Prenetics Announces Second Quarter 2024 Financial Results
Cost Optimization Boosted Gross Margin by 21.7% YoY in H1 2024Enters U.S. Health Market in October with IM8, a New Health and Wellness BrandRe-affirms Revenue Target to Exceed US$33 million for FY 2024
CHARLOTTE, N.C., Oct. 07, 2024 (GLOBE NEWSWIRE) -- Prenetics Global Limited (NASDAQ:PRE) ("Prenetics" or the "Company"), a leading health sciences company, today announced unaudited financial results for the second quarter ended June 30, 2024, along with recent business updates.
Second Quarter 2024 Financial Highlights
Revenue from continuing operations of US$5.9 million, as compared to US$6.5 million in the second quarter 2023 attributable to clinical segment revenues, which are anticipated in the latter half of the year.
Gross profit from continuing operations of US$3.8 million, an increase of 23.6% as compared to the second quarter 2023.
Gross margin of continuing operations increased to 63.4% from 46.8% in the second quarter 2023 driven by operational efficiencies, better pricing strategies, and cost optimization measures.
Adjusted EBITDA1 loss from continuing operations of US$5.5 million, an improvement of 24.9% as compared to the second quarter 2023.
Cash and other short-term assets2 of US$78.7 million and debt-free as of June 30, 2024.
Insighta3, our early cancer detection joint venture with Professor Dennis Lo, had a cash balance of US$80.5 million on its balance sheet and debt-free as of June 30, 2024.
First Half 2024 Financial Highlights
Revenue from continuing operations of US$12.4 million, an increase of 8.0% as compared to the first half 2023.
Gross profit from continuing operations of US$7.6 million, expanded by 67.6% as compared to the first half 2023.
Gross margin of continuing operations of 61.1%, up from 39.4% in the first half 2023.
Adjusted EBITDA loss from continuing operations of US$9.6 million, an improvement of 42.3% as compared to the first half 2023.
Second Quarter 2024 and Subsequent Operational Updates
IM8 is fully prepared for a successful launch in October, with all marketing and operational plans in place.
Completed the acquisition of Europa Sports establishing IM8's diverse distribution capabilities to include a brick-and-mortar network and a 3PL logistics platform.
CircleDNA and ACT Genomics are on track to achieve business-unit breakeven by the second half of 2025.
In September, Insighta commenced a 1,500 person clinical trial for early Liver cancer detection.
Insighta has begun leveraging AI technologies in early cancer detection research and development efforts with considerable progress and results to be announced.
________________________1 Adjusted EBITDA is defined as loss from operations excluding (1) employee equity-settled share-based payment expenses, (2) depreciation and amortization, (3) amortization of deferred expenses, (4) acquisition and transaction-related costs, (5) strategic realignment and discontinued products impact, and (6) finance income and exchange gain or loss, net. These adjustments are made for items that may not be indicative of our business performance, including non-cash and/or non-recurring items.2 Represents current assets, including cash and cash equivalents totaling US$41.2 million, financial assets at fair value through profit or loss of US$10.9 million, and trade receivables of US$4.1 million, amongst other accounting line items under current assets as of June 30, 2024.3 As of June 30, 2024, we owned 50% shareholding in Insighta, which was accounted for under equity-accounted investee. Equity-accounted investees, totaling US$97.9 million as of June 30, 2024, were classified as non-current assets on our balance sheet.
Management CommentaryDanny Yeung, Chief Executive Officer and Co-Founder, remarked: "We continue to make progress in our strategic initiatives, achieving key milestones, in both our consumer and clinical health divisions. During the second quarter, we remained committed to structuring our business for operational efficiency. This can be recognized by improvements in key metrics as drivers of operating leverage, and highlighted by a 23.6% improvement in gross profit as we narrowed our adjusted EBITDA loss by 24.9% from the prior year.
We are excited about the future as we prepare for the highly anticipated U.S. launch of IM8, our health and wellness brand. Our recent Europa acquisition provides a strong foundation and extensive global distribution network as a tailwind for IM8 to make a meaningful impact in the health and wellness market. We remain fully committed to driving growth and innovation while focusing on long-term value creation for our shareholders."
About PreneticsPrenetics (NASDAQ:PRE), a leading health sciences company, is dedicated to advancing consumer and clinical health. Our consumer initiative is led by IM8, a new health and wellness brand and Europa, one of the largest sports distribution companies in the USA. Our clinical division is led by Insighta, our US$200 million joint venture with renowned scientist Prof. Dennis Lo, focused on multi-cancer early detection technologies. This is followed by ACT Genomics, which has achieved FDA clearance for comprehensive genomic profiling of solid tumors, and CircleDNA, which uses NGS to offer comprehensive DNA tests. Each of Prenetics' units synergistically enhances our global impact on health, embodying our commitment to ‘enhancing life through science'. To learn more about Prenetics, please visit www.prenetics.com.
Forward-Looking Statements This press release contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. Statements that are not historical facts, including statements about the Company's goals, targets, projections, outlooks, beliefs, expectations, strategy, plans, objectives of management for future operations of the Company, and growth opportunities are forward-looking statements. In some cases, forward-looking statements can be identified by words or phrases such as "may," "will," "expect," "anticipate," "target," "aim," "estimate," "intend," "plan," "believe," "potential," "continue," "is/are likely to" or other similar expressions. Forward-looking statements are based upon estimates and forecasts and reflect the views, assumptions, expectations, and opinions of the Company, which involve inherent risks and uncertainties, therefore they should not be relied upon as being necessarily indicative of future results. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to: the Company's ability to further develop and grow its business, including new products and services; its ability to execute on its new business strategy in genomics, precision oncology, and specifically, early detection for cancer; the results of case control studies and/or clinical trials; and its ability to identify and execute on M&A opportunities, especially in precision oncology. In addition to the foregoing factors, you should also carefully consider the other risks and uncertainties described in the "Risk Factors" section of the Company's most recent registration statement and the prospectus therein, and the other documents filed by the Company from time to time with the U.S. Securities and Exchange Commission. All information provided in this press release is as of the date of this press release, and the Company does not undertake any duty to update such information, except as required under applicable law.
