REG - Integrated Diag Hdgs - 3rd Quarter Results
16/11/2021 07:05
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RNS Number : 4515S Integrated Diagnostics Holdings PLC 16 November 2021
Integrated Diagnostics Holdings Plc
3(rd) Quarter Results
Tuesday, 16 November 2021
Integrated Diagnostics Holdings Plc reports another set of record-breaking
results on the back of strong demand across its entire portfolio
(Cairo and London) Integrated Diagnostics Holdings ("IDH," "the Group," or
"the Company"), a leading consumer healthcare company with operations in
Egypt, Jordan, Sudan and Nigeria, released today its reviewed financial
statements and operational performance for the nine-month period ended 30
September 2021, reporting revenue of EGP 3,767 million, up 126% from the
comparable period of 2020. Profitability remained at an all-time high, with
normalised EBITDA(1) growing 180% year-on-year to reach EGP 1,992 million, and
net profit recording a three-fold year-on-year increase recording EGP 1,148
million in 9M 2021. IDH's nine-month results were bolstered by a
record-breaking third quarter which saw the Company outperform its already
remarkable results from the first and second quarters of this year to deliver
revenue and net profit quarter-on-quarter growth of 27% and 47%, respectively.
Financial Results
EGP mn 9M 2020 9M 2021 Change
Revenues 1,670 3,767 126%
Cost of Sales 840 1,600 90%
Gross Profit 830 2,167 161%
Gross Profit Margin 50% 58% 7.8 pts
Operating Profit(2) 575 1,823 217%
Normalised EBITDA(1) 710 1,992 180%
EBITDA Margin 43% 53% 10.4 pts
Net Profit 375 1,148 206%
Net Profit Margin 22% 30% 8.0 pts
Cash Balance 465 1,807 288%
Key Operational Indicators
9M 2020 9M 2021 change
Branches 471 507 36
Patients ('000) 4,792 7,480 56%
Revenue per Patient (EGP) 348 504 44%
Tests ('000) 18,765 24,960 33%
Revenue per Test (EGP) 89 151 70%
Test per Patient 3.9 3.3 -15%
1 Normalised EBITDA is calculated as operating profit plus depreciation and
amortization and excluding one-off fees incurred in 9M 2021 (EGP 29.0 million)
related to the Company's dual listing on the EGX completed in May 2021.
2 Operating Profit excludes one-off fees incurred in 9M 2021 (EGP 29.0
million) related to the Company's dual listing on the EGX completed in May
2021.
Introduction
i. Financial Highlights
· Revenue increased by an impressive 126% year-on-year in 9M 2021 to
EGP 3,767 million on the back of strong results across both the Company's
Covid-19-related(3) and conventional tests portfolios. Top-line growth for the
period was supported by a 33% year-on-year increase in tests performed coupled
with a 70% year-on-year rise in average price per test. Controlling for
Covid-19-related tests, IDH's top-line expanded a solid 30% year-on-year in 9M
2021 as the Company's conventional test offering continues to pick up steam
following widespread shutdowns and lockdowns at the early onset of covid. In
Q3 2021, IDH outperformed its already impressive results from the first and
second quarters of this year to deliver quarter-on-quarter revenue growth of
27% and year-on-year revenue growth of 105%.
· 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. More
specifically, during 9M 2021 core Covid-19 tests made up 42% of consolidated
revenue, while other Covid-19-related tests made a 9% contribution to
consolidated revenue for the nine-month period.
· Consolidated revenues continued to be supported by IDH's house call
service in Egypt and Jordan. Revenue generated by the service expanded 146%
year-on-year in 9M 2021, with its contribution to total revenue reaching 20%
versus 19% in 9M 2020. Through its house call service, IDH successfully served
over 944 thousand patients in 9M 2021 (up 69% versus 9M 2020), performing 4.9
million tests (up 34% year-on-year). In response to the service's increasingly
popularity, the Company has been expanding its house call capabilities and in
9M 2021 was able to carry out an average of 3,500 house call visits per day,
up remarkably from the 2,000 visits per day performed in 9M 2020.
· Gross Profit recorded EGP 2,167 million in 9M 2021, up 161%
year-on-year, with gross profit margin at 58% or an eight percentage points
expansion versus last year. Improved gross profitability for the period came
on the back strong top-line growth and the subsequent dilution of fixed costs
for the period such as direct salaries and wages and other expenses. On a
quarterly basis, gross profit recorded EGP 861 million, up 29% from Q2 2021
and with an associated margin of 58% versus 57% last quarter.
· Operating Profit(4) posted a strong 217% year-on-year rise in 9M 2021
to EGP 1,823 million. Operating profit margin expanded an impressive 14
percentage points to reach 48% in 9M 2021 versus 34% this time last year. The
remarkable growth in operating profit was supported by strong gross
profitability for the period. Operating profitability was further buoyed by
the normalisation of provisions booked in 9M 2021, which stood at EGP 18
million down from the EGP 36 million in 9M 2020 that had been booked to
account for expected credit losses in accordance with IFRS 9.
· Normalised EBITDA(5) increased 180% year-on-year to EGP 1,992 million
in 9M 2021, while EBITDA margin expanded 10 percentage points to record 53%
for the period. Strong EBITDA profitability was supported by the Company's
remarkable top-line growth and the subsequent dilution of its fixed costs. In
Q3 2021, normalised EBITDA reached EGP 790 million, up a solid 31% from last
quarter's figure. Normalised EBITDA margin stood at 54% for the quarter
compared to 52% in Q2 2021.
· Net Profit recorded EGP 1,148 million in 9M 2021, a three-fold
increase from the same period of last year. Net profit margin stood at 30%
versus 22% in 9M 2020. Net profit growth comes on the back of strong EBITDA
level profitability and despite the Company booking EGP 29 million in one-off
fees related to its dual-listing in May 2021. On a quarterly basis, net profit
stood at EGP 480 million, up 47% quarter-on-quarter and with an associated
margin of 33% in Q3 2021 versus 28% the previous quarter.
· Full-year guidance: IDH is on track to deliver record high revenues
of around EGP 4.9 billion in FY 2021 (representing year-on-year growth above
the 80% mark) with a normalised EBITDA margin(5) in the 50% range. The
record-breaking performance is set to be supported by the strong and sustained
recovery witnessed by IDH's conventional business coupled with robust
contributions coming from its Covid-19-related test offering in both Egypt and
Jordan.
( )
(3) 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.
(4) Operating Profit excludes one-off fees incurred in 9M 2021 (EGP 29.0
million) related to the Company's dual listing on the EGX completed in May
2021.
(5) Normalised EBITDA is calculated as operating profit plus depreciation and
amortization and minus one-off fees incurred in 9M 2021 (EGP 29 million)
related to the Company's EGX listing completed in May 2021.
ii. Operational Highlights
· IDH's branch network stood at 507 branches as of 30 September 2021,
up from 481 branches and 495 branches as of 31 December 2020 and 30 June 2021,
respectively.
· Total tests performed increased 33% year-on-year to reach 25.0
million in 9M 2021. Test volume growth came on the back of both strong demand
for IDH's Covid-19-related(6) test offering coupled with a 20% year-on-year
increase in conventional tests performed by the Group during the nine-month
period. During the third quarter of the year, IDH performed 8.6 million tests,
up 5% from the previous quarter supported by both higher Covid-19-related and
conventional tests performed during the quarter.
· Average revenue per test increased 70% year-on-year to EGP 151 in 9M
2021. Controlling for the generally higher value Covid-19-related(6) tests,
average revenue per test records an 8% increase versus last year.
· Total patients served reached 7.5 million in 9M 2021, an increase of
56% from the comparable period of last year. Meanwhile, average test per
patient declined to 3.3 in 9M 2021 from 3.9 last year as an increasing number
of patients visit the Group's labs for single Covid-19 tests (PCR, Antigen and
Antibody).
· IDH's Egyptian operations generated revenue of EGP 3,122 million, up
122% from 9M 2020 as both patient and test volumes posted solid year-on-year
expansions for the period. The country's top-line growth continued to be
supported by both Covid-19-related(6) and conventional tests, and was further
bolstered by the Group's house call service which in 9M 2021 contributed 23%
of Egypt's top-line versus 20% in 9M 2020. Controlling for Covid-19-related
contributions in 9M 2021, revenue increased 30% year-on-year driven by a 21%
increase in conventional tests performed versus last year.
· Al-Borg Scan reported revenue of EGP 31 million, up 92% increase
compared to 9M 2020. Top-line growth at the venture was supported by a 75%
year-on-year rise in tests performed. To capitalise on the rising patient
demand for IDH's radiology service, the Group inaugurated a third Al-Borg Scan
branch in of the end of September 2021, with an additional two branches set to
come online over the coming six months.
· Wayak reported standalone revenues of EGP 6.6 million in 9M 2021, up
from EGP 2.1 million this time last year. The venture's standalone EBITDA
losses continued to narrow reaching EGP 1.1 million in 9M 2021 from EGP 6.4
million in 9M 2020, supported by management's cost optimisation strategy.
· In Jordan, revenue expanded 172% year-on-year during 9M 2021
supported by solid growth in both tests performed and average price per test.
Covid-19-related tests made up 62% of the country's top-line with the
contribution further bolstered by Biolab's multiple revenue-sharing
partnerships with Amman's Queen Alia International Airport (QAIA), Aqaba's
King Hussein International Airport (KHIA) and Aqaba Port. The agreements,
which see Biolab operate multiple testing stations primarily offering
Covid-19-related tests, generated a total of EGP 141 million in 9M 2021,
contributing 24% to Jordan's top-line. In parallel, demand for Biolab's
conventional test offering continues to increase steadily, with the number of
conventional tests performed and revenue generated during 9M 2021 increasing
32% and 35% year-on-year, respectively.
· In Nigeria, revenues expanded 62% year-on-year (65% in NGN terms) in
9M 2021 supported by a 24% and 43% year-on-year increase in patients served
and tests performed, respectively. Echo-Lab's revenues have been posting
consistent quarter-on-quarter growth since the start of the year, and when
combined with the successful cost optimisation strategy implemented by the
venture's new management team, see Echo-Lab on track to turn EBITDA positive
early next year.
( )
(6) 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.
iii. Management Commentary
Commenting on the Group's performance, IDH Chief Executive Officer Dr. Hend
El-Sherbini said: "As we near the end of what is shaping out to be another
record-breaking year for IDH, I am delighted to present to you a new set of
impressive financial and operational results. During the third quarter of
2021, we successfully built on an already remarkable first half of the year to
report our highest ever revenue and net profit figures for a single quarter.
More specifically, during Q3 2021 we recorded top- and bottom-line
quarter-on-quarter growth of 27% and 47%, respectively, an outstanding
performance which was supported by growing demand across our entire offering.
While our Covid-19-related(7) offering continued to make a significant
contribution to consolidated revenue, we also witnessed a robust contribution
coming from our traditional offering with conventional revenues for Q3 2021
and 9M 2021 up 19% and 30% year-on-year, respectively. It is also worth
highlighting that our conventional test volumes are back to pre-Covid-19
levels on both a quarterly and year-to-date basis, and in 9M 2021 recorded a
3% increase versus the same nine months of 2019 once adjusting for the impact
of the 100 Million Healthy Lives campaign.(8)
Since the start of the year, we have displayed a remarkable ability to adapt
to changing market and demand dynamics and consistently cater to the evolving
needs of our growing patient base. In the third quarter, we continued to
effectively care for both our conventional and Covid-19 patients leveraging an
expanded branch network, a ramped up house call service, and a growing digital
presence to make our services increasingly accessible and our payment methods
increasingly convenient. On the one hand, we are continuing to serve our
Covid-19 patients by ensuring we are well-equipped to handle peaks in demand
when infection rates increase, while promptly adapting our offering to the
requirements of patients. Over the course of the year, IDH secured multiple
partnerships with international air carriers and regional healthcare providers
like National Air Services (NAS) and Pure Health UAE to conduct PCR testing
for passengers traveling from Egypt to other regional destinations. We also
offer PCR testing for passengers on a walk-in basis, with the Company being
the first lab in Egypt to provide QR codes on travel certificates. This
enabled us to not only to play an important role in supporting the recovery of
international travel, but also ensured that we successfully captured a leading
market share for the service. On the other hand, despite the challenges posed
by the pandemic, we have never lost sight of the needs of our conventional
patients, continuing to care for them even at the height of the Covid-19
crisis. Our efforts have focused on expanding our service offering and
delivery capabilities, as well as organising special campaigns to raise
healthcare awareness specifically targeting patients suffering from chronic
diseases, a particularly vulnerable category in light of the ongoing pandemic.
