Prenetics Announces Second Quarter 2022 Financial Results and Raises Full Year Adjusted EBITDA Outlook

  • Revenue of US$51.7 million in the second quarter of 2022
  • Loss from operations of US$(17.9) million and adjusted EBITDA1 of US$6.5 million in the same period
  • Raises full year adjusted EBITDA guidance to the range of US$35 million to US$45 million, with corresponding full year revenue guidance in the range of US$255 million to US$275 million
  • Strong cash and cash equivalents, short-term financial assets, trade receivables, deposits, prepayments and other receivables of US$215.3 million on balance sheet as of June 30, 2022
  • Successfully launched two pipeline products, ColoClear and Circle SnapShot in the period, growing Prenetics beyond COVID-19 testing services
  • Prenetics and Animoca Brands, the pioneer in Web3 signed an agreement to form a joint venture to create a decentralized digital health data platform on the Metaverse. Additional details to be announced in the fourth quarter of 2022

LONDON and HONG KONG, Sept. 09, 2022 (GLOBE NEWSWIRE) -- Prenetics Global Limited (NASDAQ: PRE) (“Prenetics” or the “Company”), a global leader in genomic and diagnostic testing, today announced its unaudited financial results for the second quarter ended June 30, 2022.

Danny Yeung, CEO & Co-founder of Prenetics, said, The current and next fiscal year are critical periods of transformative growth for Prenetics. With the full support of our management and board we have put into motion a sensible strategic plan which guides us in achieving our mission to decentralize healthcare. In doing so, we aim to further grow our business beyond diagnostic testing by penetrating prevention and personalized care segments.

At present, our genetics and diagnostics testing services continue to be our strongest offering. The diagnostics segment is a major contributor to our total revenues and places us into a strong position to execute on our diversification initiatives through M&A. Organically, we expanded our product pipeline through the launch of ColoClear, a non-invasive stool DNA test for the early detection of colorectal cancer and Circle SnapShot, an at-home painless blood test, two major initiatives in placing the control of health into consumers’ hands while in the comfort of their homes. At a global level, we continue to be in deep discussions with various M&A targets, especially in the areas of telehealth, personalized care and specialized clinics. The synergies which we believe we can build upon are expected to provide us the tools needed to build the world’s first global end-to-end healthcare ecosystem.”

Second Quarter 2022 Financial and Operational Highlights

  • Revenue was US$51.7 million for the second quarter of 2022
  • Loss from operations was US$(17.9) million for the second quarter of 2022. Included in the loss were employee equity-settled share-based payment expenses of US$13.0 million and other strategic financing, transactional expense and non-recurring expenses of US$8.8 million
  • Gross margin was 42% for the second quarter of 2022
  • Adjusted EBITDA was US$6.5 million for the second quarter of 2022
  • Maintained strong balance sheet with cash and cash equivalents, short-term financial assets, trade receivables, deposits, prepayments and other receivables of US$215.3 million to support M&A and strategic growth initiatives
  • Ease of quarantine policy globally accelerated resumption of travel and continued COVID-19 testing service volumes, with further momentum into the third and fourth quarter of 2022
  • Significant progress with M&A discussions and geographic expansion
  • Robust organic growth - official launch of ColoClear in June 2022 and Circle SnapShot in August 2022. Pipeline product Pet DNA expected to be launched in the fourth quarter of 2022
  • Prenetics has performed and delivered more than 23 million laboratory and at-home COVID-19 tests globally as of June 30, 2022

First Half 2022 Financial Highlights

  • Revenue was US$143.8 million for the six months ended June 30, 2022, compared to US$136.5 million for the six months ended June 30, 2021, representing an increase of 5% year-over-year, on track to beat FY2022 guidance
  • Loss from operations was US$(18.4) million for the six months ended June 30, 2022 compared to profit from operations of US$25.9 million for the six months ended June 30, 2021. Included in the loss were employee equity-settled share-based payment expenses of US$22.3 million and other strategic financing, transactional expense and non-recurring expenses of US$10.5 million
  • Gross margin was 40% for the six months ended June 30, 2022 compared to 42% for the six months ended June 30, 2021
  • Adjusted EBITDA was US$19.3 million for the six months ended June 30, 2022 compared to US$32.6 million for the six months ended June 30, 2021, achieving full year adjusted consensus estimates

Financial Outlook

Prenetics provides guidance based on current market conditions and expectations for revenue and adjusted EBITDA, which is a non-IFRS financial measure.

