Last checked at 16 Nov 2023 07:00
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 excluding1 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-related2 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 EBITDA4 | 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 Indicators5
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 revenues6 (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-related78 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 EBITDA9 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 conventional10 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 million11 contribution made from Covid-19-related12 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.
[10] Conventional (non-Covid) tests include IDH's full service offering excluding the Covid-19 related tests outlined below. [11] 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. [12] 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 2022 | Q1 2023 | Q2 2022 | Q2 2023 | Q3 2022 | Q3 2023 | % | 9M 2022 | 9M 2023 | % |
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
EGP mn | Q1 2022 | Q1 2023 | Q2 2022 | Q2 2023 | Q3 2022 | Q3 2023 | % | 9M 2022 | 9M 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
EGP mn | Q1 2022 | Q1 2023 | Q2 2022 | Q2 2023 | Q3 2022 | Q3 2023 | % | 9M 2022 | 9M 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 2022 | Q1 2023 | Q2 2022 | Q2 2023 | Q3 2022 | Q3 2023 | % | 9M 2022 | 9M 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 2022 | 30 September 2023 | Change | |
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
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
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
EBITDA IDH reported normalised EBITDA13 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. [13] 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
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 expense14 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
14 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. 15 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. 16 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
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
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.
IDH's net debt17 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.
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 debt19 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 Payable20 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. 20 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 2023 |
| 31 Dec 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 period ended 30 September |
| For the nine months period 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 months period ended 30 September |
| For the six months period ended 30 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
| Notes |
| 30 September 2023 |
| 30 September 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 |
| Sharecapital | Sharepremium reserve | Capitalreserve | Legalreserve* | Put option reserve | Translationreserve | Retained earnings | Total attributable to the owners of the Parent | Non-controlling interests | Total equity |
|
|
|
|
|
|
|
|
|
|
| |
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
Land & buildings | Medical, electric & information system equipment | Leaseholdimprovements | Fixtures, fittings & vehicles | Project under construction | Payment on 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 ended30 September |
| For the nine months ended30 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 | ||||||||
Related Party |
| Nature of transaction |
| Nature of relationship |
| Transaction amount of the year |
| Amount due from / (to) |
| ||||||||
| EGP'000 |
| EGP'000 | |||||
ALborg Scan (S.A.E)* | Expenses paid on behalf | Affiliate | (351) | - | ||||
International Fertility (IVF)** | Expenses paid on behalf | Affiliate | (1,771) | - | ||||
H.C Security | Provide service | Entity owned by Company's board member | (7) | (106) | ||||
Life Health Care | Provided service | Entity owned by Company's CEO | (5,505) | (2,987) | ||||
Dr. Amid Abd Elnour | Put option liability | Bio. Lab C.E.O and shareholder | 168,560 | (271,135) | ||||
Current account | Bio. Lab C.E.O and shareholder | 6,345 | (13,663) | |||||
International Finance corporation (IFC) | Put option liability | Echo-Scan shareholder | 12,448 | (38,551) | ||||
International Finance corporation (IFC) | Current account | Echo-Scan shareholder | 623 | - | ||||
Integrated Treatment for Kidney Diseases (S.A.E) | Collection | Entity owned by Company's CEO | (200) | |||||
Medical Test analysis | 72 | 1,562 | ||||||
Hena Holdings Ltd | shareholders' dividends deferral agreement | shareholder | (63) | (2,435) | ||||
Actis IDH Limited | shareholders' dividends deferral agreement | shareholder | (1,005) | (2,960) | ||||
Medical Health Development | Put option liability | Affiliate | (26,616) | (26,616) | ||||
Dr. Kalid Ismail | Current account | Wayak C.E.O and shareholder | (6,510) | (6,510) | ||||
|
| (363,401) | ||||||
15. Related party transactions (continued)
31 December 2022 | ||||||
Related Party | Nature of transaction | Nature of relationship | Transaction amount of the year |
| Amount due from / (to) | |
| EGP'000 |
| EGP'000 | |||
AL borg Scan (S.A.E)* | Expenses paid on behalf | Affiliate | - | 351 | ||
International Fertility (IVF)** | Expenses paid on behalf | Affiliate | 4 | 1,771 | ||
H.C Security | Provide service | Entity owned by Company's board member | 220 | (99) | ||
Life Health Care | Provided service | Entity owned by Company's CEO | 424 | 2,518 | ||
Dr. Amid Abd Elnour | Put option liability | Bio. Lab C.E.O and 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 (S.A.E) | Rental income | Entity owned by Company's CEO | 116 | 1,290 | ||
Medical Test analysis | 381 | - | ||||
Dr. Hend El Sherbini | Loan arrangement | CEO | 17,025 | - | ||
HENA HOLDINGS LTD | shareholders' dividends deferral agreement | shareholder | (2,373) | (2,373) | ||
ACTIS IDH LIMITED | shareholders' dividends deferral 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 ended 30 September |
| For the nine months 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 ended | Egypt region | Sudan region | Jordan region | Nigeria region | Saudi Arabia | Total |
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 ended | Egypt region | Sudan region | Jordan region | Nigeria region | Saudi Arabia | Total |
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 ended | Egypt region | Sudan region | Jordan region | Nigeria region | Saudi Arabia | Total |
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 For the three months ended 30 September |
| Net profit by type For the three months 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 2023 |
| 31 December 2022 | |
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.