Looking at our geographies in more detail, I am pleased to note that Egypt,
Jordan and Nigeria continued to report strong growth during the third quarter
of the year. Highlights for Q3 2021 include the outstanding growth of Al-Borg
Scan, the continued ramp up of our house call services and of our AI-focused
subsidairy Wayak, and the important contributions coming from our
revenue-sharing partnerships in Jordan. During the quarter, Al-Borg Scan
reported year-on-year revenue growth of 52% and successfully rolled out its
third branch located in the strategic East Cairo neighbourhood of Heliopolis.
The launch comes as part of a wider ramp up strategy which in the coming six
months will see us roll out an additional two branches. Meanwhile, our house
call services in both Egypt and Jordan are continuing to record steady growth,
and in Q3 2021 we served 39% more house call patients than in the comparable
quarter of last year. Through our house call service, we are able to carry out
more tests per patient than at our traditional branches, enabling us to
deliver on an important pillar of our long-term growth strategy and further
emphasising the significant potential offered by the service well beyond the
end of the Covid-19 pandemic. Meanwhile, operations at Wayak continued to be
ramped up effectively, with the venture's losses declining further, supported
by strong top-line growth and management's cost optimisation strategy. In
Jordan, our multiple revenue-sharing agreements with QAIA, KHIA and Aqaba
Port, made a noteworthy 46% contribution to the country's topline for the
quarter, with their positive impact on Biolab's top-line set to continue in
the coming months as international travel recovers further. In Nigeria, EBITDA
losses excluding a one-time adjustment continued their steady narrowing.
Revenue at Echo-Lab has been consistently growing quarter-on-quarter
throughout 2021, and when combined with the stellar work being done by the
company's new management team to streamline operations, sees the venture on
track to turn EBITDA positive early next year. Finally, in Sudan our results
continued to be heavily impacted by the Sudanese Pound devaluation from
earlier in the year. Moreover, we are continuing to monitor the mounting
political and social unrest across the country, and our management team on the
ground is well-prepared to take the necessary measures to protect our
patients, staff, and operations.
Looking ahead, our strategic priorities remain unchanged as we continue
assisting local authorities in their battle against Covid-19 while
simultaneously pressing forward with our post-pandemic strategy and set the
foundations for a new chapter of sustainable growth. On this front, during the
quarter we launched our new loyalty programme specifically aimed at retaining
the new patients we were able to acquire since the start of the pandemic. At
the same time, we rolled out an additional 12 branches in Q3 2021, and remain
on track to reach our target of 30 to 35 new branch rollouts in 2021. Our
ability to consistently rollout new branches currently sees us operate the
largest network of branches amongst private players in the country and enables
us to maintain our leadership position in the market. We are also continuing
to assess potential value-accretive acquisition opportunities in new markets
across Africa, the Middle East, and Asia where we feel our business model is
best-suited to capitalise on healthcare and consumer trends similar to those
prevailing in our current markets of operation. Finally, while the ongoing
global supply chain disruptions have had no impacts on our operations so far,
we are keeping a close eye on the evolving situation and have taken proactive
steps to build up our inventory to shield ourselves from any potential future
disruptions. It is also worth highlighting that our test kits are purchased on
fixed-price contracts with tenors ranging from five to seven years, providing
effective protection from short-term price fluctuations.
In light of our most recent results, we are on track to post record revenues
of around EGP 4.9 billion in FY 2021, representing a year-on-year growth above
the 80% mark, with a normalised EBITDA margin(9) in the 50% range. The
record-breaking performance is expected to come on the back of strong and
sustained recovery witnessed at our conventional business coupled with robust
contributions from our Covid-19-related test offering in both Egypt and
Jordan."
- End -
(7 )Covid-19-related tests include both core Covid-19 tests (Polymerase Chain
Reaction (PCR), Antigen, and Antibody) as well as other routine inflammatory
and clotting markers including, but not limited to, Complete Blood Picture,
Erythrocyte Sedimentation Rate (ESR), D-Dimer, Ferritin and C-reactive Protein
(CRP), which the Company opted to include in the classification as "other
Covid-19-related tests" due to the strong rise in demand for these tests
witnessed following the outbreak of Covid-19.
(8 )The 100 Million Healthy Lives Campaign which ran from November 2018
through June 2019. As part of the Campaign, the Group performed 2.4 million
tests in 1H 2019.
(9 )Normalised EBITDA is calculated as operating profit plus depreciation and
amortization and minus one-off fees incurred in 9M 2021 (EGP 29 million)
related to the Company's EGX listing completed in May 2021.
(10 )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.
Analyst and Investor Call Details
An analyst and investor call will be hosted at 1pm (UK) | 3pm (Egypt) on
Thursday, 18 November 2021. You can access the call by clicking on this link
(https://efghermesevents.webex.com/mw3300/mywebex/default.do?nomenu=true&siteurl=efghermesevents&service=6&rnd=0.5976098682919178&main_url=https%3A%2F%2Fefghermesevents.webex.com%2Fec3300%2Feventcenter%2Fevent%2FeventAction.do%3FtheAction%3Ddetail%26%26%26EMK%3D4832534b00000005f58095ddb8d491bef881b8c1414c5d60a0e219f2cdcbc3308393a861d51d823b%26siteurl%3Defghermesevents%26confViewID%3D210577283140815410%26encryptTicket%3DSDJTSwAAAAVygYMpn_jFfp4VDZUIxhkmQCUPsLShd-kGPdi2SSH_cg2%26)
, and you may dial in using the conference call details below:
• Event number: 2374 489 7777
• Event password: C5wWfFNBa46
For more information about the event, please contact: halaa@EFG-HERMES.com
(mailto:halaa@EFG-HERMES.com)
About Integrated Diagnostics Holdings (IDH)
IDH is a leading consumer healthcare company in the Middle East and Africa
with operations 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 507 branches
as of 30 September 2021, 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 nine-month period ended 30 September 2021 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.
Group Operational & Financial Review
i. Revenue and Cost Analysis
Revenue
Consolidated revenue recorded EGP 3,767 million in 9M 2021, a 126%
year-on-year increase driven by both a 33% year-on-year increase in tests
performed and a 70% year-on-year rise in average price per test. The Group's
top-line growth was supported by its Covid-19-related(12) and conventional
test portfolios, both of which recorded growing demand during the period.
IDH's Covid-19-related offering contributed to exactly half of consolidated
revenue versus the 14% contribution made this time last year. Meanwhile,
revenues generated by IDH's conventional test offering recorded a robust 30%
year-on-year rise as tests performed increased 20% versus last year and
average price per conventional test increased 8% from 9M 2020.
Breaking down the Group's Covid-19-related offering further, revenues
generated from core Covid-19 tests (PCR, Antigen and Antibody) reached to EGP
1,580 million in 9M 2021, contributing to 42% of total revenue for the period.
In parallel, revenue generated by IDH's other Covid-19-related tests reached
EGP 321 million in 9M 2021.
IDH's consolidated top-line was further bolstered by its house call services
in Egypt and Jordan, with revenue generated by the service expanding 146%
year-on-year in 9M 2021 to reach EGP 770 million. The service's contribution
to total revenue reached 20% in 9M 2021 versus the 19% contribution in 9M
2020. Through its house call service, IDH served more than 944 thousand
patients in the nine-month period, an increase of 69% from last year, and
performed more than 4.9 million tests, up 34% year-on-year. In response to the
service's increasingly popularity, the Company has been expanding its house
call capabilities, and in 9M 2021 was able to carry out an average of 3,500
house call visits per day, up remarkably from the 2,000 visits per day
performed in 9M 2020. It is worth noting that in 9M 2021, average revenue per
house call test stood at EGP 157 (versus the Group's average of EGP 151),
while the number of tests per house call patient stood at 5.2 (versus the
Group's average of 3.3 tests).
The Group's year-to-date performance was supported by a record-breaking third
quarter, which saw the Company outperform its results from the first and
second quarters of 2021 to record revenues of EGP 1,473 million, up 27% versus
Q2 2021 and 30% versus Q1 2021. Moreover, revenues in the third quarter more
than doubled year-on-year. Top-line growth for the quarter was supported by
strong results across the entirety of IDH's service portfolio with the number
of conventional tests performed increasing 8% quarter-on-quarter. It is worth
noting that revenues during the month of September reached record highs,
recording 44% above the average monthly revenue in the preceding eight months.
Total Covid-19-related tests contributed to 59% of September's top-line as the
recovery in international travel saw IDH record growing demand for PCR tests
from travellers.
Detailed Consolidated Revenue Breakdown
EGP mn Q1 2020 Q1 2021 Q2 2020 Q2 2021 Q3 2020 Q3 2021 9M 2020 9M 2021
Total revenues 500 1,130 450 1,164 720 1,473 1,670 3,767
Conventional tests 495 594 367 595 568 676 1,430 1,865
Total Covid-19-related tests 5 536 83 569 152 797 240 1,901
Core Covid-19 tests (PCR, Antigen, Antibody) 5 399 26 431 92 750 123 1,580
Other Covid-19-related tests 0 137 57 138 60 47 117 321
Contribution to consolidated revenue
Conventional tests 99% 53% 82% 51% 79% 46% 86% 50%
Total Covid-19-related tests 1% 47% 18% 49% 21% 54% 14% 50%
Core Covid-19 tests (PCR, Antigen, Antibody) 1% 35% 6% 37% 13% 51% 7% 42%
Other Covid-19-related tests 0% 12% 13% 12% 8% 3% 7% 9%
(12) Covid-19-related tests include both core Covid-19 tests (Polymerase Chain
Reaction (PCR), Antigen, and Antibody) as well as other routine inflammatory
and clotting markers including, but not limited to, Complete Blood Picture,
Erythrocyte Sedimentation Rate (ESR), D-Dimer, Ferritin and C-reactive Protein
(CRP), which the Company opted to include in the classification as "other
Covid-19-related tests" due to the strong rise in demand for these tests
witnessed following the outbreak of Covid-19.
Revenue Analysis: Contribution by Patient Segment
Contract Segment
At the Group's contract segment, revenue increased 133% year-on-year in 9M
2021 on the back of 34% year-on-year increase in test performed and a 74%
year-on-year rise in average revenue per contract test. This pushed the
segment's contribution to total revenues up to 57% for the period versus 55%
in the comparable nine-month period of last year. Covid-19-related(13) testing
contributed 52% of contract revenues in 9M 2021 as the Company continued to
witness strong demand for its offering in both Egypt and Jordan. Controlling
for contributions made by Covid-19-related tests during the period, the
contract segment would record a 32% year-on-year increase in revenue supported
by a 23% rise in tests performed and a 7% increase in average revenue per
test.
The contract segment's results continued to include contributions from IDH's
multiple partnerships to conduct PCR testing for passengers. More
specifically, IDH's agreement with Pure Health UAE, generated EGP 81 million
in the nine-month period. Meanwhile, the Group's agreement with National Air
Services (NAS) contributed EGP 79 million to the segment's top-line. In
Jordan, the Group's partnership with Queen Alia International Airport (QAIA)
generated EGP 84 million, while Biolab's agreements with Aqaba's King Hussein
International Airport (KHIA) and Aqaba Port contributed an additional EGP 57
million to the segment. It is worth highlighting that Biolab's partnership
with KHIA started in August 2020, followed by the company's agreement with
Aqaba Port which kicked off in May 2021, and its partnership with QAIA which
commenced in August 2021.
Walk-in Segment
Revenue from IDH's walk-in segment recorded a 116% year-on-year expansion in
9M 2021, contributing 43% of consolidated revenues for the nine-month period
versus the 45% contribution in 9M 2020. During 9M 2021, average revenue per
test at the walk-in segment increased 66% year-on-year, while tests performed
increased by 30% versus the same period a year ago. The contribution of
Covid-19-related tests to the walk-in segment stood at 48% in 9M 2021.
Controlling for this, walk-in revenues recorded a 29% increase versus last
year, as conventional walk-in tests grew 13% year-on-year and revenue per
conventional walk-in test increased 13% versus 9M 2020.
