Prenetics Announces Second Quarter 2024 Financial Results
Cost Optimization Boosted Gross Margin by 21.7% YoY in H1 2024
Enters U.S. Health Market in October with IM8, a New Health and Wellness Brand
Re-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.
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(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 Commentary
Danny 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 Prenetics
Prenetics (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 Contact:
investors@prenetics.com
PRE@mzgroup.us
Angela Cheung
Investor Relations / Corporate Finance
Prenetics Global Limited
angela.hm.cheung@prenetics.com
Basis of Presentation
Unaudited 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 Measures
To 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.
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