REG - Integrated Diag Hdgs - 1st Quarter Results
01/06/2023 07:00
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RNS Number : 2516B Integrated Diagnostics Holdings PLC 01 June 2023
Integrated Diagnostics Holdings Plc
Q1 2023 Results
Thursday, 01 June 2023
Integrated Diagnostics Holdings Plc kicks off 2023 with a solid first quarter,
recording 43% growth in conventional revenues
(Cairo and London) - Integrated Diagnostics Holdings ("IDH," "the Group," or
"the Company"), a leading provider of diagnostic services with operations in
Egypt, Jordan, Nigeria and Sudan, released today its reviewed financial
statements and operational performance for the quarter ended 31 March 2023,
booking revenue of EGP 915 million, 22% below revenues reported in the first
quarter of the previous year when Covid-19-related(1) testing had
significantly boosted the consolidated figure. Excluding(2) the contribution
made by Covid-19-related testing in the comparable three months of 2022, the
Group's conventional(3) revenues recorded an impressive 43% year-on-year
expansion supported by a 12% year-on-year increase in conventional test
volumes and a 27% year-on-year increase in average revenue per conventional
test for the quarter. IDH recorded a net profit of EGP 168 million, declining
46% from Q1 2022 and with an associated margin of 18%.
Financial Results (IFRS)(4)
EGP mn Q1 2022 Q1 2023 Change
Revenues 1,180 915 -22%
Conventional Revenues 640 915 43%
Covid-19-related Revenues 540 - -
Cost of Sales (649) (591) -9%
Gross Profit 532 325 -39%
Gross Profit Margin 45% 35% -10 pts
Operating Profit 396 129 -68%
EBITDA(5) 468 227 -51%
EBITDA Margin 40% 25% -15 pts
Net Profit 314 168 -46%
Net Profit Margin 27% 18% -8 pts
Cash Balance 2,659 813 -69%
Note (1): Throughout the document, percentage changes between reporting
periods are calculated using the exact value (as per the Consolidated
Financials) and not the corresponding rounded figure.
Key Operational Indicators(6)
Q1 2022 Q1 2023 Change
Branches 520 576 56
Patients ('000) 2,649 1,939 -27%
Revenue per Patient (EGP) 446 472 6%
Tests ('000) 8,402 8,036 -4%
Conventional Tests ('000) 7,148 8,036 12%
Covid-19-related Tests ('000) 1,254 - -
Revenue per Test 140 114 -19%
Revenue per Conventional Test (EGP) 90 114 27%
Revenue per Covid-19-related Test (EGP) 431 - -
Test per Patient 3.2 4.1 31%
(1)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.
(2)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 (Q1 2022) IDH had recorded EGP
540 million in Covid-19-related revenues and had performed 1.3 million
Covid-19-related tests.
(3)Conventional (non-Covid) tests include all of the Group's test offering
with the exception of its Covid-19-related test offering outlined above.
(4)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 (Q1 2022),
include concession fees amounting to EGP 63 million paid by Biolab as part of
its agreement with QAIA and Aqaba Port.
(5)EBITDA is calculated as operating profit plus depreciation and
amortization.
(6)Key operational indicators are calculated based on revenues for the quarter
of EGP 915 million and EGP 1,180 million for Q1 2023 and Q1 2022,
respectively.
Introduction
i. Financial Highlights
· Conventional(7) revenue recorded EGP 915 million in Q1 2023 compared
to EGP 640 million (including concession fees paid as part of Biolab's
agreements with QAIA, KHIA, and Aqaba Port amounting to EGP 63 million) in the
same period of the previous year, representing an impressive 43% year-on-year
growth.
· Conventional top-line growth continues to be driven by simultaneous
rises in test volumes and average revenue per test, which in Q1 2023 increased
12% and 27% year-on-year, respectively. It is worth highlighting that a
portion of the rise in average revenue per test reflects the translation
effect resulting from the multiple devaluations of the Egyptian Pound during
FY 2022 and the beginning of FY 2023.
· Consolidated revenues recorded EGP 915 million in Q1 2023 contracting
22% from the high base of EGP 1,180 million in Q1 2022. It is important to
note that the comparable three months of 2022 included a significant EGP 540
million contribution (46% of Q1 2022 revenues) from IDH's Covid-19-related(8)
offering in Egypt and Jordan (of which EGP 63 million related to concession
fees paid by Biolab to Queen Alia International Airport and Aqaba Port).
· Gross Profit booked EGP 325 million in Q1 2023, down 39%
year-on-year, with a Gross Profit Margin (GPM) of 35% in Q1 2023 versus 45% in
Q1 2022. Lower gross profitability during the quarter primarily reflects a
normalisation of margins following the year-on-year decline in
Covid-19-related business which had significantly boosted revenue and
profitability in Q1 2022. Gross margins were further diluted by higher direct
salaries and wages to counteract the current inflationary pressures and staff
the newly rolled out branches.
· EBITDA(9) stood at EGP 227 million during Q1 2023, declining 51%
year-on-year and recording an EBITDA margin of 25% versus 40% in Q1 2022.
Decreased EBITDA profitability for the period came on the back of lower gross
profitability combined with increased SG&A outlays including higher
salary, marketing, auditing, and consulting expenses. The rise in auditing and
consulting expenses is partially attributable to a weaker EGP.
· Net Profit for the three-month period ended 31 March 2023 booked EGP
168 million, down 46% year-on-year and with an associated Net Profit Margin
(NPM) of 18%.
(7)Conventional (non-Covid) tests include IDH's full service offering
excluding the Covid-19 related tests outlined below.
(8)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.
(9)EBITDA is calculated as operating profit plus depreciation and
amortization.
ii. Operational Highlights
· IDH's branch network increased to 576 branches in Q1 2023, up by 56
branches compared to the same period of the previous year. Since the start of
the year, IDH has inaugurated 24 new branches including 20 in Egypt, three in
Jordan, and one in Sudan.
· Conventional tests performed during Q1 2023 increased by 12%
year-on-year to record 8.0 million tests for the quarter. Consolidated tests
performed for the period declined 4% year-on-year, as Q1 2022 test volumes
include a significant contribution for IDH's Covid-19-related offering.
· Average net revenue per conventional test increased a robust 27% (out
of which translation effect accounted for 9%) versus Q1 2022 to book EGP 114
in Q1 2023. Consolidated average net revenue per test declined 19% to EGP 114
in Q1 2022 from the EGP 140 recorded in the same quarter a year ago when
consolidated results had been boosted by significant contributions made by
IDH's generally higher-priced Covid-19-related offering.
· Total patients served by the Company during the quarter came in at
1.9 million, down 27% year-on-year. Simultaneously, average test per patient
increased to 4.1 in Q1 2023 from 3.2 in Q1 2022 largely reflecting a
normalisation in IDH's patient mix in favour of conventional patients who
typically opt for multiple tests when visiting IDH's branches.
· In Egypt (79.9% of consolidated revenues) IDH continued to record
robust growth at its conventional business, which expanded 33% year-on-year
for the quarter. Conventional revenue growth was supported by a 13%
year-on-year rise in test volumes and an 18% year-on-year increase in average
revenue per test. Meanwhile, consolidated revenues in IDH's home market
declined 17% versus Q1 2022 when results had been boosted by contributions
made from the Company's Covid-19-related offering (38% of Egypt revenues in Q1
2022).
· In Jordan (15.8% of consolidated revenues), the Group recorded
conventional revenue growth in EGP terms of 105% year-on-year in Q1 2023. In
local currency terms, conventional revenues also posted a remarkable 12%
year-on-year expansion on the back of higher conventional test. Including
contributions from Covid-19-related testing in the first three months of last
year, consolidated revenues in Jordan recorded a 48% year-on-year decline
during Q1 2023.
· In Nigeria (3.4% of consolidated revenue in Q1 2023), the Company
continued recording impressive revenue growth, increasing 109% year-on-year to
EGP 31 million in Q1 2023. In NGN terms, revenue increased 26% year-on-year to
reach NGN 468 million during Q1 2023, supported by a 16% increase in test
volumes.
· In Sudan (1.0% of consolidated revenue in Q1 2023), IDH posted an
impressive year-on-year revenue growth of 55% in EGP terms, and 11% in SDG
terms. It is important to note that due to recent political unrest in Sudan,
16 of IDH's 18 branches in Sudan have temporarily ceased operations, with only
two branches, in Madani and Port Sudan, still operational. The closure of
these branches will have a significant impact on Sudan's operational and
financial results for the coming quarter.
iii. Management Commentary
Commenting on the Group's performance, IDH Chief Executive Officer Dr. Hend
El-Sherbini said: "With the first five months of the year now behind us, I am
happy to report another quarter of sustained growth at our conventional
business and of solid progress on our longer-term value creation and growth
strategies. Looking at our results for the first quarter of the year in more
detail, I am particularly pleased to note that we recorded solid conventional
top-line expansions across all four of our markets in both EGP and local
currency terms. At the consolidated level, conventional revenue growth was
driven by steady rises in both patient and test volumes coupled with rising
average revenue per test as our strategic price hikes come into effect. The
43% year-on-year expansion of our conventional business was especially
impressive as it comes in the midst of an increasingly difficult operating
environment with our markets, and the global economy in general, continuing to
face rising inflation, tightening monetary policies, and weakening currencies,
as was the case in Egypt, Nigeria, and Sudan. On top of this, it is worth
noting that our results in March were also impacted by the expected seasonal
slowdown related to the holy month of Ramadan which in 2023 weighed on patient
volumes starting mid-March.