For the third quarter of 2022, we expect:

  • Revenue to be in the range of US$65 million to US$70 million
  • Adjusted EBITDA to be in the range of US$15 million to US$20 million

About Prenetics

Founded in 2014, Prenetics is a major global diagnostics and genetic testing company with the mission to bring health closer to millions of people globally and decentralize healthcare by making the three pillars — Prevention, Diagnostics and Personalized Care — comprehensive and accessible to anyone, at anytime and anywhere. Prenetics is led by visionary entrepreneur, Danny Yeung, with operations across 9 locations, including United Kingdom, Hong Kong, India, South Africa, and Southeast Asia. Prenetics develops consumer genetic testing and early colorectal cancer screening; and provides COVID-19 testing, rapid point of care and at-home diagnostic testing and medical genetic testing. To learn more about Prenetics, visit www.prenetics.com.

Enquires:

Investors:
investors@prenetics.com

Media:
Strategic Public Relations Group
Vicky Lee+852 2864 4834Email: vicky.lee@sprg.com.hk
Corinne Ho+852 2114 4911Email: corinne.ho@sprg.com.hk
Holly Szeto+852 2864 4853Email: holly.szeto@sprg.com.hk
www.sprg.com.hk  

Forward-Looking Statements

This document contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act that are based on beliefs and assumptions and on information currently available to Prenetics, and also contains certain financial forecasts and projections.

All statements other than statements of historical fact contained in this document, including, but not limited to, statements about Prenetics’ future results of operations and financial position, plans for new product development and geographic expansion, objectives of management for future operations, projections of market opportunity and revenue growth, competitive position, and technological and market trends, are forward-looking statements. In some cases, you can identify forward-looking statements by the following words: "may," "will," "could," "would," "should," "expect," "intend," "plan," "anticipate," "believe," "estimate," "predict," "project," "potential," "continue," "ongoing," "target," "seek" or the negative or plural of these words, or other similar expressions that are predictions or indicate future events or prospects, although not all forward-looking statements contain these words. These statements are based upon estimates and forecasts and reflect the views, assumptions, expectations, and opinions of Prenetics, which involve inherent risks, uncertainties and other factors that may cause actual results, levels of activity, performance or achievements to be materially different from those expressed or implied by these forward-looking statements. Any such estimates, assumptions, expectations, forecasts, views or opinions, whether or not identified in this document, should be regarded as indicative, preliminary and for illustrative purposes only and should not be relied upon as being necessarily indicative of future results. A number of risks and uncertainties could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to: changes in applicable laws or regulations applicable to Prenetics; developments related to the COVID-19 pandemic; the regulatory environment and changes in laws, regulations or policies in which Prenetics operate; Prenetics’ ability to successfully compete in highly competitive industries and markets; Prenetics’ ability to continue to adjust its offerings to meet market demand; Prenetics’ ability to attract customers to choose its products and services and grow its ecosystem; political instability in the jurisdictions in which Prenetics operates; the overall economic environment and general market and economic conditions in the jurisdiction in which Prenetics operates; and Prenetics’ ability to execute its strategies, manage growth and maintain its corporate culture as it grows. In addition to the foregoing factors, you should also carefully consider the other risks and uncertainties included in Prenetics’ filings with the U.S. Securities and Exchange Commission (the “SEC”) from time to time.

Forward-looking statements speak only as of the date they are made. Prenetics does not undertake any obligation to update any forward-looking statement, whether as a result of new information, future developments, or otherwise, except as required under applicable law.

Website

Prenetics intends to use its website as a distribution channel of material company information. Financial and other important information regarding the Company is routinely posted on and accessible through the Company’s website at https://www.prenetics.com/. Accordingly, we recommend you to monitor the investor relations portion of our website at https://ir.prenetics.com/ in addition to following our press releases, SEC filings, and public conference calls and webcasts. In addition, you may automatically receive email alerts and other information about the Company when you enroll your email address by visiting the “Request Email Alerts” section of our investor relations page at https://ir.prenetics.com/. However, the additional information contained on our website is not part of our SEC filings.

Basis of Presentation

Unaudited Financial Information and 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 Financial Information and Non-IFRS Financial Measures.”