Key Performance Indicators
Walk-in Segment Contract Segment Total
9M20 9M21 Change 9M20 9M21 Change 9M20 9M21 Change
Revenue^ 749 1,619 116% 921 2,148 133% 1,670 3,767 126%
(EGP mn)
Total Covid-19-related revenue (EGP mn) 101 785 679% 139 1,117 701% 240 1,901 692%
Patients ('000) 1,531 2,488 62% 3,261 4,992 53% 4,792 7,480 56%
%of Patients 32% 33% 68% 67%
Revenue per Patient (EGP) 489 651 33% 282 430 52% 348 503 44%
Tests ('000) 4,984 6,491 30% 13,780 18,469 34% 18,765 24,960 33%
%of Tests 27% 26% 73% 74%
Total Covid-19-related tests ('000) 322 1,202 273% 825 2,557 210% 1,147 3,760 228%
Revenue per Test (EGP) 150 249 66% 67 116 74% 89 151 70%
Test per Patient 3.3 2.6 -20% 4.2 3.7 -12% 3.9 3.3 -15%
(13 )Covid-19-related tests include both core Covid-19 tests (Polymerase Chain
Reaction (PCR), Antigen, and Antibody) as well as other routine inflammatory
and clotting markers including, but not limited to, Complete Blood Picture,
Erythrocyte Sedimentation Rate (ESR), D-Dimer, Ferritin and C-reactive Protein
(CRP), which the Company opted to include in the classification as "other
Covid-19-related tests" due to the strong rise in demand for these tests
witnessed following the outbreak of Covid-19.
Revenue Analysis: Contribution by Geography
Egypt
In Egypt, revenues recorded EGP 3,122 million in 9M 2021, up 122% year-on-year
on the back of a 30% year-on-year rise in tests performed and a 70%
year-on-year increase in average revenue per test. Revenue growth for the
nine-month period was supported by both the Group's Covid-19-related(14) test
offering which in 9M 2021 made up 49% of the Egypt's top-line, as well as the
country's conventional test offering. When controlling for contributions made
by Covid-19-related tests during the period, revenue generated by conventional
tests increased 30% versus 9M 2020 supported by a 21% rise in conventional
tests performed.
On a quarterly basis, revenues generated by IDH's Egyptian operations reached
EGP 1,187 million in Q3 2021, up 97% versus the same three months of last year
and 17% above Q2 2021. During the third quarter, IDH saw Covid-19-related
revenues in Egypt reach EGP 614 million versus EGP 504 million in Q2 2021,
mainly driven by growing demand for PCR tests coming from international
travellers as restrictions imposed by governments around the world continued
to ease.
IDH's house call service, which has been successfully ramped up to capitalise
on the service's growing popularity, recorded revenue of EGP 725 million in 9M
2021, up 152% year-on-year. The service's contribution to Egypt's top-line
stood at 23% in 9M 2021, versus the 20% contribution made in the comparable
period of last year.
Al-Borg Scan reported revenue of EGP 31 million in 9M 2021, a 92% year-on-year
increase. Top-line growth at the venture was supported by a 75% rise in tests
performed versus the same nine months a year ago. To capitalise on the rising
patient demand for IDH's radiology service, the Group inaugurated a third
Al-Borg Scan branch at the end of September of this year, with an additional
two branches set to come online over the coming twelve months.
Overall, IDH served 6.3 million patients in Egypt and performed 22.1 million
tests in 9M 2021, up by 45% and 30% year-on-year, respectively.
Detailed Egypt Revenue Breakdown
EGP mn Q1 2020 Q1 2021 Q2 2020 Q2 2021 Q3 2020 Q3 2021 9M 2020 9M 2021
Total revenues 424 920 381 1,015 602 1,187 1,407 3,122
Conventional tests 424 507 314 510 482 573 1,220 1,590
Total Covid-19-related tests 0 414 67 504 120 614 187 1,531
Core Covid-19 tests (PCR, Antigen, Antibody) 0 277 10 366 60 567 70 1,210
Other Covid-19-related tests 0 137 57 138 60 47 117 321
Contribution to Egypt revenue
Conventional tests 100% 55% 82% 50% 80% 48% 87% 51%
Total Covid-19-related tests 0% 45% 18% 50% 20% 52% 13% 49%
Core Covid-19 tests (PCR, Antigen, Antibody) 0% 30% 3% 36% 10% 48% 5% 39%
Other Covid-19-related tests 0% 15% 15% 14% 10% 4% 8% 10%
Jordan
IDH's Jordanian operations reported year-on-year revenue grow of 172% in 9M
2021 recording EGP 592 million. Top-line growth was driven by an 81% increase
in test performed coupled with a 50% rise in Biolab's average revenue per
test. In the nine-month period, Covid-19-related tests (PCR, Antigen, and
Antibody) contributed to 62% of Biolab's revenue and to 31% of its tests
performed. Controlling for this, revenue increased 35% year-on-year on the
back of a 32% increase in conventional tests performed. Meanwhile, the
country's top-line continued to be bolstered by Biolab's house call service
which in 9M 2021 generated EGP 45 million in revenue, up 81% year-on-year.
On a quarterly basis, Jordan's revenue reached EGP 269 million, a 101%
increase from last quarter's figure and up 167% versus Q3 2020. The impressive
quarter-on-quarter expansion was supported by an EGP 84 million net revenue
contribution coming from Biolab's new partnership with QAIA coupled with the
EGP 40 million in net revenue coming from its partnerships with KHIA and Aqaba
Port. PCR test volumes generated by Biolab's testing stations in QAIA, KHIA,
and Aqaba Port more than offset a general decrease in demand for
Covid-19-related testing as infection rates declined following the continued
ramp up of the country's vaccination campaign.
Detailed Jordan Revenue Breakdown
EGP mn Q1 2020 Q1 2021 Q2 2020 Q2 2021 Q3 2020 Q3 2021 9M 2020 9M 2021
Total revenues 58 190 59 134 100 269 218 592
Conventional revenue 53 68 44 69 68 86 165 222
Total Covid-19-related revenue (PCR, Antigen, Antibody) 5 122 16 65 32 183 53 370
Contribution to Jordan revenue
Conventional revenue 91% 36% 74% 52% 68% 32% 76% 38%
Total Covid-19-related revenue (PCR, Antigen, Antibody) 9% 64% 26% 48% 32% 68% 24% 62%
(14) 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.
Nigeria
At the Group's Nigerian subsidiary, revenue recorded EGP 40 million in 9M
2021, up 62% year-on-year. In local currency terms, growth was even more
pronounced with revenues up 65% year-on-year on the back of a 43% year-on-year
expansion in tests performed (patients served were up 24%) and a 13% rise in
average revenue per test. The continued growth in patient and test volumes
over the last two years has come as a direct result of management's revamp
strategy which has involved the complete renovation of Echo-Lab's branches
combined with the rollout of targeted marketing campaigns aimed at stimulating
demand for the venture's services. In parallel, volumes are also benefitting
from a gradual normalisation of traffic following the easing of restrictive
measures enforced to curb the spread of Covid-19 throughout 2020. On a
quarterly basis, IDH's Nigeria operations reported revenues of EGP 14.9
million in Q3 2021, up 54% year-on-year and 16% versus Q2 2021. It is worth
noting that Dr. Alok Bhatia joined Echo-Lab as CEO in March 2021.
Sudan
In Sudan, IDH reported a 41% year-on-year decline in revenues to EGP 12
million for 9M 2021. The country's results continue to be significantly
impacted by the devaluation of the Sudanese pound in early 2021 with the
average SDG/EGP rate in 9M 2021 standing at 0.07 versus 0.30 this time last
year. Nonetheless, management's continued success in raising prices in step
with inflation, saw revenue in local currency terms expand a remarkable 169%
year-on-year in 9M 2021.
Revenue Contribution by Country
9M 2020 9M 2021 Change
Egypt Revenue (EGP mn) 1,407 3,122 122%
Covid-19-related (EGP mn) 187 1,531 719%
Egypt Contribution 84% 83%
Jordan Revenue (EGP mn) 218 592 172%
Covid-19-related (EGP mn) 53 370 598%
Jordan Revenue (JOD mn) 10 27 174%
Jordan Contribution 13% 16%
Nigeria Revenue (EGP mn) 25 40 62%
Nigeria Revenue (NGN mn) 620 1,020 65%
Nigeria Contribution 1% 1%
Sudan Revenue (EGP mn) 21 12 -41%
Sudan Revenue (SDG mn) 69 187 169%
Sudan Contribution 1% 0.3%
---
Patients Served and Tests Performed by Country
9M 2020 9M 2021 Change
Egypt Patients Served (mn) 4.3 6.3 45%
Egypt Tests Performed (mn) 17.0 22.1 31%
Covid-19-related tests (mn) 1.1 3.0 179%
Jordan Patients Served (k) 284 1,031 263%
Jordan Tests Performed (k) 1,372 2,482 81%
Covid-19-related tests (k) 77 778 916%
Nigeria Patients Served (k) 95 117 24%
Nigeria Tests Performed (k) 150 215 43%
Sudan Patients Served (k) 91 47 -48%
Sudan Tests Performed (k) 289 140 -51%
Total Patients Served (mn) 4.8 7.5 56%
Total Tests Performed (mn) 18.8 25.0 33%
Branches by Country
31 December 2020 30 September 2021 Change
Egypt 429 455 26
Jordan 20 21 1
Nigeria 12 12 -
Sudan 20 19 -1
Total Branches 481 507 26
Cost of Goods Sold
IDH's cost of goods sold increased 90% year-on-year to EGP 1,600 million in 9M
2021, rising at a significantly slower pace than the Group's top-line during
the period. As such, gross profit for 9M 2021 increased 161% year-on-year to
EGP 2,167 million, with an associated margin of 58% versus 50% last year.
COGS Breakdown as a Percentage of Revenue
9M 2020 9M 2021
Raw Materials 16.4% 18.3%
Wages & Salaries 16.0% 12.5%
Depreciation & Amortisation 7.1% 4.0%
Other Expenses 10.8% 7.6%
Total 50.3% 42.5%
Raw material costs, which include cost of specialized analysis at other
laboratories, recorded EGP 690 million in 9M 2021, and continued to make up
the lion share of total COGS at 43%. As a share of revenue, raw material costs
increased to 18.3% in 9M 2021 compared to 16.4% last year. This increase is
primarily attributable to higher raw material costs as a share of revenue
recorded in Jordan, with Biolab's raw material to revenues ratio reaching 33%
in 9M 2021 from 25% in 9M 2020 mainly due to additional fees incurred by the
company during the months of August and September as part of its revenue
sharing agreement with QAIA.
Direct salaries and wages increased 77% year-on-year to EGP 473 million in 9M
2021 and made up the second largest share of total COGS for the nine-month
period at 30%. The year-on-year increase is largely attributable to a rise in
the share of profits allocated to direct salaries and wages to EGP 141 million
in 9M 2021 from EGP 50 million in the comparable period of 2020 following
higher net profit recorded at its Egyptian operations,(15) in addition to
higher bonuses and incentives paid during 9M 2021 in light of the impressive
performance recorded during the period.
Direct depreciation and amortisation increased 28% year-on-year in 9M 2021 to
EGP 152 million, principally due to the incremental amortisation of additional
branches (IFRS 16 right-of-use assets).
EBITDA
IDH's normalised EBITDA(16) recorded EGP 1,992 million in 9M 2021, up 180%
year-on-year. Normalised EBITDA margin expanded to 53% in 9M 2021 versus 43%
last year. Improved EBITDA level profitability was supported by strong
top-line growth and the subsequent dilution of fixed costs. EBITDA growth was
further bolstered by the normalization of provisions booked during 9M 2021,
which recorded EGP 18 million versus the EGP 36 million booked in 9M 2020 to
account for expected credit losses in accordance with IFRS 9. It is worth
noting that normalised EBITDA excludes one-off listing fees of EGP 29 million
incurred in 9M 2021 related to the Company's dual listing on the EGX completed
in May 2021.
On a quarterly basis, normalised EBITDA expanded 130% year-on-year to record
EGP 790 million in Q3 2021. This represents a 31% quarter-on-quarter increase
largely driven by the strong top-line growth recorded by the Group during the
third quarter. Normalised EBITDA margin stood at 54% for the quarter, up from
the 48% margin recorded in Q3 2020 and the 52% margin recorded in Q2 2021.
In Egypt, EBITDA recorded EGP 1,761 million in 9M 2021, up 177% year-on-year
on the back of strong top-line growth. EBITDA margin increased to 56% for the
nine-month period from 45% in 9M 2020.
IDH's Jordanian operations recorded a 206% year-on-year increase in EBITDA to
EGP 236 million for 9M 2021 supported by strong revenue growth for the period.
