TIDMIDHC
RNS Number : 6173T
Integrated Diagnostics Holdings PLC
16 November 2023
Integrated Diagnostics Holdings Plc
9M 2023 Results
Thursday, 16 November 2023
Integrated Diagnostics Holdings Plc reports impressive 44%
year-on-year conventional revenue expansion in 9M 2023, with
consolidated figures surpassing the high Covid base of 9M 2022
(Cairo and London) - Integrated Diagnostics Holdings ("IDH,"
"the Group," or "the Company"), a leading provider of diagnostic
services with operations in Egypt, Jordan, Nigeria, Sudan, and soon
launching in Saudi Arabia, announced today its reviewed financial
statements for the nine-month period ended 30 September 2023,
booking its strongest quarter since the start of the year. IDH
recorded consolidated revenues of EGP 1,182 in Q3 2023 million,
yielding 40% year-on-year and 24% quarter-on-quarter growth
rates.
When excluding(1) Covid-19-related contributions from the
previous period, conventional revenues recorded a 51% year-on-year
growth in Q3 2023. Impressive top-line performance during the
quarter translated to improved results down the income statement,
with net profit coming in at EGP 176 million and yielding an NPM of
15% in Q3 2023. This represents a significant improvement from the
net loss of EGP 36 million recorded in Q3 2022 when IDH's
bottom-line profitability had been weighed down by a one-off
expense.
On a year-to-date basis, IDH recorded consolidated revenues of
EGP 3,054 million, a 9% year-on-year expansion versus the high base
of 9M 2022, which had included EGP 678 million in
Covid-19-related(2) revenues (constituting 24% of the Company's
top-line). Meanwhile, the Company booked conventional revenue
growth of 44% year-on-year in 9M 2023, supported by a 16%
year-on-year increases in test volumes coupled with a 24%
year-on-year increase in average revenue per conventional test.
Further down the income statement, the Company posted a net
profit of EGP 387 million in 9M 2023, representing a marginal 4%
year-on-year decline from the figure reported in the same period of
last year and yielding a net profit margin (NPM) of 13%.
Financial Results (IFRS)(3)
EGP mn Q3 2022 Q3 2023 Change 9M 2022 9M 2023 Change
============================= ======= ======= ====== ======= ======= ======
Revenues 846 1,182 40% 2,800 3,054 9%
============================= ======= ======= ====== ======= ======= ======
Conventional Revenues 784 1,182 51% 2,123 3,054 44%
============================= ======= ======= ====== ======= ======= ======
Covid-19-related Revenues 63 - - 678 - -
============================= ======= ======= ====== ======= ======= ======
Cost of Goods Sold (497) (702) 41% (1,619) (1,916) 18%
============================= ======= ======= ====== ======= ======= ======
Gross Profit 350 480 37% 1,182 1,138 -4%
============================= ======= ======= ====== ======= ======= ======
Gross Profit Margin 41% 41% -1 pts 42% 37% -5 pts
============================= ======= ======= ====== ======= ======= ======
Operating Profit 186 312 67% 749 577 -23%
============================= ======= ======= ====== ======= ======= ======
Normalised EBITDA(4) 265 411 55% 974 873 -10%
============================= ======= ======= ====== ======= ======= ======
EBITDA Margin 31% 35% 3 pts 35% 29% -6 pts
============================= ======= ======= ====== ======= ======= ======
Net Profit (36) 176 - 403 387 -4%
============================= ======= ======= ====== ======= ======= ======
Net Profit Margin -4% 15% 19 pts 14% 13% -2 pts
============================= ======= ======= ====== ======= ======= ======
Cash Balance 816 794 -3% 816 794 -3%
============================= ======= ======= ====== ======= ======= ======
Note: Throughout the document, percentage changes are calculated
using the exact value (as per the Consolidated Financials) and not
the corresponding rounded figure.
Key Operational Indicators(5)
EGP mn 9M 2022 9M 2023 Change
================================= ======= ======= ======
Branches 546 594 48
================================= ======= ======= ======
Patients ('000) 6,633 6,248 -6%
================================= ======= ======= ======
Revenue per Patient (EGP) 422 489 16%
================================= ======= ======= ======
Tests ('000) 24,359 26,468 9%
================================= ======= ======= ======
Conventional Tests ('000) 22,728 26,468 16%
================================= ======= ======= ======
Covid-19-related Tests ('000) 1,631 - -
================================= ======= ======= ======
Revenue per Test 115 115 0%
================================= ======= ======= ======
Revenue per Conventional Test
(EGP) 93 115 24%
================================= ======= ======= ======
Revenue per Covid-19-related
Test (EGP) 416 - -
================================= ======= ======= ======
Test per Patient 3.7 4.2 15%
================================= ======= ======= ======
[1] Starting Q1 2023, IDH has opted to stop reporting on its
Covid-19-related revenues and test volumes due to their material
insignificance to the consolidated figures and to Egypt's and
Jordan's country-level results for the quarter. In the comparable
period of last year (9M 2022) IDH had recorded EGP 678 million in
Covid-19-related revenues and had performed 1.6 million
Covid-19-related tests.
2 Covid-19-related tests include both core Covid-19 tests
(Polymerase Chain Reaction (PCR), Antigen, and Antibody) as well as
other routine inflammatory and clotting markers including, but not
limited to, Complete Blood Picture, Erythrocyte Sedimentation Rate
(ESR), D-Dimer, Ferritin and C-reactive Protein (CRP), which the
Company opted to include in the classification as "other
Covid-19-related tests" due to the strong rise in demand for these
tests witnessed following the outbreak of Covid-19.
(3) Important notice: In the Company's earnings releases
covering the five quarters starting from Q4 2021 and ending Q4
2022, management had opted to present Alternative Performance
Measures (APM) alongside IFRS-compliant figures as outlined on page
2 of the Company's FY 2022 Earnings Release. Starting in Q1 2023,
due to the material insignificance of Covid-19-related revenues on
consolidated results, the Company will only report IFRS-compliant
figures. It is worth noting that revenues for the comparable period
(9M 2022), include concession fees amounting to EGP 63 million paid
by Biolab as part of its agreement with QAIA and Aqaba Port.
4 Normalised EBITDA is calculated as operating profit plus
depreciation and amortization, excluding non-recurring expenses,
specifically a EGP 12 million one-off expense owed to the Egyptian
government for vocational training, EGP 6.5 million in
pre-operating expenses in Saudi Arabia, and EGP 5.0 million
impairment expense in Sudan due to the ongoing situation in the
country.
5 Key operational indicators are calculated based on revenues
for the periods of EGP 3,054 million and EGP 2,800 million for 9M
2023 and 9M 2022, respectively.
Important notice: In the Company's earnings releases covering
the five quarters starting from Q4 2021 and ending Q4 2022,
management had opted to present Alternative Performance Measures
(APM) alongside IFRS-compliant figures as outlined on page 2 of the
Company's FY 2022 Earnings Release. Starting in Q1 2023, due to the
material insignificance of Covid-19-related revenues on
consolidated results, the Company will only report IFRS-compliant
figures. It is worth noting that revenues for the comparable period
(9M 2022) include concession fees amounting to EGP 63 million paid
by Biolab as part of its agreement with QAIA and Aqaba Port.
Introduction
i. Financial Highlights
Quarterly Performance
-- IDH recorded its strongest quarterly performance since the
start of the year in Q3 2023, capitalising on strong momentum seen
during May and carrying on throughout the summer period. The
quarter recorded a noticeable pickup in patient footfall and
testing volumes, specifically in IDH's two largest markets, Egypt
and Jordan.
-- IDH booked record test volumes in Q3 2023, surpassing the
10.0 million test mark for a single quarter for the first time. As
a result, the Company booked total revenues of EGP 1,182 million,
expanding 40% year-on-year and 24% quarter-on-quarter. Robust
top-line performance compared to the previous quarter is a
reflection of a normalisation in operations following a slow start
to the year in 1H 2023 due to increased inflationary pressures, the
holy month of Ramadan, and Eid vacations which affected
operations.
-- In parallel, conventional revenues(6) (excluding Covid-19
revenues in the comparative period) in Q3 2023 increased 51%
year-on-year, up from EGP 784 million in Q3 2022.
Year-to-Date Performance
-- Conventional revenue during 9M 2023 amounted to EGP 3,054
million, representing a 44% year-on-year increase. Conventional
revenue growth was driven by year-on-year increases of 16% and 24%
in conventional test volumes and average revenue per conventional
test, respectively.
-- Driven by strong quarterly performance, IDH recorded total
revenues of EGP 3,054 million in 9M 2023, a 9% year-on-year
increase.
-- This is a particularly noteworthy result when considering
that the comparable 9M 2022 had included significant contributions
from Covid-19-related(78) testing, amounting to EGP 678 million and
constituting 24% of consolidated revenues. Total revenue growth
came on the back of a 9% year-on-year increase in test volumes with
average revenue per test remaining stable due to the high Covid
base of 9M 2022.
(6) Conventional (non-Covid) tests include IDH's full service
offering excluding the Covid-19 related tests outlined below.
(7) Covid-19-related tests include both core Covid-19 tests
(Polymerase Chain Reaction (PCR), Antigen, and Antibody) as well as
other routine inflammatory and clotting markers including, but not
limited to, Complete Blood Picture, Erythrocyte Sedimentation Rate
(ESR), D-Dimer, Ferritin and C-reactive Protein (CRP), which the
Company opted to include in the classification as "other
Covid-19-related tests" due to the strong rise in demand for these
tests witnessed following the outbreak of Covid-19.
(8) Covid-19-related revenue in 9M 2022 includes EGP 63 million
in concession fees paid by Biolab to Queen Alia International
Airport and Aqaba Port as part of its revenue sharing agreement
-- Gross Profit in Q3 2023 booked EGP 480 million, 37% above the
figure recorded in Q3 2022 and 44% above Q2 2023.Meanwhile, IDH
reported a gross profit margin (GPM) of 41%, unchanged compared to
Q3 2022 and 6 points above the GPM booked in Q2 2023. Significantly
improving gross profitability compared to the first two quarters of
the year reflect a normalisation of profitability as the initial
effects of the devaluation in FY 2022 and early FY 2023 began to
fade.
On a nine-month basis, gross profit stood at EGP 1,138 million,
down 4% year-on-year, and with an associated margin (GPM) of 37%
compared to 42% in 9M 2022. Lower gross profitability on a
year-to-date basis partially reflected rises in raw material costs
due to higher average costs per kit on the back of rising inflation
and a weaker EGP, coupled with higher direct salaries and wages
costs to provide greater-than-usual increases in compensation
packages to existing staff to compensate for inflationary
pressures, as well as higher depreciation expenses.
-- Normalised EBITDA(9) booked EGP 411 million, recording a
remarkable year-on-year growth of 55% and with an EBITDA margin of
35%, 4% higher compared to Q3 2022. EBITDA profitability also
showed solid improvements compared to previous quarters, up from
25% and 24% in Q1 2023 and Q2 2023, respectively. Ona year-to-date
basis, normalised EBITDA stood at EGP 873 million in 9M 2023, down
10% year-on-year, and with an associated margin of 29% compared to
35% in 9M 2022. Lower EBITDA profitability on a year-to-date basis
came on the back of the decreased gross profitability coupled with
increased SG&A outlays in part reflecting the impact of a
weaker EGP on USD-denominated expenses.
It is worth noting that normalised EBITDA has been adjusted for
several one-offs including an EGP 12 million expense related to
contributions owed to the Egyptian government vocational training
fund for the previous five-year period, EGP 7 million in
pre-operating expenses booked by IDH's new Saudi venture, and EGP 5
million impairment expense for Sudanese operations following the
unfortunate political situation in the country.
9 Normalised EBITDA is calculated as operating profit plus
depreciation and amortization, excluding non-recurring expenses,
specifically a EGP 12 million one-off expense owed to the Egyptian
government for vocational training, EGP 6.5 million in
pre-operating expenses in Saudi Arabia, and EGP 5.0 million
impairment expense in Sudan due to the ongoing situation in the
country.
-- Net Profit booked EGP 176 million and yielded an NPM of 15%
in Q3 2023 compared to a net loss of EGP 36 million one year prior.
Net profit during the quarter also posted robust figures compared
to the previous quarter, more than tripling the EGP 43 million
booked in Q2 2023 and yielding an associated margin 9 points above
Q2 2023.
Net profit in 9M 2023 recorded EGP 387 million, a 4%
year-on-year decrease. IDH's NPM recorded 13% in 9M 2023, largely
stable versus last year.
ii. Operational Highlights
-- As at 30 September 2023, IDH's total branch network across
its four markets stood at 594 branches, an increase of 48 branches
in the past twelve-month period. During Q3 2023, IDH rolled out 6
new branches in its home market of Egypt, including one new Al-Borg
Scan branch which commenced operations in September.
-- Conventional tests (excluding Covid-19 contributions in the
base year) booked a record-high in Q3 2023, reaching 10.0 million
tests for the first time and expanding 22% year-on-year and 19%
quarter-on-quarter, further highlighting its strong growth momentum
coupled with the normalisation of patient behaviour following the
Covid-19 pandemic. Meanwhile, conventional tests reached 26.5
million tests in 9M 2023, a 16% year-on-year increase. Consolidated
test volumes, which in 9M 2022 included 1.6 million
Covid-19-related tests, grew 9% year-on-year.
-- Average revenue per conventional test increased 24%
year-on-year to book EGP 115 in 9M 2023. Average revenue per
conventional test was driven by both direct and indirect price
adjustments in Egypt and Nigeria in response to ongoing inflation.
It is worth highlighting that this figure was partially boosted by
a 10% contribution from the translation effect resulting from the
devaluation of the EGP over the past twelve months.
-- The Company served a total of 6.2 million patients during 9M
2023, 6% below last year's figure. The decline reflects the
comparable period's high base due to Covid-19 contributions.
Meanwhile, average test per patient rose to a record high 4.2 tests
in 9M 2023, up from 3.7 tests one year prior. Continually surging
average tests per patient reflect a post-Covid-19 patient
normalisation coupled with the continued success of IDH's loyalty
programme which launched in FY 2021.
iii. Updates by Geography
-- In Egypt (81.9% of total revenues), IDH booked its strongest
quarterly performance of FY 2023, with conventional revenues
(excluding Covid-19 contributions from the base year) expanding 49%
year-on-year and 26% quarter-on-quarter, as the Company continues
to build off the strong momentum witnessed starting May. In
parallel, consolidated revenues increased 39% year-on-year in Q3
2023.
