Image Plus posts $16 million loss as operating costs surge in Q2

Image Plus Consultants Limited which provides MRI medical scans made a $16 million loss in its second-quarter ending August 2024 as its operating costs rocketed during the quarter.

It was also empty on cash ending the quarter in negative $12.5 million in cash and equivalent. That's coming from $110 million in cash a year earlier.

Higher staff costs and depreciation related to its new scanning equipment resulted in the company burning through cash in the period. It reflects the wider difficulty in the micro economy as other firms are also posting losses.

The company recorded a 3.4 per cent decline in revenues for the quarter to $245.3 million, compared to the same period in the previous year. Over the six-month-period ending August 2024, total revenues amounted to $539 million, representing a 2.8 per cent decrease from the prior year.

"We are also actively scanning the market for inorganic growth opportunities that would add value to our performance," the company said.

The company’s management said that the shortfall was attributed to a 6.0 per cent reduction in scan volumes, with the total number of scans dropping to 26,955 during the review period.

 “Despite the desired build-out of modalities, we have not achieved the targeted growth in revenue from our diversified revenue streams,” said the company. “We continue to take a very clinical approach to review actions needed to achieve the desired mix of scans by modality and source private versus public patients.”

Several operational challenges contributed to this underperformance. Key among them were issues with the company's CT-scan modalities, particularly at the Ocho Rios and Winchester branches, where machine downtime impacted scan volumes. Both branches experienced delays in receiving replacement parts for their CT units, further exacerbating the revenue shortfall. Additionally, the decision to retire the malfunctioning 129Pro CT unit led to the consolidation of services at Winchester, which extended its operating hours to meet patient demand.

Moreover, newer services such as MRI and Mammography scans, launched in August 2023 and February 2024 respectively, have not yet reached expected performance levels, the company stated. While there is strong demand for MRI services, the company continues to optimize volumes to match projected revenue targets.

Similarly, Mammography volumes have been lower than expected, particularly in the competitive Kingston and St Andrew market.