Q&M Dental Group posted earnings of $8.1 million for the 1H20 ended June, a 2% drop from the earnings of $8.3 million a year ago.
Revenue fell 14% y-o-y to $53.0 million mainly due to the circuit breaker measures imposed from April to June, as well as the movement control order (MCO) in Malaysia. During the period, only essential, or urgent treatments were allowed.
When Singapore gradually reopened in Phase 2, dentists were able to perform more dentistry services, with the exception of aerosol-generating procedures. Treatments were also slightly less than before due to the time taken to disinfect clinics in between treatments.
In Malaysia, under the current Recovery Movement Control Order (RMCO), from June 10 to August 31, dental clinics were allowed to perform most types of dental treatment except aerosol-generating procedures.
Revenue for outlets in June has also seen a recovery for Singapore and Malaysia with revenue coming in higher by 20% and 15% respectively compared to June 2019.
Revenue contribution from the dental equipment and supplies distribution business decreased by 11% y-o-y to $4.4 million in 1H20 mainly due to the CB and MCO in Singapore and Malaysia respectively.
In China, the group’s associated companies’ operations were affected by the Covid-19 pandemic. Aoxin Q & M Dental Group has resumed their operations from March 26 although the Dalian hospital and clinic are temporarily under lock down again due to the resurgent of the Covid-19 virus.
Aidite (Qinhuangdao) Technology Co has also resumed operation on February 10.
Other gains in 1H20 came up to some $2.2 million mainly due to an assignment fee income of $1.7 million arising from the acquisition of the Covid-19 diagnostic test kits and related business from Acumen Research Laboratories.
In line with the decrease in revenue, consumables and supplies used fell by 13% y-o-y to $3.6 million in 1H20.
Cost of sales from dental equipment and supplies distribution business dipped by 6% y-o-y to $3.3 million in 1H20, mainly due to the decrease in revenue from the dental equipment and supplies distribution business in Malaysia.
As at end June, cash and cash equivalents stood at $41.6 million.
“Following the circuit breaker [measures] and movement control order, we are pleased that Q&M as a trusted dental provider has been able to resume servicing our patients safely resulting in June revenue outperforming June 2019 revenue in key markets. The resilience of our business is underpinned by us serving primarily the local residents and hence not affected by borders closure,” says group CEO Ng Chin Siau.
“With the completion of the acquisition of the Covid-19 business of Acumen Research Laboratories Pte. Ltd. on 22 April 2020 through the setting up of Acumen Diagnostics Pte. Ltd., we are in a good position to supply Covid-19 test kits to global markets. I am therefore cautiously optimistic that our business will continue to deliver growth even in the midst of the Covid-19 challenges”, he adds.
Shares in Q&M Dental closed 0.5 cents higher, or 1.1% up, at 46.5 cents on August 13, prior to the announcement.
