The cost containment strategies rolled out at Elite Diagnostic in 2023 are working, resulting in the medical diagnostic company cutting its losses.

For the second quarter ended December 2024, the strategies continue to yield appreciable results. For the reporting period, Elite Diagnostic generated a gross profit amounting to J$149 million, representing a 15 per cent increase over the comparative figure of J$139.9 million during the 2023 quarter. 

The performance resulted in an improvement in the gross profit margin of two percentage points. Overall, the performance for the quarter resulted in a net loss of J$6.2 million, which is an improvement over the loss of J$9.03 million for the comparative quarter of 2023.

For the period under review, Elite Diagnostic reported revenues of J$198.9 million, reflecting an increase of J$23.2 million or 13.2 per cent above the J$175.7 million reported in 2023. This growth can be attributed mainly to greater machine uptime in this quarter when compared to the prior year.

Admin expenses trending up

The business continues to execute cost-reduction strategies, yielding appreciable results, however,m administrative expenses went up by J$13.7 million or 14.5 per cent, with the main contributors being increases in repairs and maintenance and salary hikes.

On the balance sheet, Elite Diagnostic’s receivables rose J$150 million, which is mainly due to extensive delays in the settlement of invoices by one major user of its services. The build-up in receivables has placed undue pressure on the business as it seeks to navigate the challenges of the current environment. 

The company says there is no dispute surrounding the balances owed and continues to engage with clients as it seeks to have them settle the outstanding amounts. Total assets closed on J$999.9 million compared to just one billion for the corresponding period in 2023, resulting from the reduction in the book value of some fixed assets. 

Total liabilities amounted to J$506 million compared to J$577 million in 2023, as long-term debt continues to be amortized as scheduled. There are plans to be finalised which, when successfully implemented, will result in increased capacity to generate additional revenues. 

The company highlights that the direct costs to achieve this will not change the costing model in any significant manner.