On a year-to-date basis, Egyptian operations recorded 39%
year-on-year growth, reaching EGP 2,500 million during 9M 2023,
driven by 18% increases in both test volumes and average revenue
per test. In parallel, consolidated revenues in 9M 2023 increased
12% year-on-year, an impressive result given Covid-19-related
contributions of 19% during 9M 2022.
-- In Jordan (15.2% of total revenues), in line with trends
observed in Egypt, Biolab's conventional revenues expanded 13%
year-on-year and 18% quarter-on-quarter in Q3 2023 to reach JOD 4.1
million, maintaining the strong momentum seen starting May 2023.
Consolidated revenues declined 1% year-on-year from the high Covid
base of Q3 2022. In EGP terms, conventional revenue posted growth
rates of 82% year-on-year and 19% quarter-on-quarter, partially
reflecting the translation effect resulting from a weaker EGP. On a
nine-month basis, conventional revenues rose 10% year-on-year in
JOD terms in 9M 2023, supported by a 10% growth in conventional
testing volumes.
-- In Nigeria (2.6% of total revenues) Echolab booked 10%
year-on-year and 11% quarter-on-quarter revenue growths in NGN
terms in Q3 2023. Top-line expansion was primarily driven by 29%
year-on-year and 4% quarter-on-quarter increases in average revenue
per test in NGN terms, as IDH applies strategic price hikes to
compensate for increasing inflation. On a year-to-date basis,
revenues booked NGN 1,457 million in 9M 2023, expanding 16%
year-on-year in NGN terms and supported by a 22% year-on-year rise
in average revenue per test in local currency terms.
-- IDH's Sudanese operations (0.4% of total revenues) recorded
revenue declines of 88% year-on-year and 62% quarter-on-quarter in
Q3 2023 in EGP terms. Meanwhile, revenues declined 27% year-on-year
in 9M 2023. IDH's operations in the country continue to be impacted
by the ongoing conflict which has seen the closure of 16 of the
country's 18 branches starting April 2023.
-- IDH remains on schedule to launch its first two Saudi Arabian
branches in December 2023. The two branches will be located in
Riyadh, enabling the Company to capitalise on the important growth
opportunities offered by the city's growing and increasingly
health-conscious population. The new venture was jointly funded by
IDH (30%), Biolab (20%) and Fawaz Alhokair's healthcare subsidiary,
Izhoor (50%). The venture aims to establish itself as a
full-fledged clinical pathology diagnostic services provider
boasting a branch network covering the entire Kingdom. The new
venture will be fully consolidated on IDH's accounts.
iv. Management Commentary
Commenting on the Group's performance, IDH Chief Executive
Officer Dr. Hend El-Sherbini said: "With the end of the year fast
approaching, I am delighted to report an exceptional quarter,
characterised by unprecedented financial and operational success
and continuing to showcase the strength of IDH's underlying
business and its future growth potential. While our results from
the first half of the year were somewhat diluted by increasing
inflationary environments, particularly in our home market, Egypt,
as well as several seasonal slowdowns due to the holy month of
Ramadan and other holidays, the Company's strong performance in the
third quarter of the year has significantly outpaced the past two
quarters. Strong growth in Q3 2023 has also reflected positively
down the income statement, with our margins expanding significantly
compared to the same quarter last year as well as compared to the
first half of 2023. I am also proud to announce that this
exceptional performance has enabled our year-to-date results to
surpass the comparable period of last year, which had included
sizeable contributions from Covid-19-related testing.
During Q3 2023, the Company continued building on its strong
momentum witnessed starting in May of this year, conducting 10.0
million tests during the quarter, 21% higher than the figure
recorded in Q3 2022, and the highest figure recorded in a single
quarter in IDH's history. This quarter saw IDH increase its average
number of tests per patient to 4.2 tests, another record high for
the Company as its patient mix begins to normalise following the
Covid-19-pandemic and it begins to harvest the fruit of its loyalty
programme, which was introduced in FY 2021. This impressive
performance has led to 40% year-on-year and 24% quarter-on-quarter
increases in our consolidated top-line in Q3 2023.
Turning to our markets' individual performances, Egypt and
Jordan both saw similar trends, with growing demand for our
traditional test offering translating in steady rises in both
conventional revenues and test volumes. In Egypt, we recorded a 49%
year-on-year increase in conventional revenues in Q3 2023, driven
by 24% and 20% rises in test volumes and average revenue per test,
respectively, despite patients' purchasing power being impacted by
rising inflation. Egyptian operations also witnessed an increase in
the average number of tests per patient, rising to a record high
4.2 tests in 9M 2023, continuing to be driven by our successful
loyalty programme which was introduced in FY 2021. Our results in
Egypt were further buoyed by the impressive near doubling of
revenues at our radiology venture, Al-Borg Scan, which constituted
5% of Egypt's revenue in Q3 2023. On this front, in line with our
ramp up strategy for the venture, in September we inaugurated the
venture's seventh branch moving us a step closer to realising our
vision of providing patients with a one-stop-shop service offering
featuring both pathology and radiology.
In Jordan, Biolab booked a 13% year-on-year increase in its
conventional top-line in JOD terms, fuelled by a 13% increase in
conventional test volumes for the period. In Nigeria, our
operations recorded revenue expansion in NGN terms of 10% compared
to Q3 2022, on the back of higher average revenue per test.
Finally, Sudan's operations continued to be hindered by the ongoing
conflict which has caused the closure of 16 out of our 18 branches
starting in April of this year. As always, we will continue to
closely monitor the situation and will provide the market with
updates when available.
Further down the income statement, we were pleased to note the
start of a gradual normalisation during the third quarter as the
initial shock of the multiple devaluations of the EGP began to
ease. More specifically, results in Q3 2023 showed significant
improvements in profitability, with both our gross and EBITDA
margins improving remarkably versus the first two quarters of 2023.
Improved profitability was also apparent compared to Q3 2022, where
the Company booked significant increases in both its EBITDA and net
margins.
Finally, I am pleased to report that in the coming weeks, we
will be officially launching our operations in Saudi Arabia, adding
a fifth geography to our portfolio and entering one of the region's
most attractive markets. Our first two branches in the country will
both be located in the Kingdom's capital city, Riyadh, allowing us
to take advantage of the important growth opportunities offered by
the city's growing and increasingly health-conscious population. In
light of the continued strengths of our results, the solid
strategies in place, and the positive momentum enjoyed by our
operations in Egypt and Jordan, we reaffirm our guidance of 30%
conventional revenue growth, boosting our consolidated revenues to
the EGP 4 billion mark, with a normalised EBITDA margin excluding
one-off expenses and pre-operating expenses in Saudi Arabia of
28-30% for FY 2023."
- End -
Analyst and Investor Call Details
An analyst and investor call will be hosted at 1pm (UK) | 3pm
(Egypt) on Tuesday, 21 November 2023. You can register for the call
by clicking on this link .
For more information about the event, please contact:
amoataz@EFG-HERMES.com
About Integrated Diagnostics Holdings (IDH)
IDH is a leading diagnostics services provider in the Middle
East and Africa offering a broad range of clinical pathology and
radiology tests to patients in Egypt, Jordan, Nigeria and Sudan.
The Group's core brands include Al Borg, Al Borg Scan and Al
Mokhtabar in Egypt, as well as Biolab (Jordan), Ultralab and Al
Mokhtabar Sudan (both in Sudan) and Echo-Lab (Nigeria). With over
40 years of experience, a long track record for quality and safety
has earned the Company a trusted reputation, as well as
internationally recognised accreditations for its portfolio of over
2,000 diagnostics tests. From its base of 552 branches as of 31
December 2022, IDH served over 8.7 million patients and performed
more than 32.7 million tests in 2022. IDH will continue to add
laboratories through a Hub, Spoke and Spike business model that
provides a scalable platform for efficient expansion. Beyond
organic growth, the Group targets expansion in appealing markets,
including acquisitions in the Middle Eastern, African, and East
Asian markets where its model is well-suited to capitalise on
similar healthcare and consumer trends and capture a significant
share of fragmented markets. IDH has been a Jersey-registered
entity with a Standard Listing on the Main Market of the London
Stock Exchange (ticker: IDHC) since May 2015 with a secondary
listing on the EGX since May 2021 (ticker: IDHC.CA).
Shareholder Information
LSE: IDHC.L
EGX: IDHC.CA
Bloomberg: IDHC:LN
Listed on LSE: May 2015
Listed on EGX: May 2021
Shares Outstanding: 600 million
Contact
Nancy Fahmy
Investor Relations Director
T: +20 (0)2 3345 5530 | M: +20 (0)12 2255 7445 |
nancy.fahmy@idhcorp.com
Forward-Looking Statements
These results for the nine-month period ended 30 September 2023
have been prepared solely to provide additional information to
shareholders to assess the group's performance in relation to its
operations and growth potential. These results should not be relied
upon by any other party or for any other reason. This communication
contains certain forward-looking statements. A forward-looking
statement is any statement that does not relate to historical facts
and events, and can be identified by the use of such words and
phrases as "according to estimates", "aims", "anticipates",
"assumes", "believes", "could", "estimates", "expects",
"forecasts", "intends", "is of the opinion", "may", "plans",
"potential", "predicts", "projects", "should", "to the knowledge
of", "will", "would" or, in each case their negatives or other
similar expressions, which are intended to identify a statement as
forward-looking. This applies, in particular, to statements
containing information on future financial results, plans, or
expectations regarding business and management, future growth or
profitability and general economic and regulatory conditions and
other matters affecting the Group .
Forward-looking statements reflect the current views of the
Group's management ("Management") on future events, which are based
on the assumptions of the Management and involve known and unknown
risks, uncertainties and other factors that may cause the Group's
actual results, performance or achievements to be materially
different from any future results, performance or achievements
expressed or implied by these forward-looking statements. The
occurrence or non-occurrence of an assumption could cause the
Group's actual financial condition and results of operations to
differ materially from, or fail to meet expectations expressed or
implied by, such forward-looking statements.
The Group's business is subject to a number of risks and
uncertainties that could also cause a forward-looking statement,
estimate or prediction to differ materially from those expressed or
implied by the forward-looking statements contained in this
communication. The information, opinions and forward-looking
statements contained in this communication speak only as at its
date and are subject to change without notice. The Group does not
undertake any obligation to review, update, confirm or to release
publicly any revisions to any forward-looking statements to reflect
events that occur or circumstances that arise in relation to the
content of this communication.
Important notice: In the Company's earnings releases covering
the five quarters starting from Q4 2021 and ending Q4 2022,
management had opted to present Alternative Performance Measures
(APM) alongside IFRS-compliant figures as outlined on page 2 of the
Company's FY 2022 Earnings Release. Starting in Q1 2023, due to the
material insignificance of Covid-19-related revenues on
consolidated results, the Company will only report IFRS-compliant
figures. It is worth noting that revenues for the comparable period
(9M 2022) include concession fees amounting to EGP 63 million paid
by Biolab as part of its agreement with QAIA and Aqaba Port.
Group Operational & Financial Review
i. Revenue and Cost Analysis
Consolidated Revenue
IDH's strong momentum observed starting in May 2023 carried into the summer,
resulting in an exceptional set of results during Q3 2023. During Q3 2023,
IDH booked conventional(10) revenue growth of 51% year-on-year, reaching
EGP 1,182 million. Conventional revenues were boosted by 22% and 23% year-on-year
increases in test volumes and average revenue per conventional test, respectively.
Strong growth during the third quarter of the year is also reflected in
the Company's quarter-on-quarter performance, with IDH capitalising on
strong growth momentum to record a 24% expansion compared to Q2 2023.
Meanwhile, consolidated revenues increased 40% year-on-year, up from EGP
784 million one year prior.
In parallel, the Company booked consolidated revenues of EGP 3,054 million
in 9M 2023, a remarkable 9% year-on-year increase especially when considering
the EGP 678 million(11) contribution made from Covid-19-related(12) testing
to consolidated revenues in 9M 2022. Positive consolidated revenue growth
for the period is mainly a reflection of exceptionally strong quarterly
performance in Q3 2023, which boosted results and enabled the Company
to record positive consolidated growth. Conventional revenue on a year-to-date
basis increased 44% year-on-year from EGP 2,123 million in 9M 2022.
[1 (0]) Conventional (non-Covid) tests include IDH's full service offering
excluding the Covid-19 related tests outlined below.
[1 (1]) Covid-19-related revenue in 9M 2022 includes EGP 63 million in
concession fees paid by Biolab to Queen Alia International Airport and
Aqaba Port as part of its revenue sharing agreement.
[1 (2]) Covid-19-related tests include both core Covid-19 tests (Polymerase
Chain Reaction (PCR), Antigen, and Antibody) as well as other routine
inflammatory and clotting markers including, but not limited to, Complete
Blood Picture, Erythrocyte Sedimentation Rate (ESR), D-Dimer, Ferritin
and C-reactive Protein (CRP), which the Company opted to include in the
classification as "other Covid-19-related tests" due to the strong rise
in demand for these tests witnessed following the outbreak of Covid-19.