On a geographic basis, across our two largest markets of Egypt and Jordan,
conventional revenues continued to record double-digit growth showcasing the
underlying health of both geographies. Since the start of the year, we
delivered on several of our key strategic priorities across both markets. In
Egypt, in the first three months of the year we rolled out 20 new branches,
taking the total number of branches in the country to 520, and further
securing our position as the largest private provider in the country. In
parallel, we also introduced planned price hikes across our service portfolio,
continuing to prioritise patient retention and loyalty by sharing the
inflationary burden with them. During the quarter, we also saw Al-Borg Scan's
contribution to the country's top-line double versus the same three months of
last year, testament to the effectiveness of our radiology ramp-up strategy,
and the contribution of our house call services remain well above pre-pandemic
averages. Meanwhile, in Jordan, we went ahead with the launch of three new
labs, taking the total number of Biolab branches to 26. New branch roll outs
have been supporting Biolab's conventional test volumes which we were pleased
to see return to double-digit growth following a Covid-19-related slowdown. In
both Nigeria and Sudan, we continued to record solid revenue growth in line
with recent trends. Here it is important to mention that we expect our second
quarter results in Sudan to be significantly impacted by the ongoing political
and social unrest, with 16 of our 18 branches in the country currently shut
down. We continue to closely monitor the evolving situation and are confident
that our management team on the ground has put in place a solid mitigation
plan to safeguard our staff, patients, and operations.
On the cost front, I am pleased to note that we recorded only a moderate
increase in raw material costs for the quarter, well below the inflation
caused by the weakening Egyptian pound. This was possible thanks to successful
negotiations with our main test kit providers who continue to value IDH as a
long-term partner. Meanwhile, as part of our efforts to retain staff, we
adjusted staff compensation packages to ensure we continue to support our
people during these difficult times and remain an employer of choice across
all of our markets. Further down the income statement, we recorded lower
margins at all levels of profitability largely reflecting a post-Covid-19
normalization.
Heading into the second half of 2023, we remain on track to deliver on our
financial and operational targets for the year. I am particularly looking
forward to the launch of our first branch in Saudi Arabia, which is currently
scheduled for September 2023. Meanwhile, across our current markets our
priorities remain unchanged as we continue to navigate the ongoing
macroeconomic turbulence to drive further conventional revenue growth,
safeguard our margins, and continue to deliver world-class quality to our
patients. In Egypt, we are planning to roll out several more branches as the
year progresses, with a particular focus on growing our radiology network to
capitalise on the strong momentum currently enjoyed by the segment.
In light of our strong start to the year and the solid strategies in place, we
are looking to record year-on-year conventional revenue growth of around 30%
in FY 2023."
- End -
Analyst and Investor Call Details
An analyst and investor call will be hosted at 1pm (UK) | 3pm (Egypt) on
Monday, 5 June 2023. You can register for the call by clicking on this link
(https://zoom.us/webinar/register/WN_ZyVUdQr2RsiZGobAl9Fbjw#/registration) ,
and you may dial in using the conference call details below:
· Webinar ID: 939 3911 9373
· Webinar Passcode: 756126
For more information about the event, please contact: amr.amin@cicapital.com
(mailto:amr.amin@cicapital.com)
About Integrated Diagnostics Holdings (IDH)
IDH is a leading diagnostics services provider in the Middle East and Africa
offering a broad range of pathology and radiology tests to patients in Egypt,
Jordan, Sudan and Nigeria. 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). 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 performs 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's expansion plans include acquisitions in new
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
(mailto:nancy.fahmy@idhcorp.com)
Forward-Looking Statements
These results for the quarter ended 31 March 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 (Q1 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 started the year on a strong note, recording conventional revenues of EGP
915 million in Q1 2023, up an impressive 43% from the same three months of
last year. Sustained top-line growth was driven by increases in the Group's
average revenue per test, which increased by 27% to EGP 114 in Q1 2023 from
EGP 90 in Q1 2022, as well as in test volumes which increased 12%
year-on-year. It is important to note that this quarter's top-line partially
reflects the translation effect resulting from the multiple devaluations of
the Egyptian pound throughout FY 2022.
On a consolidated level, IDH recorded revenues of EGP 915 million in Q1 2023,
down 22% year-on-year compared to EGP 1,180 million Q1 2022 when consolidated
results had included a significant contribution from IDH's Covid-19-related
offering impacting Egyptian and Jordanian operations.
Revenue Analysis
Q1 2022 Q1 2023 %
Total revenue (EGP mn) 1,180 915 -22%
Conventional revenue (EGP mn) 640 915 43%
Total Covid-19-related revenue (EGP mn) 540 - -
Contribution to Consolidated Results
Conventional revenue 54% 100%
Total Covid-19-related revenue 46% -
Test Volume Analysis
Total tests (mn) 8.4 8.0 -4%
Conventional tests performed (mn) 7.1 8.0 12%
Total Covid-19-related tests performed (mn) 1.3 - -
Contribution to Consolidated Results
Conventional tests performed 85% 100%
Total Covid-19-related tests performed 15% -
Revenue per Test Analysis
Total revenue per test (EGP) 140 114 -19%
Conventional revenue per test (EGP) 90 114 27%
Covid-19-related revenue per test (EGP) 431 - -
Test Volume Analysis
Total tests (mn) 8.4 8.0 -4%
Conventional tests performed (mn) 7.1 8.0 12%
Total Covid-19-related tests performed (mn) 1.3 - -
Contribution to Consolidated Results
Conventional tests performed 85% 100%
Total Covid-19-related tests performed 15% -
Revenue per Test Analysis
Total revenue per test (EGP) 140 114 -19%
Conventional revenue per test (EGP) 90 114 27%
Covid-19-related revenue per test (EGP) 431 - -
Revenue Analysis: Contribution by Patient Segment
Contract Segment (63% of Group revenue)
IDH's contract segment recorded conventional revenue of EGP 579 million during
the first quarter of 2023, a 46% year-on-year expansion from EGP 396 million
in Q1 2022. The increase was driven by a sustained increase in test volumes at
the Company's conventional business, which rose 16% year-on-year to reach 6.5
million and was further bolstered by an increase in average revenue per
conventional test, which grew 26% year-on-year to EGP 89 in Q1 2023.
Walk-in Segment (37% of Group revenue)
In parallel, IDH's walk-in segment also recorded strong conventional revenue
growth of 38% in Q1 2023 driven by a 39% increase in average revenue per test.
Conventional test volumes at the segment remained largely stable, recording
1.5 million tests in Q1 2023. Total walk-in revenues for the quarter recorded
EGP 337 million, down 37% year-on-year. Lower walk-in revenues for the quarter
mainly reflect the high base effect resulting from the significant
contribution made by Covid-19-related testing in the comparable three months
of 2022.
It is important to highlight that the average number of tests per patient at
both the Company's contract and walk-in segments are continuing to normalize
following a decrease associated with the Covid-19 pandemic. More specifically,
test per patients at the contract and walk-in segments in Q1 2023 reached 4.3
and 3.6 tests per patient, respectively.
Key Performance Indicators
Walk-in Segment Contract Segment Total
1Q22 1Q23 Change 1Q22 1Q23 Change 1Q22 1Q23 Change
Revenue (EGP mn) 535 337 -37% 645 579 -10% 1,180 915 -22%
Conventional Results (EGP mn) 244 337 38% 396 579 46% 640 915 43%
Total Covid-19-related revenue (EGP mn) 291 - - 250 - - 540 - -
Patients ('000) 971 422 -57% 1,678 1,517 -10% 2,649 1,939 -27%
% of Patients 37% 22% 63% 78%
Revenue per Patient (EGP) 551 798 45% 385 381 -1% 446 472 6%
Tests ('000) 2,144 1,519 -29% 6,258 6,517 4% 8,402 8,036 -4%
% of Tests 26% 19% 74% 81%
Conventional tests ('000) 1,530 1,519 -0.7% 5,618 6,517 16% 7,148 8,036 12%
Total Covid-19-related tests ('000) 614 - - 641 - - 1,254 - -
Revenue per Test (EGP) 250 222 -11% 103 89 -14% 140 114 -19%
Conventional Revenue per Test (EGP) 160 222 39% 70 89 26% 90 114 27%
Test per Patient 2.2 3.6 63% 3.7 4.3 15% 3.2 4.1 31%
Revenue Analysis: Contribution by Geography
Egypt (79.9% of Group revenue)
At IDH's home market, Egypt, the Company continued posting strong conventional
revenue growth on the back of higher test volumes and average revenue per
test. More specifically, Egypt recorded conventional revenue growth of 33%
year-on-year, booking revenues of EGP 731 million in Q1 2023 compared to EGP
549 million one year prior. Throughout the quarter, IDH's Egyptian operations
recorded conventional test volume year-on-year growth of 13% and an 18%
year-on-year increase in average revenue per test. Consolidated revenues in
Egypt recorded a 17% year-on-year contraction versus the first quarter of 2022
when Covid-19-related revenues has significantly boosted the country's
consolidated top-line.
Al-Borg Scan
IDH's Egyptian radiology venture, Al Borg Scan, continued its rapid growth
trajectory booking revenues of EGP 28 million in Q1 2023, up a robust 65%
versus Q1 2022. Revenue growth for the quarter was supported by a 37%
year-on-year growth in test volumes as well as by a 21% year-on-year rise in
average revenue per test provided. Al Borg Scan continued to see its
contribution to Egypt's revenues grow, nearly doubling to reach 4% of Egypt's
overall top-line in Q1 2023. Patient and test volumes continue to be supported
by the successful ramp up of IDH's newer radiology branches launches
throughout FY 2021 and FY 2022. Building on this, the Company is looking to
grow its current network of six branches with the rollout of an additional
branch by year-end 2023.
House Calls
IDH's house call service in Egypt recorded revenue of EGP 114.2 million in the
first quarter of the year, contributing to 16% of Egypt's revenues for the
period. The robust contribution, which stands well above IDH's pre-pandemic
averages, was recorded despite demand for the Company's Covid-19-related
offering falling to near zero during the quarter.