Investor Relations
Angela CheungInvestor Relations / Corporate FinancePrenetics Global
Basis of PresentationUnaudited Non-IFRS Financial Measures has been provided in the financial statements tables included at the end of this press release. An explanation of these measures is also included below under the heading "Unaudited Non-IFRS Financial Measures".
Unaudited Non-IFRS Financial MeasuresTo supplement Prenetics' consolidated financial statements prepared in accordance with International Financial Reporting Standards ("IFRS"), the Company is providing non-IFRS measures, adjusted EBITDA loss from continuing operations. These non-IFRS financial measures are not based on any standardized methodology prescribed by IFRS and are not necessarily comparable to similarly-titled measures presented by other companies. Management believes these non-IFRS financial measures are useful to investors in evaluating the Company's ongoing operating results and trends.
Management is excluding from some or all of its non-IFRS results (1) Employee equity-settled share-based payment expenses, (2) depreciation and amortization, (3) Amortization of deferred expenses, (4) Acquisition and transaction-related costs, (5) Strategic realignment and discontinued products impact, and (6) finance income and exchange gain or loss, net, items that may not be indicative of our business, results of operations, or outlook, including but not limited to non-cash and/ or non-recurring items. These non-IFRS financial measures are limited in value because they exclude certain items that may have a material impact on the reported financial results. Management accounts for this limitation by analyzing results on an IFRS basis as well as a non-IFRS basis and also by providing IFRS measures in the Company's public disclosures.
In addition, other companies, including companies in the same industry, may not use the same non-IFRS measures or may calculate these metrics in a different manner than management or may use other financial measures to evaluate their performance, all of which could reduce the usefulness of these non-IFRS measures as comparative measures. Because of these limitations, the Company's non-IFRS financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with IFRS. Investors are encouraged to review the non-IFRS reconciliations provided in the tables captioned "Reconciliation of loss from operations from continuing operations under IFRS and adjusted EBITDA loss from continuing operations (Non-IFRS)" set forth at the end of this document.
PRENETICS GLOBAL LIMITEDUnaudited consolidated statements of financial position(Expressed in United States dollars unless otherwise indicated)
June 30,
March 31,
December 31,
2024
2024
2023
Assets
Property, plant and equipment
$
4,745,228
$
4,585,957
$
5,777,794
Intangible assets
12,455,997
13,169,672
13,424,648
Goodwill
29,170,123
29,170,123
29,170,123
Interests in equity-accounted investees
97,875,233
98,244,733
98,464,875
Financial assets at fair value through profit or loss
9,371,064
9,371,064
9,371,064
Deferred tax assets
27,627
27,630
27,680
Deferred expenses
—
1,483,348
3,530,756
Other non-current assets
968,525
948,811
743,173
Non-current assets
154,613,797
157,001,338
160,510,113
Deferred expenses
7,710,439
8,272,025
8,312,890
Inventories
2,878,258
2,815,607
3,126,776
Trade receivables
4,086,030
4,106,052
4,058,007
Deposits, prepayments and other receivables
11,797,508
5,708,610
5,284,848
Amount due from a related company
2,561
2,556
5,123
Amount due from an equity-accounted investee
120,966
126,177
132,114
Financial assets at fair value through profit or loss
10,893,094
11,034,200
11,034,200
Short-term deposits
—
—
16,000,000
Cash and cash equivalents
41,204,165
54,518,588
45,706,448
Current assets
78,693,021
86,583,815
93,660,406
Total assets
$
233,306,818
$
243,585,153
$
254,170,519
Liabilities
Deferred tax liabilities
$
2,238,336
$
2,327,331
$
2,614,823
Warrant liabilities
311,152
143,264
223,850
Lease liabilities
1,181,457
669,373
867,215
Other non-current liabilities
286,047
464,215
823,345
Non-current liabilities
4,016,992
3,604,183
4,529,233
Trade payables
1,693,564
1,637,568
1,671,019
Accrued expenses and other current liabilities
6,821,131
7,100,324
8,174,815
Contract liabilities
5,480,399
5,542,678
6,111,017
Lease liabilities
1,183,046
1,079,449
1,502,173
Liabilities for puttable financial instrument4
15,707,143
14,472,666
14,622,529
Tax payable
7,402,553
7,385,897
7,402,461
Current liabilities
38,287,836
37,218,582
39,484,014
Total liabilities
42,304,828
40,822,765
44,013,247
Equity
Share capital
19,024
18,326
18,308
Reserves
188,225,181
199,425,243
206,339,490
Total equity attributable to equity shareholders of the Company
188,244,205
199,443,569
206,357,798
Non-controlling interests
2,757,785
3,318,819
3,799,474
Total equity
191,001,990
202,762,388
210,157,272
Total equity and liabilities
$
233,306,818
$
243,585,153
$
254,170,519
PRENETICS GLOBAL LIMITEDUnaudited consolidated statements of profit or loss and other comprehensive income(Expressed in United States dollars unless otherwise indicated)
Six Months Ended
June 30,
June 30,