Revenue Analysis
Q1 Q2 Q2 Q3 Q3 9M 9M
Q1 2023 2022 2023 2022 2023 % 2022 2023 %
2022
--------------------------- ------- ------ ------ ------ ------ ------ ---- ------ ------ ----
Total revenue (EGP mn) 1,180 915 774 957 846 1,182 40% 2,800 3,054 9%
=========================== ======= ====== ====== ====== ====== ====== ==== ====== ====== ====
Conventional revenue
(EGP mn) 640 915 699 957 784 1,182 51% 2,123 3,054 44%
=========================== ======= ====== ====== ====== ====== ====== ==== ====== ====== ====
Covid-19-related revenue
(EGP mn) 540 - 75 - 63 - - 678 - -
Contribution to Consolidated Results
========================================================================================================
Conventional revenue 54% 100% 90% 100% 93% 100% 76% 100%
=========================== ======= ====== ====== ====== ====== ====== ==== ====== ====== ====
Covid-19-related revenue 46% - 10% - 7% - 24% -
--------------------------- ------- ------ ------ ------ ------ ------ ---- ------ ------ ----
Test Volume Analysis
Total tests (mn) 8.4 8.0 7.6 8.5 8.4 10.0 20% 24.4 26.5 9%
============================== ==== ===== ==== ===== ==== ===== ==== ===== ===== ====
Conventional tests performed
(mn) 7.1 8.0 7.4 8.5 8.2 10.0 22% 22.7 26.5 16%
============================== ==== ===== ==== ===== ==== ===== ==== ===== ===== ====
Total Covid-19-related
tests performed (mn) 1.3 - 0.2 - 0.2 - - 1.6 - -
------------------------------ ---- ----- ---- ----- ---- ----- ---- ----- ----- ----
Contribution to Consolidated Results
===============================================================================================
Conventional tests performed 85% 100% 97% 100% 98% 100% 93% 100%
============================== ==== ===== ==== ===== ==== ===== ==== ===== ===== ====
Total Covid-19-related
tests performed 15% - 3% - 2% - 7% -
------------------------------ ---- ----- ---- ----- ---- ----- ---- ----- ----- ----
Revenue per Test Analysis
Total revenue per test
(EGP) 140 114 102 113 101 118 17% 115 115 -
========================== ==== ==== ==== ==== ==== ==== ==== ==== ==== ====
Conventional revenue
per test (EGP) 90 114 94 113 96 118 23% 93 115 24%
Covid-19-related revenue
per test (EGP) 431 - 454 - 361 - - 416 - -
-------------------------- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
Revenue Analysis: Contribution by Patient Segment
Contract Segment (63% of Group revenue)
IDH's contract segment recorded conventional revenues of EGP 1,938 million
during the nine-month period, expanding 49% year-on-year from the figure
reported last year. Growth at the segment was driven by 21% and 23% increases
in conventional test volumes and average revenue per conventional test,
respectively.
Consolidated revenues at the segment recorded a 22% year-on-year increase
in 9M 2023 on the back of increased volumes and prices. The contract segment's
average tests per patient reached a record-high 4.4 tests, up from 4.1
tests in 9M 2022, reflecting a normalisation in patient mix following
the Covid-19 pandemic and the success of IDH's loyalty programme which
was introduced in FY 2021.
Walk-in Segment (37% of Group revenue)
In parallel, IDH's walk-in segment posted conventional revenues of EGP
1,116 million, increasing 34% year-on-year in 9M 2023. Growth came on
the back of a 34% year-on-year increase in average revenue per conventional
test, while test volumes remained unchanged compared to the same time
last year.
Meanwhile, consolidated revenue at the walk-in segment declined 8% year-on-year
on the back of lower test volumes and reflecting a high base effect in
the comparable period of 2022. In line with the trend noted in the contract
segment, tests per patient at the walk-in segment increased to 3.6 tests
in 9M 2023, well above historical figures as the Company books another
record high.
Detailed Segment Performance Breakdown
Walk-in Segment Contract Segment Total
========================= ======================= ========================= =========================
9M22 9M23 Change 9M22 9M23 Change 9M22 9M23 Change
========================= ====== ====== ======= ======= ======= ======= ======= ======= =======
Revenue (EGP mn) 1,214 1,116 -8% 1,584 1,938 22% 2,800 3,054 9%
========================= ====== ====== ======= ======= ======= ======= ======= ======= =======
Conventional Results
(EGP mn) 830 1,116 34% 1,293 1,938 49% 2,123 3,054 44%
Total Covid-19-related
revenue (EGP mn) 384 - - 294 - - 678 - -
Patients ('000) 2,112 1,343 -36% 4,522 4,905 8% 6,633 6,248 -6%
% of Patients 32% 21% 68% 79%
========================= ====== ====== ======= ======= ======= ======= ======= ======= =======
Revenue per Patient
(EGP) 575 831 44% 351 395 13% 422 489 16%
========================= ====== ====== ======= ======= ======= ======= ======= ======= =======
Tests ('000) 5,712 4,894 -14% 18,648 21,574 16% 24,359 26,468 9%
% of Tests 23% 18% 77% 82%
Conventional tests
('000) 4,891 4,894 - 17,837 21,574 21% 22,728 26,468 16%
Total Covid-19-related
tests ('000) 821 - - 810 - - 1,631 - -
========================= ====== ====== ======= ======= ======= ======= ======= ======= =======
Revenue per Test (EGP) 213 228 7% 85 90 6% 115 115 0.4%
========================= ====== ====== ======= ======= ======= ======= ======= ======= =======
Conventional Revenue
per Test (EGP) 170 228 34% 72 90 23% 93 115 24%
========================= ====== ====== ======= ======= ======= ======= ======= ======= =======
Test per Patient 2.7 3.6 35% 4.1 4.4 7% 3.7 4.2 15%
------------------------- ------ ------ ------- ------- ------- ------- ------- ------- -------
Revenue Analysis: Contribution by Geography
Egypt (81.9% of Group revenue)
IDH's home and largest market, Egypt, reported robust performance in Q3
2023, capitalising on the impressive growth trajectory witnessed starting
in May 2023, and expanding both conventional and consolidated revenues
on the back of increased test volumes and average revenue per conventional
test. More specifically, Q3 2023 represented the strongest quarter for
Egyptian operations in FY 2023, following anticipated seasonal slowdowns
in the first half of the year.
On a conventional basis, revenue expanded 49% year-on-year and 26% quarter-on-quarter,
reaching EGP 986 million on the back of increased test volumes and average
revenue per test. Meanwhile, consolidated revenues increased 39% year-on-year
compared to Q3 2022.
On a year-to-date basis, Egypt booked consolidated revenues of EGP 2,500
million, a 12% year-on-year expansion marking the full completion of the
geography's post-Covid-19 recovery. This is particularly noteworthy when
considering that the comparable period of last year included significant
contributions of EGP 432 million from the Company's Covid-19-related testing.
Consolidated revenue growth was supported by a 12% year-on-year increase
in tests performed. Meanwhile, conventional revenues increased 39% year-on-year
from EGP 1,803 in 9M 2022.
Al-Borg Scan
IDH's fast-growing radiology venture continued its steady ramp up throughout
Q3 2023, posting revenues of EGP 108 million in 9M 2023 and booking a
top-line year-on-year growth rate of 86%. Revenue growth for the period
was primarily driven by increased test volumes, which grew 50% year-on-year,
partially due to the ramp up of new branches across the Greater Cairo
area. In parallel, average revenue per test also rose by 24% year-on-year,
reaching EGP 705 in 9M 2023.
In line with the impressive performance recorded by Al-Borg Scan, and
its maintained operational ramp-up, IDH rolled out the venture's seventh
branch in September of this year. The branch, located in Cairo's underpenetrated
Nasr City neighbourhood, falls in line with the Company's strategic direction
to expand its radiology business and establish itself as a leading play
in the fragmented market.
House Calls
In the nine months ended 30 September 2023, IDH's house call service in
Egypt continued to make a robust contribution of 16% to total revenues
in the country. This continues to be significantly ahead of the service's
pre-pandemic contribution, highlighting the segment's growth potential,
and the success of IDH's investment and ramp up strategy specifically
throughout the Covid-19 pandemic.
Wayak
During 9M 2023, Wayak completed 122 thousand orders, representing a 30%
year-on-year increase. On the profitability front, the venture's EBITDA
losses continued to narrow steadily, recording EGP 659 thousand in 9M
2023 versus the EGP 2,780 million in EBITDA losses booked in the comparable
period of FY 2022.
Detailed Egypt Performance Breakdown
Revenue Analysis
Q1 Q1 Q2 Q2 Q3 Q3 9M 9M
EGP mn 2022 2023 2022 2023 2022 2023 % 2022 2023 %
------------------------ ------ ------ ------ ------ ------ ----
Total Revenue 879 731 645 783 711 986 39% 2,235 2,500 12%
======================== ====== ====== ====== ====== ====== ====== ==== ====== ====== ====
Conventional Revenue 549 731 591 783 662 986 49% 1,803 2,500 39%
======================== ====== ====== ====== ====== ====== ====== ==== ====== ====== ====
Pathology Revenue 532 703 573 748 639 941 47% 1,745 2,392 37%
Radiology Revenue 17 28 19 35 23 45 99% 58 108 86%
======================== ====== ====== ====== ====== ====== ====== ==== ====== ====== ====
Total Covid-19-related
Revenue 330 - 53 - 49 - - 432 - -
------------------------ ------ ------ ------ ------ ------ ------ ---- ------ ------ ----
Contribution to Consolidated Results
----------------------------------------------------------------------------------------------------
Conventional revenue 62% 100% 92% 100% 93% 100% 81% 100%
======================== ====== ====== ====== ====== ====== ====== ==== ====== ====== ====
Pathology Revenue 61% 96% 89% 96% 90% 95% 78% 96%
Radiology Revenue 1.9% 3.8% 2.9% 4.5% 3% 5% 3% 4%
======================== ====== ====== ====== ====== ====== ====== ==== ====== ====== ====
Total Covid-19-related
revenue 38% - 8% - 7% 19%
Test Volume Analysis
Total Tests 7.3 7.3 6.9 7.8 7.6 9.3 21% 21.8 24.4 12%
============================== ==== ===== ==== ===== ==== ===== ==== ===== ===== ====
Conventional Tests 6.5 7.3 6.7 7.8 7.5 9.3 24% 20.7 24.4 18%
============================== ==== ===== ==== ===== ==== ===== ==== ===== ===== ====
Total Covid-19-related
Tests 0.8 - 0.2 - 0.2 - - 1.1 -
------------------------------ ---- ----- ---- ----- ---- ----- ---- ----- ----- ----
Contribution to Consolidated Results
-----------------------------------------------------------------------------------------------
Conventional tests performed 89% 100% 97% 100% 98% 100% 95% 100%
============================== ==== ===== ==== ===== ==== ===== ==== ===== ===== ====
Total Covid-19-related
tests performed 11% - 3% - 2% - 5% -
Revenue per Test Analysis
Total Revenue per Test 120 99 94 101 93 107 14% 102 103 0.1%
========================== ==== === === ==== === ==== ==== ==== ==== =====
Revenue per Conventional
Test 84 99 88 101 89 107 20% 87 103 18%
========================== ==== === === ==== === ==== ==== ==== ==== =====
Jordan (15.2% of Group revenue)
In Jordan, IDH's second-largest geography, the Company recorded conventional
revenues of JOD 4.0 million in Q3 2023, increasing 13% year-on-year. This
is primarily a reflection of increased conventional test volumes, which
grew 13% year-on-year to reach 678 thousand tests in Q3 2023. Meanwhile,
IDH recorded an 18% quarter-on-quarter revenue increase in local currency
terms, fuelled by a 19% expansion in test volumes In EGP terms, conventional
revenue growth for the quarter came in at 82% year-on-year, booking EGP
174 million for the quarter. Average revenue per conventional test was
the main driver of growth in EGP terms, booking a 61% year-on-year expansion
due to the weakening of the EGP since last year. It is worth noting that,
in line with trends seen in Egypt, IDH's Jordanian operations have also
started to see steady recovery starting May and throughout the summer
period. Consolidated revenues declined 1% year-on-year during Q3 2023.
On a year-to-date basis, the Company recorded a conventional revenue growth
of 10% year-on-year in local currency terms, reaching JOD 10.8 million
in 9M 2023. Conventional growth for the period came on the back of a 10%
year-on-year increase in conventional test volumes. In EGP terms, Jordanian
operations booked an 86% year-on-year increase, reaching EGP 464 million
compared to EGP 250 million one year prior. Growth in EGP terms includes
significant contributions from the translation effect as a result of the
devaluation of the EGP over the last twelve months. Consolidated revenue
for the nine-month period remained 48% below last year's figure in JOD
terms and 6% in EGP terms as the high base effect from Covid-19-related
testing performed in the first part of 2022 continued to impact results.
Detailed Jordan Performance Breakdown
Revenue Analysis
Q1 Q1 Q2 Q2 Q3 Q3 9M 9M
EGP mn 2022 2023 2022 2023 2022 2023 % 2022 2023 %
------------------------------ ------ ------ ------ ---- ------ ----
Total Revenue 281 144 106 146 109 174 59% 496 464 -6%
============================== ====== ====== ====== ====== ====== ====== ==== ====== ====== ====
Conventional Results 70 144 84 146 95 174 82% 250 464 86%
Total Covid-19-related
Revenues (PCR and Antibody) 210 - 21 - 14 - - 246 -
------------------------------ ------ ------ ------ ------ ------ ------ ---- ------ ------ ----
Contribution to Consolidated Results
Conventional Results 25% 100% 80% 100% 87% 100% 50% 100%
Total Covid-19-related
Revenue (PCR and Antibody) 75% - 20% - 13% - 50% -
------------------------------ ------ ------ ------ ------ ------ ------ ---- ------ ------ ----
Test Volume Analysis
Total tests (k) 991 582 603 598 627 678 8% 2,221 1,858 -16%
============================== ==== ===== ==== ===== ==== ===== ==== ====== ====== =====
Conventional tests performed
(k) 519 582 572 598 599 678 13% 1,691 1,858 10%
Total Covid-19-related
tests performed (k) 472 - 30 - 28 - - 530 -
------------------------------ ---- ----- ---- ----- ---- ----- ---- ------ ------ -----
Contribution to Consolidated Results
==================================================================================================
Conventional tests performed 52% 100% 95% 100% 96% 100% 76% 100%
Total Covid-19-related
tests performed 48% - 5% - 4% - 24% -
------------------------------ ---- ----- ---- ----- ---- ----- ---- ------ ------ -----
Revenue per Test Analysis
Total Revenue per Test 283 248 175 244 174 257 47% 223 250 12%
========================== ==== ==== ==== ==== ==== ==== ==== ==== ==== ====
Revenue per Conventional
Test 136 248 147 244 159 257 61% 148 250 69%
========================== ==== ==== ==== ==== ==== ==== ==== ==== ==== ====
Nigeria (2.6% of revenue)
Echo-Lab, IDH's Nigerian subsidiary, reported sustained top-line growth,
recording revenue expansion of 16% year-on-year in local currency terms
to reach NGN 1,457 million in 9M 2023. In EGP terms, Echo-Lab booked revenue
growth of 44% year-on-year, rising to EGP 79 million in the nine-month
period. Growth was spurred by 22% and 52% year-on-year increases in average
revenue per test in NGN and EGP terms, respectively, with the latter partially
reflecting a weakening of the EGP in the last year. Revenue growth for
the period came despite a 5% year-on-year decline in test volumes, which
reached 204 thousand tests during 9M 2023.