Wayak
Wayak recorded a 16% year-on-year increase in the number of orders, which came
in at 40 thousand in Q1 2023 compared to 34.5 thousand this time last year.
EBITDA losses for the quarter recorded EGP 0.4 million, a decline of 21%
versus losses recorded in Q1 2022. The venture's EBITDA losses are expected to
decrease further in the coming months as management's strategic efforts
continue to pay off.
Detailed Egypt Revenue Breakdown
EGP mn Q1 2022 Q1 2023 %
Total Revenue 879 731 -17%
Conventional Revenue 549 731 33%
Radiology Revenue 17 28 65%
Total Covid-19-related Revenue 330 - -
Contribution to Consolidated Results
Conventional revenue 62% 100%
Radiology revenue 1.9% 3.8%
Total Covid-19-related revenue 38% -
Jordan (15.8% of Group revenue)
IDH's Jordanian subsidiary, Biolab, recorded solid conventional revenue
year-on-year growth of 12% in JOD terms (in EGP terms revenue was up 105%
year-on-year) supported by higher test volumes for the quarter of 12%. On a
consolidated level, in EGP terms, Biolab recorded a 48% year-on-year decline
in revenue for the quarter reflecting the high base effect resulting from
results in Q1 2022 having included a significant contribution from Biolab's
Covid-19-related offering. Similarly, in JOD terms, Biolab's consolidated
revenues declined 73% year-on-year.
Detailed Jordan Revenue Breakdown
EGP mn Q1 2022 Q1 2023 %
Total Revenue 281 144 -48%
Conventional Results 70 144 105%
Total Covid-19-related Revenues (PCR and Antibody) 210 - -
Contribution to Consolidated Results
Conventional Results 25% 100%
Total Covid-19-related Revenue (PCR and Antibody) 75% -
Jordan (15.8% of Group revenue)
IDH's Jordanian subsidiary, Biolab, recorded solid conventional revenue
year-on-year growth of 12% in JOD terms (in EGP terms revenue was up 105%
year-on-year) supported by higher test volumes for the quarter of 12%. On a
consolidated level, in EGP terms, Biolab recorded a 48% year-on-year decline
in revenue for the quarter reflecting the high base effect resulting from
results in Q1 2022 having included a significant contribution from Biolab's
Covid-19-related offering. Similarly, in JOD terms, Biolab's consolidated
revenues declined 73% year-on-year.
Detailed Jordan Revenue Breakdown
EGP mn Q1 2022 Q1 2023 %
Total Revenue 281 144 -48%
Conventional Results 70 144 105%
Total Covid-19-related Revenues (PCR and Antibody) 210 - -
Contribution to Consolidated Results
Conventional Results 25% 100%
Total Covid-19-related Revenue (PCR and Antibody) 75% -
Nigeria (3.4% of revenue)
Echo-Lab, IDH's Nigerian subsidiary, saw its revenue for the first quarter of
the year more than double to record EGP 31 million in Q1 2023 from EGP 15
million in Q1 2022. In local currency terms, revenue expanded a solid 26%
year-on-year. Top-line growth for the quarter was dual driven as both test
volumes and average revenue per test expanded versus the same three months of
2022. More specifically, total tests performed in the first quarter increased
16% year-on-year. Meanwhile, average revenue per test increased 80%
year-on-year in EGP terms and 9% year-on-year in NGN terms. IDH's Nigerian
subsidiary now boasts 12 fully operational branches throughout the country, up
from 10 branches as of 31 March 2022.
Sudan (1.0% of revenue)
IDH's operations in Sudan recorded revenue growth in EGP terms of 55%
reflecting a 119% year-on-year increase in average revenue per test in the
country. In SDG terms, revenues were up by 11% supported by a 57% year-on-year
rise in average revenue per test in local currency terms. As at 31 March 2023,
IDH's branches in the country stood at 18 up from 17 this time last year. IDH
management continues to closely monitor the evolving situation in the country
and a detailed emergency response plan is in place to safeguard IDH's staff
and operations. Currently, 16 of IDH's 18 branches in the country have
temporarily halted operations. Only two of the 18 branches, located in Madani
and Port-Sudan, are currently operational.
Revenue Contribution by Country
Q1 2022 Q1 2023 Change
Egypt Revenue (EGP mn) 879 731 -17%
Conventional (EGP mn) 549 731 33%
Radiology Revenue 17 28 65%
Covid-19-related (EGP mn) 330 - -
Egypt Contribution to IDH Revenue 74.5% 79.9%
Jordan Revenue (EGP mn) 281 144 -48%
Conventional (EGP mn) 70 144 105%
Covid-19-related (EGP mn) 210 - -
Jordan Revenues (JOD mn) 12.5 3.4 -73%
Jordan Revenue Contribution to IDH Revenue 23.8% 15.8%
Nigeria Revenue (EGP mn) 15 31 109%
Nigeria Revenue (NGN mn) 371 468 26%
Nigeria Contribution to IDH Revenue 1.3% 3.4%
Sudan Revenue (EGP mn) 5.7 8.8 55%
Sudan Revenue (SDG mn) 152 169 11%
Sudan Contribution to IDH Revenue 0.5% 1.0%
Average Exchange Rate
Q1 2022 Q1 2023 Change
USD/EGP 16.5 30.5 85.0%
JOD/EGP 23.2 42.9 84.5%
NGN/EGP 0.04 0.07 67.1%
SDG/EGP 0.04 0.05 39.1%
Patients Served and Tests Performed by Country
Q1 2022 Q1 2023 Change
Egypt Patients Served (mn) 2.0 1.8 -12%
Egypt Tests Performed (mn) 7.3 7.3 0.6%
Conventional tests (mn) 6.5 7.3 13%
Covid-19-related tests (mn) 0.8 - -
Jordan Patients Served (k) 552 92 -83%
Jordan Tests Performed (k) 991 582 -41%
Conventional tests (k) 519 582 12%
Covid-19-related tests (k) 472 - -
Nigeria Patients Served (k) 33 35 4%
Nigeria Tests Performed (k) 62 72 16%
Sudan Patients Served (k) 28 11 -61%
Sudan Tests Performed (k) 47 33 -29%
Total Patients Served (mn) 2.6 1.9 -27%
Total Tests Performed (mn) 8.4 8.0 -4%
Branches by Country
31 March 2022 31 March 2023 Change
Egypt 472 520 48
Jordan 21 26 5
Nigeria 10 12 2
Sudan 17 18 1
Total Branches 520 576 56
-Cost of Sales
Cost of sales dropped 9% year-on-year in Q1 2023 to book EGP 591 million. The
decline in cost of sales for the period was primarily a result of a 27%
year-on-year decline in raw material expenses coupled with lower
Covid-19-related costs for the three-month period.
Cost of Sales Breakdown as a Percentage of Revenue
Q1 2022 Q1 2023
Raw Materials 21.4% 20.2%
Conventional raw material costs as % of conventional revenues 17.7% 20.2%
Covid-19-related raw material costs as % of Covid-19-related revenues 25.6% -
Wages & Salaries 14.1% 20.7%
Depreciation & Amortisation 5.5% 9.7%
Other Expenses 14.0% 13.9%
Total 55.0% 64.5%
Raw material costs including the cost of specialized analysis at other
laboratories (31% of consolidated cost of sales), came in as the second
largest contributor to cost of sales during the quarter, recording EGP 185
million compared to EGP 253 million in Q1 2022. As a percentage of revenue,
raw materials came in at 20.2%, down from 21.4% in the same period of the
previous year. The decline wholly reflects the high base effect resulting from
Covid-19-related test kits purchased during Q1 2022, when demand for IDH's
Covid-19-related test offering was high. Looking at conventional test kit
prices, it is important to note that the Company did register a rise in
average prices for conventional test kits throughout the first quarter of the
year on the back of a weaker EGP and rising inflation. Rising conventional
test kit prices were only partially mitigated by free test kits received
during January 2023 from one of IDH's largest suppliers, Siemens.
Wages and salaries including employee share of profits (32% share of
consolidated cost of sales) made up the largest share of total cost of sales
during the first quarter of 2023, increasing 14% year-on-year to book EGP 190
million versus EGP 167 million in Q1 2022. The increase in direct wages and
salaries for the period was primarily driven by increases in salaries and
wages in Egypt, both due to higher than usual annual wage increases and
adjustments to partially compensate for rising inflation as well as extra
staffing costs to support the rollout of new branches. Higher wages and
salaries also in part reflected an increase in Jordanian salaries due to the
translation impact as a result of the devaluation of the Egyptian pound over
the past year. Finally, wages and salaries in Nigeria also contributed to
consolidated wages and salaries expansion due to additional radiology staff
hires, coupled with annual salary increases.
Direct Wages and Salaries by Region
Q1 2022 Q1 2023
Egypt (EGP mn) 127.8 141.1
Jordan (EGP mn) 34.0 39.1
Jordan (JOD mn) 1.5 0.9
Nigeria (EGP mn) 3.7 7.5
Nigeria (NGN mn) 92.4 113.5
Sudan (EGP mn) 1.1 2.0
Sudan (SDG mn) 29.5 38.0
Direct depreciation and amortization costs (15% of consolidated cost of sales)
for the period booked EGP 88 million, increasing 37% year-on-year from EGP 64
million in Q1 2022. Depreciation and amortization expenses witnessed a notable
increase from the same period of the previous year primarily due to the
rollout of new branches across IDH's network, as the Company launched 56 new
branches, 24 of which were launched during the first quarter of 2023.
Other expenses (22% of consolidated cost of sales) for the quarter decreased
23% year-on-year, reaching EGP 127 million in Q1 2023. Increases in other
expenses for the period came on the back of increased repair & maintenance
costs and cleaning costs, which combined accounted for approximately 29% of
overall other expenses for the quarter. Increases in repair & maintenance
costs and cleaning costs were further heightened by the rollout of additional
branches across IDH's network.
