Q & M Dental Singapore : Press Release (403 KB)

MEDIA RELEASE

FOR IMMEDIATE RELEASE

Q & M Dental's Core Healthcare1 Average revenue growth over the past 5 years of 9% per annum with revenue at all time high of S$42.2m for three months ended September 2022 (3Q2022)

• Group total revenue of S$133.4m and profit after tax of S$13.5m for nine months ended 30 September 2022 (9M2022)
• Core Healthcare Revenue growth remains respectable despite COVID-19 pandemic receding, with third quarter (3Q) and nine- months (9M) comparisons
• Strategy going forward is to combine growth with productivity and cost optimisation for all clinics

SINGAPORE, 13 November 2022 - Mainboard-listed Q & M Dental Group (Singapore) Limited (hereinafter, "Q & M" and "Company") today reported total revenue of S$133.4 million and profit after tax attributable to parent ("PATMI") of S$13.5 million for nine months ended 30 September 2022 ("9M2022"). The Group Earnings before interest, tax, depreciation, amortisation ("EBITDA) for 9M2022 was S$31.3 million.

For the 9M2022, Core Healthcare revenue increased 3% to S$125.9 million and Core Healthcare EBITDA increased by 5% to S$30.4 million.

A comparison of 3Q Core Healthcare Revenue (ie 3Q2018, 3Q2019, 3Q2020, 3Q2021, 3Q2022) with longer term indicator 9M Core Healthcare Revenue (ie 9M2018, 9M2019, 9M2020, 9M2021, 9M2022) reaffirms that core healthcare revenue exhibits a secular uptrend. See Charts 1A and 1B in Annex A.

1 Core Healthcare Business excludes contributions from the Group's medical laboratory, share of profit from disposal of associate, Aidite, and expenses incurred on the development of the Group's digital Artificial Intelligence

(AI) guided clinical decision support system as well as rental rebates received from the Singapore Government.

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Table 1: Financial Highlights

	Period ended			3Q2022			3Q2021			Change			9M2022			9M2021			Change
	30 Sep S$'000
Group's Total	42,521		57,734		-26%		133,431		152,305		-12%
Revenue
-Core
Healthcare	42,203		41,399		+2%		125,932		122,455		+3%
Business
Revenue
-Other Business	318		16,335		-98%		7,499		29,850		-75%
Group's Total	9,422		21,377		-56%		31,293		52,867		-41%
EBITDA
-Core
Healthcare	10,065		10,513		-4%		30,418		29,108		+5%
EBITDA
Group's Profit	3,610		9,512		-62%		13,459		27,306		-51%
After Tax & MI
(PATMI)
-Core
Healthcare	4,257		5,147		-17%		13,691		14,220		-4%
Business PATMI

For the Other Business segment, revenue contributions from the Group's medical laboratory business dropped significantly, with lesser demand for COVID-19 testing following changes in Singapore's policies on COVID-19 management, as well as the reduction in COVID-19 test prices to maintain competitiveness in the market.

As at 30 September 2022, the Group's financial position remains strong with Net Assets of S$96.9 million, as well as cash and cash equivalents of S$36.5 million.

Q & M Chief Executive Officer Dr Ng Chin Siau (黄震霄医生) said, "Our Core Healthcare business remains resilient with good prospects for growth. Revenue has come in above S$40m for the eight consecutive quarters and it will continue to be the key contributor to the Group's revenue and profitability going forward.

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"While the COVID-19 pandemic is now very much part of everyday life in Singapore, the economy is being buffeted by inflationary pressures, high interest rates and the possibility of a global recession in 2023/2024.

At Q & M Group, we are mindful of these challenges, but we will continue to invest in our people first and foremost. We will not let up in developing the key talent within the Group to ensure the long-term success of Q&M. We are also growing our footprint in Singapore, Malaysia, and other parts of South-East Asia when good opportunities arise.

Dr Ng continued, "With our strategic investments in Artificial Intelligence for our dental business, we are also creating a larger moat between our competitors and ourselves.

The future of dentistry lies in combining the dentist's domain expertise and valuable experience with AI's data-centric analysis and ability to generate holistic dental healthcare plans that are specifically tailored to individual needs.

