Prenetics Announces Fourth Quarter and Full Year 2023 Financial Results
- Revenue increased by 65.2% to US$21.7 million in 2023 compared to 2022.
- Fourth-quarter revenue rose by 90.8% to US$5.4 million in 2023 compared to 2022.
- Adjusted EBITDA was US$(24.8) million for the full year 2023.
- Cash and short-term assets totaled US$93.7 million as of December 31, 2023.
- ACT Genomics and CircleDNA achieved profitability in December 2023.
- Revenue projections for 2024 revised to US$33-36 million with a focus on profitability.
- None.
Insights
The substantial revenue growth reported by Prenetics Global Limited is a positive indicator for investors, showcasing the company's ability to scale its operations effectively. The reported 65.2% year-over-year increase in revenue is a testament to the company's strategic initiatives and may signal a strong market demand for genomics-driven health solutions. Furthermore, the transition to profitability of its business units, ACT Genomics and CircleDNA, could suggest operational efficiencies and a maturing business model, potentially leading to sustained earnings growth.
However, the reported negative adjusted EBITDA figures, while common in growth-focused companies, indicate that Prenetics is still navigating its path to consistent profitability. Investors should monitor the company's cost management strategies and its ability to convert increased revenues into net income. The cash and short-term assets position provides a buffer for strategic investments, but the deployment of this capital must be scrutinized for its potential to generate returns without excessively diluting shareholder value.
The genomics-driven health sciences sector is experiencing rapid growth, driven by technological advancements and increasing consumer interest in personalized healthcare. Prenetics' performance reflects this trend and suggests the company is capturing market share. The revised revenue projections for 2024 indicate management's confidence in continued growth, which could be fueled by the expansion into new consumer healthcare ventures. However, it is critical to assess the competitive landscape and the scalability of these new ventures to understand their potential impact on the company's long-term market position.
Investors should also be aware of the regulatory environment surrounding genomics and personalized medicine, as changes could significantly impact the company's operations. Prenetics' joint venture with Professor Dennis Lo, Insighta, in early cancer detection, positions the company at the forefront of a high-growth niche, potentially offering a competitive edge. The success of this and other ventures will hinge on their ability to navigate the complex regulatory pathways and deliver clinically validated products.
Prenetics' focus on genomics-driven health sciences places it within a highly innovative and research-intensive industry. The company's performance, particularly the profitability of its business units, may reflect the successful translation of scientific advancements into marketable services. The collaboration with Professor Dennis Lo, a notable figure in the field of early cancer detection, could enhance the company's credibility and drive further research and development efforts.
It's important to consider the long-term R&D investment required to stay competitive in this field, as genomics technology evolves rapidly. Investors should evaluate Prenetics' potential to maintain a robust pipeline of innovative products and services, which is critical for long-term growth. The company's ability to forge strategic partnerships and collaborations will be essential in accelerating product development and gaining access to new markets.
HONG KONG, April 01, 2024 (GLOBE NEWSWIRE) -- Prenetics Global Limited (NASDAQ: PRE) (“Prenetics” or the “Company”), a leading genomics-driven health sciences company, today announced unaudited financial results for the fourth quarter and full year ended December 31, 2023, along with recent business updates.
Financial Highlights
- Revenue from continuing operations of US
$21.7 million in the full year 2023, an increase of65.2% as compared to the full year 2022. - Revenue from continuing operations of US
$5.4 million in the fourth quarter 2023, an increase of90.8% as compared to the fourth quarter 2022. - Adjusted EBITDA from continuing operations of US
$(24.8) million in the full year 2023. - Adjusted EBITDA from continuing operations of US
$(6.2) million in the fourth quarter 2023. - Cash and other short-term assets1 of US
$93.7 million as of December 31, 2023. Additionally, Insighta2, our 50/50 joint venture in early cancer detection with Professor Dennis Lo, had a cash balance of US$79.1 million in its balance sheet as of December 31, 2023.