Gross Profit
IDH's gross profit booked EGP 325 million during Q1 2023, down 39% compared to
the same period of the previous year. The Company's gross profit margin on
revenue came in at 35% decreasing 10 percentage points year-on-year. The drop
in gross profitability for the period is primarily a reflection of a
post-Covid-19 normalisation in IDH's test mix, as well as the previously
discussed cost increases largely related to direct wages and salaries.
Selling, General and Administrative Expenses
Total SG&A outlays recorded during Q1 2023 amounted to EGP 196 million,
increasing 45% year-on-year. As a percentage of consolidated revenues,
SG&A expenses came in at 21% compared to 11% in Q1 2022. Increases in
SG&A expenses are mainly attributable to:
· An increase in wages and salaries primarily due to an increase in
IDH's Board of Directors remuneration as a result of the addition of a board
member during the second quarter of 2022, as well as increased salaries in
Nigeria to support the hire of new management.
· An increase in accounting fees related to the external auditor "PwC",
reflecting both an increase in the fees paid in US dollars as well as the
devaluation of the EGP versus the same period of last year (average rate in Q1
2023 was 30.5 EGP/USD versus 16.5 EGP/USD in Q1 2022).
· Increased consulting fees related to the Company's 2023
sustainability report. Additionally, one-off expenses related to an
information strategy agreement executed in 2023 and legal fees related to the
Pakistan transaction. It is important to note that these expenses have been
impacted by several devaluations throughout 2022 in IDH's home market of
Egypt.
· Higher marketing and advertisement expenses, which increased 43%
year-on-year to reach EGP 32 million, compared to EGP 23 million during Q1
2022. Increases in advertising expenses were the result of marketing efforts
aimed at expediting the ramp-up of Al Borg Scan's operations as well as
supporting the rollout of new branches in IDH's network.
· During Q1 2023, IDH recorded other income of EGP 5 million versus
other expenses of EGP 1 million in the comparable three-month period of 2022.
The figure is partially related to a EGP 1.3 million liability pertaining to a
contract with Siemens to equip Al-Borg Scan's Capital Business Park branch
with PET-CT equipment, which had weighed down other income in the
corresponding period of 2022.
Selling, General and Administrative Expenses
Q1 2022 Q1 2023 Change
Wages & Salaries 45 69 51%
Accounting Fees 8 17 101%
Professional Services Fees 9 22 141%
Market - Advertisement expenses 23 32 43%
Other Expenses 30 33 9%
Depreciation & Amortisation 8 10 35%
Impairment loss on trade and other receivable 7 11 49%
Travelling and transportation expenses 3 6 89%
Other income 1 (5) -
Total 135 196 45%
Selling, General and Administrative Expenses by Region
Q1 2022 Q1 2023
Egypt (EGP mn) 109 155
Jordan (EGP mn) 18 24
Jordan (JOD mn) 0.8 0.6
Nigeria (EGP mn) 6 14
Nigeria (NGN mn) 151 209
Sudan (EGP mn) 2.0 2.3
Sudan (SDG mn) 52 46
Selling, General and Administrative Salaries by Region
Q1 2022 Q1 2023
Egypt (EGP mn) 28.1 43.0
Jordan (EGP mn) 12.2 16.7
Jordan (JOD mn) 0.5 0.4
Nigeria (EGP mn) 3.5 7.2
Nigeria (NGN mn) 87.4 108.1
Sudan (EGP mn) 1.7 1.9
Sudan (SDG mn) 44.5 36.4
EBITDA
The Company's EBITDA(10) booked EGP 227 million during Q1 2023, down 51%
year-on-year from the figure recorded in the same period of the previous year.
IDH's EBITDA margin came in at 25% for the quarter versus 40% in Q1 2022.
Lower EBITDA profitability for the period mainly reflects lower gross
profitability coupled with the aforementioned increases in SG&A expenses.
EBITDA by Country
In Egypt, EBITDA recorded EGP 198 million in Q1 2023, down 50% year-on-year
compared to the EGP 395 million in the same period of the previous year on the
back of decreased consolidated revenue from Egyptian operations. EBITDA margin
for the period declined to 27% in Q1 2023 from 45% in Q1 2022. Lower
profitability at the EBITDA level was dual driven by decreased gross
profitability as well as increased SG&A expenses, which grew 47%
year-on-year.
In Jordan, IDH's subsidiary, Biolab, booked an EBITDA of EGP 36 million in the
current quarter, down 52% year-on-year and with an associated margin of 25%.
In JOD terms, EBITDA declined 75% year-on-year during the first quarter of
2023. Decreases in EBITDA and its margin reflect lower gross profitability in
Jordanian operations as a result of the post-Covid-19 normalisation, in
addition to increased SG&A expenses, which increased 34% y-o-y to record
EGP 25 million.
In Nigeria, EBITDA losses widened to EGP 8 million from EGP 1 million in Q1
2022. Widening EBITDA losses were primarily driven by high levels of inflation
(in particular fuel inflation) which have weighed on IDH's Nigerian operations
over the past year, more than outweighing the venture's consistent revenue
growth. In local currency terms, EBITDA contracted 289% year-on-year in the
first three months of 2023.
The Company's Sudanese operations reported positive EBITDA of EGP 2 million,
up from EGP 0.1 million in the same period of the previous year on the back of
increased gross profitability. In SDG terms, EBITDA recorded a 720%
year-on-year expansion for the first quarter of the year.
Regional EBITDA in Local Currency
Mn Q1 2022 Q1 2023 Change
Egypt EBITDA EGP 395 198 -50%
Margin 45% 27%
Jordan JOD 3.3 0.8 -75%
Margin 27% 25%
Nigeria NGN -31 -121 -289%
Margin -8% -26%
Sudan SDG 3.8 31.3 720%
Margin 3% 18%
(10)EBITDA is calculated as operating profit plus depreciation and
amortization. It is important to note that while in absolute terms the EBITDA
figure is identical when using IFRS or APM, its margin differs between the two
sets of performance indicators only for the comparable period of 2022. Margins
for Q1 2023 are identical across both IFRS and APM.
Interest Income / Expense
IDH reported interest income of EGP 15 million in Q1 2023, a 66% year-on-year
decrease from the EGP 45 million recorded in the same period of the previous
year. Decreased interest income is primarily attributable to lower cash
balances as a result of the record cash dividend distributed during the
previous year.
Interest expense(11) booked EGP 43 million during Q1 2023, increasing 29%
year-on-year from EGP 33 million one year prior. The increase is mainly
attributable to:
· Increased interest on lease liabilities related to IFRS 16 due to the
rollout of new branches.
· Higher interest expenses following the CBE decision to increase rates
by 1,000 bps since March 2022. It is worth highlighting that IDH's interest
bearing debt balance increased to EGP 163 million as at 31 March 2023, from
EGP 117 million at year-end 2022. The increase in interest bearing debt is
primarily attributable to IDH's strategy of reducing foreign currency risk by
coming to an agreement 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 loan
by Ahly United Bank - Egypt.
Interest Expense Breakdown
EGP mn Q1 2022 Q1 2023 Change
Interest on Lease Liabilities (IFRS 16) 16.9 22.3 32%
Interest Expenses on Leases 4.7 8.4 79%
Bank Charges 7.1 2.4 -66%
Loan-related Expenses on IFC facility(12) 1.9 4.6 146%
Interest Expenses on Borrowings(13) 2.5 5.1 103%
Total Interest Expense 33.1 42.8 29%
(11)Interest expenses on medium-term loans include EGP 5.0 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.
(12)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.
(13)Interest expenses on medium-term loans include EGP 5.0 million 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.
Foreign Exchange
IDH booked a foreign exchange gain of EGP 109 million during Q1 2023, up from
EGP 61 million in the same period of the previous year.
Taxation
Tax expenses (income and deferred tax) came in at EGP 42 million during Q1
2023, down from EGP 157 million in Q1 2022. IDH's effective tax rate for the
period stood at 20% in the current period, compared to 33% in Q1 2022. The
decrease in effective tax rate for the period was primarily driven by the
decline in undistributed reserves from Group's subsidiaries compared to the
same period of the previous year, which dropped due to a special dividend paid
to shareholders during the third quarter of 2022 (see "Deferred Tax
Liabilities Analysis" table below). It is worth noting that there is no tax
payable for IDH's two companies at the holding level, while tax was paid on
profits generated by its operating subsidiaries (Egypt 22.5%, Jordan 21%,
Nigeria 30% and Sudan 30%).
Taxation Breakdown by Region
EGP Mn Q1 2022 Q1 2023 Change
Egypt 143.6 36.0 -75%
Jordan 13.6 5.4 -60%
Nigeria 0.0 0.3 N/A
Sudan 0.0 0.4 N/A
Total Tax Expenses 157.2 42.1 -73%
Deferred Tax Liabilities Breakdown
Q1 2023 Analysis Q1 2022 Analysis
EGP Mn 31 Mar 2023 31 Dec 2022 31 Mar 2022 31 Dec 2021
Deferred Tax Liabilities Balance (323.1) (321.7) (384.2) (332.1)
DT Expense (Mar-Dec) (1.4) (52.1)
DT Translation 0.4 (3.8)
Total DT Expenses (1.0) (55.9)
Income Tax (41.1) (101.4)
Current Income Tax as P&L (42.1) (157.2)
Net Profit
IDH reported consolidated net profit of EGP 168 million, down 46% year-on-year
from EGP 314 million in Q1 2022. The Company's net profit margin stood at 18%,
down 8 points from 27% in Q1 2022.
