+ Franchise is still expanding. There were three new clinics opened in 3Q22 (2Q22: 8). Another two clinics are planned in November. There has been a change in strategy in clinic openings. The priority is to fill existing capacity in current clinics before new locations are open. Other efforts are to build larger dental centres where profitability is higher from economies of scale.
– Sluggish dental earnings and other expenses. Net profit from core dental operations declined 17% YoY to S$4.2mn. Performance of new clinics has been softer since border re-opening as visits have declined. Other expenses causing a drag in earnings have been the development cost of the AI guided dental software, recruitment cost for new dentists and start-up costs from new clinics. The record expansion of 24 clinics in Singapore and Malaysia over the past 12 months has been a burden on profitability in the near term.