Sudan (0.4% of revenue)
The Company's Sudanese operations continued to be impacted by the ongoing
conflict which has led to the closure of 16 of the country's 18 branches
starting in April 2023. More specifically, during 9M 2023, IDH booked
revenues of SDG 207 million, 50% below the figure recorded the same time
last year. In EGP terms, revenue reached EGP 11 million during the first
nine months of the year, dropping 27% year-on-year from 9M 2023. IDH continues
to closely monitor the situation as it unfolds and will update the market
should any material aspects evolve.
Revenue Contribution by Country
Q1 Q1 Q2 Q2 Q3 Q3 9M 9M
2022 2023 2022 2023 2022 2023 % 2022 2023 %
============================= ====== ====== ====== ====== ====== ====== ===== ====== ====== =====
Egypt Revenue (EGP mn) 879 731 645 783 711 986 39% 2,235 2,500 12%
Conventional (EGP mn) 549 731 591 783 662 986 49% 1,803 2,500 39%
Pathology Revenue 532 703 573 748 639 941 47% 1,745 2,392 37%
Radiology Revenue 17 28 19 35 23 45 99% 58 108 86%
Covid-19-related (EGP
mn) 330 - 53 - 49 - - 432 -
Egypt Contribution to
IDH Revenue 74.5% 79.9% 83.2% 81.8% 84.0% 83.5% 78.0% 80.1%
Jordan Revenue (EGP mn) 281 144 106 146 109 174 59% 496 464 -6%
Conventional (EGP mn) 70 144 84 146 95 174 82% 250 464 86%
Covid-19-related (EGP
mn) 210 - 21 - 14 - - 246 -
Jordan Revenues (JOD
mn) 12.5 3.4 4.0 3.4 4.1 4.0 -1% 20.6 10.8 -48%
Conventional (JOD mn) 3.0 3.4 3.2 3.4 3.5 4.0 13% 9.8 10.8 10%
Jordan Revenue Contribution
to IDH Revenue 23.7% 15.7% 13.7% 15.2% 12.9% 14.7% 17.7% 15.2%
Nigeria Revenue (EGP
mn) 15 31 19 27 21 21 -1% 55 79 44%
Nigeria Revenue (NGN
mn) 371 468 416 469 473 520 10% 1,260 1,457 16%
Nigeria Contribution
to IDH Revenue 1.3% 3.4% 2.5% 2.8% 2.5% 1.8% 2.0% 2.6%
Sudan Revenue (EGP mn) 5.7 8.8 4.8 1.4 4.3 0.5 -88% 14.8 10.7 -27%
Sudan Revenue (SDG mn) 152 169 137 27 128 10 -92% 417 207 -50%
Sudan Contribution to
IDH Revenue 0.5% 1.0% 0.6% 0.1% 0.5% 0.05% 0.5% 0.4%
Average Exchange Rate
9M 2022 9M 2023 Change
========= ======== ======== =================
USD/EGP 18.1 30.7 69.9%
========= ======== ======== =================
JOD/EGP 25.5 43.0 68.9%
========= ======== ======== =================
NGN/EGP 0.04 0.06 27.1%
========= ======== ======== =================
SDG/EGP 0.04 0.05 45.7%
========= ======== ======== =================
Patients Served and Tests Performed by Country
9M 2022 9M 2023 Change
================================= ======== ======== =======
Egypt Patients Served (mn) 5.7 5.8 3%
Egypt Tests Performed (mn) 21.8 24.4 12%
Conventional tests (mn) 20.7 24.4 18%
Covid-19-related tests (mn) 1.1 - -
================================= ======== ======== =======
Jordan Patients Served (k) 789 286 -64%
Jordan Tests Performed (k) 2,221 1,858 -16%
Conventional tests (k) 1,691 1,858 10%
Covid-19-related tests (k) 530 - -
Nigeria Patients Served (k) 110 102 -8%
Nigeria Tests Performed (k) 215 204 -5%
Sudan Patients Served (k) 59 14 -76%
Sudan Tests Performed (k) 112 40 -64%
================================= ======== ======== =======
Total Patients Served (mn) 6.6 6.2 -6%
Total Tests Performed (mn) 24.4 26.5 9%
Branches by Country
30 September 30 September Change
2022 2023
================ ============= ============= =============
Egypt 496 537 41
================ ============= ============= =============
Jordan 21 27 6
================ ============= ============= =============
Nigeria 12 12 -
================ ============= ============= =============
Sudan 17 18 1
================ ============= ============= =============
Total Branches 546 594 48
================ ============= ============= =============
Cost of Goods Sold
Cost of goods sold during the nine-month period reached EGP 1,916 million,
increasing 18% compared to the EGP 1,619 million booked during 9M 2022.
As a percentage of revenue, cost of goods sold stood at 63% in 9M 2023,
up from 58% in the same period of the previous year. Higher cost of goods
sold as a percentage of revenues reflected higher raw material costs,
increased direct wages and salaries costs, as well as higher depreciation
expenses.
Cost of Goods sold Breakdown as a Percentage of Revenue 9M 2022 9M 2023
================================== ======== ========
Raw Materials 20.1% 21.9%
================================== ======== ========
Conventional raw material
costs as % of conventional
revenues 17.0% 21.9%
================================== ======== ========
Covid-19-related raw 29.8% -
material costs as %
of Covid-19-related
revenues
================================== ======== ========
Wages & Salaries 16.5% 19.2%
================================== ======== ========
Depreciation & Amortisation 7.2% 8.7%
================================== ======== ========
Other Expenses 14.1% 12.9%
================================== ======== ========
Total 57.8% 62.7%
================================== ======== ========
Raw material costs (35% of consolidated cost of goods sold) remained
the single largest contributor to cost of goods sold during the period.
Raw materials recorded costs of EGP 668 million during 9M 2023, expanding
19% year-on-year, and constituting a total of 22% of revenues for the
period versus 20% in the same period of the previous year. During the
nine-month period, IDH reported a rise in the average cost of conventional
test kits (21.9% of revenues in 9M 2023 compared to 17% in 9M 2022) on
the back of rising inflation and a weaker EGP. The Company expects test
kit prices as a share of revenue to gradually normalize in the coming
months as the initial impact of the EGP devaluation begins to fade. It
is also important to highlight that raw material outlays in 9M 2023 include
a one-off EGP 15.5 million expense related to expired Covid-19-related
test kits.
Wages and salaries including employee share of profits (31% share of
consolidated cost of goods sold) continued to be the second largest contributor
to cost of goods sold during 9M 2023, coming at EGP 587 million, a year-on-year
increase of 27%. Increased direct wages and salaries reflect higher than
usual adjustments to compensation packages to compensate for unprecedented
inflation as part of the Group's staff retention strategy. Furthermore,
the translation effect due to a weaker EGP resulted in increased direct
wages and salaries expenses in both Jordan and Nigeria.
Direct Wages and Salaries by Region 9M 2022 9M 2023 Change
================== ======== ======== =======
Egypt (EGP mn) 362 445 23%
================== ======== ======== =======
Jordan (EGP mn) 84 118 41%
================== ======== ======== =======
Jordan (JOD mn) 3 3 -16%
================== ======== ======== =======
Nigeria (EGP mn) 12 22 79%
================== ======== ======== =======
Nigeria (NGN mn) 280 395 -41%
================== ======== ======== =======
Sudan (EGP mn) 3 3 -6%
================== ======== ======== =======
Sudan (SDG mn) 79 51 -35%
================== ======== ======== =======
Direct depreciation and amortization costs (14% of consolidated cost
of goods sold) rose 31% year-on-year, reaching EGP 266 million in 9M 2023.
Higher depreciation and amortization costs for the period primarily reflect
the addition of new branches to IDH's network, including the addition
of the newly rolled out Al-Borg Scan branch.
Other expenses (21% of consolidated cost of goods sold) booked EGP 395
million during 9M 2023, increasing a marginal 0.5% year-on-year. It is
worth noting that other expenses for the comparable period, 9M 2022, had
included EGP 63 million paid in concession fees as part of Biolab's agreement
with Queen Alia International Airport and Aqaba Port to provide Covid-19-related
testing to passengers in January and February of 2022. Excluding these
fees, other expenses increased 20% year-on-year from EGP 330 million in
9M 2022. The increase in other expenses is attributable to increased cleaning,
transportation, and consulting expenses to support the expansion of IDH's
branch network in Egypt, and specifically Al-Borg Scan's growth. Additionally,
in Nigeria, higher gasoline prices and repair and maintenance costs pushed
other expenses up continuing to reflect a weaker Naira (versus the US
dollar) and an increasing inflationary environment.
Gross Profit
IDH's gross profit booked EGP 480 million in Q3 2023, increasing 37% year-on-year.
GPM for the quarter stood unchanged compared to Q3 2022 at 41% reflecting
a normalisation in margins as the initial impact of the multiple EGP devaluations
throughout FY 2022 and early FY 2023 begin to fade. It is important to
note that gross profitability witnessed tangible growth compared to the
first half of the year, increasing from a GPM of 35% in Q1 2023 and Q2
2023.
On a year-to-date basis, the Company recorded gross profit of EGP 1,138
million during 9M 2023, down 4% year-on-year. The gross profit margin
(GPM) stood at 37%, declining five percentage points from 42% in 9M 2022.
Lower gross profitability during the period reflected the above-mentioned
increase in cost of goods sold.
Selling, General and Administrative Expenses
SG&A outlays during 9M 2023 climbed to EGP 535 million, a 29% year-on-year
increase. As a percentage of revenues, SG&A outlays constituted 18% of
revenues, up from 15% in 9M 2022. Increased SG&A expenses came mainly
on the back of:
* Higher indirect wages and salaries expenses, which
rose by 46% year-on-year to EGP 207 million. Indirect
wages and salaries amounted to 7% of revenues in 9M
2023, compared to 5% one year prior. The increase can
be attributed to USD-denominated directors'
compensations, as well as the addition of a board
member in the first quarter of last year (who
received compensation starting March 2022). Indirect
wages and salaries also reflect increased wage
expenses in Jordan due to the translation effect from
a weaker EGP.
* Increased other expenses, which grew 36% year-on-year
to EGP 222 million in 9M 2023. The increase in other
expenses is mainly attributable to a weaker EGP which
saw USD-denominated expenses (including auditor fees)
at the holding level weigh on the consolidated
figure.
* One-off legal consultancy expenses related to the
termination of the Pakistan deal in the first quarter
of 2023 which stood at EGP 8 million.
Selling, General and Administrative Expenses 9M 2022 9M 2023 Change
=============================== ======== ======== =======
Wages & Salaries 141 207 46%
=============================== ======== ======== =======
Accounting Fees 33 58 73%
=============================== ======== ======== =======
Professional Services
Fees 27 44 63%
=============================== ======== ======== =======
Market - Advertisement
expenses 87 77 -12%
=============================== ======== ======== =======
Other Expenses 92 99 8%
=============================== ======== ======== =======
Depreciation & Amortisation 23 30 28%
=============================== ======== ======== =======
Travelling and transportation
expenses 12 20 74%
=============================== ======== ======== =======
Total 415 535 29%
=============================== ======== ======== =======
EBITDA
IDH reported normalised EBITDA(13) of EGP 411 million, up an impressive
55% year-on-year and yielding an associated margin of 35% versus 31% in
Q3 2022. Additionally, EBITDA profitability recorded significant improvement
compared to the first two quarters of 2023, which booked EBITDA margins
of 25% and 24% in Q1 2023 and Q2 2023, respectively. Higher EBITDA profitability
is a direct reflection of IDH's gradual cost normalisation as the effects
of the devaluation over the past year begin to fade.
On a nine-month basis, the Company recorded a normalised EBITDA of EGP
873 million during the first nine months of 2023, down 10% year-on-year
from the high base of 9M 2022 when Covid-19-related testing had boosted
results. IDH reported an associated margin of 29%, declining six percentage
points from 35% in 9M 2022. Decreased EBITDA profitability mainly reflects
lower gross profitability coupled with higher SG&A expenses as discussed
above.
It is important to highlight that EBITDA is normalised for several one-off
expenses, including an EGP 12 million non-recurring expense owed to the
Egyptian government. expense is in accordance with article 134 of labour
law on Vocational Guidance and Training issued by the Egyptian Government
in 2003. In accordance with the law, IDH's Egyptian operations are required
to provide 1% of net profits each year into a training fund. Integrated
Diagnostics Holdings plc has taken legal advice and considered market
practices in Egypt relating to the law, and more specifically whether
vocational training courses undertaken by the Company's Egyptian subsidiaries
suggest that obligations have been satisfied by in-house training programmes
provided by those entities. Since the issue of the law, IDH's Egyptian
subsidiaries have not been requested by the government to pay, nor have
they voluntarily paid, any amounts into the external training fund.
[1 (3]) Normalised EBITDA is calculated as operating profit plus depreciation
and amortization, excluding non-recurring expenses, specifically a EGP
12 million one-off expense owed to the Egyptian government for vocational
training, EGP 6.5 million in pre-operating expenses in Saudi Arabia, and
EGP 5.0 million impairment expense in Sudan due to the ongoing situation
in the country.
EBITDA by Country
In Egypt, the Company booked normalised EBITDA of EGP 359 million with
a margin of 36% in Q3 2023, 53% above the figure booked in Q3 2022 when
the Company's EBITDA margin stood at 33%. Compared to the previous quarter,
Egyptian operations posted a 72% quarter-on-quarter growth with its EBITDA
margin expanding by 10 points.
Normalised EBITDA on a nine-month basis stood at EGP 766 million in 9M
2023, down 11% year-on-year. Meanwhile, IDH booked an EBITDA margin of
31%, down from 38% in 9M 2022. Lower EBITDA profitability is a reflection
lower gross profitability coupled with increased SG&A outlays at the Company's
Egyptian operations, which expanded 25% year-on-year in 9M 2023.
In Jordan, IDH's subsidiary, Biolab, recorded normalised EBITDA of JOD
1.3 million in Q3 2023, increasing 7% year-on-year and 18% quarter-on-quarter.