Raw material costs including the cost of specialized analysis at other
laboratories (31% of consolidated cost of sales), came in as the second
largest contributor to cost of sales during the quarter, recording EGP 185
million compared to EGP 253 million in Q1 2022. As a percentage of revenue,
raw materials came in at 20.2%, down from 21.4% in the same period of the
previous year. The decline wholly reflects the high base effect resulting from
Covid-19-related test kits purchased during Q1 2022, when demand for IDH's
Covid-19-related test offering was high. Looking at conventional test kit
prices, it is important to note that the Company did register a rise in
average prices for conventional test kits throughout the first quarter of the
year on the back of a weaker EGP and rising inflation. Rising conventional
test kit prices were only partially mitigated by free test kits received
during January 2023 from one of IDH's largest suppliers, Siemens.
Wages and salaries including employee share of profits (32% share of
consolidated cost of sales) made up the largest share of total cost of sales
during the first quarter of 2023, increasing 14% year-on-year to book EGP 190
million versus EGP 167 million in Q1 2022. The increase in direct wages and
salaries for the period was primarily driven by increases in salaries and
wages in Egypt, both due to higher than usual annual wage increases and
adjustments to partially compensate for rising inflation as well as extra
staffing costs to support the rollout of new branches. Higher wages and
salaries also in part reflected an increase in Jordanian salaries due to the
translation impact as a result of the devaluation of the Egyptian pound over
the past year. Finally, wages and salaries in Nigeria also contributed to
consolidated wages and salaries expansion due to additional radiology staff
hires, coupled with annual salary increases.
Direct Wages and Salaries by Region
Q1 2022 Q1 2023
Egypt (EGP mn) 127.8 141.1
Jordan (EGP mn) 34.0 39.1
Jordan (JOD mn) 1.5 0.9
Nigeria (EGP mn) 3.7 7.5
Nigeria (NGN mn) 92.4 113.5
Sudan (EGP mn) 1.1 2.0
Sudan (SDG mn) 29.5 38.0
Direct depreciation and amortization costs (15% of consolidated cost of sales)
for the period booked EGP 88 million, increasing 37% year-on-year from EGP 64
million in Q1 2022. Depreciation and amortization expenses witnessed a notable
increase from the same period of the previous year primarily due to the
rollout of new branches across IDH's network, as the Company launched 56 new
branches, 24 of which were launched during the first quarter of 2023.
Other expenses (22% of consolidated cost of sales) for the quarter decreased
23% year-on-year, reaching EGP 127 million in Q1 2023. Increases in other
expenses for the period came on the back of increased repair & maintenance
costs and cleaning costs, which combined accounted for approximately 29% of
overall other expenses for the quarter. Increases in repair & maintenance
costs and cleaning costs were further heightened by the rollout of additional
branches across IDH's network.
Gross Profit
IDH's gross profit booked EGP 325 million during Q1 2023, down 39% compared to
the same period of the previous year. The Company's gross profit margin on
revenue came in at 35% decreasing 10 percentage points year-on-year. The drop
in gross profitability for the period is primarily a reflection of a
post-Covid-19 normalisation in IDH's test mix, as well as the previously
discussed cost increases largely related to direct wages and salaries.
Selling, General and Administrative Expenses
Total SG&A outlays recorded during Q1 2023 amounted to EGP 196 million,
increasing 45% year-on-year. As a percentage of consolidated revenues,
SG&A expenses came in at 21% compared to 11% in Q1 2022. Increases in
SG&A expenses are mainly attributable to:
· An increase in wages and salaries primarily due to an increase in
IDH's Board of Directors remuneration as a result of the addition of a board
member during the second quarter of 2022, as well as increased salaries in
Nigeria to support the hire of new management.
· An increase in accounting fees related to the external auditor "PwC",
reflecting both an increase in the fees paid in US dollars as well as the
devaluation of the EGP versus the same period of last year (average rate in Q1
2023 was 30.5 EGP/USD versus 16.5 EGP/USD in Q1 2022).
· Increased consulting fees related to the Company's 2023
sustainability report. Additionally, one-off expenses related to an
information strategy agreement executed in 2023 and legal fees related to the
Pakistan transaction. It is important to note that these expenses have been
impacted by several devaluations throughout 2022 in IDH's home market of
Egypt.
· Higher marketing and advertisement expenses, which increased 43%
year-on-year to reach EGP 32 million, compared to EGP 23 million during Q1
2022. Increases in advertising expenses were the result of marketing efforts
aimed at expediting the ramp-up of Al Borg Scan's operations as well as
supporting the rollout of new branches in IDH's network.
· During Q1 2023, IDH recorded other income of EGP 5 million versus
other expenses of EGP 1 million in the comparable three-month period of 2022.
The figure is partially related to a EGP 1.3 million liability pertaining to a
contract with Siemens to equip Al-Borg Scan's Capital Business Park branch
with PET-CT equipment, which had weighed down other income in the
corresponding period of 2022.
Selling, General and Administrative Expenses
Q1 2022 Q1 2023 Change
Wages & Salaries 45 69 51%
Accounting Fees 8 17 101%
Professional Services Fees 9 22 141%
Market - Advertisement expenses 23 32 43%
Other Expenses 30 33 9%
Depreciation & Amortisation 8 10 35%
Impairment loss on trade and other receivable 7 11 49%
Travelling and transportation expenses 3 6 89%
Other income 1 (5) -
Total 135 196 45%
Selling, General and Administrative Expenses by Region
Q1 2022 Q1 2023
Egypt (EGP mn) 109 155
Jordan (EGP mn) 18 24
Jordan (JOD mn) 0.8 0.6
Nigeria (EGP mn) 6 14
Nigeria (NGN mn) 151 209
Sudan (EGP mn) 2.0 2.3
Sudan (SDG mn) 52 46
Selling, General and Administrative Salaries by Region
Q1 2022 Q1 2023
Egypt (EGP mn) 28.1 43.0
Jordan (EGP mn) 12.2 16.7
Jordan (JOD mn) 0.5 0.4
Nigeria (EGP mn) 3.5 7.2
Nigeria (NGN mn) 87.4 108.1
Sudan (EGP mn) 1.7 1.9
Sudan (SDG mn) 44.5 36.4
EBITDA
The Company's EBITDA(10) booked EGP 227 million during Q1 2023, down 51%
year-on-year from the figure recorded in the same period of the previous year.
IDH's EBITDA margin came in at 25% for the quarter versus 40% in Q1 2022.
Lower EBITDA profitability for the period mainly reflects lower gross
profitability coupled with the aforementioned increases in SG&A expenses.
EBITDA by Country
In Egypt, EBITDA recorded EGP 198 million in Q1 2023, down 50% year-on-year
compared to the EGP 395 million in the same period of the previous year on the
back of decreased consolidated revenue from Egyptian operations. EBITDA margin
for the period declined to 27% in Q1 2023 from 45% in Q1 2022. Lower
profitability at the EBITDA level was dual driven by decreased gross
profitability as well as increased SG&A expenses, which grew 47%
year-on-year.
In Jordan, IDH's subsidiary, Biolab, booked an EBITDA of EGP 36 million in the
current quarter, down 52% year-on-year and with an associated margin of 25%.
In JOD terms, EBITDA declined 75% year-on-year during the first quarter of
2023. Decreases in EBITDA and its margin reflect lower gross profitability in
Jordanian operations as a result of the post-Covid-19 normalisation, in
addition to increased SG&A expenses, which increased 34% y-o-y to record
EGP 25 million.
In Nigeria, EBITDA losses widened to EGP 8 million from EGP 1 million in Q1
2022. Widening EBITDA losses were primarily driven by high levels of inflation
(in particular fuel inflation) which have weighed on IDH's Nigerian operations
over the past year, more than outweighing the venture's consistent revenue
growth. In local currency terms, EBITDA contracted 289% year-on-year in the
first three months of 2023.
The Company's Sudanese operations reported positive EBITDA of EGP 2 million,
up from EGP 0.1 million in the same period of the previous year on the back of
increased gross profitability. In SDG terms, EBITDA recorded a 720%
year-on-year expansion for the first quarter of the year.
Regional EBITDA in Local Currency
Mn Q1 2022 Q1 2023 Change
Egypt EBITDA EGP 395 198 -50%
Margin 45% 27%
Jordan JOD 3.3 0.8 -75%
Margin 27% 25%
Nigeria NGN -31 -121 -289%
Margin -8% -26%
Sudan SDG 3.8 31.3 720%
Margin 3% 18%
(10)EBITDA is calculated as operating profit plus depreciation and
amortization. It is important to note that while in absolute terms the EBITDA
figure is identical when using IFRS or APM, its margin differs between the two
sets of performance indicators only for the comparable period of 2022. Margins
for Q1 2023 are identical across both IFRS and APM.
Interest Income / Expense
IDH reported interest income of EGP 15 million in Q1 2023, a 66% year-on-year
decrease from the EGP 45 million recorded in the same period of the previous
year. Decreased interest income is primarily attributable to lower cash
balances as a result of the record cash dividend distributed during the
previous year.
Interest expense(11) booked EGP 43 million during Q1 2023, increasing 29%
year-on-year from EGP 33 million one year prior. The increase is mainly
attributable to:
· Increased interest on lease liabilities related to IFRS 16 due to the
rollout of new branches.
· Higher interest expenses following the CBE decision to increase rates
by 1,000 bps since March 2022. It is worth highlighting that IDH's interest
bearing debt balance increased to EGP 163 million as at 31 March 2023, from
EGP 117 million at year-end 2022. The increase in interest bearing debt is
primarily attributable to IDH's strategy of reducing foreign currency risk by
coming to an agreement 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 loan
by Ahly United Bank - Egypt.
Interest Expense Breakdown
EGP mn Q1 2022 Q1 2023 Change
Interest on Lease Liabilities (IFRS 16) 16.9 22.3 32%
Interest Expenses on Leases 4.7 8.4 79%
Bank Charges 7.1 2.4 -66%
Loan-related Expenses on IFC facility(12) 1.9 4.6 146%
Interest Expenses on Borrowings(13) 2.5 5.1 103%
Total Interest Expense 33.1 42.8 29%
(11)Interest expenses on medium-term loans include EGP 5.0 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.