Unaudited Financial Information and 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, adjusted gross profit and adjusted profit for the period. 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 operating results (1) Equity-settled share-based payment expenses, (2) depreciation and amortization, (3) finance income and exchange gain or loss, and (4) other discretionary items determined by management. 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 under IFRS and Adjusted EBITDA (Non-IFRS)”, “Reconciliation of Gross Profit under IFRS and Adjusted Gross Profit (Non-IFRS)” and “Reconciliation of Loss attributable to equity shareholders of Prenetics under IFRS and Adjusted Profit for the period (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)
         
 June 30,  March 31,  December 31, 
 2022  2022  2021 
 $  $  $ 
         
Assets        
Property, plant and equipment12,863,570  13,889,642  13,037,192 
Intangible assets21,675,333  23,866,729  23,826,282 
Goodwill3,538,599  3,841,604  3,978,065 
Deferred tax assets4,983  82,387  79,702 
Deferred expenses8,538,212  -  - 
Other non-current assets449,651  637,816  693,548 
Non-current assets47,070,348  42,318,178  41,614,789 
Inventories11,296,467  15,684,851  6,829,226 
Trade receivables42,634,854  59,248,964  47,041,538 
Deferred expenses4,553,370  -  - 
Deposits, prepayments and other receivables11,563,328  8,162,554  7,817,756 
Amounts due from related companies-  9,670  9,060 
Financial assets at fair value through profit or loss26,746,657  9,906,000  9,906,000 
Cash and cash equivalents134,379,603  34,246,918  35,288,952 
Current assets231,174,279  127,258,957  106,892,532 
Total assets278,244,627  169,577,135  148,507,321 
         
Liabilities        
Deferred tax liabilities596,151  740,057  659,498 
Preference shares liabilities-  517,102,888  486,404,770 
Warrant liabilities8,311,000  -  - 
Lease liabilities3,066,826  3,242,210  3,600,232 
Non-current liabilities11,973,977  521,085,155  490,664,500 
Trade payables8,571,871  14,216,664  9,979,726 
Accrued expenses and other current liabilities14,735,987  31,374,348  36,280,298 
Contract liabilities9,762,974  11,548,746  9,587,245 
Lease liabilities1,874,093  1,503,240  1,666,978 
Bank loans9,201,820  12,076,364  - 
Tax payable3,121,962  2,807,049  1,223,487 
Current liabilities47,268,707  73,526,411  58,737,734 
Total liabilities59,242,684  594,611,566  549,402,234 
         


 
PRENETICS GLOBAL LIMITED
Unaudited consolidated statements of financial position
(Expressed in United States dollars unless otherwise indicated)
         
 June 30,  March 31,  December 31, 
 2022  2022  2021 
 $  $  $ 
    
Equity   
Share capital (US$0.0001 par value, 500,000,000   
shares authorized and 110,979,347 shares issued   
(March 31, 2022: US$0.0001 par value, 500,000,000   
shares authorized and 14,932,033 shares issued;   
December 31, 2021: US$0.0001 par value,   
500,000,000 shares authorized and 14,932,033   
shares issued))11,098  1,493  1,493 
Reserves219,075,867  (424,950,903) (400,811,431)
Total equity/(equity deficiency) attributable to equity   
shareholders of the Company219,086,965  (424,949,410) (400,809,938)
Non-controlling interests(85,022) (85,021) (84,975)
Total equity/(equity deficiency)219,001,943  (425,034,431) (400,894,913)
Total equity and liabilities278,244,627  169,577,135  148,507,321 
         


 
PRENETICS GLOBAL LIMITED
Unaudited consolidated statements of profit or loss and other comprehensive income
(Expressed in United States dollars unless otherwise indicated)
  
 For the six months ended
 June 30,  June 30, 
 2022  2021 
 $  $ 
   
Revenue143,760,317  136,477,480 
Direct costs(86,027,559) (79,851,389)
Gross profit57,732,758  56,626,091 
Other income and other net (losses)/gains(585,339) 356,043 
Selling and distribution expenses (included employee equity-settled 
share-based payment expenses of $39,642 (2021: $5,853))(8,402,422) (6,283,243)
Research and development expenses (included employee equity-settled 
share-based payment expenses of $2,897,319 (2021: $699,028))(8,664,734) (2,933,491)
Administrative and other operating expenses (included employee 
equity-settled share-based payment expenses of $19,213,164  
(2021: $2,566,014))(58,528,531) (21,889,982)
(Loss)/profit from operations(18,448,268) 25,875,418 
Fair value loss on financial assets at fair value through profit or loss(1,659,343) - 
Share-based payments on listing2(89,546,601) - 
Fair value loss on convertible securities-  (29,054,669)
Fair value loss on preference shares liabilities(60,091,353) - 
Fair value loss on warrant liabilities(1,539,577) - 
Other finance costs(3,939,574) (422,356)
Loss before taxation(175,224,716) (3,601,607)
Income tax expense(1,938,375) (4,258,869)
Loss for the period(177,163,091) (7,860,476)
Other comprehensive income for the period  
Item that may be reclassified subsequently to profit or loss:  
Exchange difference on translation of:  
- financial statements of subsidiaries and a joint venture  
outside Hong Kong(4,775,936) (147,833)
Total comprehensive income for the period(181,939,027) (8,008,309)
Loss attributable to:  
Equity shareholders of Prenetics(177,163,044) (7,855,358)
Non-controlling interests(47) (5,118)
 (177,163,091) (7,860,476)
Total comprehensive income attributable to:  
Equity shareholders of Prenetics(181,938,980) (8,003,191)
Non-controlling interests(47) (5,118)
 (181,939,027) (8,008,309)
   