The normalised EBITDA margin stood at 31%, up from 29% in Q3 2022 and
22% in Q2 2023. In EGP terms, Jordan's normalised EBITDA came in at EGP
54 million and yielded a margin of 31%, increasing 73% year-on-year and
66% quarter-on-quarter from Q3 2022 and Q2 2023, respectively. It is important
to note that EBITDA results in EGP terms were partially affected by the
translation effect from a weakened EGP compared to Q3 2022.
On a year-to-date basis, the Company booked a normalised EBITDA of JOD
2.9 million in 9M 2023, declining 44% year-on-year and yielding an associated
margin of 26%. In EGP terms, normalised EBITDA remained marginally unchanged
at EGP 123 million and with a margin of 26%, mainly due to the translation
effect as a result of the weakening EGP. Lower EBITDA profitability is
a result of lower gross profitability, which declined 45% year-on-year
in JOD terms.
In Nigeria, despite growing revenues in EGP and NGN terms, the Company's
EBITDA losses widened, reaching NGN 61 million in Q3 2023 from NGN 43
million during the same period last year. Compared to the previous quarter,
the Company recorded a narrowing of EBITDA losses, compared to NGN 111
million in Q2 2023. In EGP terms, EBITDA losses reached EGP 2.5 million
in Q3 2023, expanding from a loss of EGP 1.9 million one year prior. Widening
EBITDA losses were fuelled by lower gross profitability in the country,
due to rising gasoline prices and increased inflation on the back of a
weakened Naira.
In Sudan, IDH booked normalised EBITDA loss of SDG 4 million, down from
a loss of SDG 0.4 million in Q3 2022. In EGP terms, Sudanese operations
yielded a normalised EBITDA loss of EGP 212 thousand during Q3 2023 compared
to EGP 14 thousand one year prior. Widening EBITDA losses for the quarter
were driven by the halting of operations in 16 of the country's 18 branches
due to ongoing conflict since the beginning of the year.
Regional EBITDA in Local Currency Mn 9M 2022 9M 2023 Change
--------------------- -------- -------- -------
Egypt EBITDA EGP 857 766 -11%
Margin 38% 31%
Jordan JOD 5.1 2.9 -44%
Margin 25% 26%
Nigeria NGN -122 -294 -140%
Margin -10% -20%
Sudan SDG 4 20 445%
Margin 1% 10%
Interest Income / Expense
IDH's interest income in 9M 2023 reached EGP 46 million, down 44% from
EGP 83 million during the comparable period of last year. Declined interest
income for the period was mainly a result of lower cash balances due to
the record cash dividends distributed during last year.
Interest expense(14) came in at EGP 115 million, rising 15% year-on-year
from EGP 100 million in 9M 2022. Higher interest expenses are mainly attributable
to:
* Higher interest on lease liabilities related to IFRS
16 due to the addition of new branches to IDH's
network.
* Higher interest expenses following the CBE decision
to increase rates by 1,000 bps since March 2022. It
is important to note that IDH's interest bearing debt
balance decreased to EGP 94 million as at 30
September 2023, from EGP 117 million at year-end
2022. Earlier in the year, as part of IDH's strategy
to reduce foreign currency risk, the Company agreed
with General Electric (GE) for the early repayment of
its contractual obligation of USD 5.7 million. To
finance the settlement, IDH utilized a bridge loan
facility, with half the amount being funded
internally, while the other half (amounting to EGP 55
million) was provided through a bridge loan by Ahly
United Bank- Egypt (AUBE). Interest expenses related
to the AUBE facility recorded EGP 18 million in 9M
2023. The bridge loan was fully settled in Q2 2023.
Interest Expense Breakdown EGP mn 9M 2022 9M 2023 Change
=============================== ======== ======== =======
Interest on Lease Liabilities
(IFRS 16) 53.8 69.0 28%
=============================== ======== ======== =======
Interest Expenses on
Leases 14.9 19.4 30%
=============================== ======== ======== =======
Interest Expenses on
Borrowings(15) 11.1 17.7 59%
=============================== ======== ======== =======
Bank Charges 11.1 8.8 -20%
=============================== ======== ======== =======
Loan-related Expenses 8.9 - -
on IFC facility(16)
=============================== ======== ======== =======
Total Interest Expense 99.7 115.0 15%
=============================== ======== ======== =======
1 (4) Interest expenses on medium-term loans include EGP 18.0 related
to the Group's facility with Ahli United Bank Egypt (AUBE). Meanwhile,
the Group's facility with the Commercial International Bank (CIB) was
fully repaid as of 5 April 2022.
1 (5) Interest expenses on medium-term loans include EGP 18.0 related
to the Group's facility with Ahli United Bank Egypt (AUBE). Meanwhile,
the Group's facility with the Commercial International Bank (CIB) was
fully repaid as of 5 April 2022.
1 (6) Loan-related expenses on IFC facility represents commitment fees
on the facility granted by IFC and Mashreq with a total value of USD 60
million. The facility was cancelled in May 2023.
Foreign Exchange
IDH recorded a foreign exchange gain of EGP 99 million during 9M 2023,
up 80% year-on-year and partially reflecting intercompany balances revaluation.
Taxation
Tax expenses, including both income and deferred tax, stood at EGP 197
million during 9M 2023, a decrease of 22% year-on-year from the EGP 251
million reported in 9M 2022. IDH's effective tax rate came in at 34%,
down from 38% in the same period of the previous year. It is worth mentioning
that there is no tax payable for IDH's two holding-level companies. Meanwhile,
tax was paid from the Group's operating subsidiaries (Egypt 31%, Jordan
28%, Nigeria 0.1%).
Taxation Breakdown by Region EGP Mn 9M 2022 9M 2023 Change
==================== ======== ======== =======
Egypt 201.7 183.7 -9%
==================== ======== ======== =======
Jordan 18.5 12.4 -33%
==================== ======== ======== =======
Nigeria 30.5 -0.05 -
==================== ======== ======== =======
Sudan 0.4 0.5 24%
==================== ======== ======== =======
Total Tax Expenses 250.9 196.7 -22%
==================== ======== ======== =======
Net Profit
IDH's net profit in Q3 2023 stood at EGP 176 million in Q3 2023, up from
a net loss of EGP 36 million in Q3 2022, and with a margin of 15%. Improved
bottom-line profitability is also apparent on a quarter-on-quarter basis,
with the Company's NPM increasing from 4% in Q2 2023. On a nine-month
basis, net profit recorded EGP 387 million, down 4% year-on-year. The
Company posted a net profit margin (NPM) of 13% compared to 14% in 9M
2022.
Non-Recurring Expenses
IDH recorded several one-off expenses during the period, namely:
* EGP 12.2 million owed to the Egyptian government for
vocational training.
* EGP 6.5 million due to pre-operating expenses in
Saudi Arabia.
* EGP 5.0 million in impairment expenses due to the
ongoing conflict in Sudan.
* EGP 16 million due to the expiration of Covid-19
testing kits.
* EGP 2 million due to an information strategy
agreement which was executed in 2023 for USD 54
thousand.
* EGP 1 million due to one-off legal reports.
* EGP 8 million due to one-off expenses related to the
termination of the Pakistan termination. It is
important to note that these expenses have been
impacted by the devaluation of the EGP.
Adjusting for these expenses, net profit would have booked EGP 191 million
and yielded an NPM of 16% in Q3 2023 and EGP 437 million with an NPM of
14% in 9M 2023.
ii. Balance Sheet Analysis
Assets
Property, Plant and Equipment
IDH booked gross property, plant and equipment (PPE) of EGP 2,453 million
as at 30 September 2023, up from EGP 2,208 at 31 December 2022. The increase
in CAPEX as a share of revenues during 9M 2023 is primarily attributable
to the addition of branches to IDH's network (constituting 7% of revenues),
while the remainder is due to the translation effect related to Jordan,
Sudan, and Nigeria (constituting 1% of revenues).
Total CAPEX Addition Breakdown - 9M 2023 EGP mn % of Revenue
================================= ======= =============
Leasehold Improvements/new
branches 138.9 4.6%
================================= ======= =============
Al-Borg Scan Expansion 69.7 2.3%
================================= ======= =============
Total CAPEX Additions Excluding
Translation 208.9 6.8%
================================= ======= =============
Translation Effect 36.2 1.2%
================================= ======= =============
Total CAPEX Additions 245.1 8.0%
================================= ======= =============
Accounts Receivable and Provisions
Accounts receivable as at 30 September 2023 amounted to EGP 602 million,
up 52% year-to-date from the figure recorded as at year-end 2022. Meanwhile,
IDH's receivables' Days on Hand (DoH) stood at 145 days, increasing from
124 days as at 31 December 2022.
Provision for doubtful account booked EGP 37 million during the first
nine months of 2023, increasing from EGP 25 million in 9M 2022. Increases
in provisions and receivable balance are a reflection of slower collection
rates due to the economic downturns and inflationary environment which
have characterized several of IDH's geographies throughout the past year,
particularly in its largest market of Egypt.
Inventory
IDH's inventory balance as at the end of 9M 2023 amounted to EGP 365 million,
up from EGP 265 million at year-end 2022. Meanwhile, Days Inventory Outstanding
(DIO) stood at 135 days compared to 127 days at 31 December 2022. Increased
DIO is a reflection of management strategy to accumulate inventory as
a hedge against inflation over the past year.
Cash and Net Debt/Cash
Cash balances booked EGP 794 million at 30 September 2023, down from 816
million as at 31 December 2023. Declining cash balances are related to
the previously discussed decision for the early repayment of IDH's contractual
obligation of USD 5.7 million (equivalent to EGP 110 million) in line
with its strategy to reduce foreign currency risk by utilizing internal
resources coupled with a bridge loan facility provided by AUBE. The bridge
loan facility was fully settled in the second quarter of the year.
EGP million 31 Dec 30 Sep
2022 2023
================== ======= =======
T-Bills 296 272
================== ======= =======
Time Deposits 123 110
================== ======= =======
Current Accounts 378 376
================== ======= =======
Cash on Hand 18 37
================== ======= =======
Total 816 794
================== ======= =======
IDH's net debt (17) balance came in at EGP 356 million as of the end of
9M 2023, down 5% year-to-date from EGP 374 million as at year-end 2022.
(17) The net cash/(debt) balance is calculated as cash and cash equivalent
balances including financial assets at amortised cost, less interest-bearing
debt (medium term loans), finance lease and Right-of-use liabilities.
EGP million 31 Dec 30 Sep 31 Dec
2022 2023 2021
========================================= ======= ======= =======
Cash and Financial Assets at Amortised
Cost (18) 816 794 2,350
========================================= ======= ======= =======
Lease Liabilities Property (727) (814) 106
========================================= ======= ======= =======
Total Financial Liabilities (Short-term
and Long-term) (335) (233)
========================================= ======= ======= =======
Interest Bearing Debt ("Medium
Term Loans") (127) (98)
========================================= ======= ======= =======
Net Cash/(debt) Balance (374) (356) 1,483
========================================= ======= ======= =======
Note: Interest Bearing Debt includes accrued interest for each period.
(18) As outlined in Note 18 of IDH's Consolidated Financial Statements,
some term deposits and treasury bills cannot be accessed for over 3 months
and are therefore not treated as cash. Term deposits which cannot be accessed
for over 3 months stood at EGP 113 million in Q1 2023, versus EGP 123
million as at year-end 2022. Meanwhile, treasury bills not accessible
for over 3 months stood at EGP 342 million in Q1 2023, up from EGP 296
million in FY 2022.
Lease liabilities and financial obligations on property stood at EGP
814 million as at the end of 9M 2023, with the increase driven by the
rollout of 48 new branches across IDH's network over the past 12-month
period.
Meanwhile, financial obligations related to equipment came in at EGP 233
million as at 30 September 2023, down from EGP 335 million as at year-end
2023. The decline in financial obligations related to equipment is due
to the early repayment of IDH's obligations with General Electric (GE)
in line with the Company's efforts to hedge against foreign currency risk.
Half of the settlement was financed by IDH internally, while the remainder
was financed through a bridge loan facility from AUBE.
Finally, interest bearing debt (19) recorded EGP 94 million at the end
of 9M 2023, down from EGP 116 million as at 31 December 2022. The decrease
primarily reflects the repayment of EGP 17 million in accordance with
Al-Borg Scan's medium term loan repayment schedule.
(19) IDH's interest bearing debt as at 31 March 2023 included EGP 172
million to its facility with Ahli United Bank Egypt (AUBE) (outstanding
loan balances are excluding accrued interest for the period). It is worth
noting that in order to finance the early repayment settlement with General
Electric, the Company utilized a bridge loan facility of EGP 55 million.
The facility was withdrawn in Q1 2023 and settled in Q2 2023.
Liabilities
Accounts Payable (20)
Accounts payable as at 30 September 2023 stood at EGP 370 million, up
from EGP 270 as at year-end 2022. Meanwhile, Days Payable Outstanding
(DPO) amounted to 137 days, down from 151 days nine months earlier.
2 (0) Accounts payable is calculated based on average payables at the
end of each period.
Put Option
The put option current liability is related to both:
* The option granted in 2011 to Dr. Amid, Biolab's CEO,
to sell his stake (40%) to IDH. The put option is in
the money and exercisable since 2016 and is
calculated as 7 times Biolab's LTM EBITDA minus net
debt. Biolab's put option liability decreased
following the significant decline in the venture's
EBITDA for the period.
* The option granted in 2022 to Izhoor, IDH, and Biolab
as part of their JV agreement in Saudi Arabia. The
option allows the non-defaulting party, at its sole
and absolute discretion, to serve one or more written
notices to the defaulting party. The notices enable
the non-defaulting party to buy the defaulting
party's shares at the fair price, sell its shares to
the defaulting party at the fair price, or request
the dissolution and liquidation of the JV company. It
is important to note that the put option, which
grants these rights to the non-defaulting party, does
not have a specified expiration date.
The put option non-current liability is related to the option granted
in 2018 to the International Finance Corporation from Dynasty - shareholders
in Echo Lab - and it is exercisable in 2024. The put option is calculated
based on fair market value (FMV).