Danny Yeung, Chief Executive Officer and Co-Founder of Prenetics said: "As we reflect on the past year, we knew that 2023 was set to be a challenging yet transformational period for Prenetics, especially as we emerged from the shadow of COVID. Our focus remained unwaveringly on driving our existing business units, ACT Genomics and CircleDNA, towards growth and profitability. I am proud to announce that for the first time in our history, both units achieved profitability in December 2023, while increasing full year revenue from continuing operations by
With this significant turnaround, we are confidently revising our revenue projections for the full year 2024 to be in the range of US
This past year also marked the completion of a pivotal 500-person clinical trial with Insighta, our early cancer detection venture with Prof. Dennis Lo, yielding very positive results. We expect to publish these findings towards the end of 2024, and we are gearing up for an even more extensive overseas clinical trial beginning in Q3 of this year. Details of this will be shared in the next earnings update.
In summary, 2023 was a testament to our commitment to executing our strategic objectives and operational excellence. Looking ahead to 2024, with a strong cash position, no debt, a dedicated management team and potentially large opportunities in consumer healthcare, we are poised to build on our momentum and delivering long-term value to our shareholders. Stay tuned as we continue this exciting journey, with transformative developments on the horizon."
Recent Highlights
- ACT Genomics and CircleDNA business units achieved EBITDA breakeven (non-IFRS) in December 2023, the first time in the Company’s history.
- The two units are expected to generate a combined revenue in the range of US
$33 million to US$36 million , up from US$21.7 million in 2023. - Insighta’s 500-participants clinical trial for early cancer detection has been completed and is preparing for publication of full results which is expected by the end of 2024.
- Our management team is diligently pursuing significant new ventures within the consumer healthcare market, with more information to be revealed in the upcoming period.
_____________________
1 Represents current assets, including cash and cash equivalents and short-term deposits totaling US
2 As of December 31, 2023, we owned
Full Year 2023 Financial Results
Total revenue from continuing operations for the full year of 2023 was US
Adjusted net loss attributable to equity shareholders of Prenetics was US
About Prenetics
Prenetics (NASDAQ:PRE),a leading genomics-driven health sciences company, is revolutionizing prevention, early detection, and treatment. Our prevention arm, CircleDNA, uses whole exome sequencing to offer the world's most comprehensive consumer DNA test. Insighta, our
Investor Relations Contact:
investors@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.
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 from continuing operations, adjusted gross profit from continuing operations and adjusted (loss)/profit attributable to equity shareholders of Prenetics. 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) finance income and exchange gain or loss, net, and (4) certain 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 from continuing operations (Non-IFRS)”, “Reconciliation of gross profit from continuing operations under IFRS and adjusted gross profit from continuing operations (Non-IFRS)” and “Reconciliation of (loss)/profit attributable to equity shareholders of Prenetics under IFRS and adjusted (loss)/profit attributable to equity shareholders of Prenetics (Non-IFRS)” set forth at the end of this document.
PRENETICS GLOBAL LIMITED
Unaudited consolidated statements of financial position
(Expressed in United States dollars unless otherwise indicated)
| December 31, | |||||
| 2023 | 2022 | ||||
| Assets | |||||
| Property, plant and equipment | $ | 5,777,794 | $ | 13,102,546 | |
