Q&M Dental's Q4 earnings fall 47% on higher costs, expenses

Q&M Dental Group (Singapore) QC7 on Wednesday (Feb 23) reported earnings of S$3.2 million for the Q4 ended Dec 31, 2021, representing a 47 per cent year-on-year decline from S$5.9 million due to higher costs and expenses.

Earnings per share (EPS) fell 46 per cent to S$0.0034 from S$0.0063.

Total revenue for the quarter grew 22 per cent to S$53.3 million from S$43.8 million previously, driven mainly by stronger contributions from the group's Covid-19 medical laboratory business.

Cost of sales from the medical laboratory business as well as dental equipment and supplies more than tripled to S$4.7 million from S$1.5 million the previous year, which the group said was in line with the higher segmental revenue.

Employee benefits expenses - which include professional fees paid to dentists - rose 22 per cent to S$30.2 million in Q4 from S$24.8 million the year before. This was due to an increase in revenue from both existing and new dental outlets in Singapore as well as the provision of additional employee benefits in the latest quarter.

Other expenses grew 56 per cent to S$3.9 million from S$2.5 million previously, as the group said revenue growth for the quarter resulted in higher incidental expenses such as credit card charges, marketing expenses, expenses incurred by the Covid-19 medical laboratory, and legal and professional fees.

The group has declared a fourth interim dividend of S$0.01 per share for the latest quarter. It will be paid out on Mar 24 after the book closure date on Mar 9.

Together with the previous dividends paid out in the last 3 quarters, the total dividends work out to S$0.04 for FY2021 which translates to a 7 per cent dividend yield and a dividend payout ratio of 113 per cent, said Q&M.

For the full year, the group's earnings were 55 per cent higher year on year at S$30.5 million compared to S$19.7 million in FY2020.

FY2021 revenue stood at S$205.6 million, 49 per cent higher than the previous year's revenue of S$137.6 million due to higher contributions from both existing and new dental clinics in Singapore.

This brings EPS for the year to S$0.0323, compared to S$0.0209 in FY2020.

As at end-2021, the group had 136 dental clinics in both Singapore and overseas compared to 118 the previous year. Its medical clinics in Singapore remain at 5.

Its total number of dentists stands at 270, up from 250 a year ago.

According to Q&M Dental chief executive Ng Chin Siau, the group intends to open at least 30 more dental clinics per year in Singapore and Malaysia over the 10 years starting from 2021.

Shares of Q&M Dental ended Tuesday down S$0.01 or 1.7 per cent at S$0.57.

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