INTEGRATED DIAGNOSTICS HOLDINGS plc - "IDH"
AND ITS SUBSIDIARIES
Consolidated Financial Statements
for the nine-month period ended 30 September 2023
Consolidated statement of financial position as at 30 September
2023
Notes 30 Sep 31 Dec
2023 2022
EGP'000 EGP'000
------------------------------------------------------- -------------------------- ----------- ---------------
Assets
Non-current assets
Property, plant and equipment 4 1,372,233 1,326,262
Intangible assets and goodwill 5 1,724,471 1,703,636
Right of use assets 6 689,718 622,975
Financial assets at fair value through
profit and loss 7 - 18,064
Total non-current assets 3,786,422 3,670,937
Current assets
Inventories 365,433 265,459
Trade and other receivables 8 758,718 543,887
Financial assets at amortized cost 9 180,088 167,404
Current financial assets at fair value
through profit and loss 7 24,534 -
Cash and cash equivalents 10 614,180 648,512
----------- ---------------
Total current assets 1,942,953 1,625,262
----------- ---------------
Total assets 5,729,375 5,296,199
=========== ===============
Equity
Share capital 1,072,500 1,072,500
Share premium reserve 1,027,706 1,027,706
Capital reserves (314,310) (314,310)
Legal reserve 51,641 51,641
Put option reserve (336,303) (490,695)
Translation reserve (78,996) 24,173
Retained earnings 1,171,361 783,081
Equity attributable to the owners
of the Company 2,593,599 2,154,096
Non-controlling interests 425,104 292,885
----------- ---------------
Total equity 3,018,703 2,446,981
----------- ---------------
Non-current liabilities
Provisions 17,455 3,519
Non-current put option liability 12 26,616 51,000
Borrowings 13 67,465 93,751
Other financial obligations 14 873,174 914,191
Deferred tax liabilities 18-C 356,739 321,732
Total non-current liabilities 1,341,449 1,384,193
Current liabilities
Trade and other payables 11 764,864 701,095
Other financial obligations 14 173,483 148,705
Current put option liability 12 309,687 439,695
Borrowings 13 40,104 22,675
Current tax liabilities 81,085 152,855
Total current liabilities 1,369,223 1,465,025
Total liabilities 2,710,672 2,849,218
----------- ---------------
Total equity and liabilities 5,729,375 5,296,199
=========== ===============
The accompanying notes form an integral part of these
consolidated financial statements.
These condensed consolidated interim financial information
were approved and authorized for issue by the Board of
Directors and signed on their behalf on 15 November 2023
by:
Dr. Hend El Sherbini Hussein Choucri
Chief Executive Officer Independent Non-Executive
Director
Consolidated income statement for the quarter and nine-month
periods ended 30 September 2023
For the three months For the nine months
period period
ended 30 September ended 30 September
Notes 2023 2022 2023 2022
EGP'000 EGP'000 EGP'000 EGP'000
----------------------------- ------ ------------- -------------- ------------- -------------
Revenue 21 1,181,736 846,251 3,053,678 2,800,316
Cost of sales (702,037) (496,581) (1,916,045) (1,618,776)
Gross profit 479,699 349,670 1,137,633 1,181,540
Marketing and advertising
expenses (50,972) (58,641) (163,445) (151,209)
Administrative expenses 16 (123,383) (99,626) (377,723) (263,818)
Impairment loss on
trade and other receivable (13,854) (8,877) (37,123) (25,035)
Other income (3,402) 3,834 (5,965) 7,305
Operating profit 288,088 186,360 553,377 748,783
------------- -------------- ------------- -------------
Non-operating expense 12,200 - - -
Net fair value losses
on financial assets
at fair value - (141,092) - (141,092)
Finance costs 17 (41,831) (49,593) (114,957) (99,718)
Finance income 17 16,264 9,016 145,745 146,286
Net finance cost (25,567) (40,577) 30,788 46,568
------------- -------------- ------------- -------------
Profit before tax 274,721 4,691 584,165 654,259
============= ============== ============= =============
Income tax expense 18-B (98,310) (40,337) (196,704) (250,853)
Profit for the period 176,411 (35,646) 387,461 403,406
============= ============== ============= =============
Profit attributed
to:
Equity holders of the
parent 177,789 (18,186) 401,379 404,034
Non-controlling interests (1,378) (17,460) (13,918) (628)
176,411 (35,646) 387,461 403,406
============= ============== ============= =============
Earnings per share
(expressed in EGP):
Basic and diluted earnings
per share 20 0.30 (0.03) 0.67 0.67
------------- -------------- ------------- -------------
The accompanying notes form an integral part of these condensed
consolidated interim financial information.
Consolidated statement of comprehensive income/(expenses) for
the quarter and six-month periods ended 30 September 2023
For the three For the six months
months period ended period ended 30
30 September September
2023 2022 2023 2022
EGP'000 EGP'000 EGP'000 EGP'000
------------------------------------- ---------- ----------- ---------- ---------
Net profit 176,411 (35,646) 387,461 403,406
Items that may be reclassified
to profit or loss:
Exchange difference on translation
of foreign operations (8,117) 34,378 (2,034) 111,686
Other comprehensive income / (Loss)
for the period net of tax (8,117) 34,378 (2,034) 111,686
---------- ----------- ---------- ---------
Total comprehensive income for
the period 168,294 (1,268) 385,427 515,092
========== =========== ========== =========
Attributed to:
Equity holders of the parent 168,294 (13,640) 298,210 421,829
Non-controlling interests - 12,372 87,217 93,263
168,294 (1,268) 385,427 515,092
========== =========== ========== =========
The accompanying notes form an integral part of these condensed
consolidated interim financial information.
Consolidated statement of cash flows for the nine-month period
ended 30 September 2023
30 September 30 September
Notes 2023 2022
EGP'000 EGP'000
----------------------------------------------- ------ -------------------- -------------------
Cash flows from operating activities
Profit for the period before tax 584,165 654,259
Adjustments
Depreciation of property, plant and equipment 4 191,692 146,433
Depreciation of right of use assets 6 98,027 73,959
Amortisation of intangible assets 5 5,810 5,211
Unrealised foreign currency exchange (gains)
losses 17 (99,406) 85,736
Interest income 17 (46,339) (83,194)
Interest expense 17 106,155 88,658
Bank Charges 8,803 11,060
Loss/(Gain) on disposal of Property, plant
and equipment (697) 312
Impairment in trade and other receivables 37,123 25,035
Impairment in goodwill - 1,755
Equity settled financial assets at fair
value (6,470) (3,427)
ROU Asset/Lease Termination (590) 1,152
Hyperinflation (gains) losses 17 - (7,736)
FV through P&L - 141,092
Change in Provisions 13,936 406
Change in Inventories (95,202) (34,123)
Change in trade and other receivables (219,352) (158,214)
Change in trade and other payables 30,672 (223,795)
Cash generated from operating activities
before income tax payment 608,327 724,579
-------------------- -------------------
Tax paid during period (231,863) (653,580)
Net cash generated from operating activities 376,464 70,999
-------------------- -------------------
Cash flows from investing activities
Interest received on financial asset at
amortised cost 46,795 84,044
Payments for the purchase of financial
assets at amortized cost (192,955) (348,139)
Proceeds for the sale of financial assets
at amortized cost 190,134 1,656,815
Payments for acquisition of property,
plant and equipment 4 (218,271) (202,506)
Payments for acquisition of intangible
assets 5 (2,150) (2,382)
Proceeds from sale of Property, plant
and equipment 2,163 9,552
Payments for shares bought - (999,376)
Proceeds for shares sold - 858,284
Net cash flows generated (used in) from
investing activities (174,284) 1,056,292
-------------------- -------------------
Cash flows from financing activities
Proceeds from borrowings 68,055 7,411
Repayments of borrowings (76,911) (21,721)
Payment of finance lease liabilities (210,496) (41,912)
Dividends paid - (1,411,752)
Interest paid (107,994) (84,096)
Bank charge paid (8,803) (11,060)
Paid cash to non-controlling interest (3,112) -
Injection of cash to non-controlling interest 48,114 8,763
Net cash flows used in financing activities (291,147) (1,554,367)
-------------------- -------------------
Net increase in cash and cash equivalent (88,967) (427,076)
Cash and cash equivalents at the beginning
of the year 648,512 891,451
Effect of exchange rate 54,635 65,215
Cash and cash equivalent at the end of
the period 10 614,180 529,590
==================== ===================
Non-cash investing and financing activities disclosed in other
notes are:
-- Acquisition of right-of-use assets - note 6
-- Property plant and equipment - note 4
-- Put option liability - note 12
The accompanying notes form an integral part of these condensed
consolidated interim financial information.
Consolidated statement of changes in equity for the nine-month
period ended 30 September 2023
Attributable to owners of the Parent
------------------------------------------------------------------------------------------------------------------------------------------
EGP '000 Share Share Capital Legal Put option Translation Retained Total Non-controlling Total equity
capital premium reserve reserve* reserve reserve earnings attributable interests
reserve to the
owners of
the Parent
----------------- ----------- ----------- ----------- ---------------- -------------
At 1 January 2023 1,072,500 1,027,706 (314,310) 51,641 (490,695) 24,173 783,081 2,154,096 292,885 2,446,981
----------- ----------- ----------- --------- ----------- ------------ ------------- ------------- ---------------- -------------
Profit for the
period - - - - - - 401,379 401,379 (13,918) 387,461
Other
comprehensive
income for the
period - - - - - (103,169) - (103,169) 101,135 (2,034)
Total
comprehensive
income at 30
September 2023 - - - - - (103,169) 401,379 298,210 87,217 385,427
----------- ----------- ----------- --------- ----------- ------------ ------------- ------------- ---------------- -------------
Transactions
with owners of
the Company
Contributions
and
distributions
Dividends - - - - - - - - - -
Legal reserve - - - - - - - - - -
formed during
the period
Movement in put
option
liabilities - - - - 154,392 - - 154,392 - 154,392
Impact of
hyperinflation - - - - - - (13,099) (13,099) - (13,099)
Paid share from
non-controlling
interest (3,112) (3,112)
Non-controlling
interests cash
injection in
subsidiaries
during the
period - - - - - - - - 48,114 48,114
Total
contributions
and
distributions - - - - 154,392 - (13,099) 141,293 45,002 186,295
----------- ----------- ----------- --------- ----------- ------------ ------------- ------------- ---------------- -------------
Balance at 30
September 2023 1,072,500 1,027,706 (314,310) 51,641 (336,303) (78,996) 1,171,361 2,593,599 425,104 3,018,703
=========== =========== =========== ========= =========== ============ ============= ============= ================ =============
At 1 January 2022 1,072,500 1,027,706 (314,310) 51,641 (956,397) 150,730 1,550,976 2,582,846 211,513 2,794,359
----------- ----------- ----------- --------- ----------- ------------ ------------- ------------- ---------------- -------------
Profit for the
period - - - - - - 404,034 404,034 (628) 403,406
Other
comprehensive
income for the
period - - - - - 17,795 - 17,795 93,891 111,686
Total
comprehensive
income at 30
September 2022 - - - - - 17,795 404,034 421,829 93,263 515,092
----------- ----------- ----------- --------- ----------- ------------ ------------- ------------- ---------------- -------------
Transactions
with owners of
the Company
Contributions
and
distributions
Dividends - - - - - - (1,304,805) (1,304,805) (106,947) (1,411,752)
Legal reserve - - - - - - - - - -
formed during
the period
Movement in put
option
liabilities - - - - 266,958 - - 266,958 - 266,958
Impact of
hyperinflation - - - - - - (6,910) (6,910) 1,446 (5,464)
Non-controlling
interest cash
injection in
subsidiaries
during the
period - - - - - - - 8,763 8,763
Total
contributions
and
distributions - - - - 266,958 - (1,311,715) (1,044,757) (96,738) (1,141,495)
----------- ----------- ----------- --------- ----------- ------------ ------------- ------------- ---------------- -------------
Balance at 30
September 2022 1,072,500 1,027,706 (314,310) 51,641 (689,439) 168,525 643,295 1,959,918 208,038 2,167,956
=========== =========== =========== ========= =========== ============ ============= ============= ================ =============
*Under Egyptian Law, each subsidiary in Egypt must set aside at
least 5% of its annual net profit into a legal reserve until such
time that this represents 50% of each subsidiary's issued capital.
This reserve is not distributable to the owners of the Company.
The accompanying notes form an integral part of these condensed
consolidated interim financial information.
(In the notes all amounts are shown in Egyptian Pounds "EGP'000"
unless otherwise stated)
1. Reporting entity
Integrated Diagnostics Holdings plc "IDH" or "the Company" is a
Company which was incorporated in Jersey on 4 December 2014 and
established according to the provisions of the Companies (Jersey)
Law 1991 under Registered No. 117257. These condensed consolidated
interim financial information as at and for the nine months ended
30 September 2023 comprise the Company and its subsidiaries
(together referred as the 'Group'). The Company is a dually listed
entity, in both London Stock Exchange (since 2015) and in the
Egyptian Exchange (during May 2021).
The principal activities of the Company and its subsidiaries
(together "The Group") include investments in all types of the
healthcare field of medical diagnostics (the key activities are
pathology and Radiology related tests), either through acquisitions
of related business in different jurisdictions or through expanding
the acquired investments they have. The key jurisdictions that the
Group operates are in Egypt, Jordan, Nigeria, Sudan and Saudi
Arabia.
The Group's financial year starts on 1 January and ends on 31
December of each year.
This condensed consolidated interim financial information were
approved for issue by the Directors of the Company on 15 November
2023.
2. Basis of preparation
A) Statement of compliance
These condensed consolidated interim financial information have
been prepared as per IAS 34 'Interim Financial Reporting' (As
adopted by the IASB). as the accounting policies adopted are
consistent with those of the previous financial year ended 31
December 2022 and corresponding interim reporting period.
These condensed consolidated interim financial information do
not include all the information and disclosures in the annual
consolidated financial Statement, and should be read in conjunction
with the financial Statement published as at and for the year ended
31 December 2022 which is available at www.idhcorp.com ,. In
addition, results of the nine month period ended 30 September 2023
are not necessary indicative for the results that may be expected
for the financial year ending 31 December 2023.
B) Basis of measurement
The condensed consolidated interim financial information has
been prepared on the historical cost basis except where adopted
IFRS mandates that fair value accounting is required which is
related to the financial assets and liabilities measured at fair
value.
C) Functional and presentation currency
These condensed consolidated interim financial information is
presented in Egyptian Pounds (EGP'000). The functional currency of
the majority of the Group's entities is the Egyptian Pound (EGP)
and is the currency of the primary economic environment in which
the Group operates.