(12)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.
(13)Interest expenses on medium-term loans include EGP 5.0 million 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.
Foreign Exchange
IDH booked a foreign exchange gain of EGP 109 million during Q1 2023, up from
EGP 61 million in the same period of the previous year.
Taxation
Tax expenses (income and deferred tax) came in at EGP 42 million during Q1
2023, down from EGP 157 million in Q1 2022. IDH's effective tax rate for the
period stood at 20% in the current period, compared to 33% in Q1 2022. The
decrease in effective tax rate for the period was primarily driven by the
decline in undistributed reserves from Group's subsidiaries compared to the
same period of the previous year, which dropped due to a special dividend paid
to shareholders during the third quarter of 2022 (see "Deferred Tax
Liabilities Analysis" table below). It is worth noting that there is no tax
payable for IDH's two companies at the holding level, while tax was paid on
profits generated by its operating subsidiaries (Egypt 22.5%, Jordan 21%,
Nigeria 30% and Sudan 30%).
Taxation Breakdown by Region
EGP Mn Q1 2022 Q1 2023 Change
Egypt 143.6 36.0 -75%
Jordan 13.6 5.4 -60%
Nigeria 0.0 0.3 N/A
Sudan 0.0 0.4 N/A
Total Tax Expenses 157.2 42.1 -73%
Deferred Tax Liabilities Breakdown
Q1 2023 Analysis Q1 2022 Analysis
EGP Mn 31 Mar 2023 31 Dec 2022 31 Mar 2022 31 Dec 2021
Deferred Tax Liabilities Balance (323.1) (321.7) (384.2) (332.1)
DT Expense (Mar-Dec) (1.4) (52.1)
DT Translation 0.4 (3.8)
Total DT Expenses (1.0) (55.9)
Income Tax (41.1) (101.4)
Current Income Tax as P&L (42.1) (157.2)
Net Profit
IDH reported consolidated net profit of EGP 168 million, down 46% year-on-year
from EGP 314 million in Q1 2022. The Company's net profit margin stood at 18%,
down 8 points from 27% in Q1 2022.
ii. Balance Sheet Analysis
Assets
Property, Plant and Equipment
IDH recorded gross property, plant and equipment (PPE) of EGP 2,425 million as
at 31 March 2023, up from EGP 2,208 million as at 31 December 2022. The rise
in CAPEX as a share of revenues during Q1 2023 is partially attributable to
the EGP 42 million spent on new radiology branches in Egypt, as well as the
EGP 134 million translation effect (associated with Jordan, Sudan, and
Nigeria) which resulted from the Egyptian Pounds devaluation throughout the
past twelve months.
Total CAPEX Addition Breakdown - Q1 2023
EGP mn % of Revenue
Leasehold Improvements/new branches 42.0 4.6%
Al-Borg Scan Expansion 41.7 4.6%
Total CAPEX Additions Excluding Translation 83.8 9.2%
Translation Effect 133.6 14.6%
Total CAPEX Additions 217.4 23.7%
Accounts Receivable and Provisions
As at 31 March 2023, IDH booked accounts receivable of EGP 467 million, up
from EGP 395 million as of 31 December 2022. The Company's receivables' Days
on Hand (DoH) recorded 122 days, compared to 124 days at year-end 2022.
Provisions for doubtful accounts recorded during Q1 2023 stood at EGP 11
million, up 49% year-on-year from EGP 7 million in Q1 2022. The increase in
provisions reflect the slowdown in collections driven by the current economic
condition in Egypt region.
Inventory
As of the end of Q1 2023, IDH recorded an inventory balance of EGP 296
million, up from EGP 265 million as of year-end 2022. In parallel, Days
Inventory Outstanding (DIO) rose to 144 days from 127 days as at 31 December
2022. The increase in DIO was driven by management initiatives to accumulate
inventory as a part of its strategy to hedge against ongoing inflation.
Cash and Net Debt/Cash
Cash balances booked as at 31 March 2023 remained relatively stable compared
to those as at year-end 2022, recording EGP 813 million.
EGP million 31 Dec 2022 31 Mar 2023
T-Bills 296 342
Time Deposits 123 113
Current Accounts 378 344
Cash on Hand 18 14
Total 816 813
IDH's net debt(14) balance as at 31 March 2023 stood at EGP 424 million,
compared to a net debt balance of EGP 374 million as at year-end 2022.
EGP million 31 Dec 2022 31 Mar 2023
Cash and Financial Assets at Amortised Cost(15) 816 813
Lease Liabilities Property (727) (782)
Total Financial Liabilities (Short-term and Long-term) (335) (278)
Interest Bearing Debt ("Medium Term Loans")(16) (127) (177)
Net Cash/(debt) Balance (374) (424)
Note: Interest Bearing Debt includes accrued interest for each period.
Lease liabilities and financial obligations on property recorded EGP 782
million as at 31 March 2023, up from EGP 727 as at year-end 2022. The increase
in lease liabilities is primarily due to the rollout of 24 new branches across
IDH's network.
Meanwhile, financial obligations related to equipment decreased to EGP 278
million, from EGP 335 million as at 31 December 2022. The decline in financial
obligations related to equipment reflects the early repayment of IDH's
contractual obligations with General Electric (GE) as part of the Company's
efforts to limit its foreign currency exposure. To finance the settlement, IDH
utilized a bridge loan facility, with half of the amount due funded internally
and the other half provided by a loan from Ahly United Bank - Egypt.
Finally, interest bearing debt recorded EGP 163 million, up from EGP 117
million as at year-end 2022. The increase in interest bearing debt was
primarily driven by additional usage of MTL to support Al Borg Scan's
expansion. It is worth highlighting that interest-bearing debt for both
periods excluded accrued interest.
Liabilities
Accounts Payable(17)
IDH recorded accounts payable of EGP 277 million as at 31 March 2023,
remaining largely stable from the EGP 270 million recorded as at year-end
2022. Simultaneously, the Group's Days Payable Outstanding (DPO) decreased to
140 from 151 as at 31 December 2022.
Put Option
The put option current liability is related to 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 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).
(14)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.
(15)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.
(16)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).
(17)Accounts payable is calculated based on average payables at the end of
each period.
Accounts Receivable and Provisions
As at 31 March 2023, IDH booked accounts receivable of EGP 467 million, up
from EGP 395 million as of 31 December 2022. The Company's receivables' Days
on Hand (DoH) recorded 122 days, compared to 124 days at year-end 2022.
Provisions for doubtful accounts recorded during Q1 2023 stood at EGP 11
million, up 49% year-on-year from EGP 7 million in Q1 2022. The increase in
provisions reflect the slowdown in collections driven by the current economic
condition in Egypt region.
Inventory
As of the end of Q1 2023, IDH recorded an inventory balance of EGP 296
million, up from EGP 265 million as of year-end 2022. In parallel, Days
Inventory Outstanding (DIO) rose to 144 days from 127 days as at 31 December
2022. The increase in DIO was driven by management initiatives to accumulate
inventory as a part of its strategy to hedge against ongoing inflation.
Cash and Net Debt/Cash
Cash balances booked as at 31 March 2023 remained relatively stable compared
to those as at year-end 2022, recording EGP 813 million.
EGP million 31 Dec 2022 31 Mar 2023
T-Bills 296 342
Time Deposits 123 113
Current Accounts 378 344
Cash on Hand 18 14
Total 816 813
IDH's net debt(14) balance as at 31 March 2023 stood at EGP 424 million,
compared to a net debt balance of EGP 374 million as at year-end 2022.
EGP million 31 Dec 2022 31 Mar 2023
Cash and Financial Assets at Amortised Cost(15) 816 813
Lease Liabilities Property (727) (782)
Total Financial Liabilities (Short-term and Long-term) (335) (278)
Interest Bearing Debt ("Medium Term Loans")(16) (127) (177)
Net Cash/(debt) Balance (374) (424)
Note: Interest Bearing Debt includes accrued interest for each period.
Lease liabilities and financial obligations on property recorded EGP 782
million as at 31 March 2023, up from EGP 727 as at year-end 2022. The increase
in lease liabilities is primarily due to the rollout of 24 new branches across
IDH's network.
Meanwhile, financial obligations related to equipment decreased to EGP 278
million, from EGP 335 million as at 31 December 2022. The decline in financial
obligations related to equipment reflects the early repayment of IDH's
contractual obligations with General Electric (GE) as part of the Company's
efforts to limit its foreign currency exposure. To finance the settlement, IDH
utilized a bridge loan facility, with half of the amount due funded internally
and the other half provided by a loan from Ahly United Bank - Egypt.
Finally, interest bearing debt recorded EGP 163 million, up from EGP 117
million as at year-end 2022. The increase in interest bearing debt was
primarily driven by additional usage of MTL to support Al Borg Scan's
expansion. It is worth highlighting that interest-bearing debt for both
periods excluded accrued interest.
Liabilities
Accounts Payable(17)
IDH recorded accounts payable of EGP 277 million as at 31 March 2023,
remaining largely stable from the EGP 270 million recorded as at year-end
2022. Simultaneously, the Group's Days Payable Outstanding (DPO) decreased to
140 from 151 as at 31 December 2022.
Put Option
The put option current liability is related to 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 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).
(14)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.
(15)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.
(16)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).
(17)Accounts payable is calculated based on average payables at the end of
each period.