| Intangible assets | 13,424,648 | 14,785,875 | |||
| Goodwill | 29,170,123 | 33,800,276 | |||
| Interests in equity-accounted investees | 98,464,875 | 788,472 | |||
| Financial assets at fair value through profit or loss | 9,371,064 | — | |||
| Deferred tax assets | 27,680 | 243,449 | |||
| Deferred expenses | 3,530,756 | 6,307,834 | |||
| Other non-current assets | 743,173 | 1,292,462 | |||
| Non-current assets | 160,510,113 | 70,320,914 | |||
| Deferred expenses | 8,312,890 | 4,577,255 | |||
| Inventories | 3,126,776 | 4,534,072 | |||
| Trade receivables | 4,058,007 | 41,691,913 | |||
| Deposits, prepayments and other receivables | 5,284,848 | 6,889,114 | |||
| Amount due from a related company | 5,123 | — | |||
| Amount due from an equity-accounted investee | 132,114 | — | |||
| Financial assets at fair value through profit or loss | 11,034,200 | 17,537,608 | |||
| Short-term deposits | 16,000,000 | 19,920,160 | |||
| Cash and cash equivalents | 45,706,448 | 146,660,195 | |||
| Current assets | 93,660,406 | 241,810,317 | |||
| Total assets | $ | 254,170,519 | $ | 312,131,231 | |
| Liabilities | |||||
| Deferred tax liabilities | $ | 2,614,823 | $ | 3,185,440 | |
| Warrant liabilities | 223,850 | 3,574,885 | |||
| Lease liabilities | 867,215 | 3,763,230 | |||
| Other non-current liabilities | 823,345 | 949,701 | |||
| Non-current liabilities | 4,529,233 | 11,473,256 | |||
| Trade payables | 1,671,019 | 7,291,133 | |||
| Accrued expenses and other current liabilities | 8,174,815 | 15,611,421 | |||
| Contract liabilities | 6,111,017 | 5,674,290 | |||
| Lease liabilities | 1,502,173 | 2,882,933 | |||
| Liabilities for puttable financial instrument3 | 14,622,529 | 17,138,905 | |||
| Tax payable | 7,402,461 | 8,596,433 | |||
| Current liabilities | 39,484,014 | 57,195,115 | |||
| Total liabilities | 44,013,247 | 68,668,371 | |||
| Equity | |||||
| Share capital4 | 18,308 | 13,698 | |||
| Reserves | 206,339,490 | 237,050,429 | |||
| Total equity attributable to equity shareholders of the Company | 206,357,798 | 237,064,127 | |||
| Non-controlling interests | 3,799,474 | 6,398,733 | |||
| Total equity | 210,157,272 | 243,462,860 | |||
| Total equity and liabilities | $ | 254,170,519 | $ | 312,131,231 | |
PRENETICS GLOBAL LIMITED
Unaudited consolidated statements of profit or loss and other comprehensive income
(Expressed in United States dollars unless otherwise indicated)
| Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||
| (Restated) | (Restated) | ||||||||||||||
| Continuing operations | |||||||||||||||
| Revenue | $ | 5,428,460 | $ | 2,844,571 | $ | 21,742,675 | $ | 13,163,841 | |||||||
| Direct costs | (2,758,288 | ) | (1,765,186 | ) | (12,912,788 | ) | (9,545,546 | ) | |||||||
| Gross profit | 2,670,172 | 1,079,385 | 8,829,887 | 3,618,295 | |||||||||||
| Other income and other net gain | 715,562 | 818,043 | 4,507,103 | 429,857 | |||||||||||
| Selling and distribution expenses5 | (1,908,415 | ) | (1,203,237 | ) | (8,243,379 | ) | (4,738,099 | ) | |||||||
| Research and development expenses5 | (2,586,477 | ) | (1,463,036 | ) | (11,661,760 | ) | (5,988,905 | ) | |||||||
| Impairment loss of goodwill | (3,900,268 | ) | — | (3,900,268 | ) | — | |||||||||
| Administrative and other operating expenses5 | (10,362,374 | ) | (10,942,029 | ) | (41,438,301 | ) | (59,341,636 | ) | |||||||
| Loss from operations | (15,371,800 | ) | (11,710,874 | ) | (51,906,718 | ) | (66,020,488 | ) | |||||||
| Fair value loss on financial assets at fair value through profit or loss | (3,190,379 | ) | (7,689,311 | ) | (7,134,786 | ) | (9,363,495 | ) | |||||||
| Share-based payment on listing6 | — | — | — | (89,546,601 | ) | ||||||||||
| Fair value loss on preference shares liabilities | — | — | — | (60,091,353 | ) | ||||||||||
| Fair value gain on warrant liabilities | 671,550 | 6,498,365 | 3,351,035 | 3,196,538 | |||||||||||
| Share of loss of equity-accounted investees | (688,183 | ) | — | (858,900 | ) | — | |||||||||