The Group also operates in Jordan, Sudan, Nigeria and Saudi
Arabia and the functional currencies of those foreign operations
are the local currencies of those respective territories, however
due to the size of these operations, there is no significant impact
on the functional currency of the Group, which is the Egyptian
Pound (EGP).
3. Significant accounting policies
In preparing these condensed consolidated interim financial
information, the significant judgments made by the management in
applying the Group's accounting policies and the key sources of
estimation uncertainty were the same as those that were applied to
the consolidated financial information for the year ended 31
December 2022."The preparation of these condensed consolidated
interim financial information requires management to make
judgements, estimates and assumptions that affect the application
of accounting policies and the reported amounts of assets,
liabilities, income and expense. Actual results may differ from
these estimates. Information about significant areas of estimation
uncertainty and critical judgement in applying accounting policies
that have the most significant effect on the amount recognised in
the condensed consolidated interim financial statement is described
in note 3.2 of the annual consolidated financial information
published for the year ended 31 December 2022. In preparing these
condensed consolidated interim financial information, the
significant judgments made by the management in applying the
Group's accounting policies and the key sources of estimation
uncertainty were the same as those that were applied to the
consolidated financial information for the year ended 31 December
2022".
4. Property, plant and equipment
Medical,
electric
& Fixtures,
information fittings Project Payment
Land & system Leasehold & under on
buildings equipment improvements vehicles construction account Total
---------- ------------ ------------- ---------- ------------- -------- ----------
Cost
At 1 January
2023 426,961 1,111,867 507,442 133,195 28,589 10,614 2,218,668
Additions 8,554 88,320 45,285 16,104 69,148 270 227,681
Hyperinflation
effect - (13,098) - - - - (13,098)
Disposals - (3,316) (503) (1,852) - (5,671)
Exchange
differences 2,727 2,966 23,095 7,373 33 - 36,194
Transfers - 36,300 29,918 (66,218) - -
---------- ------------ ------------- ---------- ------------- -------- ----------
At 30 September
2023 438,242 1,223,039 605,237 154,820 31,552 10,884 2,463,774
---------- ------------ ------------- ---------- ------------- -------- ----------
Depreciation
At 1 January
2023 61,578 513,869 261,705 55,254 - 892,406
Depreciation
for the period 5,339 113,197 61,121 12,035 - - 191,692
Disposals - (2,275) (440) (1,490) - - (4,205)
Exchange
differences 632 1,031 8,243 1,742 - - 11,648
---------- ------------ ------------- ---------- ------------- -------- ----------
At 30 September
2023 67,549 625,822 330,629 67,541 - - 1,091,541
---------- ------------ ------------- ---------- ------------- -------- ----------
Net book value
at 30
September 370,693 597,217 274,608 87,279 31,552 10,884 1,372,233
========== ============ ============= ========== ============= ======== ==========
At 31 December
2022 365,383 597,998 245,737 77,941 28,589 10,614 1,326,262
========== ============ ============= ========== ============= ======== ==========
5. Intangible assets and goodwill
Intangible assets represent goodwill acquired through business
combinations and brand names.
Goodwill Brand name Software Total
---------- ----------- --------- ----------
Cost
Balance at 1 January 2023 1,291,823 395,551 92,836 1,780,210
Additions - - 2150 2,150
Effect of movements in exchange rates 14,552 7,911 4,102 26,565
---------- ----------- --------- ----------
Balance at 30 September 2023 1,306,375 403,462 99,088 1,808,925
---------- ----------- --------- ----------
Amortisation and impairment
Balance at 1 January 2023 6,373 381 69,820 76,574
Amortisation - - 5,810 5,810
Effect of movements in exchange rates 80 11 1,979 2,070
---------- ----------- --------- ----------
Balance at 30 September 2023 6,453 392 77,609 84,454
---------- ----------- --------- ----------
Carrying amount
Balance at 30 September 2023 1,299,922 403,070 21,479 1,724,471
========== =========== ========= ==========
Balance at 31 December 2022 1,285,450 395,170 23,016 1,703,636
========== =========== ========= ==========
Goodwill impairment reviews are undertaken annually or more
frequently if events or changes in circumstances indicate a
potential impairment. No indicators of impairment have been
identified during the nine months ended 30 September 2023.
6. Right-of-use assets
30 September 2023 31 December 2022
------------------ -----------------
Balance at 1 January 622,975 462,432
Addition for the period / year 127,261 214,846
Depreciation charge for the period / year (98,027) (103,099)
Terminated contracts (5,092) (13,564)
Exchange differences 42,601 62,360
------------------ -----------------
Balance 689,718 622,975
================== =================
7. Financial asset at fair value through profit and loss
30 September 2023 31 December 2022
------------------ -----------------
Non-current equity investments - 18,064
Current equity investments 24,534 -
------------------
24,534 18,064
================== =================
* On August 17, 2017, Almakhbariyoun AL Arab (seller) has signed
IT purchase Agreement with JSC Mega Lab (Buyer) to transfer and
install the Laboratory Information Management System (LIMS) for a
purchase price amounted to USD 400 000, which will be in the form
of 10% equity stake in JSC Mega Lab. In case the valuation of the
project is less or more than USD 4,000,000, the seller stake will
be adjusted accordingly, in a way that the seller equity stake
shall not fall below 5% of JSC Mega Lab.
- Ownership percentage in JSC Mega Lab at the transaction date
on April 8, 2019, and as of September 30, 2023, was 8.25%.
- On April 8, 2019, Al Mokhabariyoun Al Arab (Biolab) has signed
a Shareholder Agreement with JSC Mega Lab and JSC Georgia
Healthcare Group (CHG), whereas, BioLab Shall have a put option,
exercisable within 12 months immediately after the expiration of
five(5) year period from the signing date, These assets have
therefore been reclassified as current assets in the financial
information as of June 30, 2023, which allows BioLab stake to be
bought out by CHG at a price of the equity value being USD 400,000
plus 15% annual Interred Rate of Return (IRR).
- In case the Management Agreement or the Purchase Agreement
and/or the Service level Agreement is terminated/cancelled within 6
months period from the date of such termination/cancellation, CHG
shall have a call option, which allows the CHG to purchase Biolab's
Strake in JSC Megalab having value of USD 400,000.00 plus 20%
annual Interred Rate of Return (IRR).
- If JCI accreditation is not obtained, immediately after the
expiration of the 12 months period, CHG shall have a call option
(the Accreditation Call option), exercisable within 6 months
period, allowing CHG to purchase BioLab's Shares in JSC Mega Lab at
a price of the equity value of USD 400,00.00 plus the 20% annual
IRR.
- After 12 months from the date of the put option period
expiration, CHG to purchase Biolab's Stake in JSC Megalab having
value of USD 400,000 plus higher of 20% annual IRR or 6X EV/EBITDA
(of the financial year immediately preceding the call option
exercise date).
8. Trade and other receivables
30 September 2023 31 December 2022
------------------ -----------------
Trade receivables - net 601,525 395,220
Prepayments 60,119 34,081
Due from related parties note (15) 1,562 5,930
Other receivables 93,677 106,363
Accrued revenue 1,835 2,293
------------------
758,718 543,887
================== =================
9. Financial assets at amortised cost
30 September 2023 31 December 2022
------------------ -----------------
Term deposits (more than 3 months) 49,245 60,200
Treasury bills (more than 3 months) 130,843 107,204
180,088 167,404
================== =================
The maturity date of the treasury bills and Fixed-term deposits
are between 3-12 months and have average interest rates treasury
bills of EGP 22.03% and Fixed-term deposits of EGP and JOD 5.20 and
5.38% respectively.
10. Cash and cash equivalents
30 September 2023 31 December 2022
------------------ -----------------
Cash at banks and on hand 412,815 399,957
Treasury bills (less than 3 months) 140,971 185,513
Term deposits (less than 3 months) 60,394 63,042
614,180 648,512
================== =================
11. Trade and other payables
30 September 2023 31 December 2022
------------------ -----------------
Trade payable 370,089 269,782
Accrued expenses 215,193 241,060
Due to related parties note (15) 28,661 25,058
Other payables 95,118 98,204
Deferred revenue 52,097 60,948
Accrued finance cost 3,706 6,043
764,864 701,095
================== =================
12. Put option liability
30 September 2023 31 December 2022
------------------ -----------------
Current put option - Biolab Jordan 271,136 439,695
Current put option - Eagle Eye-Echo scan 38,551 -
------------------ -----------------
309,687 439,695
================== =================
30 September 2023 31 December 2022
------------------ -----------------
Non-current put option - Eagle Eye-Echo scan - 51,000
------------------ -----------------
Non-current put option - Medical Health Development 26,616 -
------------------ -----------------
26,616 51,000
================== =================
Put option - Biolab Jordan
The accounting policy for put options after initial recognition
is to recognise all changes in the carrying value of the put option
liability within equity.
Through the historic acquisitions of Makhbariyoun Al Arab the
Group entered into separate put option arrangements to purchase the
remaining equity interests from the vendors at of a subsequent
date. At acquisition, a put option liability has been recognised at
the net present value of the exercise price of the option.
The option is calculated at seven times EBITDA of the last 12
months minus Net Debt and its exercisable in whole starting the
fifth anniversary of completion of the original purchase agreement,
which fell due in June 2016. The vendor has not exercised this
right at 30 September 2023. It is important to note that the put
option liability is treated as current as it could be exercised at
any time by the NCI. However, based on discussions and ongoing
business relationships, there is no expectation that this will
happen in next 18 months. The option has no expiry date.
Put option - Eagle Eye-Echo scan
According to the definitive agreements signed on 15 January 2018
between Dynasty Group Holdings Limited and the International
Finance Corporation (IFC) related to the Eagle Eye-Echo scan
transaction, IFC has the option to put it is shares to Dynasty in
year 2024. The put option price will be calculated on the basis of
the fair market value determined by an independent valuator.
Put option - Medical Health Development
According to this joint venture agreement made on October 27th,
2022, between Business Flower Holding LLC, Integrated Diagnostics
Holdings plc and al Makhbaryoun al Arab LLC, in cases of bankruptcy
and stumbling, a non-struggling party is entitled to implement any
of the following options for a struggling party's share without
reference to it:
(A) sell to the Non-Defaulting Party its Shares at the Fair
Price of such Shares.
(B) buy the Non-Defaulting Party's Shares at the Fair Price of
such Shares.
(C) requesting the dissolution and liquidation of the
Company.
Due to the execution of the put option in the case specified
above, the option has been classified as a non-current liability in
exchange for equity rights for the Group.
13. Loans and borrowings
Currency Nominal interest rate Maturity 30 September 2023 31 December 2022
---------- ---------------------- ----------------- ------------------ -----------------
AUB - Bank EGP CBE corridor rate+1% 26 January 2027 94,451 116,426
AUB - Bank EGP Secured 7% 3 December 2023 13,118 -
------------------ -----------------
107,569 116,426
================== =================
Amount held as:
Current liability 40,104 22,675
Non- current liability 67,465 93,751
------------------ -----------------
107,569 116,426
================== =================
A) In July 2018, AL-Borg lab, one of IDH subsidiaries, was
granted a medium term loan amounting to EGP 130.5m from Ahli United
Bank "AUB Egypt" to finance the investment cost related to the
expansion into the radiology segment. As at 30 September 2023 only
EGP 108 M had been drawn down from the total facility available
with 72M had been repaid. Loan withdrawal availability period was
extended till July 2023 and the loan will be fully repaid by
January 2027.
The loan contains the following financial covenants which if
breached will mean the loan is repayable on demand:
1. The financial leverage shall not exceed 0.7 throughout the period of the loan
" Financial leverage ": total bank debt divided by net
equity.
2. The debt service ratios (DSR) shall not be less than 1.35 starting 2020
"Debt service ratio ": cash operating profit after tax plus
depreciation for the financial year less annual maintenance on
machinery and equipment adding cash balance (cash and cash
equivalent ) divided by total financial payments.
" Cash operating profit ": Operating profit after tax, interest
expense, depreciation and amortisation, is calculated as follows:
Net income after tax and unusual items adding Interest expense,
Depreciation, Amortisation and provisions excluding tax related
provisions less interest income and Investment income and gains
from extraordinary items.
" Financial payments ": current portion of long-term debt
including finance lease payments, interest expense and fees and
dividends distributions.
3. The current ratios shall not be less than 1.
" Current ratios ": Current assets divided current
liabilities.
The terms and conditions of outstanding loans are as
follows:
* As at 30 September 2023 corridor rate 20.25% (2022: 17.25%)
13. Loans and borrowings (continued)
AL- Borg company didn't breach any covenants for MTL
agreements.
IDH opted to reduce its exposure to foreign currency risk by
agreeing with General Electric (GE) for the early repayment of its
dollar obligation. The Group and GE have agreed to settle this
balance early for USD 3.55 million, payable in EGP, equivalent to
EGP 110 million.
To finance the settlement, IDH utilized a bridge loan facility,
with half of the amount (EGP 55 million) being funded internally
and the other half (EGP 55 million) provided by a loan from Ahly
United Bank - Egypt, this credit facility was fully repaid during
the six-month period ending 30 June 2023.
