On April 29, 2020 WuXi AppTec Co., Ltd. (stock code: 603259.SH / 2359.HK), a company that provides a broad portfolio of R&D and manufacturing services that enable companies in the pharmaceutical, biotech and medical device industries worldwide to advance discoveries and deliver groundbreaking treatments to patients, reported its unaudited financial results for the First-Quarter 2020 ("Reporting Period") (Press release, WuXi AppTec, APR 29, 2020, View Source [SID1234556796]).
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This document serves purely as a summary and is not intended to provide a complete representation of the relevant matters. For further information, please refer to the 2020 first quarterly report and relevant announcements published on the websites of the Shanghai Stock Exchange (www.sse.com.cn) and the Stock Exchange of Hong Kong (www.hkexnews.hk), and the designated media for dissemination of the relevant information. Investors are advised to exercise caution and be aware of the investment risks in dealing in the shares of the Company.
All financials disclosed in this press release are prepared based on International Financial Reporting Standards (or "IFRS").
First-Quarter 2020 Financial Highlights
Revenue grew 15.1% year-over-year to RMB3,188 million, driven by solid growth of our China-based laboratory services and US-based laboratory services.
IFRS gross profit grew 3.9% year-over-year to RMB1,097 million. Gross profit margin was 34.4%, lower than the 38.1% achieved in the same period of 2019[2], mainly because of: (1) the COVID-19 impact on our Wuhan site and clinical research services business, and (2) an increase in share-based compensation expenses.
Non-IFRS gross profit grew 10.3% year-over-year to RMB1,224 million. Non-IFRS gross profit margin was 38.1% compared to 39.9% for the same period in 2019.
EBITDA grew 2.7% year-over-year to RMB746 million.
Adjusted EBITDA grew 22.1% year-over-year to RMB1,035 million.
IFRS net profit attributable to owners of the Company was down 21.6% year-over-year to RMB303 million. In First-Quarter 2020, we experienced a RMB105 million loss from the fair value change of our investment portfolio and a RMB84 million loss of equity pick up from our joint ventures and associates, primarily due to a decline in stock price as of March 31, 2020, of certain public companies in our investment portfolio. During the same period in 2019, we reported a RMB189 million loss from the fair value change of our investment portfolio and a RMB181 million gain of equity pick up from our joint ventures and associates.
Adjusted non-IFRS net profit attributable to owners of the Company grew 10.8% year-over-year to RMB576 million.
Adjusted diluted non-IFRS EPS increased by 9.4% to RMB0.35 versus the same period last year, while diluted EPS was down 25.0% to RMB0.18.[3]
[1] In the three months ended March 31, 2019 and three months ended March 31, 2020, we had a fully-diluted weighted average share count of 1,630 million and 1,638 million ordinary shares, respectively.
[2] If prepared under Accounting Standard for Business Enterprises of PRC, the gross profit grew 4.0% year-over-year to RMB1,098 million. Gross profit margin was 34.5%, lower than the 38.1% achieved during the same period in 2019.
[3] In the three months ended March 31, 2019 and three months ended March 31, 2020, we had a fully-diluted weighted average share count of 1,630 million and 1,638 million ordinary shares, respectively.
Management Comment
Dr. Ge Li, Chairman and CEO of WuXi AppTec, said, "We achieved solid growth in the first quarter of 2020, in spite of the COVID-19 impact on our Wuhan site, which was closed for almost two months, and dramatically reduced activities in our China clinical research services business. Our revenue grew 15.1% year-over-year to RMB3,188 million and our adjusted Non-IFRS net profit grew 10.8% year-over-year to RMB576 million, which was attributable to the timely implementation of our Business Continuity Plan. We maintained and continue to be in close communication with our global customers through video conferencing."
"For the three months ended March 31, 2020, we added over 240 new customers, including 128 global customers, and our number of active customers continued to exceed 3,900. We also continued to make progress across all business segments. As of March 31, 2020, our small molecule CDMO/CMO pipeline has grown to more than 1,000 active projects, including 42 projects in Phase III clinical trials and 22 in commercial manufacturing, and our cell and gene therapies CDMO business provided services for 35 clinical stage projects, including 24 projects in Phase I and 11 projects in Phase II/III. During the Reporting Period, our success-based drug discovery unit filed INDs for 6 new-chemical-entities for our customers and obtained 5 CTAs. As of March 31, 2020, we have cumulatively submitted 91 new-chemical-entities IND filings for our customers and obtained 62 CTAs."
Dr. Ge Li concluded, "The fundamentals of our business remain very strong. Our laboratories and facilities in China are fully operational and we expect to deliver a strong second quarter. Due to the spread of COVID-19 in the United States, our US operations will be negatively impacted in the second quarter, however, we expect the continued implementation of our Business Continuity Plan to mitigate some of this impact. We are determined to navigate through the COVID-19 crisis in partnership with our global customers, and to assume an even greater responsibility for keeping the R&D and manufacturing engine humming. We are confident that we will win back 2020 and deliver another year of strong growth."
First-Quarter 2020 Adjusted Non-IFRS Results
First-Quarter 2020 adjusted non-IFRS net profit attributable to owners of the Company grew 10.8% year-over-year to RMB576 million. This adjusts for share-based compensation expenses, listing expenses and convertible bonds issuance expenses, fair value gain or loss from conversion option of convertible bonds, foreign exchange-related effects, amortization of intangible assets acquired in business combinations, realized/unrealized gains or losses from our venture investments and realized/unrealized gains or losses from our joint ventures.