This results in better patient management outcome and care which are the main objectives of all medical practice"

Taking into consideration our competitive advantages, we are cautiously optimistic on the outlook of our core Healthcare Business.

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3Q2022 Core Business Healthcare- Financial Performance

Revenue from Core Healthcare Business increased modestly by 2% from S$41.4 million for the three months ended 30 September 2021 ("3Q2021") to S$42.2 million for the three months ended 30 September 2022 ("3Q2022") mainly due to the organic growth of opening new dental clinics in Singapore the last 12 months.

Operational Update and Recent Developments

Dr Raymond Ang, Chief Operating Officer said, "Going forward our emphasis will be to optimise the productivity of each clinic. There will be internal Key Performance Indicators to monitor, and data analytics will enable us to have a profile of each clinic in terms of Revenue, Utilisation, CAPEX, and OPEX. We will then implement measures to optimise productivity. As the Group grows, increasing productivity instead of merely increasing the number of clinics will play an important part in ensuring sustainable growth."

1. Dental Operations (Singapore and Malaysia)

Q &M Currently has 152 dental clinics, of which 106 are located in Singapore and 45 in Malaysia and 1 in PRC China. (See Table 2 below)

The Group plans to open 2 new clinics in Singapore in the subsequent quarter. In Malaysia, the Group operates 45 clinics with 17 clinics in Johor, 9 clinics in Kuala Lumpur, 12 clinics in Selangor, 4 clinics in Melaka and 3 clinics in Negeri Sembilan.

Table 2: Number of Dental and Medical Clinics (Singapore*, Malaysia, China PRC)

	As at	As at	Variance
	30 Sep 2022	30 Sep 2021	Growth
	(Present)		Last 12 months
Singapore-Dental	106	90	+16 Dental Clinics		+18%
Singapore-Medical	5	5	-		-
Malaysia	45	37	+8 Dental Clinics		+22%
China PRC	1	1	-		-

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2. Performance Shares Awarded as a Retention Exercise

In September 2022, the Group announced the award of 2,014,245 shares to 7 promising next-generation dentists, who also signed 12-year service agreements, as part of the Q

• M Performance Share Plan ("PSP") 2018, as well as the proposed placement of an additional 4,985,755 treasury shares, totalling S$1,750,000, through placement to the same dentists. The PSP 2018 and proposed placement shares was completed on 20 October 2022.

3. Medical Laboratory Wins Ministry of Health ("MOH") Tender for Operation of a Joint Testing and Vaccination Center ("JTVC")

On 11 October 2022, the Group announced that the Group's 51%-owned subsidiary, Acumen Diagnostics Pte. Ltd. ("Acumen") won a Singapore MOH tender for the operation of one of the sites allocated for Joint Testing Vaccination Centres (JTVCs). The operation of JTVCs by the private medical sector is part of the Government's policy and effort to provide the public with efficient and convenient access to COVID-19 booster shot vaccinations.

Acumen's 15-months contract commences on 1 October 2022 and ends on 31 December 2023, with actual operations starting from 2 November 2022. The value of the contract over the period is estimated to be worth at least S$3.6 million.

In the last few months, Acumen has launched a new series of PCR (Polymerase Chain Reaction) tests: (1) AcuSept that will rapidly detect sepsis based on specific mRNA biomarkers in the blood; (2) Unyvero HPN that can rapidly detect bacteria with their associated antibiotics resistance profile in patients with severe pneumonia.

4. Awards Received

In September 2022, Q & M was conferred the title of "Champion of Good" by the National Volunteer and Philanthropy Centre (NVPC). This is an award under the Company of Good that recognises organisations that are exemplary in doing good and are also a multiplier by engaging their partners and stakeholders on a collaborative journey toward doing good.

In October 2022, Q & M received the Most Transparent Company (Healthcare) Award at the Securities Investors Association of Singapore's ("SIAS") Investors Choice Award Ceremony. The Award's investor-centric selection criteria were developed by a SIAS-NUS ("National University of Singapore") partnership to recognise companies that have

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