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Good oral health is a necessity for overall health and well-being. According to the Australian Institute of Health and Welfare, poor oral health contributed 4.5% of all the burden that non-fatal diseases placed on the community in 2015.
Is dental care covered under Medicare?
Unlike other health services, most dental care is not covered by the Australian government and the costs are paid by patients. However, Medicare pays for some essential dental services for eligible children and adults.
Private insurance for dental care
Australians generally use private health insurance to take care of their dental care expenses. Most health funds only cover half of the amount while the patient should pay the rest.
In 2019–20 nearly AU$9.5 billion was spent on dental services in Australia. However, COVID-19 impacted both patients and service providers in terms of types and number of services.
Australia’s National Oral Health Plan (2015-2024)
How are ASX-listed dental stocks faring?
The benchmark index of healthcare, S&P/ASX 200 Health Care is down by nearly 4.37% on a year-to-date basis. Dental stocks are much below the value, with an average loss of almost 27%.
As mentioned above, dental services were impacted by COVID-19 and recently, the ongoing inflation might have led people to defer dental services. As dental services do not come under critical needs, people generally tend to postpone receiving the services for a later time.
With this overview, we at Kalkine Media® will discuss the performance of three ASX-listed dental stocks.
Orthocell Ltd (ASX:OCC)
Orthocell is a regenerative medicine company. One of the approved products manufactured by Orthocell is Striate+™. It is a sterile and resorbable collagen membrane. Striate+™ is used by dentists for guided bone and tissue regeneration in dental applications.
During the quarter ended 30 June 2022, Orthocell sealed global licence and manufacturing agreements with BioHorizons Implant Systems Inc. (BioHorizons) for Striate+™. It received AU$21,461,686 million net of fees for the license.
Other highlights of the quarter
- Upgradation of the facility to enable scale-up of Striate+™ manufacturing capacity to more than 100,000 units per year
- Received research and development tax refund of AU$2.1million
Orthocell ended the quarter with a cash balance of AU$11.022million.
Stock information: Orthocell has a market capitalisation of AU$81.34 million. Shares of the company are red by about 19% on a year-to-date basis.
Pacific Smiles Group Ltd (ASX:PSQ)
Pacific Smiles Group is a popular Dentist Service Organisation which operates more than 120 dental centres throughout Australia. PSQ is steered by the mission to enhance the oral health of all Australians to the best in the globe.
Glimpse into FY22 performance
- Patient fees down by 6.0%
- Dental Centres up by 16.5%
- 9% decline in underlying EBITDA
- Underlying NPAT of AU$3.2million
FY2022 was impacted by the outbreak of the Omicron variant of COVID-19 and lockdowns imposed by governments. The company witnessed a 6% decline in total patient fees. New centres opened in FY21, and FY22 were also impacted.
As of 16 August, the company's performance to date for FY23 are as follows:
- Year to date patient fees - AU$32.9million
- Year on Year growth in patient fees - 35.3%
- Same centre patient fee increase - 28.4%
Stock information: Shares of PSQ have lost around 46.4% on a YTD basis. It has a market capitalisation of AU$250.54million.
SDI is one of the top manufacturers of specialist dental materials in Australia. Its products are marketed in more than 100 countries globally, including alloys, cements, composites, equipments, tooth whitenings etc. The company is primarily involved in researching, developing, producing, and marketing dental products.
In June, SDI announced that the company is expecting a 16% increase in sales for the 12 months ending 30 June 2022 to nearly AU$95.0 million, compared to the prior corresponding period of AU$81.6 million (FY21).
However, the company estimated a decline of 16% to 22% in the after-tax profit during the same period. It is expected in the range of AU$7.0 million to AU$7.5 million, compared to AU$8.9 million in FY21.
Stock information: SDI has a market capitalisation of AU$98.65 million. Shares of the company are at a loss of nearly 18.7% on a YTD basis.