| Other finance costs | 1,073 | (51,014 | ) | (119,662 | ) | (3,994,755 | ) | ||||||||
| Loss before taxation | (18,577,739 | ) | (12,952,834 | ) | (56,669,031 | ) | (225,820,154 | ) | |||||||
| Income tax (expense)/credit | (10,678 | ) | (150,282 | ) | 269,359 | 244,816 | |||||||||
| Loss from continuing operations | (18,588,417 | ) | (13,103,116 | ) | (56,399,672 | ) | (225,575,338 | ) | |||||||
| Discontinued operation | |||||||||||||||
| (Loss)/profit from discontinued operation, net of tax7 | (1,026,983 | ) | 14,711,059 | (8,377,660 | ) | 35,121,951 | |||||||||
| (Loss)/profit for the period/year | (19,615,400 | ) | 1,607,943 | (64,777,332 | ) | (190,453,387 | ) | ||||||||
| Other comprehensive income for the period/year | |||||||||||||||
| Item that may be reclassified subsequently to profit or loss: | |||||||||||||||
| Exchange difference on translation of foreign operations | 1,118,149 | 2,759,672 | 1,795,623 | (4,842,932 | ) | ||||||||||
| Total comprehensive income for the period/year | $ | (18,497,251 | ) | $ | 4,367,615 | $ | (62,981,709 | ) | $ | (195,296,319 | ) | ||||
| (Loss)/profit attributable to: | |||||||||||||||
| Equity shareholders of Prenetics | $ | (19,047,124 | ) | $ | 1,607,942 | $ | (62,723,871 | ) | $ | (190,453,333 | ) | ||||
| Non-controlling interests | (568,276 | ) | 1 | (2,053,461 | ) | (54 | ) | ||||||||
| $ | (19,615,400 | ) | $ | 1,607,943 | $ | (64,777,332 | ) | $ | (190,453,387 | ) | |||||
| Total comprehensive income attributable to: | |||||||||||||||
| Equity shareholders of Prenetics | $ | (18,677,610 | ) | $ | 4,367,614 | $ | (61,112,335 | ) | $ | (195,296,265 | ) | ||||
| Non-controlling interests | 180,359 | 1 | (1,869,374 | ) | (54 | ) | |||||||||
| $ | (18,497,251 | ) | $ | 4,367,615 | $ | (62,981,709 | ) | $ | (195,296,319 | ) | |||||
| (Loss)/earnings per share: | |||||||||||||||
| Basic | $ | (1.57 | ) | $ | 0.21 | $ | (5.58 | ) | $ | (37.57 | ) | ||||
| Diluted | (1.57 | ) | 0.21 | (5.58 | ) | (37.57 | ) | ||||||||
| Loss per share - Continuing operations: | |||||||||||||||
| Basic | (1.49 | ) | (2.07 | ) | (4.83 | ) | (44.50 | ) | |||||||
| Diluted | (1.49 | ) | (2.07 | ) | (4.83 | ) | (44.50 | ) | |||||||
| Weighted average number of common shares: | |||||||||||||||
| Basic | 12,114,922 | 7,692,436 | 11,246,010 | 5,069,315 | |||||||||||
| Diluted | 12,114,922 | 7,692,436 | 11,246,010 | 5,069,315 | |||||||||||
PRENETICS GLOBAL LIMITED
Unaudited Non-IFRS Financial Measures
(Expressed in United States dollars unless otherwise indicated)
Reconciliation of loss from operations from continuing operations under IFRS and adjusted EBITDA from continuing operations (Non-IFRS)
| Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||
| (Restated) | (Restated) | ||||||||||||||
| Loss from operations from continuing operations under IFRS | $ | (15,371,800 | ) | $ | (11,710,874 | ) | $ | (51,906,718 | ) | $ | (66,020,488 | ) | |||
| Employee equity-settled share-based payment expenses | 2,055,858 | 3,557,088 | 10,588,944 | 26,154,915 | |||||||||||
| Depreciation and amortization | 1,564,816 | 526,005 | 6,671,022 | 2,076,858 | |||||||||||
| Other strategic financing, transactional expense and non-recurring expenses | 6,263,188 | 2,647,418 | 14,081,833 | 14,130,281 | |||||||||||
| Finance income, exchange gain or loss, net | (673,740 | ) | (419,881 | ) | (4,253,472 | ) | 191,126 | ||||||||
| Adjusted EBITDA from continuing operations (Non-IFRS) | $ | (6,161,678 | ) | $ | (5,400,244 | ) | $ | (24,818,391 | ) | $ | (23,467,308 | ) | |||
Reconciliation of gross profit from continuing operations under IFRS and adjusted gross profit from continuing operations (Non-IFRS)
| Three Months Ended December 31, | Year Ended December 31, | ||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||
| (Restated) | (Restated) | ||||||||||
| Gross profit from continuing operations under IFRS | $ | 2,684,103 | $ | 1,079,385 | $ | 8,843,818 | $ | 3,618,295 | |||