In local currency terms, EBITDA grew 208% compared to 9M 2020. EBITDA margin
recorded 40% in 9M 2021 compared to 35% in 9M 2020.
In Nigeria, EBITDA losses increased to EGP 5.2 million in 9M 2021 compared to
EGP 3.8 million in the same nine months of 2020. Increased losses are
partially attributable to an increase in management salaries incurred during
the course of 2021 following the hiring of a new CEO at Echo-Lab in Q1 2021.
Moreover, it is also worth noting that the figure includes a one-off
adjustment related to the previous year of EGP 4.4 million. Excluding the
one-off adjustment, EBITDA losses would have reached EGP 0.8 million,
representing a significant improvement compared to the same period of last
year.
Finally, Sudan's EBITDA recorded EGP 0.2 million in 9M 2021, down 86%
year-on-year with an EBITDA margin of 1% compared to 6% in 9M 2020. EBITDA for
the period was weighed down by the sharp SDG devaluation in February of this
year. In SDG terms EBITDA declined 38% year-on-year.
Regional EBITDA in Local Currency
Mn 9M 2020 9M 2021 Change
Egypt EGP 636 1,761 177%
margin 45% 56%
Jordan JOD 3.5 10.7 208%
margin 35% 40%
Nigeria NGN -94 -131 40%
margin -15% -13%
Sudan SDG 4 3 -38%
margin 6% 1%
(15) According to IAS 1, 10% of Egypt's net profit is allocated to direct
wages and salaries.
(16) Normalised EBITDA is calculated as operating profit plus depreciation and
amortization and minus one-off fees incurred in 9M 2021 related to the
Company's EGX listing completed in May 2021.
Interest Income / Expense
IDH recorded interest income of EGP 69 million in 9M 2021, up 56% year-on-year
on the back of higher cash balances during the period coupled with proper cash
allocation between T-bills and time deposits.
Interest expense recorded EGP 83 million in the 9M 2021, up 56% year-on-year.
The increase in attributable to:
· Higher interest on lease liabilities related to IFRS 16 following the
addition of new branches and the renewal of medical equipment agreements with
our main equipment suppliers.
· Higher bank charges resulting from increased penetration of, and
reliance on, POS machines and electronic payments in both Egypt and Jordan
during the period. It is important to note that bank charges recorded by IDH's
Jordanian operations represented 51% of total bank charges during 9M 2021,
which is mainly related to the newly launched partnership with QAIA.
· Loan-related expenses incurred by IDH during the period as the
Company secured a new eight-year US$ 45 million facility with the
International Finance Corporation (IFC) in May 2021. During 9M 2021, IDH
booked loan-related expenses of EGP 14.6 million including a front-end fee,
syndication fee, and legal advisory fees.
Interest Expense Breakdown
EGP Mn 9M 2020 9M 2021 Change
Interest on Lease Liabilities (IFRS 16) 38.3 44.0 15%
Interest Expenses on Borrowings(17) 9.9 7.0 -29%
Loan-related Expenses on IFC facility - 14.6 N/A
Interest Expenses on Leases 3.0 4.8 62%
Bank Charges 1.9 12.5 549%
Total Interest Expense 53.1 82.9 56%
(17 )Interest expenses on medium-term loans divided as EGP 2.3 million related
to IDH's facility with the Commercial International Bank (CIB) and EGP 4.6
million related to IDH's facility with Ahli United Bank Egypt (AUBE).
Foreign Exchange
IDH recorded a net foreign exchange loss of EGP 18 million in 9M 2021 compared
to EGP 10 million in the same nine months of 2020. The figure largely reflects
FX losses on the back of the SDG devaluation versus the EGP in February 2021.
Taxation
Tax expenses recorded in the first nine months of 2021 were EGP 610 million
compared to EGP 182 million in the same period of last year. The effective tax
rate stood at 35% in the period versus 33% in 9M 2020, reflecting the change
in withholding tax on undistributed profits from 5% to 10% which came into
effect in Egypt in September of last year. It is important to note that there
is no tax payable for IDH's two companies at the holding level, while tax was
paid on profits generated by operating subsidiaries.
Net Profit
IDH's consolidated net profit recorded EGP 1,148 million in 9M 2021, an
impressive three-fold year-on-year increase. Improving net profitability was
supported by strong revenue growth coupled with the dilution of fixed costs,
higher interest income and normalising provisions for the nine-month period.
As such, net profit margin expanded eight percentage points year-on-year to
record 30% in 9M 2021.
(12) Covid-19-related tests include both core Covid-19 tests (Polymerase Chain
Reaction (PCR), Antigen, and Antibody) as well as other routine inflammatory
and clotting markers including, but not limited to, Complete Blood Picture,
Erythrocyte Sedimentation Rate (ESR), D-Dimer, Ferritin and C-reactive Protein
(CRP), which the Company opted to include in the classification as "other
Covid-19-related tests" due to the strong rise in demand for these tests
witnessed following the outbreak of Covid-19.
Revenue Analysis: Contribution by Patient Segment
Contract Segment
At the Group's contract segment, revenue increased 133% year-on-year in 9M
2021 on the back of 34% year-on-year increase in test performed and a 74%
year-on-year rise in average revenue per contract test. This pushed the
segment's contribution to total revenues up to 57% for the period versus 55%
in the comparable nine-month period of last year. Covid-19-related(13) testing
contributed 52% of contract revenues in 9M 2021 as the Company continued to
witness strong demand for its offering in both Egypt and Jordan. Controlling
for contributions made by Covid-19-related tests during the period, the
contract segment would record a 32% year-on-year increase in revenue supported
by a 23% rise in tests performed and a 7% increase in average revenue per
test.
The contract segment's results continued to include contributions from IDH's
multiple partnerships to conduct PCR testing for passengers. More
specifically, IDH's agreement with Pure Health UAE, generated EGP 81 million
in the nine-month period. Meanwhile, the Group's agreement with National Air
Services (NAS) contributed EGP 79 million to the segment's top-line. In
Jordan, the Group's partnership with Queen Alia International Airport (QAIA)
generated EGP 84 million, while Biolab's agreements with Aqaba's King Hussein
International Airport (KHIA) and Aqaba Port contributed an additional EGP 57
million to the segment. It is worth highlighting that Biolab's partnership
with KHIA started in August 2020, followed by the company's agreement with
Aqaba Port which kicked off in May 2021, and its partnership with QAIA which
commenced in August 2021.
Walk-in Segment
Revenue from IDH's walk-in segment recorded a 116% year-on-year expansion in
9M 2021, contributing 43% of consolidated revenues for the nine-month period
versus the 45% contribution in 9M 2020. During 9M 2021, average revenue per
test at the walk-in segment increased 66% year-on-year, while tests performed
increased by 30% versus the same period a year ago. The contribution of
Covid-19-related tests to the walk-in segment stood at 48% in 9M 2021.
Controlling for this, walk-in revenues recorded a 29% increase versus last
year, as conventional walk-in tests grew 13% year-on-year and revenue per
conventional walk-in test increased 13% versus 9M 2020.
Key Performance Indicators
Walk-in Segment Contract Segment Total
9M20 9M21 Change 9M20 9M21 Change 9M20 9M21 Change
Revenue^ 749 1,619 116% 921 2,148 133% 1,670 3,767 126%
(EGP mn)
Total Covid-19-related revenue (EGP mn) 101 785 679% 139 1,117 701% 240 1,901 692%
Patients ('000) 1,531 2,488 62% 3,261 4,992 53% 4,792 7,480 56%
% of Patients 32% 33% 68% 67%
Revenue per Patient (EGP) 489 651 33% 282 430 52% 348 503 44%
Tests ('000) 4,984 6,491 30% 13,780 18,469 34% 18,765 24,960 33%
% of Tests 27% 26% 73% 74%
Total Covid-19-related tests ('000) 322 1,202 273% 825 2,557 210% 1,147 3,760 228%
Revenue per Test (EGP) 150 249 66% 67 116 74% 89 151 70%
Test per Patient 3.3 2.6 -20% 4.2 3.7 -12% 3.9 3.3 -15%
(13 )Covid-19-related tests include both core Covid-19 tests (Polymerase Chain
Reaction (PCR), Antigen, and Antibody) as well as other routine inflammatory
and clotting markers including, but not limited to, Complete Blood Picture,
Erythrocyte Sedimentation Rate (ESR), D-Dimer, Ferritin and C-reactive Protein
(CRP), which the Company opted to include in the classification as "other
Covid-19-related tests" due to the strong rise in demand for these tests
witnessed following the outbreak of Covid-19.
Revenue Analysis: Contribution by Geography
Egypt
In Egypt, revenues recorded EGP 3,122 million in 9M 2021, up 122% year-on-year
on the back of a 30% year-on-year rise in tests performed and a 70%
year-on-year increase in average revenue per test. Revenue growth for the
nine-month period was supported by both the Group's Covid-19-related(14) test
offering which in 9M 2021 made up 49% of the Egypt's top-line, as well as the
country's conventional test offering. When controlling for contributions made
by Covid-19-related tests during the period, revenue generated by conventional
tests increased 30% versus 9M 2020 supported by a 21% rise in conventional
tests performed.
On a quarterly basis, revenues generated by IDH's Egyptian operations reached
EGP 1,187 million in Q3 2021, up 97% versus the same three months of last year
and 17% above Q2 2021. During the third quarter, IDH saw Covid-19-related
revenues in Egypt reach EGP 614 million versus EGP 504 million in Q2 2021,
mainly driven by growing demand for PCR tests coming from international
travellers as restrictions imposed by governments around the world continued
to ease.
IDH's house call service, which has been successfully ramped up to capitalise
on the service's growing popularity, recorded revenue of EGP 725 million in 9M
2021, up 152% year-on-year. The service's contribution to Egypt's top-line
stood at 23% in 9M 2021, versus the 20% contribution made in the comparable
period of last year.
Al-Borg Scan reported revenue of EGP 31 million in 9M 2021, a 92% year-on-year
increase. Top-line growth at the venture was supported by a 75% rise in tests
performed versus the same nine months a year ago. To capitalise on the rising
patient demand for IDH's radiology service, the Group inaugurated a third
Al-Borg Scan branch at the end of September of this year, with an additional
two branches set to come online over the coming twelve months.
Overall, IDH served 6.3 million patients in Egypt and performed 22.1 million
tests in 9M 2021, up by 45% and 30% year-on-year, respectively.
Detailed Egypt Revenue Breakdown
EGP mn Q1 2020 Q1 2021 Q2 2020 Q2 2021 Q3 2020 Q3 2021 9M 2020 9M 2021
Total revenues 424 920 381 1,015 602 1,187 1,407 3,122
Conventional tests 424 507 314 510 482 573 1,220 1,590
Total Covid-19-related tests 0 414 67 504 120 614 187 1,531
Core Covid-19 tests (PCR, Antigen, Antibody) 0 277 10 366 60 567 70 1,210
Other Covid-19-related tests 0 137 57 138 60 47 117 321
Contribution to Egypt revenue
Conventional tests 100% 55% 82% 50% 80% 48% 87% 51%
Total Covid-19-related tests 0% 45% 18% 50% 20% 52% 13% 49%
Core Covid-19 tests (PCR, Antigen, Antibody) 0% 30% 3% 36% 10% 48% 5% 39%
Other Covid-19-related tests 0% 15% 15% 14% 10% 4% 8% 10%
Jordan
IDH's Jordanian operations reported year-on-year revenue grow of 172% in 9M
2021 recording EGP 592 million. Top-line growth was driven by an 81% increase
in test performed coupled with a 50% rise in Biolab's average revenue per
test. In the nine-month period, Covid-19-related tests (PCR, Antigen, and
Antibody) contributed to 62% of Biolab's revenue and to 31% of its tests
performed. Controlling for this, revenue increased 35% year-on-year on the
back of a 32% increase in conventional tests performed. Meanwhile, the
country's top-line continued to be bolstered by Biolab's house call service
which in 9M 2021 generated EGP 45 million in revenue, up 81% year-on-year.
On a quarterly basis, Jordan's revenue reached EGP 269 million, a 101%
increase from last quarter's figure and up 167% versus Q3 2020. The impressive
quarter-on-quarter expansion was supported by an EGP 84 million net revenue
contribution coming from Biolab's new partnership with QAIA coupled with the
EGP 40 million in net revenue coming from its partnerships with KHIA and Aqaba
Port. PCR test volumes generated by Biolab's testing stations in QAIA, KHIA,
and Aqaba Port more than offset a general decrease in demand for
Covid-19-related testing as infection rates declined following the continued
ramp up of the country's vaccination campaign.
