GWEST Corporation, which is being strangled by mounting losses, is divesting itself of its laboratory operations to focus on its medical operations and real estate business lines.
The Montego Bay-based medical and real estate company, which was started by a group of Jamaican medical and business professionals led by Dr Konrad Kirlew, has entered into a strategic partnership arrangement with laboratory service provider Microlabs, which will be running the day-to-day operations of GWest Laboratory.
Both parties have signed a memorandum of understanding to transfer the management of GWest Laboratory, also based in the second city, to Microlabs effective Tuesday, March 2, 2021. Microlabs has been in the private medical laboratory business for over 45 years and is ISO-compliant, thereby giving GWest Laboratory greater levels of recognition with the added benefit of Microlabs’ operators being internationally certified.
NEW DEVELOPMENT COMES AMID MOUNTING FINANCIAL LOSSES
This new development comes at a time when GWest Corporation has been undergoing financial challenges, reporting quarter after quarter losses over the past year and a half. In seeking to justify the move, however, GWest reports that this arrangement will result in a wider range of diagnostics laboratory services being offered at the facility.
According to a statement released to the Jamaica Stock Exchange, where its shares have been trading since being listed in late 2017, GWest argued that divesting the operations of its laboratory services to Microlabs will result in “improved service delivery and patient care to the Montego Bay and western region, as well as the realisation of a complete health service delivery network”.
In addition, the partnership should result in increased service availability to persons covered by insurance plans as well as increased revenue for stakeholders. GWest reports that it “continues to pursue partnerships with key health care and medical services in order to develop our strategic plan to be a one-stop health care facility for western Jamaica”.
LOSSES CONTINUE TO MOUNT
For the December 2020 quarter GWest managed to cut its losses by $7.86 million, or 34.46 per cent, to $13.12 million. For the nine-month period ended December 31, 2020 the year-to-date losses have amounted to $50.1 million coming from $63.15 million for the corresponding period in 2019, representing a 21 per cent reduction.
Revenues for the December 2020 quarter was flat at $32.5 million compared to $32.9 million for the comparable quarter in 2019 however, revenues from leases increased quarter over quarter. But revenues from patient fees continue to underperform due to the reduction in economic and business activity brought on by the onset of the novel coronavirus pandemic.