-End-
INTEGRATED DIAGNOSTICS HOLDINGS plc - "IDH"
AND ITS SUBSIDIARIES
Consolidated Financial Statements
for the quarter ended 31 March 2023
Consolidated statement of financial position as at 31 March 2023
Notes 31 Mar 2023 31 Dec 2022
EGP'000 EGP'000
Assets
Non-current assets
Property, plant and equipment 4 1,413,485 1,326,262
Intangible assets and goodwill 5 1,732,745 1,703,636
Right of use assets 6 677,726 622,975
Financial assets at fair value through profit and loss 7 22,961 18,064
Total non-current assets 3,846,917 3,670,937
Current assets
Inventories 296,363 265,459
Trade and other receivables 8 611,033 543,887
Financial assets at amortized cost 9 257,668 167,404
Cash and cash equivalents 10 555,373 648,512
Total current assets 1,720,437 1,625,262
Total assets 5,567,354 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 (298,406) (490,695)
Translation reserve (61,726) 24,173
Retained earnings 955,990 783,081
Equity attributable to the owners of the Company 2,433,395 2,154,096
Non-controlling interests 406,714 292,885
Total equity 2,840,109 2,446,981
Non-current liabilities
Provisions 3,538 3,519
Borrowings 13 79,560 93,751
Other financial obligations 15 892,894 914,191
Non-current put option liability 14 56,992 51,000
Deferred tax liabilities 19-C 323,123 321,732
Total non-current liabilities 1,356,107 1,384,193
Current liabilities
Trade and other payables 11 694,177 701,095
Other financial obligations 15 167,515 148,705
Current put option liability 12 241,414 439,695
Borrowings 13 83,320 22,675
Current tax liabilities 184,712 152,855
Total current liabilities 1,371,138 1,465,025
Total liabilities 2,727,245 2,849,218
Total equity and liabilities 5,567,354 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
30 May 2023 by:
Dr. Hend El Sherbini Hussein Choucri
Chief Executive Officer Independent Non-Executive Director
Consolidated income statement for the quarter ended 31 March 2023
Notes 31 Mar 2023 31 Mar 2022
EGP'000 EGP'000
Revenue 22 915,291 1,180,479
Cost of sales (590,717) (648,793)
Gross profit 324,574 531,686
Marketing and advertising expenses (63,295) (40,764)
Administrative expenses 17 (126,483) (86,300)
Impairment loss on trade and other receivable (10,683) (7,178)
Other Income 4,697 (1,082)
Operating profit 128,810 396,362
Finance costs 18 (42,795) (33,060)
Finance income 18 124,488 108,045
Net finance income /(costs) 81,693 74,985
Profit before income tax 210,503 471,347
Income tax expense 19-B (42,117) (157,214)
Profit for the year 168,386 314,133
Profit attributed to:
Owners of the Company 172,909 296,609
Non-controlling interests (4,523) 17,524
168,386 314,133
Earnings per share
Basic and diluted 21 0.29 0.49
The accompanying notes form an integral part of these consolidated financial
statements.
Consolidated statement of comprehensive income for the quarter ended 31 March
2023
31 Mar 2023 31 Mar 2022
EGP'000 EGP'000
Net profit for the year 168,386 314,133
Other comprehensive income:
Items that may be reclassified to profit or loss:
Exchange difference on translation of foreign operations 32,453 77,308
Other comprehensive income for the period, net of tax 32,453 77,308
Total comprehensive income for the period 200,839 391,441
Attributable to:
Owners of the Company 87,010 310,550
Non-controlling interests 113,829 80,891
200,839 391,441
The accompanying notes form an integral part of these consolidated financial
statements.
Consolidated statement of cash flows for the quarter ended 31 March 2023
Note 31 Mar 2023 31 Mar 2022
EGP'000 EGP'000
Cash flows from operating activities
Profit before tax 210,503 471,347
Adjustments for:
Depreciation of property, plant and equipment 63,717 46,048
Depreciation of right of use assets 32,938 23,926
Amortisation of intangible assets 1,913 1,949
Gain on disposal of Property, plant and equipment (7) (4)
Impairment in trade and other receivables 10,683 7,178
Impairment in goodwill (98) -
Interest income 18 (15,168) (45,247)
Interest expense 18 40,387 25,916
Bank Charges 2,408 7,144
Equity settled financial assets at fair value (4,897) (1,842)
ROU Asset/Lease Termination (237) 1,743
Hyperinflation 18 - (1,664)
Unrealised foreign currency exchange loss 18 (109,320) (61,134)
Change in Provisions 19 (331)
Change in Inventories (24,065) (28,598)
Change in trade and other receivables (15,677) (78,311)
Change in trade and other payables (93,454) (58,801)
Net cash generated from operating activities 99,645 309,319
Cash flows from investing activities
Proceeds from sale of Property, plant and equipment 584 184
Interest received on financial asset at amortised cost 15,113 8,180
Payments for acquisition of property, plant and equipment 4 (85,501) (33,363)
Payments for acquisition of intangible assets 5 (944) (843)
Payments for the purchase of financial assets at amortized cost (252,163) (312,592)
Proceeds for the sale of financial assets at amortized cost 177,816 341,163
Net cash generated from/(used in) investing activities (145,095) 2,729
Cash flows from financing activities
Proceeds from borrowings 54,936 -
Repayments of borrowings (8,483) -
Payment of finance lease liabilities (111,994) (8,535)
Interest paid (37,011) (28,688)
Bank charge paid (2,408) (7,144)
Net cash flows used in financing activities (104,960) (44,367)
Net (decrease) increase in cash and cash equivalents (150,410) 267,681
Cash and cash equivalents at the beginning of the year 648,512 891,451
Effect of exchange rate 57,271 69,596
Cash and cash equivalents at the end of the period 10 555,373 1,228,728
Non-cash investing and financing activities disclosed in other notes are:
· Acquisition of right-of-use assets - note 26
· Property, plant and equipment - note 11
· Put option liability - note 23 and 25
The accompanying notes form an integral part of these consolidated financial
statements.
Consolidated statement of changes in equity for the quarter ended 31 March
2023
EGP'000 Share Capital Share premium Capital reserve Legal reserve* Put option reserve Translation reserve Retained earnings Total attributed to Non-Controlling interests Total Equity
the owners of the
Company
1,027,706 (314,310) 51,641 (490,695) 24,173 783,081 2,154,096 292,885 2,446,981
As at 1 January 2023 1,072,500
Profit / (loss) for the year - - - - - - 172,909 172,909 (4,523) 168,386
Other comprehensive (expense)/ income for the year - - - - - (85,899) - (85,899) 118,352 32,453
Total comprehensive income - - - - - (85,899) 172,909 87,010 113,829 200,839
Transactions with owners in their capacity as owners
Contributions and distributions
Movement in put option liabilities for the year - - - - 192,289 - - 192,289 - 192,289
Total - - - - 192,289 - - 192,289 - 192,289
At at 31 March 2023 1,072,500 1,027,706 (314,310) 51,641 (298,406) (61,726) 955,990 2,433,395 406,714 2,840,109
As 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 year - - - - - - 296,609 296,609 17,524 314,133
Other comprehensive loss for the year - - - - - 13,941 - 13,941 63,367 77,308
Total comprehensive income - - - - - 13,941 296,609 310,550 80,891 391,441
Transactions with owners in their capacity as owners
Contributions and distributions
Movement in put option liabilities for the year - - - - (170,940) - - (170,940) - (170,940)
Impact of hyperinflation - - - - - - 1,570 1,570 409 1,979
Total - - - - (170,940) - 1,570 (169,370) 409 (168,961)
At 31 March 2022 1,072,500 1,027,706 (314,310) 51,641 (1,127,337) 164,671 1,849,155 2,724,026 292,813 3,016,839
* Under Egyptian Law each subsidiary 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 consolidated financial
statements.
(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
three months ended 31 March 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 and Sudan.
The Group's financial year starts on 1 January and ends on 31 December of each
year.
These condensed consolidated interim financial information were approved for
issue by the Directors of the Company on 30 May 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 (http://www.idhcorp.com) ,. In addition, results of the
three-month period ended 31 March 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 and Nigeria 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 2.2 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 Leasehold Fixtures, fittings & vehicles Project under construction Payment Total
& information
improvements
system equipment on
account
Cost
At 1 January 2023 426,961 1,111,867 507,442 133,195 28,589 10,614 2,218,668
Additions - 29,937 5,051 10,172 40,341 - 85,501
Disposals - (825) (317) (601) - (1,743)
Transfers - - 8,948 - (8,948) - -
Exchange differences 5,158 74,204 37,095 16,116 1,028 - 133,601
At 31 March 2023 432,119 1,215,183 558,219 158,882 61,010 10,614 2,436,027
Depreciation
At 1 January 2023 61,578 513,869 261,705 55,254 - 892,406
Depreciation for the period 1,768 38,330 19,761 3,858 - - 63,717
Disposals - (501) (262) (403) - - (1,166)
Exchange differences 901 38,044 19,029 9,611 - - 67,585
At 31 March 2023 64,247 589,742 300,233 68,320 - 1,022,542
Net book value at 31 March 367,872 625,441 257,986 90,562 61,010 10,614 1,413,485
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 - - 944 944
Effect of movements in exchange rates 20,320 7,588 4,338 32,246
Balance at 31 March 2023 1,312,143 403,139 98,118 1,813,400
Amortisation and impairment
Balance at 1 January 2023 6,373 381 69,820 76,574
Amortisation - - 1,913 1,913
Effect of movements in exchange rates - - 2,168 2,168
Balance at 31 March 2023 6,373 381 73,901 80,655
Carrying amount
Balance at 31 December 2022 1,285,450 395,170 23,016 1,703,636
Balance at 31 March 2023 1,305,770 402,758 24,217 1,732,745
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 three months ended 31
March 2023.
6. Right-of-use assets
31 March 31 December 2022
2023
Balance at 1 January 622,975 462,432
Addition for the period / year 44,903 214,846
Depreciation charge for the period / year (32,938) (103,099)
Terminated contracts (3,584) (13,564)
Exchange differences 46,370 62,360
Balance 677,726 622,975
7. Financial asset at fair value through profit and loss
31 March 31 December
2023 2022
Equity investments* 22,961 18,064
22,961 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 March 31, 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,
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.