Detailed Jordan Revenue Breakdown
EGP mn Q1 2020 Q1 2021 Q2 2020 Q2 2021 Q3 2020 Q3 2021 9M 2020 9M 2021
Total revenues 58 190 59 134 100 269 218 592
Conventional revenue 53 68 44 69 68 86 165 222
Total Covid-19-related revenue (PCR, Antigen, Antibody) 5 122 16 65 32 183 53 370
Contribution to Jordan revenue
Conventional revenue 91% 36% 74% 52% 68% 32% 76% 38%
Total Covid-19-related revenue (PCR, Antigen, Antibody) 9% 64% 26% 48% 32% 68% 24% 62%
(14) 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.
Nigeria
At the Group's Nigerian subsidiary, revenue recorded EGP 40 million in 9M
2021, up 62% year-on-year. In local currency terms, growth was even more
pronounced with revenues up 65% year-on-year on the back of a 43% year-on-year
expansion in tests performed (patients served were up 24%) and a 13% rise in
average revenue per test. The continued growth in patient and test volumes
over the last two years has come as a direct result of management's revamp
strategy which has involved the complete renovation of Echo-Lab's branches
combined with the rollout of targeted marketing campaigns aimed at stimulating
demand for the venture's services. In parallel, volumes are also benefitting
from a gradual normalisation of traffic following the easing of restrictive
measures enforced to curb the spread of Covid-19 throughout 2020. On a
quarterly basis, IDH's Nigeria operations reported revenues of EGP 14.9
million in Q3 2021, up 54% year-on-year and 16% versus Q2 2021. It is worth
noting that Dr. Alok Bhatia joined Echo-Lab as CEO in March 2021.
Sudan
In Sudan, IDH reported a 41% year-on-year decline in revenues to EGP 12
million for 9M 2021. The country's results continue to be significantly
impacted by the devaluation of the Sudanese pound in early 2021 with the
average SDG/EGP rate in 9M 2021 standing at 0.07 versus 0.30 this time last
year. Nonetheless, management's continued success in raising prices in step
with inflation, saw revenue in local currency terms expand a remarkable 169%
year-on-year in 9M 2021.
Revenue Contribution by Country
9M 2020 9M 2021 Change
Egypt Revenue (EGP mn) 1,407 3,122 122%
Covid-19-related (EGP mn) 187 1,531 719%
Egypt Contribution 84% 83%
Jordan Revenue (EGP mn) 218 592 172%
Covid-19-related (EGP mn) 53 370 598%
Jordan Revenue (JOD mn) 10 27 174%
Jordan Contribution 13% 16%
Nigeria Revenue (EGP mn) 25 40 62%
Nigeria Revenue (NGN mn) 620 1,020 65%
Nigeria Contribution 1% 1%
Sudan Revenue (EGP mn) 21 12 -41%
Sudan Revenue (SDG mn) 69 187 169%
Sudan Contribution 1% 0.3%
---
Patients Served and Tests Performed by Country
9M 2020 9M 2021 Change
Egypt Patients Served (mn) 4.3 6.3 45%
Egypt Tests Performed (mn) 17.0 22.1 31%
Covid-19-related tests (mn) 1.1 3.0 179%
Jordan Patients Served (k) 284 1,031 263%
Jordan Tests Performed (k) 1,372 2,482 81%
Covid-19-related tests (k) 77 778 916%
Nigeria Patients Served (k) 95 117 24%
Nigeria Tests Performed (k) 150 215 43%
Sudan Patients Served (k) 91 47 -48%
Sudan Tests Performed (k) 289 140 -51%
Total Patients Served (mn) 4.8 7.5 56%
Total Tests Performed (mn) 18.8 25.0 33%
Branches by Country
31 December 2020 30 September 2021 Change
Egypt 429 455 26
Jordan 20 21 1
Nigeria 12 12 -
Sudan 20 19 -1
Total Branches 481 507 26
Cost of Goods Sold
IDH's cost of goods sold increased 90% year-on-year to EGP 1,600 million in 9M
2021, rising at a significantly slower pace than the Group's top-line during
the period. As such, gross profit for 9M 2021 increased 161% year-on-year to
EGP 2,167 million, with an associated margin of 58% versus 50% last year.
COGS Breakdown as a Percentage of Revenue
9M 2020 9M 2021
Raw Materials 16.4% 18.3%
Wages & Salaries 16.0% 12.5%
Depreciation & Amortisation 7.1% 4.0%
Other Expenses 10.8% 7.6%
Total 50.3% 42.5%
Raw material costs, which include cost of specialized analysis at other
laboratories, recorded EGP 690 million in 9M 2021, and continued to make up
the lion share of total COGS at 43%. As a share of revenue, raw material costs
increased to 18.3% in 9M 2021 compared to 16.4% last year. This increase is
primarily attributable to higher raw material costs as a share of revenue
recorded in Jordan, with Biolab's raw material to revenues ratio reaching 33%
in 9M 2021 from 25% in 9M 2020 mainly due to additional fees incurred by the
company during the months of August and September as part of its revenue
sharing agreement with QAIA.
Direct salaries and wages increased 77% year-on-year to EGP 473 million in 9M
2021 and made up the second largest share of total COGS for the nine-month
period at 30%. The year-on-year increase is largely attributable to a rise in
the share of profits allocated to direct salaries and wages to EGP 141 million
in 9M 2021 from EGP 50 million in the comparable period of 2020 following
higher net profit recorded at its Egyptian operations,(15) in addition to
higher bonuses and incentives paid during 9M 2021 in light of the impressive
performance recorded during the period.
Direct depreciation and amortisation increased 28% year-on-year in 9M 2021 to
EGP 152 million, principally due to the incremental amortisation of additional
branches (IFRS 16 right-of-use assets).
EBITDA
IDH's normalised EBITDA(16) recorded EGP 1,992 million in 9M 2021, up 180%
year-on-year. Normalised EBITDA margin expanded to 53% in 9M 2021 versus 43%
last year. Improved EBITDA level profitability was supported by strong
top-line growth and the subsequent dilution of fixed costs. EBITDA growth was
further bolstered by the normalization of provisions booked during 9M 2021,
which recorded EGP 18 million versus the EGP 36 million booked in 9M 2020 to
account for expected credit losses in accordance with IFRS 9. It is worth
noting that normalised EBITDA excludes one-off listing fees of EGP 29 million
incurred in 9M 2021 related to the Company's dual listing on the EGX completed
in May 2021.
On a quarterly basis, normalised EBITDA expanded 130% year-on-year to record
EGP 790 million in Q3 2021. This represents a 31% quarter-on-quarter increase
largely driven by the strong top-line growth recorded by the Group during the
third quarter. Normalised EBITDA margin stood at 54% for the quarter, up from
the 48% margin recorded in Q3 2020 and the 52% margin recorded in Q2 2021.
In Egypt, EBITDA recorded EGP 1,761 million in 9M 2021, up 177% year-on-year
on the back of strong top-line growth. EBITDA margin increased to 56% for the
nine-month period from 45% in 9M 2020.
IDH's Jordanian operations recorded a 206% year-on-year increase in EBITDA to
EGP 236 million for 9M 2021 supported by strong revenue growth for the period.
In local currency terms, EBITDA grew 208% compared to 9M 2020. EBITDA margin
recorded 40% in 9M 2021 compared to 35% in 9M 2020.
In Nigeria, EBITDA losses increased to EGP 5.2 million in 9M 2021 compared to
EGP 3.8 million in the same nine months of 2020. Increased losses are
partially attributable to an increase in management salaries incurred during
the course of 2021 following the hiring of a new CEO at Echo-Lab in Q1 2021.
Moreover, it is also worth noting that the figure includes a one-off
adjustment related to the previous year of EGP 4.4 million. Excluding the
one-off adjustment, EBITDA losses would have reached EGP 0.8 million,
representing a significant improvement compared to the same period of last
year.
Finally, Sudan's EBITDA recorded EGP 0.2 million in 9M 2021, down 86%
year-on-year with an EBITDA margin of 1% compared to 6% in 9M 2020. EBITDA for
the period was weighed down by the sharp SDG devaluation in February of this
year. In SDG terms EBITDA declined 38% year-on-year.
Regional EBITDA in Local Currency
Mn 9M 2020 9M 2021 Change
Egypt EGP 636 1,761 177%
margin 45% 56%
Jordan JOD 3.5 10.7 208%
margin 35% 40%
Nigeria NGN -94 -131 40%
margin -15% -13%
Sudan SDG 4 3 -38%
margin 6% 1%
(15) According to IAS 1, 10% of Egypt's net profit is allocated to direct
wages and salaries.
(16) Normalised EBITDA is calculated as operating profit plus depreciation and
amortization and minus one-off fees incurred in 9M 2021 related to the
Company's EGX listing completed in May 2021.
Interest Income / Expense
IDH recorded interest income of EGP 69 million in 9M 2021, up 56% year-on-year
on the back of higher cash balances during the period coupled with proper cash
allocation between T-bills and time deposits.
Interest expense recorded EGP 83 million in the 9M 2021, up 56% year-on-year.
The increase in attributable to:
· Higher interest on lease liabilities related to IFRS 16 following the
addition of new branches and the renewal of medical equipment agreements with
our main equipment suppliers.
· Higher bank charges resulting from increased penetration of, and
reliance on, POS machines and electronic payments in both Egypt and Jordan
during the period. It is important to note that bank charges recorded by IDH's
Jordanian operations represented 51% of total bank charges during 9M 2021,
which is mainly related to the newly launched partnership with QAIA.
· Loan-related expenses incurred by IDH during the period as the
Company secured a new eight-year US$ 45 million facility with the
International Finance Corporation (IFC) in May 2021. During 9M 2021, IDH
booked loan-related expenses of EGP 14.6 million including a front-end fee,
syndication fee, and legal advisory fees.
Interest Expense Breakdown
EGP Mn 9M 2020 9M 2021 Change
Interest on Lease Liabilities (IFRS 16) 38.3 44.0 15%
Interest Expenses on Borrowings(17) 9.9 7.0 -29%
Loan-related Expenses on IFC facility - 14.6 N/A
Interest Expenses on Leases 3.0 4.8 62%
Bank Charges 1.9 12.5 549%
Total Interest Expense 53.1 82.9 56%
(17 )Interest expenses on medium-term loans divided as EGP 2.3 million related
to IDH's facility with the Commercial International Bank (CIB) and EGP 4.6
million related to IDH's facility with Ahli United Bank Egypt (AUBE).
Foreign Exchange
IDH recorded a net foreign exchange loss of EGP 18 million in 9M 2021 compared
to EGP 10 million in the same nine months of 2020. The figure largely reflects
FX losses on the back of the SDG devaluation versus the EGP in February 2021.
Taxation
Tax expenses recorded in the first nine months of 2021 were EGP 610 million
compared to EGP 182 million in the same period of last year. The effective tax
rate stood at 35% in the period versus 33% in 9M 2020, reflecting the change
in withholding tax on undistributed profits from 5% to 10% which came into
effect in Egypt in September of last year. It is important to note that there
is no tax payable for IDH's two companies at the holding level, while tax was
paid on profits generated by operating subsidiaries.
Net Profit
IDH's consolidated net profit recorded EGP 1,148 million in 9M 2021, an
impressive three-fold year-on-year increase. Improving net profitability was
supported by strong revenue growth coupled with the dilution of fixed costs,
higher interest income and normalising provisions for the nine-month period.
As such, net profit margin expanded eight percentage points year-on-year to
record 30% in 9M 2021.
ii. Balance Sheet Analysis
Assets
Property, Plant and Equipment
IDH held gross property, plant and equipment (PPE) of EGP 1,569 million as at
30 September 2021, up from the EGP 1,256 million as of 31 December 2020.
Meanwhile, CAPEX outlays represented around 8% of consolidated revenues in 9M
2021. The increase in CAPEX outlays as a share of total revenue is partially
due to the EGP 149 million in equipment related to the SPA (Reagent deals) and
the EGP 48.7 million spent on a new radiology branch (CBP) during the period.
