SINGAPORE (Aug 15): Q&M Dental Group announced group earnings increased more than trebled to $13.64 million for 2Q17 from $3.7 million in 2Q16 due to a one-time $16.9 million gain from Q&M’s spin-off of Aoxin from an subsidiary to an associate in April.
However, excluding the one-time gain, the group posted earnings of $4.3 million in 2Q17 on lower expenses following the deconsolidation of its former subsidiaries Aoxin and Aidite to associates. This represents a 29% increase from $3.3 million reported a year ago.
The latest quarter brings the group’s earnings for the half year to $7.8 million, up 21% from $6.4 million in the previous year.
Revenue for the quarter declined 7% to $27.3 million from $29.3 million due to the deconsolidation of Aoxin from a subsidiary to an associate in April this year, resulting in revenue contribution from the dental equipment and supplies distribution business.
As Aidite was deconsolidated in Dec 2016 and is now an associate of the group, there was also no revenue from dental supplies manufacturing in 2Q17.
Following the spin-off and separate listing of Aoxin, as at end-June, Q&M has a total of nine dental outlets in Malaysia and one dental outlet in China. This is compared to eight dental outlets in Malaysia as well as three dental hospitals and eight dental outlets as at end-2Q16 in China, prior to the spin-off.
With the deconsolidation of Aidite and particularly Aoxin, the group reported lower other items of expense with reduced consumables and supplies used in dental & medical clinics; a decrease in other expenses; as well as lower cost of sales from dental equipment and supplies.
Employee benefits expense, too, decreased 8% to $16.4 million from $17.8 million as a result of the deconsolidation of the subsidiaries to associates.
An interim dividend of 0.7 cent has been announced, which is to be paid on Sept 8.
“The market conditions remain challenging but we remain focused on the expansion of the Group’s Singapore dental clinics and has initiated a strategy to add clinics organically,” says group CEO, Ng Chin Siau.
“We also remain active in looking for opportunities in the region with the recent announcement for the proposed acquisition of Shenzhen Superline. We are well-positioned to cater to the rising demand for dental healthcare services,” he adds.
Shares in Q&M closed 1 cent lower at 64 cents on Monday.
