Evergrande Health Industry reports 1.4b yuan lossBusiness | 23 Aug 2019 6:40 pm
The health care arm of China Evergrande (3333), Evergrande Health Industry (0708), recorded a net interim loss of 1.48 billion yuan (HK$1.64 billion), compared with a 197 million yuan net profit of the same period last year.
The net loss was from a year-on-year increase of 12.7 times of the company's administrative expenses, which amounted to 1.25 billion yuan, as well as additional labor cost, depreciation and amortization, research and development cost of new energy vehicles after a series of acquisitions.
Eelling and marketing expenses also increased by 4.91 times to 344.38 million, mainly due to the increase in marketing expenses for Evergrande Elderly Care Valley projects and the year-on-year increase in sales commissions.
Revenue grew by 1.3 times to 2.65 billion yuan, driven by the health management segment.
Finance expenses surged by 95.6 times to 689 million yuan, due to the increase in interest expenses arising from an increase in borrowings.
The gross profit margin dropped by 25.17 percentage points to 23.07 percent, mainly dragged down by the decrease in the gross profit margin of the income of new health and living projects of different locations.
In addition, there was an increase in the cost of health and living projects, labor costs of hospitals, equipment depreciation and medicine costs, said the company.