Total CAPEX Breakdown
EGP Mn 9M 2021 % of Revenue
Mega Lab 130.2 3.5%
Al-Borg Scan Expansion 100.3 2.7%
Leasehold Improvements/others 83.0 2.2%
Total CAPEX Additions 313.5 8.3%
Accounts Receivable and Provisions
As at 30 September 2021, accounts receivables' Days on Hand (DOH) stood at 107
days compared to 144 days at year-end 2020, continuing to highlight a
sustained improvement in collections versus 2020. Accounts receivables' DOH is
calculated based on credit revenues amounting to EGP 967 million during 9M
2021.
The receivables balance in Egypt and Jordan stood at EGP 376 million as of 30
September 2021. More specifically, in Egypt account receivables' DOH declined
to 96 days as at 30 September 2021 compared to 145 days as at 31 December
2020. Accounts receivables' DOH for Egypt is calculated based on credit
revenues amounting to EGP 812 million during 9M 2021. Meanwhile, in Jordan
accounts receivables' DOH increased from 150 days to 172 days largely due to
recent agreements with various airline companies as part of QAIA and KHIA
agreements. Accounts receivables' DOH for Jordan is calculated based on credit
revenues amounting to EGP 144 million during 9M 2021.
Provision for doubtful accounts established during the nine months to 30
September 2021 amounted to EGP 18 million, down from the EGP 36 million booked
in the comparable nine-month period of last year.
Inventory
As at 30 September 2021, the Group's inventory balance reached EGP 190
million, up from EGP 100 million as at year-end 2020. Days Inventory
Outstanding (DIO) decreased to 59 days as at 30 September 2021 from 72 days as
at year-end 2020. The decline is mainly due to the high turnover of PCR
testing for Covid-19.
Cash and Net Debt/Cash
IDH's cash balances increased to EGP 1,807 million as at 30 September 2021
compared to EGP 877 million as at 31 December 2020.
EGP million 31 Dec 2020 30 Sep 2021
Time Deposits 162.4 366.5
T-Bills 461.2 943.1
Current Accounts 234.3 474.3
Cash on Hand 19.0 22.7
Total 876.8 1,806.7
Net cash balance(18) amounted to EGP 1,013 million as at 30 September 2021, an
increase of 215% compared to EGP 321 million as at 31 December 2020.
EGP million 31 Dec 2020 30 Sep 2021
Cash and Investments at Amortised Cost 876.8 1,806.7
Interest Bearing Debt ("Medium Term Loans")(19) 96.5 103.4
Lease Liabilities Property 389.9 475.4
Lease Liabilities Equipment 69.1 215.2
Net Cash Balance 321.3 1,012.8
Lease liabilities on property stood at EGP 475 million as at 30 September 2021
versus the EGP 390 million booked as at year-end 2020. The increase is
attributable to the addition of new branches during 9M 2021 including Al-Borg
Scan's third branch which came online at the start of October 2021. Meanwhile,
financial obligations related to equipment recorded EGP 215 million as at 30
September 2021, up from EGP 69 million as at year-end 2020. This increase
reflects the renewal of the Company's contracts and the addition of new
equipment. Finally, the increase partially reflects a rise in the interest
bearing debt related to IDH's two medium term facilities with Commercial
International Bank (CIB) and Ahli United Bank of Egypt (AUBE). More
specifically, IDH's interest bearing debt as at 30 September 2021 is split as
EGP 27.2 million related to its medium term facility with CIB and EGP 76.1
million to its facility with AUBE. It is worth noting that interest bearing
debt in both periods includes accrued interest.
(18) The net cash balance is calculated as cash and cash equivalent balances
less interest-bearing debt (medium term loans), finance lease and Right-of-use
liabilities.
(19 )IDH's interest bearing debt as at 30 September 2021 is split as EGP 27.2
million related to its medium term facility with the Commercial International
Bank (CIB) and EGP 76.1 million to its facility with Ahli United Bank Egypt
(AUBE).
Liabilities
Accounts Payable
As at 30 September 2021, accounts payable balance stood at EGP 292 million up
from EGP 178 million as at year-end 2020. However, the Group's days payable
outstanding (DPO) stood at 95 days as at 30 September 2021 down from 127 days
as year-end 2020. The decline primarily reflects the fact that PCR testing kit
suppliers are paid within a period of 15 days.
iii. Cash Flow Analysis
Net cash flow from operating activities recorded EGP 1,641 million in 9M 2021
compared to EGP 370 million in 9M 2020, continuing to display the Company's
strong cash generation ability.
-End-
INTEGRATED DIAGNOSTICS HOLDINGS plc - "IDH"
AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION
FOR THE NINE MONTHS ENDED
30 SEPTEMBER 2021
Index to the condensed consolidated interim financial information Pages
Condensed consolidated interim statement of financial position 21
Condensed consolidated interim statement of profit or loss 22
Condensed consolidated interim statement of comprehensive income 23
Condensed consolidated interim statement of changes in equity 24
Condensed consolidated interim statement of cash flows 25
Notes to the condensed consolidated interim financial information 26 - 44
Condensed consolidated interim statement of financial position - As of 30
September 2021
(All amounts in Egyptian Pounds "EGP'000") 30 September 31 December
Notes 2021 2020
EGP'000 EGP'000
(Reviewed) (Audited)
ASSETS
Non-current assets
Property, plant and equipment 4 1,006,695 787,590
Intangible assets and goodwill 5 1,659,481 1,659,755
Right of use assets 6 417,708 354,688
Investment at fair value through profit and loss 7 10,372 9,604
Total non-current assets 3,094,256 2,811,637
Current assets
Inventories 190,178 100,115
Trade and other receivables 8 489,813 388,903
Investments at amortized cost 9 856,016 276,625
Cash and cash equivalents 10 950,703 600,130
Total current assets 2,486,710 1,365,773
Total assets 5,580,966 4,177,410
EQUITY AND LIABILITIES
Equity
Share Capital 1,072,500 1,072,500
Share premium reserve 1,027,706 1,027,706
Capital reserve (314,310) (314,310)
Legal reserve 51,641 49,218
Put option reserve (809,677) (314,057)
Translation reserve 150,988 145,617
Retained earnings 1,234,832 603,317
Equity attributable to the equity holders of the parent 2,413,680 2,269,991
Non-controlling interest 176,992 156,383
Total equity 2,590,672 2,426,374
Non-current liabilities
Deferred tax liabilities 19-C 316,693 240,333
Provisions 3,799 3,408
Long term Loans and borrowings 13 67,591 67,617
Other long-term financial obligations 15 581,471 398,525
Long-term financial liability at fair value 14 33,682 31,790
Total non-current liabilities 1,003,236 741,673
Current liabilities
Trade and other payables 11 649,117 383,623
Other short-term financial obligations 15 109,123 60,517
Short-term financial liability at fair value 12 775,995 282,267
Short term loans and borrowings 13 33,457 25,416
Current tax liabilities 419,366 257,540
Total current liabilities 1,987,058 1,009,363
Total liabilities 2,990,294 1,751,036
Total equity and liabilities 5,580,966 4,177,410
These condensed consolidated interim financial information were approved and
authorized for issue by the Board of Directors and signed on their behalf on
15 November 2021 by:
Dr. Hend El Sherbini Hussein Choucri
Chief Executive Officer Board member of the audit committee
The accompanying notes on pages 26 - 44 form an integral part of these
condensed consolidated interim financial information.
Condensed consolidated interim statement of profit or loss For the three and
nine months period ended 30 September 2021
(All amounts in Egyptian Pounds "EGP'000")
For the three months period ended 30 September For the nine months period ended 30 September
Notes 2021 2020 2021 2020
EGP'000 EGP'000 EGP'000 EGP'000
(Reviewed) (Unaudited) / (Unreviewed) (Reviewed) (Unaudited) / (Unreviewed)
Revenue 23 1,473,411 720,290 3,766,581 1,669,977
Cost of sales (612,146) (336,615) (1,600,019) (840,105)
Gross profit 861,265 383,675 2,166,562 829,872
Marketing and advertising expenses (41,273) (26,781) (107,928) (72,456)
General and administrative expenses 17 (82,969) (51,546) (259,101) (154,809)
Impairment loss on trade and other receivable (7,816) (7,300) (18,081) (35,581)
Other income (135) 487 12,296 8,377
Operating profit 729,072 298,535 1,793,748 575,403
Finance income 18 23,838 10,434 69,086 44,199
Finance cost 18 (30,261) (21,583) (105,161) (62,555)
Net finance cost (6,423) (11,149) (36,075) (18,356)
Profit before tax 722,649 287,386 1,757,673 557,047
Income tax expense 19-B (242,961) (86,591) (609,775) (181,627)
Profit for the period 479,688 200,795 1,147,898 375,420
Profit attributed to:
Equity holders of the parent 454,236 194,371 1,100,676 373,139
Non-controlling interests 25,452 6,424 47,222 2,281
479,688 200,795 1,147,898 375,420
Earnings per share (expressed in EGP):
Basic and diluted earnings per share 22
0.76 0.32 1.83 0.62
The accompanying notes on pages 26 - 44 form an integral part of these
condensed consolidated interim financial information.
Condensed consolidated interim statement of comprehensive income For the three
and nine months period ended 30 September 2021
(All amounts in Egyptian Pounds "EGP'000")
For the three months period ended 30 September For the nine months period ended 30 September
2021 2020 2021 2020
EGP'000 EGP'000 EGP'000 EGP'000
(Reviewed) (Unaudited) / (Unreviewed) (Reviewed) (Unaudited) / (Unreviewed)
Net profit 479,688 200,795 1,147,898 375,420
Items that may be reclassified to profit or loss:
Currency translation differences (4,285) (5,607) 8,090 (19,747)
Other comprehensive (loss) / income for the period net of tax (4,285) (5,607) 8,090 (19,747)
Total comprehensive income for the period 475,403 195,188 1,155,988 355,673
Attributed to:
Equity holders of the parent 449,464 196,889 1,106,047 362,621
Non-controlling interests 25,939 (1,701) 49,941 (6,948)
475,403 195,188 1,155,988 355,673
The accompanying notes on pages 26 - 44 form an integral part of these
condensed consolidated interim financial information.
Share Share Capital Legal Put option reserve Translation Retained earnings Total attributable to the owners of the Parent Non-controlling interests Total equity
capital
premium reserve
reserve
reserve*
reserve
At 1 January 2021 1,072,500 1,027,706 (314310) 49,218 (314,057) 145,617 603,317 2,269,991 156,383 2,426,374
Profit for the period - - - - - - 1,100,676 1,100,676 47,222 1,147,898
Other comprehensive income for the period - - - - - 5,371 - 5,371 2,719 8,090
Total comprehensive income - - - - - 5,371 1,100,676 1,106,047 49,941 1,155,988
Transactions with owners of the Company
Contributions and distributions
Dividends - - - - - - (455,182) (455,182) (23,566) (478,748)
Legal reserve formed during the period - - - 2,423 - - (2,423) - - -
Movement in put option liability - - - - (495,620) - - (495,620) - (495,620)
Impact of hyperinflation - - - - - - (11,556) (11,556) (5,766) (17,322)
Total contributions and distributions - - - 2,423 (495,620) - (469,161) (962,358) (29,332) (991,690)
Balance at 30 September 2021 (Reviewed) 1,072,500 1,027,706 (314310) 51,641 (809,677) 150,988 1,234,832 2,413,680 176,992 2,590,672
At 1 January 2020 1,072,500 1,027,706 (314310) 46,330 (229,163) 155,823 456,661 2,215,547 144,710 2,360,257
Profit for the period - - - - - - 373,139 373,139 2,281 375,420
Other comprehensive loss for the period - - - - - (10,518) - (10,518) (9,229) (19,747)
Total comprehensive income - - - - - (10,518) 373,139 362,621 (6,948) 355,673
Transactions with owners of the Company
Contributions and distributions
Dividends - - - - - - (441,855) (441,855) (8,883) (450,737)
Legal reserve formed during the period - - - 1,331 - - (1,331) - - -
Movement in put option liability - - - - 20,481 - - 20,481 - 20,481
Impact of hyperinflation - - - - - - (3,296) (3,296) 790 (2,506)
Non-controlling interest cash injection in subsidiaries during the period - - - - - - - 17,372 17,372
Total contributions and distributions - - - 1,331 20,481 - (446,482) (424,670) 9,279 (415,391)
Balance at 30 September 2020 (Unaudited)/(Unreviewed) 1,072,500 1,027,706 (314310) 47,661 (208,682) 145,305 383,318 2,153,499 147,041 2,300,540
Condensed consolidated interim statement of changes in equity For the nine
months period ended 30 September 2021
(All amounts in Egyptian Pounds "EGP'000")
*Under Egyptian Law, each subsidiary in Egypt must set aside at least 5% of
its annual net profit into a legal reserve until such time that this
represents 50% of each subsidiary's issued capital. This reserve is not
distributable to the owners of the Company.