14. Other Financial obligations
30 September 2023 31 December 2022
------------------ -----------------
Lease liabilities building 813,717 727,426
Financial liability- laboratory equipment 232,940 335,470
1,046,657 1,062,896
================== =================
The financial obligations for the laboratory equipment and
building are payable as follows:
30 September 2023
Minimum payments Interest Principal
----------------- --------- -----------
Less than one year 282,085 108,602 173,483
Between one and five years 1,016,173 288,382 727,791
More than five years 184,256 38,873 145,383
----------------- --------- -----------
1,482,514 435,857 1,046,657
================= ========= ===========
31 December 2022
Minimum payments Interest Principal
----------------- --------- ----------
Less than one year 285,962 137,257 148,705
Between one and five years 1,030,750 314,656 716,094
More than Five years 227,715 29,618 198,097
----------------- --------- ----------
1,544,427 481,531 1,062,896
================= ========= ==========
Amounts recognised in profit or loss:
For the three months ended For the nine months ended
30 September 30 September
2023 2022 2023 2022
Interest on lease liabilities 23,823 9,111 69,044 44,037
--------------- ------------ ------------- -------------
Expenses related to short-term lease 3,116 4,644 8,307 19,788
--------------- ------------ ------------- -------------
14. Related party transactions
The significant transactions with related parties, their nature
volumes and balance during the period 30 September 2023 are as
follows:
30 September 2023
-----------------------------------------
Nature of Nature of Transaction amount Amount due from /
Related Party transaction relationship of the year (to)
-------------------- -------------------- -------------------- ------------------- --------------------
EGP'000 EGP'000
ALborg Scan Expenses paid on Affiliate ( 351 ) -
(S.A.E)* behalf
International Expenses paid on Affiliate (1,771) -
Fertility (IVF)** behalf
Entity owned by
Company's board
H.C Security Provide service member (7) (106)
Entity owned by
Life Health Care Provided service Company's CEO (5,505) (2,987)
Bio. Lab C.E.O and
Dr. Amid Abd Elnour Put option liability shareholder 168,560 (271,135)
Bio. Lab C.E.O and
Current account shareholder 6,345 (13,663)
International
Finance corporation Echo-Scan
(IFC) Put option liability shareholder 12,448 (38,551)
International Current account Echo-Scan 623 -
Finance corporation shareholder
(IFC)
Integrated Treatment
for Kidney Diseases Entity owned by
(S.A.E) Collection Company's CEO (200)
Medical Test analysis 72 1,562
shareholders'
dividends deferral
Hena Holdings Ltd agreement shareholder (63) (2,435)
shareholders'
dividends deferral
Actis IDH Limited agreement shareholder (1,005) (2,960)
Medical Health
Development Put option liability Affiliate (26,616) (26,616)
Wayak C.E.O and
Dr. Kalid Ismail Current account shareholder (6,510) (6,510)
====================
(363,401)
====================
15. Related party transactions (continued)
31 December 2022
--------------------------------------------
Nature of Nature of Transaction amount Amount due from /
Related Party transaction relationship of the year (to)
--------------------- --------------------- ---------------------- --------------------- ---------------------
EGP'000 EGP'000
AL borg Scan Expenses paid on
(S.A.E)* behalf Affiliate - 351
International Expenses paid on
Fertility (IVF)** behalf Affiliate 4 1,771
Entity owned by
Company's board
H.C Security Provide service member 220 (99)
Entity owned by
Life Health Care Provided service Company's CEO 424 2,518
Bio. Lab C.E.O and
Dr. Amid Abd Elnour Put option liability shareholder 481,665 (439,695)
Current account Bio. Lab C.E.O and shareholder (20,008) (20,008)
International
Finance corporation
(IFC) Put option liability Echo-Scan shareholder (15,963) (51,000)
International
Finance corporation
(IFC) Current account Echo-Scan shareholder 12,292 (623)
Integrated Treatment
for Kidney Diseases Entity owned by
(S.A.E) Rental income Company's CEO 116 1,290
Medical Test
analysis 381 -
Dr. Hend El Sherbini Loan arrangement CEO 17,025 -
shareholders'
dividends deferral
HENA HOLDINGS LTD agreement shareholder (2,373) (2,373)
shareholders'
dividends deferral
ACTIS IDH LIMITED agreement shareholder (1,955) (1,955)
---------------------
(509,823)
=====================
* ALborg Scan is a company whose shareholders include Dr.
Moamena Kamel (founder of IDH subsidiary Al-Mokhtabar Labs).
** International Fertility (IVF) is a company whose shareholders
include Dr. Moamena Kamel (founder of IDH subsidiary Al-Mokhtabar
Labs).
Compensation of key management personnel of the Group
The amounts disclosed in the table are the amounts recognised as
an expense during the reporting period related to key management
personnel.
30 September 2023 30 September 2022
------------------ ------------------
Short-term employee benefits 52,872 39,027
------------------ ------------------
52,872 39,027
================== ==================
16. General and administrative expenses
For the three months ended 30 September For the nine months ended 30 September
2023 2022 2023 2022
---------------------- ------------------ -------------------- -------------------
Wages and salaries 52,720 34,352 159,931 101,262
Depreciation 7,936 6,867 24,576 19,782
Amortisation 1,560 1,031 4,649 2,959
Consulting fees 32,066 23,800 100,420 57,864
Other expenses 29,101 33,576 88,147 81,951
---------------------- ------------------ -------------------- -------------------
Total 123,383 99,626 377,723 263,818
====================== ================== ==================== ===================
17. Net finance cost
For the three months ended 30
September For the nine months ended 30 September
2023 2022 2023 2022
--------- --------- ------------------ ----------------
Finance income
Interest income 16,264 7,751 46,339 83,194
Net foreign
exchange gain - - 99,406 55,356
Gain on
hyperinflationary
net monetary
position - 1,265 - 7,736
--------- --------- ------------------ ----------------
Total finance
income 16,264 9,016 145,745 146,286
========= ========= ================== ================
Finance cost
Net foreign
exchange loss (2,753) (14,022) - -
Bank charges (3,420) (2,255) (8,803) (11,060)
Interest expense (35,658) (33,316) (106,154) (88,658)
--------- --------- ---------------------- -----------------
Total finance cost (41,831) (49,593) (114,957) (99,718)
--------- --------- ---------------------- -----------------
Net finance
(cost)/income (25,567) (40,577) 30,788 46,568
========= ========= ====================== =================
18. Tax
A. Tax expense
Tax expense is recognised based on management's best estimate of
the weighted-average annual income tax rate expected for the full
financial year multiplied by the pre-tax income of the interim
reporting period.
B. Income tax
Amounts recognised in profit or loss as follow:
For the three months For the nine months ended 30 September
ended 30 September
2023 2022 2023 2022
------------------------ ---------- -------------------- -------------------
Current tax:
Current period (74,558) (20,292) (162,126) (180,131)
WHT suffered - (100,906) - (100,906)
------------------------ ---------- -------------------- -------------------
Current tax (74,558) (121,198) (162,126) (281,037)
Deferred tax:
Deferred tax arising on
undistributed reserves
in subsidiaries (23,157) 113,285 (34,064) 64,732
Relating to origination
and reversal of
temporary differences (595) (32,424) (514) (34,548)
------------------------ ---------- -------------------- -------------------
Total Deferred tax
expense (23,752) 80,861 (34,578) 30,184
------------------------ ---------- -------------------- -------------------
Tax expense recognised
in profit or loss (98,310) (40,337) (196,704) (250,853)
======================== ========== ==================== ===================
C. Deferred tax liabilities
Deferred tax relates to the following:
30 September 2023 31 December 2022
------------------ -----------------
Property, plant and equipment (34,500) (35,804)
Intangible assets (111,365) (109,118)
Undistributed reserves from Group subsidiaries (210,874) (176,810)
Net deferred tax liabilities (356,739) (321,732)
================== =================
19. Financial instruments
The Group has reviewed the financial assets and liabilities held
at 30 September 2023. It has been deemed that the carrying amounts
for all financial instruments are a reasonable approximation of
fair value. All financial instruments are deemed Level 3.
20. Earnings per share
For the three months ended 30 September For the nine months ended 30 September
2023 2022 2023 2022
------------------- --------------------- -------------------- -------------------
Profit attributed to
owners of the parent 177,789 (18,186) 401,379 404,034
Weighted average number
of ordinary shares in
issue 600,000 600,000 600,000 600,000
------------------- --------------------- -------------------- -------------------
Basic and diluted
earnings per share 0.30 (0.03) 0.67 0.67
=================== ===================== ==================== ===================
The Company has no potential diluted shares as at 30 September
2023 and 30 September 2022, therefore; the earnings per diluted
share are equivalent to basic earnings per share.
21. Segment reporting
Operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision-maker.
The chief operating decision-maker who is responsible for
allocating resources and assessing performance of the operating
segments, has been identified as the steering committee that makes
strategic decisions.
The Group has five operating segments based on geographical
location rather than two operating segments based on service
provided, as the Group's Chief Operating Decision Maker (CODM)
reviews the internal management reports and KPIs of each
geography.
The Group operates in five geographic areas, Egypt, Sudan,
Jordan, Nigeria and Saudi Arabia. As a provider of medical
diagnostic services, IDH's operations in Sudan are not subject to
sanctions. The revenue split, EBITDA split (being the key profit
measure reviewed by CODM) net profit and loss between the five
regions is set out below.
Revenue by geographic location
-----------------------------------------------------------------------------------------
For the three months ended Egypt region Sudan region Jordan region Nigeria region Saudi Arabia Total
------------- ------------- -------------- --------------- -------------- ----------
30-September-23 986,160 532 173,992 21,052 - 1,181,736
30-September-22 711,195 4,317 109,372 21,367 - 846,251
Revenue by geographic location
----------------------------------------------------------------------------------------
For the nine months period Egypt region Sudan region Jordan region Nigeria region Saudi Arabia Total
ended
------------- ------------- -------------- --------------- ------------- ----------
30-September-23 2,499,833 10,726 464,247 78,872 - 3,053,678
30-September-22 2,235,235 14,786 495,507 54,788 - 2,800,316
EBITDA by geographic location
--------------------------------------------------------------------------------------
For the three months ended Egypt region Sudan region Jordan region Nigeria region Saudi Arabia Total
------------- ------------- -------------- --------------- ------------- --------
30-September-23 347,223 (5,227) 54,344 (2,471) (6,511) 387,358
30-September-22 235,623 (14) 31,447 (1,931) - 265,125
21. Segment reporting (continued)
EBITDA by geographic location
--------------------------------------------------------------------------------------
For the nine months period Egypt region Sudan region Jordan region Nigeria region Saudi Arabia Total
ended
------------- ------------- -------------- --------------- ------------- --------
30-September-23 754,085 (3,978) 122,846 (17,536) (6,511) 848,906
30-September-22 857,363 49 122,237 (5,263) - 974,386
Net profit / (loss) by geographic location
---------------------------------------------------------------------------------------
For the three months ended Egypt region Sudan region Jordan region Nigeria region Saudi Arabia Total
------------- ------------- -------------- --------------- ------------- ---------
30-September-23 175,813 (5,449) 21,243 (8,652) (6,544) 176,411
30-September-22 (13,555) 547 14,718 (37,356) - (35,646)
Net profit / (loss) by geographic location
--------------------------------------------------------------------------------------
For the nine months period Egypt region Sudan region Jordan region Nigeria region Saudi Arabia Total
ended
------------- ------------- -------------- --------------- ------------- --------
30-September-23 401,734 (1,812) 32,555 (38,472) (6,544) 387,461
30-September-22 380,005 4,825 62,189 (43,613) - 403,406
Revenue by type Net profit by type
For the three months For the three months
ended 30 September ended 30 September
2023 2022 2023 2022
------------- --------- ----------- -----------
Pathology 1,115,644 802,245 198,065 (2,876)
Radiology 66,092 44,006 (21,652) (32,770)
------------- --------- ----------- -----------
1,181,736 846,251 176,413 (35,646)
============= ========= =========== ===========
Revenue by type Net profit by type
For the nine months For the nine months
ended 30 September ended 30 September
2023 2022 2023 2022
---------- ---------- ----------- ---------
Pathology 2,866,836 2,687,516 485,870 474,842
Radiology 186,842 112,800 (98,407) (71,436)
---------- ---------- ----------- ---------
3,053,678 2,800,316 387,463 403,406
========== ========== =========== =========
21. Segment reporting (continued)
Non-current assets by geographic location
----------------------------------------------------------------------------------------
Egypt region Sudan region Jordan region Nigeria region Saudi Arabia Total
------------- ------------- -------------- --------------- ------------- ----------
30-September-23 3,070,167 3,847 606,928 80,423 25,057 3,786,422
31-December-22 3,039,930 14,993 494,244 121,770 - 3,670,937
The operating segment profit measure reported to the CODM is
EBITDA, as follows:
For the three months ended 30 September For nine months period ended 30 September
2023 2022 2023 2022
-------------------- -------------------- --------------------- ---------------------
Profit from operations 288,088 186,360 553,377 748,783
Property, plant and
equipment depreciation 64,937 51,249 191,692 146,433
Right of use depreciation 32,395 25,744 98,027 73,959
Amortization of
Intangible assets 1,938 1,772 5,810 5,211
-------------------- -------------------- --------------------- ---------------------
EBITDA 387,358 265,125 848,906 974,386
-------------------- -------------------- --------------------- ---------------------
Non-recurring expenses 23,730 - 23,730 -
==================== ==================== ===================== =====================
Normalised EBITDA 411,088 265,125 872,636 974,386
==================== ==================== ===================== =====================
22. Distributions made
30 September 31 December 2022
2023
-------------- -----------------
EGP'000 EGP'000
Cash dividends on ordinary shares declared and paid:
Nil per qualifying ordinary share US$ 0.116 per share - 1,304,805
--------------- -----------------
- 1,304,805
=============== =================
During the year ended December 31, 2022 during the Company's
annual general meeting (AGM) held in London on 7 June 2022, IDH's
shareholders approved a record-breaking dividend distribution of
0.116 US$ per share or US$ 69.6 million in aggregate.
23. Important events
On March 8, 2023, the Group completed the establishment of
Medical Health Development Company, a limited liability company
based in Saudi Arabia with a total stake of 51% directly and
indirectly through one of the Group's subsidiaries, where
Integrated Diagnostics Holdings (IDH) owns 30% and Al Makhbaryoun
Al Arab LLC ("Biolab")-Jordan a subsidiary owns 21%.
The Central Bank of Egypt increased the interest rate by 200
points, to reach 19.25% instead of 17.25%. This was by a decision
of the Monetary Policy Committee, according to the meeting held on
March 30, 2023. And increased the interest rate by 100 points, to
reach 20.25% instead of 19.25%. This was by a decision of the
Monetary Policy Committee, according to the meeting held on 6
August 2023.
During April 2023, an armed conflict began in Sudan that led to
security unrest across the country. Business has been temporarily
frozen in the branches of the Sudan Laboratory Company and Ultra
Lab until further notice, which will greatly affect the profits of
the geographical sector in the subsequent period. The Group's
management is closely monitoring the situation and is currently
evaluating the impact of these events on the Group's business
results and activities. Therefore, the company's management has
evaluated the business results, and a provision has been formed for
5 M.
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END
QRTEANFSFAEDFFA
(END) Dow Jones Newswires
November 16, 2023 02:00 ET (07:00 GMT)
Integrated Diagnostics (LSE:IDHC)
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