 
PRENETICS GLOBAL LIMITED
Unaudited consolidated statements of profit or loss and other comprehensive income
(Expressed in United States dollars unless otherwise indicated)
  
 For the six months ended
 June 30,  June 30, 
 2022  2021 
 $  $ 
Loss per share  
Basic loss per share(3.57) (0.26)
Diluted loss per share(3.57) (0.26)
   
Weighted average number of common shares:  
Basic49,616,648  30,396,578 
Diluted49,616,648  30,396,578 
      


 
PRENETICS GLOBAL LIMITED
Unaudited consolidated statements of profit or loss and other comprehensive income
(Expressed in United States dollars unless otherwise indicated)
  
 For the three months ended
 June 30,  March 31,  June 30, 
 2022  2022  2021 
 $  $  $ 
    
Revenue51,716,268  92,044,049  79,023,326 
Direct costs(30,021,343) (56,006,216) (44,332,377)
Gross profit21,694,925  36,037,833  34,690,949 
Other income and other net losses(556,328) (29,011) (74,125)
Selling and distribution expenses (included employee   
equity-settled share-based payment expenses   
of $30,150 (March 31, 2022: $9,492;   
June 30, 2021: $4,316))(3,119,276) (5,283,146) (3,928,747)
Research and development expenses (included   
employee equity-settled share-based payment   
expenses of $1,647,701 (March 31, 2022:   
$1,249,618; June 30, 2021: $791,495))(4,843,244) (3,821,490) (1,640,316)
Administrative and other operating expenses   
(included employee equity-settled share-based   
payment expenses in $11,316,433 (March 31, 2022:   
$7,896,731; June 30, 2021: $2,381,565))(31,073,684) (27,454,847) (14,228,784)
(Loss)/profit from operations(17,897,607) (550,661) 14,818,977 
Fair value loss on financial assets at fair value   
through profit or loss(1,659,343) -  - 
Share-based payment on listing(89,546,601) -  - 
Fair value loss on convertible securities-  -  (21,788,577)
Fair value loss on preference shares liabilities(31,815,352) (28,276,001) - 
Fair value loss on warrant liabilities(1,539,577) -  - 
Other finance costs(1,447,778) (2,491,796) (387,269)
Loss before taxation(143,906,258) (31,318,458) (7,356,869)
Income tax expense(270,937) (1,667,438) (2,418,181)
Loss for the period(144,177,195) (32,985,896) (9,775,050)
Other comprehensive income for the period   
Item that may be reclassified subsequently to   
profit or loss:   
Exchange difference on translation of:   
- financial statements of subsidiaries and a joint   
venture outside Hong Kong(4,245,198) (530,738) (144,558)
Total comprehensive income for the period(148,422,393) (33,516,634) (9,919,608)
         


 
PRENETICS GLOBAL LIMITED
Unaudited consolidated statements of profit or loss and other comprehensive income
(Expressed in United States dollars unless otherwise indicated)
   
 For the three months ended
 June 30,  March 31,  June 30, 
 2022  2022  2021 
 $  $  $ 
    
Loss attributable to:   
Equity shareholders of Prenetics(144,177,194) (32,985,850) (9,772,377)
Non-controlling interests(1) (46) (2,673)
 (144,177,195) (32,985,896) (9,775,050)
Total comprehensive income attributable to:  
Equity shareholders of Prenetics(148,422,392) (33,516,588) (9,916,935)
Non-controlling interests(1) (46) (2,673)
 (148,422,393) (33,516,634) (9,919,608)
Loss per share   
Basic loss per share(2.91) (1.06) (0.32)
Diluted loss per share(2.91) (1.06) (0.32)
    
Weighted average number of common shares:  
Basic49,616,648  31,207,949  30,396,578 
Diluted49,616,648  31,207,949  30,396,578 
         