The accompanying notes on pages 26 - 44 form an integral part of these
condensed consolidated interim financial information.
(All amounts in Egyptian Pounds "EGP'000") 30 September 30 September
Note 2021 2020
EGP'000 EGP'000
(Reviewed) (Unaudited) / (Unreviewed)
Cash flows from operating activities
Profit for the period before tax 1,757,673 557,047
Adjustments - -
Depreciation of property, plant and equipment and right of use 164,534 130,982
Amortization 5,002 4,045
Gain on disposal of Property, plant and equipment (208) (274)
Impairment in trade receivables 18,081 35,582
Interest expense 18 55,822 53,118
Interest income 18 (69,086) (44,199)
Equity settled shares financial investments (768) (3,464)
ROU Asset/Lease Termination 1,038 -
Loss / (gain) in hyperinflationary net monetary position 18 4,628 (192)
Unrealised foreign currency exchange loss 18 17,588 9,629
Net cash from operating activities before changes in working capital 1,954,304 742,274
Change in Provisions 392 (1,982)
Change in inventory (95,002) (15,424)
Change in trade and other receivables (127,907) (65,856)
Change in trade and other payables 183,011 (125,204)
Cash generated from operating activities before income tax payment 1,914,798 533,808
Income tax paid during period (273,881) (163,571)
Net cash from operating activities 1,640,917 370,237
Cash flows from investing activities
Interest received 68,048 43,505
Decrease in restricted cash - 247
Payments for the purchase of short term investments (904,779) (460,476)
Proceeds for the sale of short term investments 325,388 527,869
Acquisition of Property, plant and equipment 4 (177,580) (77,892)
Acquisition of intangible assets 5 (8,285) (3,665)
Proceeds from sale of Property, plant and equipment 6,255 1,278
Net cash flows(used in)/from investing activities (690,953) 30,866
Cash flows from financing activities
Proceeds from borrowings 20,724 10,311
Repayments of borrowings (12,708) (12,708)
Interest paid (56,696) (49,532)
Dividends paid (478,748) (450,737)
Payment of finance lease liabilities (68,372) (26,921)
Injection of cash by non-controlling interest - 17,372
Net cash flows used in financing activities (595,800) (512,216)
Net increase (decrease) in cash and cash equivalent 354,164 (111,114)
Cash and cash equivalent at the beginning of the period 600,130 409,139
Effect of exchange rate fluctuations on cash held (3,591) 13,092
Cash and cash equivalent at the end of the period 10 950,703 311,118
Condensed consolidated interim statement of cash flows For the nine months
period ended 30 September 2021
The accompanying notes on pages 26 - 44 form an integral part of these
condensed consolidated interim financial information.
(In the notes all amounts are shown in Egyptian Pounds "EGP' 000" unless otherwise stated)
1. Reporting entity
Integrated Diagnostics Holdings plc "IDH" or "the Company" is a Company which
was incorporated in Jersey on 4 December 2014 and established according to the
provisions of the Companies (Jersey) Law 1991 under Registered No. 117257.
These condensed consolidated interim financial information as at and for the
nine months ended 30 September 2021 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 15 November 2021.
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). The
group's assessment for the differences with IAS 34 'Interim Financial
Reporting' (As adopted by the EU) concluded that there are no
material differences on the consolidated financial position and consolidated
financial performance of the Group for the period then ended, as the
accounting policies adopted are consistent with those of the previous
financial year ended 31 December 2020 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 2020 which is available at
www.idhcorp.com (http://www.idhcorp.com) , In addition, results of the
nine-month period ended 30 September 2021 are not necessary indicative for the
results that may be expected for the financial year ending 31 December 2021.
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 2020 "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 2020. 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 2020".
4. Property, plant and equipment
Land & buildings Medical, electric Leasehold Fixtures, fittings & vehicles Building & Leasehold assets in the course of construction Total
& information
improvements
system equipment*
Cost
At 1 January 2021 332,345 565,697 254,474 73,261 21,207 1,246,984
Additions 48,886 222,230 49,915 20,822 3,891 345,744
Hyperinflation effect - (12,377) - - - (12,377)
Disposals - (2,968) (893) (1,330) - (5,191)
Transfers - - 5,310 (5,310) -
Translation differences (329) (9,742) (2,226) (1,298) (1,079) (14,674)
At 30 September 2021 (Reviewed) 380,902 762,840 306,580 91,455 18,709 1,560,486
Depreciation
At 1 January 2021 47,724 245,929 138,511 27,230 - 459,394
Depreciation for the period 4,238 68,444 27,722 5,212 - 105,616
On disposals - (2,573) (751) (1,131) - (4,455)
Translation differences (29) (4,855) (895) (985) - (6,764)
At 30 September 2021 (Reviewed) 51,933 306,945 164,587 30,326 - 553,791
Net book value at 30 September (Reviewed) 328,969 455,895 141,993 61,129 18,709 1,006,695
At 31 December 2020 (Audited) 284,621 319,768 115,963 46,031 21,207 787,590
* Medical equipment
The group entered into purchase agreement with an external party to
supply medical equipment. These equipment's are supplied to service the
Group's new state-of-the-art Mega Lab. The agreement provides for annual base
payments, The Group entered into new agreements for the period ended 30
September 2021 to replace the current equipment in use.
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 2021 1,261,808 383,922 67,157 1,712,887
Additions - - 8,285 8,285
Translation (3,169) (347) (47) (3,563)
Balance at 30 September 2021 (Reviewed) 1,258,639 383,575 75,395 1,717,609
Amortisation and impairment
Balance at 1 January 2021 1,849 - 51,283 53,132
Amortisation - - 5,002 5,002
Translation - - (6) (6)
Balance at 30 September 2021 (Reviewed) 1,849 - 56,279 58,128
Carrying amount
Balance at 31 December 2020 (Audited) 1,259,959 383,922 15,874 1,659,755
Balance at 30 September 2021 (Reviewed) 1,256,790 383,575 19,116 1,659,481
Goodwill impairment reviews are undertaken annually or more frequently if
events or changes in circumstances indicate a potential impairment. No
indicators of impairment have been identified during the nine months ended 30
September 2021.
6. Right of use assets
30 September 31 December 2020
2021
(Reviewed) (Audited)
Balance at 1 January 354,688 264,763
Addition for the period / year 128,864 152,030
Depreciation charge for the period / year (58,918) (60,803)
Terminated contracts (3,454) (1,302)
Translation (3,472) -
Balance 417,708 354,688
7. Investment at fair value through profit and loss
30 September 2021 31 December 2020
(Reviewed) (Audited)
Equity investments* 10,372 9,604
10,372 9,604
* On August 17, 2017, Almakhbariyoun AL Arab (seller) has signed IT
purchase Agreement with JSC Mega Lab (Buyer) to transfer and install the
Laboratory Information Management System (LIMS) for a purchase price amounted
to USD 400 000, which will be in the form of 10% equity stake in JSC Mega Lab.
In case the valuation of the project is less or more than USD 4,000,000, the
seller stake will be adjusted accordingly, in a way that the seller equity
stake shall not fall below 5% of JSC Mega Lab.
- ownership percentage in JSC Mega Lab at the transaction date on
April 8, 2019, and as of September 30, 2021, 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 of BioLab Shares/total stake (being USD 400,000.00) plus 15% annual IRR
(including preceding 5 Financial years). After the expiration of above 12
months from the date of the put option period expiration, which allows CHG to
purchase Biolab's all shares at a price of equity value of Biolab's stake
(having value of USD 400,000) plus higher of 20% annual IRR or 6X EV/EBITDA
(of the financial year immediately preceding the call option exercise date. In
case the Management Agreement or the Purchase Agreement and/or the SLA 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 all Shares at a price of the equity value of BioLab's
stake in JSC Mega Lab (having value of USD 400,000.00) plus 205 annual IRR. If
JCI accreditation is not obtained, immediately after the expiration of the
additional 12 months period of the CHG shall have a call option (the
Accreditation Call option), exercisable within 6 months period, which allows
CHG to purchase BioLab's all Shares at a price of the equity value of BioLab's
stake in JSC Mega Lab (having value of USD 400,00.00) plus 20% annual IRR.
8. Trade and other receivables
30 September 2021 31 December 2020
(Reviewed) (Audited)
Trade receivables - net 380,490 325,770
Prepayments 27,859 19,363
Due from related parties note (16) 3,847 2,910
Accrued revenue 2,044 1,006
Other receivables* 75,573 39,854
489,813 388,903
* Other receivables during the period ended 30 September 2021,
including EGP 27m related to advance to suppliers for purchasing fixed assets
and leasehold improvement the new and existing pathology branches.
9. Investments at amortised cost
30 September 2021 31 December 2020
(Reviewed) (Audited)
Term deposits 96,294 -
Treasury bills 759,722 276,625
856,016 276,625
The maturity date of the treasury bills and Fixed-term deposits is between
3-12 months and have settled average interest rates of 12.53% and 7.85%
respectively. Treasury bills are classified as held to collect.
10. Cash and cash equivalents
30 September 2021 31 December 2020
(Reviewed) (Audited)
Term deposits (less than 90 days) 270,237 162,380
Treasury bills (less than 90 days) 183,419 184,525
Cash at banks and on hand 497,047 253,225
950,703 600,130
11. Trade and other payables
30 September 2021 31 December 2020
(Reviewed) (Audited)
Trade payable 291,591 177,602
Accrued expenses 254,525 151,201
Due to related parties note (16) 121 439
Other payables 100,555 50,959
Accrued finance cost 2,325 3,422
649,117 383,623
12. Short-term financial liability at fair value
30 September 2021 31 December 2020
(Reviewed) (Audited)
Put option liability 775,995 282,267
775,995 282,267
The accounting policy for put options after initial recognition is to
recognise all changes in the carrying value of the put liability within equity
as all these transactions are with the non-controlling interests of the Group.
During the historic acquisitions of Makhbariyoun Al Arab (Biolabs) which took
place at 31 December 2011, the Group entered into separate put option
arrangements to purchase the remaining equity interests at a subsequent date.
At acquisition, a put option liability has been recognised for the net present
value for the exercise price of the option. The options are exercisable in
whole from the fifth anniversary of the completion of the original purchase
agreement, which fell due in September 2016. The vendor has not exercised this
right at 30 September 2021.
13. Loans and borrowings
A) In April 2017 AL-Mokhtabar for medical lab, one of IDH subsidiaries,
was granted a medium-term loan amounting to EGP 110m from the Commercial
International Bank "CIB Egypt" to finance the purchase of the new
administrative building for the group. As at 30 September 2021, loan amount
EGP 110m had been drawn down in full. 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 the following percentages
Year 2017 2018 2019 2020 2021 2022
% 2.33 1.71 2.31 1.95 1.64 1.47
"Financial leverage": total liabilities divided by net equity
2. The debt service ratios (DSR) shall not be less than 1.
"Debt service ratios": cash operating profit after tax plus Depreciation for
the financial year less annual maintenance on machinery and equipment divided
by total distributions plus accrued interest and loan instalments.
3. The current ratios shall not be less than 1.
"Current ratios": Current assets divided current liabilities.
4. The capital expansions in AL Mokhtabar company shall not exceed EGP
50m per year, other than year 2017 which includes in addition the value of the
building financed by EGP 110m loan facility. This condition is valid
throughout the term of the loan.
The agreement includes other non-financial covenants which relate to the
impact of material events on the Company and the consequential ability to
repay the loan.
B) In July 2018, AL-Borg lab, one of IDH subsidiaries, was granted a
medium term loan amounting to EGP 130.5m from the Ahli United Bank "AUB Egypt"
to finance the investment cost related to the expansion into the radiology
segment. As at 30 September 2021 only EGP 75m had been drawn down from the
total facility available. 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
2019
"Debt service ratio": cash operating profit after tax plus depreciation for
the financial year less annual maintenance on machinery and equipment adding
cash balance 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:
Currency Nominal interest rate Maturity 30 September 2021 31 December 2020
(Reviewed) (Audited)
CIB - Bank EGP Secured rate 9.5% 5 April 2022 25,947 38,654
AUB - Bank EGP CBE corridor rate+1% 26 April 2026 75,101 54,379
101,048 93,033
Amount held as:
Current liability 33,457 25,416
Non- current liability 67,591 67,617
101,048 93,033
* As at 30-September-21 corridor rate 9.25% (2020: 9.25%)
The companies (Mokhtabar and Borg) didn't breach any covenants for both MTL
agreements.
