Q & M Dental Singapore : Press Release (458 KB)

MEDIA RELEASE

FOR IMMEDIATE RELEASE

Q&M reports lower full year profits due to impairments and decrease in Covid-19 related revenue

Core Healthcare1 Revenue strengthens to S$172.1 million for twelve months ended 31 December 2022 (FY2022)

• Core Healthcare Revenue grew at a CAGR of 9% from S$120.8 million to S$172.1 million for the last 5 financial years (FY2018 to FY2022) demonstrating the inherent strength and sustainability of our healthcare business;
• Covid-19testing revenue significantly decreased, and also with write-off of Covid-19 related consumables
• Second interim dividend of 0.6 cent declared for current quarter making a total dividend of 1.0 cent for FY2022;
• Group total revenue of S$181.2m and profit after tax attributable to shareholders (PATMI) of S$11.3m for FY2022;
• Increased utilisation, Optimisation of existing clinics and Improvement of margins are key strategies going forward.

SINGAPORE, 1 March 2023 - Mainboard-listed Q & M Dental Group (Singapore) Limited (hereinafter, "Q & M" and "Company") today reported total revenue of S$181.2 million, and profit after tax attributable to parent ("PATMI") of S$11.3 million for the twelve months ended 31 December 2022 ("FY2022"). The Group Earnings before interest, tax, depreciation, amortisation ("EBITDA") for FY2022 was S$35.2 million.

1 Core Healthcare Business excludes contributions from the Group's medical laboratory, share of profit from disposal of associate, Aidite, other gains, other losses 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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For FY2022, Core Healthcare revenue increased 2% to S$172.1 million and Core Healthcare EBITDA increased by 6% to S$39.5 million.

Table 1: Financial Highlights

	Period ended			4Q2022			4Q2021			Change			FY2022			FY2021			Change
	31 Dec S$'000
Group's Total	47,783		53,294		-10%		181,214		205,599		-12%
Revenue
-Core
Healthcare	46,199		45,999		-		172,131		168,454		+2%
Business
Revenue
-Other Business	1,584		7,295		-78%		9,083		37,145		-76%
Group's Total	3,927		10,378		-62%		35,220		63,245		-44%
EBITDA
-Core
Healthcare	9,093		8,052		+13%		39,473		37,283		+6%
EBITDA
Group's Loss/
Profit After Tax &	(2,150)		3,165			NM	11,309		30,471		-63%
MI (PATMI)
-Core
Healthcare	3,415		1,613		+112%		17,068		15,955		+7%
Business PATMI

For the Other Business segment, revenue contributions from the Group's medical laboratory business dropped very significantly with demand for COVID-19 testing now reduced to a very small group, following the government eliminating all tests for locals and foreign visitors to Singapore.

As at 31 December 2022, the Group's financial position remains strong with Net Assets of S$96.5 million, as well as cash and cash equivalents of S$39.7 million. Bank borrowings plus finance leases amounted to S$85.1 million.

The Group declares a second interim dividend of 0.6 Singapore cent per ordinary share for 4Q2022. Together with the 0.4 Singapore cent dividend paid out for 1Q2022, the total dividends for FY2022 work out to 1.0 Singapore cent. The 4Q2022 dividend will be paid on 24 March 2023.

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Q & M Chief Executive Officer Dr Ng Chin Siau (黄震霄医生) said, "We are pleased to note that our Core Healthcare Business has continued to demonstrate strong resilience and is well-positionedto grow in the coming year.

We are heartened by the fact that the Core Healthcare's Revenue and EBITDA compound annual growth rate ("CAGR") for the last 5 years (FY2018 to FY2022) are 9% and 26% respectively. We believe that with the strategies that we are implementing, this will continue to be the case.

The Group had been very nimble in the Covid-19 period, treating and reacting to threats as opportunities with resulting outstanding results. As we transition to a "living with COVID-19" stance now, long term growth will be driven by improved utilisation of our professional staff, optimising the use of clinics and improving margins. The key to this approach is continuing training and upgrading of our dentists and professional assistants and use of technologies. The Group is very well placed to implement these strategies with the Q&M College of Dentistry, our investments in technologies and an experienced management team, which has led the exponential expansion of our core businesses. "

Dr Ng continued, "We see the future of dentistry lying in combining the dentist's domain expertise and valuable experience with data-centric analysis to generate objective and highly accurate dental healthcare plans that are specifically tailored to individual needs.

With the above in mind, we will continue to prioritise in investing in our people as they are the bedrock upon which our long term success lies. Whether frontline or behind the scenes, they play a vital role in ensuring that we deliver the best dental healthcare to our patients, every single day."

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4Q2022 Core Business Healthcare- Financial Performance

Revenue from Core Healthcare Business continues to inch up to S$46.2 million for the three months ended 31 December 2022 ("4Q2022") mainly due to the organic growth of dental clinics (See Table 1). The Group added a net 10 dental clinics in Singapore and net 6 dental clinics in Malaysia the last 12 months.

Over the last 4 consecutive quarters ie 4Q2022 vs 1Q2022, 2Q2022 and 3Q2022, Core Healthcare Business grew between 9% and 12%. (See Table 2 below)

Table 2: Revenue for 1Q2022, 2Q2022, 3Q2022, 4Q2022

4Q2022

4Q2022

4Q2022

S$'000

1Q2022

2Q2022

3Q2022

4Q2022

Vs

Vs

Vs

1Q2022

2Q2022

3Q2022

Group's

46,782

44,128

42,521

47,783

+2%

+8%

+12%

Total

Revenue

Core

Healthcare

41,286

42,443

42,203

46,199

+12%

+9%

+9%

Business

Revenue

Total

146

152

157

157

+11

+5

-

Clinics

Operational Update and Recent Developments

The Group currently operates a total of 152 dental clinics, of which 107 are located in Singapore, 44 in Malaysia and 1 in PRC China. (See Table 3 below)

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Table 3: Number of Dental and Medical Clinics (Singapore*, Malaysia, China PRC)

	As at	As at	Variance
	31 Dec 2022	31 Dec 2021	Net Growth
			Last 12 months
Singapore-Dental	107	97	+10 Dental Clinics		+10%
Singapore-Medical	5	5	-		-
Malaysia	44	38	+6 Dental Clinics		+16%
China PRC	1	1	-		-
TOTAL	157	141

1. Dental Operations (Singapore and Malaysia)

The Group is initiating a strategy of intensive organic growth of dental clinics and will expand its team of dentists to support the future growth of its operations in Singapore. We will continue to develop, invest and optimise our digital guided clinical decision support system to provide the most effective and suitable treatment plans for our patients.

With rising standards of living and higher expectations of dental healthcare in Singapore, the Group believes it is well-positioned to meet the rising demand for primary and high- value specialist dental healthcare services for its patients.

In Malaysia, the Group operates 44 clinics with 16 dental clinics in Johor, 9 in Kuala Lumpur, 12 in Selangor, 4 in Melaka and 3 in Negeri Sembilan. The eventual number of dental outlets will depend on available opportunities and pertinent market conditions. The increasingly tight labour market is a limiting factor.

2. Dental Operations (People's Republic of China (PRC))

The main thrust of the Group's proposed expansion in PRC is through organic growth to develop a new and sustainable growth pillar that can yield long term value for the Group.

The Group is also actively exploring opportunities to expand its dental business to Southeast Asian countries at this time.

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