 
PRENETICS GLOBAL LIMITED
Unaudited Financial Information and Non-IFRS Financial Measures
(Expressed in United States dollars unless otherwise indicated)
 
Reconciliation of (Loss)/profit from Operations under IFRS and Adjusted EBITDA (Non-IFRS)
     
 For the six months ended
   
 June 30,  June 30,    
 2022  2021    
 $  $    
     
(Loss)/profit from operations under IFRS(18,448,268) 25,875,418    
Employee equity-settled share-based payment expenses22,344,081  3,537,228    
Depreciation and amortization4,102,685  2,362,372    
Other strategic financing, transactional expense   
and non-recurring expenses10,549,874  1,195,386    
Finance income, exchange gain or loss, net703,368  (321,377)   
Adjusted EBITDA (Non-IFRS)19,251,740  32,649,027    
     
 For the three months ended
 June 30,  March 31,  June 30, 
 2022  2022  2021 
 $  $  $ 
     
(Loss)/profit from operations under IFRS(17,897,607) (550,661) 14,818,977 
Employee equity-settled share-based payment   
expenses12,966,966  9,377,115  3,290,531 
Depreciation and amortization1,947,390  2,155,295  1,234,547 
Other strategic financing, transactional expense   
and non-recurring expenses8,854,689  1,695,185  692,702 
Finance income, exchange gain or loss, net671,596  31,772  75,958 
Adjusted EBITDA (Non-IFRS)6,543,034  12,708,706  20,112,715 
     
Reconciliation of Gross Profit under IFRS and Adjusted Gross Profit (Non-IFRS)
     
 For the six months ended
   
 June 30,  June 30,    
 2022  2021    
 $  $    
     
Gross profit under IFRS57,732,758  56,626,091    
Depreciation and amortization863,103  448,441    
Adjusted gross profit (Non-IFRS)58,595,861  57,074,532    
         
 For the three months ended
 June 30,  March 31,  June 30, 
 2022  2022  2021 
 $  $  $ 
     
Gross profit under IFRS21,694,925  36,037,833  34,690,949 
Depreciation and amortization445,484  417,619  243,049 
Adjusted gross profit (Non-IFRS)22,140,409  36,455,452  34,933,998 
         


 
PRENETICS GLOBAL LIMITED
Unaudited Financial Information and Non-IFRS Financial Measures
(Expressed in United States dollars unless otherwise indicated)
 
Reconciliation of Loss attributable to equity shareholders of Prenetics under IFRS and Adjusted profit for the period (Non-IFRS)
    
 For the six months ended
  
 June 30,  June 30,   
 2022  2021   
 $  $   
    
Loss attributable to equity shareholders   
of Prenetics under IFRS(177,163,044) (7,855,358)  
Employee equity-settled share-based payment expenses22,344,081  3,537,228   
Other strategic financing, transactional expense   
and non-recurring expenses10,549,874  1,195,386   
Share-based payment on listing89,546,601  -   
Fair value loss on convertible securities-  29,054,669   
Fair value loss on preference shares liabilities60,091,353  -   
Fair value loss on warrant liabilities1,539,577  -   
Fair value loss on financial assets at fair value   
through profit or loss1,659,343  -   
Adjusted profit for the period (Non-IFRS)8,567,785  25,931,925   
    
 For the three months ended
 June 30,  March 31,  June 30, 
 2022  2022  2021 
 $  $  $ 
    
Loss attributable to equity shareholders   
of Prenetics under IFRS(144,177,194) (32,985,850) (9,772,377)
Employee equity-settled share-based payment   
expenses12,966,966  9,377,115  3,290,531 
Other strategic financing, transactional expense   
and non-recurring expenses8,854,689  1,695,185  692,702 
Share-based payment on listing89,546,601  -  - 
Fair value loss on convertible securities-  -  21,788,577 
Fair value loss on preference shares liabilities31,815,352  28,276,001  - 
Fair value loss on warrant liabilities1,539,577  -  - 
Fair value loss on financial assets at fair value   
through profit or loss1,659,343  -  - 
Adjusted profit for the period (Non-IFRS)2,205,334  6,362,451  15,999,433 
         

______________________________
1 Adjusted EBITDA (non-IFRS) represents (loss)/profit from operations under IFRS before equity-settled share-based payment expenses, depreciation and amortization, other strategic financing, transactional expense and non-operating recurring expense, and finance income, exchange gain or loss. See the section titled “Unaudited Financial Information and Non-IFRS Financial Measures” and the table captioned “Reconciliation of (Loss)/Profit from Operations under IFRS and Adjusted EBITDA (Non-IFRS)” for more details.
2 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.