C) On 25 May 2021, IDH has secured an 8 years USD 45 million debt
financing package from the International Finance Corporation (IFC). The
eight-year loan will be used to finance IDH's growth plans across new and
existing markets and help expand access to high-quality diagnostic services in
high growth emerging markets, in addition to its current presence in Egypt,
Jordan, Nigeria and Sudan. The loan has an availability period of two years.
As of September30, 2021, the USD 45 million debt has not been withdrawn by
IDH.
14. Long-term financial liability at fair value
30 September 2021 31 December 2020
(Reviewed) (Audited)
Put option liability* 33,682 31,790
33,682 31,790
* According to definitive agreements signed on 15 January 2018 between
Dynasty Group Holdings Limited and 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 valuer.
15. Other Financial obligations
30 September 2021 31 December 2020
(Reviewed) (Audited)
Lease liabilities - buildings 475,408 389,920
Financial obligations- laboratory equipment 215,186 69,122
690,594 459,042
The financial obligations for the laboratory equipment and building are
payable as follows:
30 September 2021
Minimum Interest Principal
payments
(Reviewed) (Reviewed) (Reviewed)
Less than one year 195,078 85,955 109,123
Between one and five years 653,533 208,045 445,488
More than five years 161,382 25,399 135,983
1,009,993 319,399 690,594
31 December 2020
Minimum payments Interest Principal
(Audited) (Audited) (Audited)
Less than one year 126,998 66,481 60,517
Between one and five years 463,646 176,312 287,334
More than Five years 131,605 20,414 111,191
722,249 263,207 459,042
Amounts recognised in profit or loss:
For the three months ended 30 September For the nine months ended 30 September
2021 2020 2021 2020
(Reviewed) (Unaudited) (Reviewed) (Unaudited)
Interest on lease liabilities 15,165 11,955 44,037 38,343
Expenses related to short-term lease 5,504 1,961 14,143 6,255
16. Related party transactions
The significant transactions with related parties, their nature volumes and
balance during the period 30 September 2021 are as follows:
30 September 2021
Related Party Nature of transaction Nature of relationship Transaction amount of the period Balance
(Reviewed)
Life Scan (S.A.E.)* Expenses paid on behalf Affiliate - 350
International Fertility (IVF)** Expenses paid on behalf Affiliate - 1,767
H.C Security Provided service Entity owned by Company's board member 242 (121)
Life Health Care Medical Test analysis Entity owned by Company's CEO 3,321 -
Provided service "Medical insurance" (2,306) 652
Dr. Amid Abd Elnour Put option liability Bio. Lab C.E.O and shareholder (493,728) (775,995)
Integrated Treatment for Kidney Diseases (S.A.E.) Rental income Entity owned by Company's CEO 125 -
Medical Test analysis 410 1,078
Total (772,269)
31 December 2020
Related Party Nature of transaction Nature of relationship Transaction amount of the year Balance
(Audited)
Life Scan (S.A.E) * Expenses paid on behalf Affiliate 6 350
International Fertility (IVF)** Expenses paid on behalf Affiliate (3,449) 1,767
H.C Security Provided service Entity owned by Company's board member (412) (76)
Life Health Care Provided service Entity owned by Company's CEO (11,058) (363)
Dr. Amid Abd Elnour Put option liability Bio. Lab C.E.O and shareholder (83,126) (282,267)
Integrated Treatment for Kidney Diseases (S.A.E) Rental income Entity owned by Company's CEO 344 -
Medical Test analysis 377 793
(279,796)
Related party transactions (continued)
* Life Scan is a company whose shareholders include Dr. Moamena Kamel
(founder of IDH subsidiary Al-Mokhtabar Labs).
** International Fertility (IVF) is a company whose shareholders include
Dr. Moamena Kamel (founder of IDH subsidiary Al-Mokhtabar Labs).
Compensation of key management personnel of the Group
The amounts disclosed in the table are the amounts recognised as an expense
during the reporting period related to key management personnel.
30 September 30 September
2021 2020
(Reviewed) (Unaudited)
(Unreviewed)
Short-term employee benefits 47,617 38,256
47,617 38,256
17. General and administrative expenses
For the three months ended 30 September For the nine months ended 30 September
2021 2020 2021 2020
(Reviewed) (Unaudited) (Reviewed) (Unaudited)
(Unreviewed) (Unreviewed)
Wages and salaries 36,239 28,954 97,875 78,337
Depreciation 6,050 5,382 17,237 15,796
Other expenses* 40,680 17,210 143,989 60,676
Total 82,969 51,546 259,101 154,809
* Other expenses included EGP 29m related to dual listing expenses in
Egyptian Exchange.
18. Net finance cost
For the three months ended 30 September For the nine months ended
30 September
2021 2020 2021 2020
(Reviewed) (Unaudited) (Reviewed) (Unaudited)
(Unreviewed) (Unreviewed)
Finance income
Interest income 23,838 10,434 69,086 44,199
Total finance income 23,838 10,434 69,086 44,199
Finance cost
(Loss) / gain on hyperinflationary net monetary position (3,424) - (4,628) 192
Bank charges (7,137) (699) (12,501) (1,927)
Interest expense (21,433) (15,734) (70,444) (51,191)
Net foreign exchange (loss) / gain 1,733 (5,150) (17,588) (9,629)
Total finance cost (30,261) (21,583) (105,161) (62,555)
Net finance cost (6,423) (11,149) (36,075) (18,356)
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 30 September For the nine months ended 30 September
2021 2020 2021 2020
(Reviewed) (Unaudited) (Reviewed) (Unaudited)
(Unreviewed) (Unreviewed)
Current tax:
Current year (182,332) (76,973) (464,677) (163,182)
Deferred tax:
Deferred tax arising on undistributed reserves in subsidiaries (55,518) (13,742) (139,298) (24,132)
Relating to origination and reversal of temporary differences (5,111) 4,124 (5,800) 5,687
Total Deferred tax expense (60,629) (9,618) (145,098) (18,445)
Tax expense recognised in profit or loss (242,961) (86,591) (609,775) (181,627)
Tax (continued)
C) Deferred tax liabilities
Deferred tax relates to the following:
30 September 31 December
2021 2020
(Reviewed) (Audited)
Property, plant and equipment (23,945) (18,334)
Intangible assets (105,603) (106,702)
Undistributed reserves from group subsidiaries (187,218) (116,657)
Provisions and finance lease liabilities 73 1,360
Net deferred tax liabilities (316,693) (240,333)
20. Financial instruments
The Group has reviewed the financial assets and liabilities held at 30
September 2021. 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. During the year, 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 and Al Mokhtabar Company for Medical Labs 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 and Al Mokhtabar Company for Medical
Labs have not been requested by the government to pay or have voluntarily paid
any amounts into the external training fund. The board of Integrated
Diagnostics Holdings plc have concluded that an outflow of funds is not
probable.
Should a claim be brought against Al Borg Laboratory Company and Al Mokhtabar
Company for Medical Labs, an amount of between EGP 19.5m to EGP 49 m could
become payable, however this is not considered probable.
21. Dividends distributions
30 September 30 September 2020
2021
(Reviewed) (Unaudited)
Cash dividends on ordinary shares declared and paid: (Unreviewed)
US$ 0.0485 per share (2020), US$ 0.04675 per share (2019) (455,182) (441,855)
(455,182) (441,855)
22. Earnings per share
For the three months ended 30 September For the nine months ended 30 September
2021 2020 2021 2020
(Reviewed) (Unaudited) (Reviewed) (Unaudited)
(Unreviewed) (Unreviewed)
Profit attributed to owners of the parent 454,236 194,371 1,100,676 373,139
Weighted average number of ordinary shares in issue 600,000 600,000 600,000 600,000
Basic and diluted earnings per share 0.76 0.32 1.83 0.62
There is no dilutive effect from equity.
* At the Extraordinary General Meeting on 4 December 2020, the Company
decided to the following share split: The existing issued ordinary share
capital of 150,000,000 ordinary shares of US$1.00 each (the "Existing Ordinary
Shares") have been split into four new ordinary shares of US$0.25 each (the
"New Ordinary Shares"). The comparative figures have been updated.
23. Segment reporting
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.
The revenue split between the four regions is set out below.
Revenue by geographic location
For the three months ended Egypt region Sudan region Jordan region Nigeria region Total
30 September 2021 (Reviewed) 1,186,803 2,912 268,770 14,926 1,473,411
30 September 2020 (Unaudited)/ (Unreviewed) 601,775 8,316 100,477 9,722 720,290
Revenue by geographic location
For nine months period ended Egypt region Sudan region Jordan region Nigeria region Total
30 September 2021 (Reviewed) 3,121,862 12,179 592,288 40,252 3,766,581
30 September 2020 (Unaudited)/ (Unreviewed) 1,406,769 20,607 217,820 24,781 1,669,977
Net profit / (loss) by geographic location
For the three months ended Egypt region Sudan region Jordan region Nigeria region Total
30 September 2021 (Reviewed) 419,408 (3,922) 68,430 (4,228) 479,688
30 September 2020 (Unaudited)/ (Unreviewed) 184,124 (2,426) 23,453 (4,356) 200,795
Net profit / (loss) by geographic location
For nine month period ended Egypt region Sudan region Jordan region Nigeria region Total
30 September 2021 (Reviewed) 1,035,620 (18,723) 151,677 (20,676) 1,147,898
30 September 2020 (Unaudited)/ (Unreviewed) 363,328 (6,963) 38,515 (19,460) 375,420
Segment reporting (continued)
Revenue by type Net profit by type
For the three months ended 30 September For the three months ended 30 September
2021 2020 2021 2020
(Reviewed) (Unaudited) (Reviewed) (Unaudited)
(Unreviewed) (Unreviewed)
Pathology 1,447,526 703,380 494,667 206,918
Radiology 25,885 16,910 (14,979) (6,123)
1,473,411 720,290 479,688 200,795
Revenue by type Net profit by type
For the nine months ended 30 September For the nine months ended 30 September
2021 2020 2021 2020
(Reviewed) (Unaudited) (Reviewed) (Unaudited)
(Unreviewed) (Unreviewed)
Pathology* 3,695,510 1,629,137 1,184,241 401,782
Radiology 71,071 40,840 (36,343) (26,362)
3,766,581 1,669,977 1,147,898 375,420
Revenue by categories Revenue by categories
For the three months ended 30 September For the nine months ended 30 September
2021 2020 2021 2020
(Reviewed) (Unaudited) (Reviewed) (Unaudited)
(Unreviewed) (Unreviewed)
Walk-in 590,504 306,296 1,619,543 749,283
Corporate 882,907 413,994 2,147,038 920,694
1,473,411 720,290 3,766,581 1,669,977
* On 30 September 2021 includes Covid-19 related Pathology tests
amounted to EGP 1,531m (30 September 2020: EGP 187m).
Non-current assets by geographic location
Egypt region Sudan region Jordan region Nigeria region Total
30 September 2021 (Reviewed) 2,693,564 3,889 299,257 97,546 3,094,256
31 December 2020 (Audited) 2,409,797 24,132 263,767 113,941 2,811,637
Segment reporting (continued)
The operating segment profit measure reported to the CODM is EBITDA, as
follows:
For the three months period ended 30 September For the nine months period ended 30 September
2021 2020 2021 2020
(Reviewed) (Unaudited) (Reviewed) (Unaudited)
(Unreviewed) (Unreviewed)
Profit from operations 729,072 298,535 1,793,748 575,403
Property, plant and equipment depreciation 46,548 28,316 105,616 86,675
Amortisation of right of use 12,241 14,852 58,918 44,307
Amortisation of Intangible assets 1,953 1,373 5,002 4,045
EBITDA 789,814 343,076 1,963,284 710,430
Non-recurring expenses - - 29,034 -
Normalised EBITDA 789,814 343,076 1,992,318 710,430
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AnnouncementREG - Integrated Diag Hdgs - Final Results
AnnouncementREG - Integrated Diag Hdgs - Notice of Results
AnnouncementREG - Integrated Diag Hdgs - IDH INCREASES STAKE IN BIOLAB KSA
AnnouncementREG - Integrated Diag Hdgs - 3rd Quarter Results
Announcement