms as the current trade receivables. As at 31 March 2026, the Group recorded non-current contract assets of S$54.1 million (31 December 2025: S$55.0 million).

Inventories

As at 31 March 2026, the Group recorded inventories of S$0.9 million (31 December 2025: S$1.0 million).

Prepayments

As at 31 March 2026, the Group recorded prepayment of S$2.3 million (31 December 2025: S$1.9 million). The increase was mainly due to the advance payment for the purchase of laboratory equipment and prepaid insurance premium.

Trade receivables, current

Current trade receivables as at 31 March 2026 was S$24.8 million compared to S$25.3 million as at 31 December 2025.

Short-term investments

As at 31 March 2026, the Group recorded short-term investments of S$1.5 million compared to S$1.4 million as at 31 December 2025.

Trade and other payables, current and non-current

As at 31 March 2026, the Group recorded current trade and other payables of S$15.7 million (31 December 2025: S$16.8 million) and non-current other payables of S$1.0 million (31 December 2025: S$1.1 million).

Lease liabilities, current and non-current

As at 31 March 2026, the Group recognised lease liabilities of S$4.4 million in respect of property, motor vehicles and equipment leases (31 December 2025: S$1.3 million). The increase in lease liabilities was primarily attributable to the addition and renewal of property leases in Hong Kong and Malaysia, partially offset by lease payments during the period.

Contract liabilities, current and non-current

Contract liabilities represent revenue received in advance for services revenues to be rendered under the various performance obligations identified in the cord blood, cord lining, cord tissue banking and diagnostics contracts. As at 31 March 2026, current and non-current contract liabilities were at S$11.3 million and S$61.8 million respectively (31 December 2025: S$11.1 million and S$63.0 million respectively).

Income tax payable

The Group recorded income tax payable of S$0.4 million as at 31 March 2026 (31 December 2025: S$0.4 million).

Deferred tax liabilities

As at 31 March 2026, deferred tax liabilities amounted to S$3.5 million (31 December 2025: S$3.6 million), comprising deferred tax liabilities on temporary differences and on intangible assets recognised on business combination.

Commentary

As at 31 March 2026, the Group continues to address the operational and regulatory challenges in Singapore, while its regional businesses continue to support the Group's overall performance.

In Singapore, the Group's remains focused on stabilising the business, strengthening governance and operational discipline, and ensuring full compliance with regulatory and professional standards. Significant resources have been set aside for rectification and compliance initiatives, with the objective of rebuilding confidence among regulators, customers and other stakeholders.

The measures implemented by the Group, including enhancements to operational processes, oversight and monitoring systems, as well as the strengthening of operational capabilities and personnel, are in tandem with Group's ongoing engagement with regulators. In January 2026, Singapore's Ministry of Health renewed the Cordlife Singapore's cord blood banking service licence for one year and its human tissue banking service licence for two years. The management remains focused on resolving the issues previously raised by the MOH as soon as possible, with a view to progressing toward the Group's broader growth plans.

Outside Singapore, the Group's regional operations continue to underpin its overall performance. Several overseas markets have shown encouraging momentum, supported by growing awareness of preventive healthcare and the potential applications of cord blood and stem cell therapies. Markets such as Hong Kong, India and Malaysia recorded higher revenue during the first three months of 2026 compared to the year before. Stemlife Berhad has been reaccredited by AABB (Association for the Advancement of Blood & Biotherapies) for the 5th consecutive cycle in February 2026 with zero non-compliance. Across the region, the Group continues to invest in infrastructure and operational capabilities to support service quality, compliance and long-term scalability, while navigating differing market dynamics.

Looking ahead to the next 12 months, the fundamentals of the cord blood banking industry remain positive. Demand is underpinned by rising interest in stem cell-based therapies and increasing awareness of the long-term value of cord blood banking as part of preventive healthcare planning.

The Group intends to capture these opportunities over the longer term, while maintaining a disciplined approach to risk management, regulatory compliance and capital allocation amid a competitive and evolving operating environment.