8. Trade and other receivables
31 March 31 December 2022
2023
Trade receivables - net 467,451 395,220
Prepayments 35,300 34,081
Due from related parties note (16) 5,990 5,930
Other receivables 99,943 106,363
Accrued revenue 2,349 2,293
611,033 543,887
9. Financial assets at amortised cost
31 March 31 December 2022
2023
Term deposits (more than 3 months) 113,080 60,200
Treasury bills (more than 3 months) 144,588 107,204
257,668 167,404
The maturity date of the treasury bills and Fixed-term deposits are between
3-12 months and have average interest rates of EGP, and JOD 18.99% and 5.23%
respectively.
10. Cash and cash equivalents
31 March 31 December 2022
2023
Cash at banks and on hand 357,782 399,957
Treasury bills (less than 3 months) 197,591 185,513
Term deposits (less than 3 months) - 63,042
555,373 648,512
11. Trade and other payables
31 March 31 December 2022
2023
Trade payable 277,462 269,782
Accrued expenses 210,957 241,060
Due to related parties note (16) 35,490 25,058
Other payables 114,140 98,204
Deferred revenue 52,564 60,948
Accrued finance cost 3,564 6,043
694,177 701,095
12. Current put option liability
31 March 31 December 2022
2023
Put option - Biolab Jordan 241,414 439,695
241,414 439,695
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 31 March 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 relationship, there is no
expectation that this will happen in next 18 months. The option has no expiry
date.
13. Loans and borrowings
Currency Nominal interest rate Maturity 31 March 31 December
2023 2022
AUB - Bank EGP CBE corridor rate+1% 26 January 2027 107,944 116,426
AUB - Bank EGP CBE corridor rate+1% 29 June 2023 54,936 -
162,879 116,426
Amount held as:
Current liability 83,320 22,675
Non- current liability 79,560 93,751
162,879 116,426
A) In July 2018, AL-Borg lab, one of IDH subsidiaries, was granted a
medium term loan amounting to EGP 185m from Ahli United Bank "AUB Egypt" to
finance the investment cost related to the expansion into the radiology
segment. As at 31 March 2023 only EGP 179.8 M had been drawn down from the
total facility available with 17m 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 31 March 2023 corridor rate 20.25% (2022: 17.25%)
AL- Borg company didn't breach any covenants for MTL agreements.
B) IDH opted to reduce its exposure to foreign currency risk by coming
to an agreement with General Electric (GE) for the early repayment of its
contractual obligation of USD 5.7 million. As of March 28, 2023, the remaining
obligation balance stood at USD 5.0 million, with USD 0.7 million having been
repaid since the contract was initiated in 2020. 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, with due to the
date on 29 June 2023.
14. Non-current put option liability
31 March 31 December 2022
2023
Put option liability* 56,992 51,000
56,992 51,000
* 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.
15. Other Financial obligations
31 March 31 December
2023 2022
Financial liability- laboratory equipment 278,319 335,470
Lease liabilities building 782,090 727,426
1,060,409 1,062,896
The financial obligations for the laboratory equipment and building are
payable as follows:
31 March 2023
Minimum Interest Principal
payments
Less than one year 299,559 132,044 167,515
Between one and five years 1,001,389 293,112 708,277
More than five years 228,482 43,865 184,617
1,529,430 469,021 1,060,409
31 December 2022
Minimum payments Interest Principal
Less than one year 285,962 137,257 148,705
Between one and five years 1,030,750 314,656 716,094
More than Five years 227,715 29,618 198,097
1,544,427 481,531 1,062,896
Amounts recognised in profit or loss:
For the three months ended 31 March
2023 2022
Interest on lease liabilities 22,323 16,861
Expenses related to short-term lease 2,676 5,757
16. Related party transactions
The significant transactions with related parties, their nature volumes and
balance during the period 31 March 2023 are as follows:
31 March 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 (8) (107)
Life Health Care Provided service Entity owned by Company's CEO (23) 2,495
Dr. Amid Abd Elnour Put option liability Bio. Lab C.E.O and shareholder 198,281 (241,414)
Current account Bio. Lab C.E.O and shareholder (4,568) (24,576)
International Finance corporation (IFC) Put option liability Echo-Scan shareholder (5,993) (56,992)
International Finance corporation (IFC) Current account Echo-Scan shareholder (4,781) (5,404)
Integrated Treatment for Kidney Diseases (S.A.E) Collection Entity owned by Company's CEO (57) 1,372
Medical Test analysis 139
HENA HOLDINGS LTD shareholders' dividends deferral agreement shareholder (63) (2,440)
ACTIS IDH LIMITED shareholders' dividends deferral agreement shareholder (1,006) (2,963)
(327,907)
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
ALborg 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 CEO 17,025 -
arrangement
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).
Related party transactions (continued)
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.
31 March 31 March
2023 2022
Short-term employee benefits 20,192 25,424
20,192 25,424
17. General and administrative expenses
For the three months ended 31 March
2023 2022
Wages and salaries 51,762 33,931
Depreciation 8,459 6,483
Amortisation 1,554 920
Other expenses 64,708 44,966
Total 126,483 86,300
18. Net finance cost
For the three months ended 31 March
2023 2022
Finance income
Interest income 15,168 45,247
Net foreign exchange gain 109,320 61,134
Gain on hyperinflationary net monetary position - 1,664
Total finance income 124,488 108,045
Finance cost
Bank charges (2,408) (7,144)
Interest expense (40,387) (25,916)
Total finance cost (42,795) (33,060)
Net finance income 81,693 74,985
19. 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 31 March
2023 2022
Current tax:
Current period (41,136) (101,360)
Deferred tax:
Deferred tax arising on undistributed reserves in subsidiaries 190 (55,225)
Relating to origination and reversal of temporary differences (1,171) (629)
Total Deferred tax expense (981) (55,854)
Tax expense recognised in profit or loss (42,117) (157,214)
Tax (continued)
C) Deferred tax liabilities
Deferred tax relates to the following:
31 March 31 December 2022
2023
Property, plant and equipment (34,409) (35,804)
Intangible assets (112,094) (109,118)
Undistributed reserves from Group subsidiaries (176,681) (176,871)
Provisions and financial obligation 61 61
Net deferred tax liabilities (323,123) (321,732)
20. Financial instruments
The Group has reviewed the financial assets and liabilities held at 31 March
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.
Contingent liabilities
As required by article 134 of the labour law on Vocational Guidance and
Training issued by the Egyptian Government in 2003, Al Borg Laboratory Company
and Al Mokhtabar Company for Medical Labs are required to conform to the
requirements set out by that law to provide 1% of net profits each year into a
training fund. Integrated Diagnostics Holdings plc have taken legal advice and
considered market practice in Egypt relating to this and more specifically
whether the vocational training courses undertaken by Al Borg Laboratory
Company, Al Mokhtabar Company for Medical Labs and Integrated medical analysis
suggest that obligations have been satisfied through training programmes
undertaken in-house by those entities. Since the issue of the law on
Vocational Guidance and Training, Al Borg Laboratory Company, Al Mokhtabar
Company for Medical Labs and Integrated medical analysis have not been
requested by the government to pay or have voluntarily paid any amounts into
the external training fund. Should a claim be brought against Al Borg
Laboratory Company, Al Mokhtabar Company for Medical Labs and Integrated
medical analysis, an to up to 46m EGP could become payable, however this is
not considered probable.
21. Earnings per share
For the three months ended 31 March
2023 2022
Profit attributed to owners of the parent 172,909 296,609
Weighted average number of ordinary shares in issue 600,000 600,000
Basic and diluted earnings per share 0.29 0.49
The Company has no potential diluted shares as at 31 March 2023 and 31 March
2022, therefore; the earnings per diluted share are equivalent to basic
earnings per share.
22. 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 four 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 four geographic areas, Egypt, Sudan, Jordan, and
Nigeria. 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 four
regions is set out below.
Revenue by geographic location
For the three months ended Egypt Sudan Jordan Nigeria region Total
region region region
31 March 2023 731,040 8,780 144,473 30,998 915,291
31 March 2022 879,490 5,672 280,514 14,803 1,180,479
EBITDA by geographic location
For the year ended Egypt Sudan Jordan region Nigeria Total
region region region
31 March 2023 197,947 1,622 35,832 (8,023) 227,378
31 March 2022 395,056 86 74,312 (1,169) 468,285
Segment reporting (continued)
Net profit / (loss) by geographic location
For three-month period ended Egypt region Sudan region Jordan region Nigeria region Total
31 March 2023 171,237 4,072 6,392 (13,315) 168,386
31 March 2022 269,516 2,756 45,030 (3,169) 314,133
Revenue by type Net profit by type
For the three months ended 31 March For the three months ended 31 March
2023 2022 2023 2022
Pathology 856,436 1,148,804 208,340 330,024
Radiology 58,855 31,675 (39,954) (15,891)
915,291 1,180,479 168,386 314,133
Revenue by categories
For the three months ended
31 March
2023 2022
Walk-in 336,740 535,105
Corporate 578,551 645,374
915,291 1,180,479
Non-current assets by geographic location
Egypt Sudan Jordan Nigeria Total
region region region region
31 March 2023 3,073,330 17,096 614,413 142,078 3,846,917
31 December 2022 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 period ended 30 March
2023 2022
Profit from operations 128,810 396,362
Property, plant and equipment depreciation 63,717 46,048
Right of use depreciation 32,938 23,926
Amortisation of Intangible assets 1,913 1,949
EBITDA 227,378 468,285
23. Important events
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
24. Subsequent event
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. There is no damage to the material assets to date. 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.
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