| Employee equity-settled share-based payment expenses | 11,522 | — | 11,522 | — | |||||||
| Depreciation and amortization | 309,812 | 188,154 | 1,435,709 | 501,786 | |||||||
| Adjusted gross profit from continuing operations (Non-IFRS) | $ | 3,005,437 | $ | 1,267,539 | $ | 10,291,049 | $ | 4,120,081 | |||
Reconciliation of (loss)/profit attributable to equity shareholders of Prenetics under IFRS and adjusted (loss)/profit attributable to equity shareholders of Prenetics (Non-IFRS)
| Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||
| (Restated) | (Restated) | ||||||||||||||
| (Loss)/profit attributable to equity shareholders of Prenetics under IFRS | $ | (19,047,124 | ) | $ | 1,607,942 | $ | (62,723,871 | ) | $ | (190,453,333 | ) | ||||
| Employee equity-settled share-based payment expenses | 2,055,858 | 3,241,872 | 10,588,944 | 31,580,384 | |||||||||||
| Other strategic financing, transactional expense and non-recurring expenses | 8,248,151 | 1,269,453 | 19,984,232 | 13,675,709 | |||||||||||
| Share-based payment on listing | — | — | — | 89,546,601 | |||||||||||
| Fair value loss on preference shares liabilities | — | — | — | 60,091,353 | |||||||||||
| Fair value gain on warrant liabilities | (671,550 | ) | (6,498,365 | ) | (3,351,035 | ) | (3,196,538 | ) | |||||||
| Fair value loss on financial assets at fair value through profit or loss | 3,190,379 | 7,689,311 | 7,134,786 | 9,363,495 | |||||||||||
| Restructuring costs | — | 2,709,143 | — | 30,378,741 | |||||||||||
| Adjusted (loss)/profit attributable to equity shareholders of Prenetics (Non-IFRS) | $ | (6,224,286 | ) | $ | 10,019,356 | $ | (28,366,944 | ) | $ | 40,986,412 | |||||
_____________________
3 In connection with the acquisition of ACT Genomics, the remaining shareholders of ACT Genomics - representing
4 Represents number of authorized and issued shares as follows:
| December 31, | |||
| 2023 | 2022 | ||
| Number of authorized shares of | 33,333,333 | 500,000,000 | |
| Number of issued shares | 12,205,200 | 136,983,110 | |
5 Includes equity-settled share-based payment expenses (excluding share-based payment on listing) from continuing operations as follows:
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||
| (Restated) | (Restated) | |||||||||||
| Direct costs | $ | 11,522 | $ | — | $ | 11,522 | $ | — | ||||
| Selling and distribution expenses | (632 | ) | 43,257 | 99,929 | 122,910 | |||||||
| Research and development expenses | 675,928 | 321,235 | 2,812,174 | 1,980,010 | ||||||||
| Administrative and other operating expenses | 1,339,419 | 3,152,921 | 7,572,081 | 23,810,797 | ||||||||
| Total equity-settled share-based payment expenses (excluding share-based payment on listing) | $ | 2,026,237 | $ | 3,517,413 | $ | 10,495,706 | $ | 25,913,717 | ||||
6 The acquisition of the net assets of Artisan Acquisition Corp. (“Artisan”) on May 18, 2022 does not meet the definition of a business under IFRS and has therefore been accounted for as a share-based payment. The excess of fair value of Prenetics shares issued over the fair value of Artisan’s identifiable net assets acquired represents compensation for the service of a stock exchange listing for its shares and is expensed as incurred.
7 We ceased our COVID-19 testing business entirely in 2023 Q2, and other DNA testing operations in the EMEA regions in 2023 Q4. As a result, COVID-19 testing business and the operations in the EMEA regions are reported as a discontinued operation under IFRS 5 Non-current Assets Held for Sale and Discontinued Operations. In accordance with IFRS 5, the results of the discontinued operation have been presented separately from the continuing operations in the consolidated statements of profit or loss and other comprehensive income. The comparative information in the consolidated statements of profit or loss and other comprehensive income has also been re-presented to show the results of discontinued operation separately.
FAQ
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