REG - Integrated Diag Hdgs - 3rd Quarter Results
14/11/2024 07:00
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RNS Number : 1674M Integrated Diagnostics Holdings PLC 14 November 2024
Integrated Diagnostics Holdings Plc
9M 2024 Results
Thursday, 14 November 2024
Integrated Diagnostics Holdings plc reports year-on-year revenue growth of 34%
in 9M 2024 with improving margins at all levels of profitability
(Cairo and London) - Integrated Diagnostics Holdings ("IDH," "the Group," or
"the Company"), a leading provider of diagnostic services with operations in
Egypt, Jordan, Nigeria, Sudan, and Saudi Arabia, announced today its unaudited
financial statements for the nine-month period ended 30 September 2024. IDH
reported revenue of EGP 4,107 million, an increase of 34% from the same period
of last year. Top-line growth came on the back of rising test and patient
volumes (up 9% and 6% year-on-year, respectively) coupled with higher average
revenue per test. Improved operational efficiencies saw top-line growth filter
down the income statement with margins improving across the board. More
specifically, in 9M 2024, IDH reported EBITDA of EGP 1,249 million, up 43%
year-on-year and with an associated margin of 30%. Similarly, IDH's
bottom-line expanded an impressive 87% year-on-year to reach EGP 724 million
in the nine months ended 30 September 2024, yielding a net profit margin (NPM)
of 18%, up five percentage points from 9M 2023.
On a three-month basis, revenue recorded EGP 1,609 million in Q3 2024,
representing a 36% increase from last year's third quarter. Meanwhile, IDH's
bottom-line expanded 38% year-on-year to EGP 244 million in Q3 2024, with a
NPM of 15% for the quarter.
Financial Results (IFRS)
EGP mn Q3 2023 Q3 2024 Change 9M 2023 9M 2024 Change
Revenue 1,182 1,609 36% 3,054 4,107 34%
Cost of Sales (702) (963) 37% (1,916) (2,536) 32%
Gross Profit 480 646 35% 1,138 1,571 38%
Gross Profit Margin 40.6% 40.2% -0.4 pts. 37.3% 38.3% 1.0 pts.
Operating Profit 312 459 47% 577 894 55%
EBITDA(1) 411 581 41% 873 1,249 43%
EBITDA Margin 34.8% 36.1% 1.3 pts. 28.6% 30.4% 1.8 pts.
Net Profit 176 244 38% 387 724 87%
Net Profit Margin 14.9% 15.2% 0.2 pts. 12.7% 17.6% 4.9 pts.
Cash Balance(2) 794 1,338 69% 794 1,338 69%
Note: Throughout the document, percentage changes are calculated using the
exact value (as per the Consolidated Financials) and not the corresponding
rounded figure.
Key Operational Indicators3
EGP mn 9M 2023 9M 2024 Change
Branches 594 6084 +14
Patients ('000) 6,248 6,598 6%
Revenue per Patient (EGP) 489 622 27%
Tests ('000) 26,468 28,839 9%
Revenue per Test 115 142 23%
Test per Patient 4.2 4.4 3%
1 EBITDA is calculated as operating profit plus depreciation and amortization.
2 Cash balance includes time deposits, treasury bills, current accounts, and
cash on hand.
3 Key operational indicators are calculated based on revenue for the periods
of EGP 4,107 million and EGP 3,054 million for 9M 2024 and 9M 2023,
respectively.
(4) IDH rolled out 30 new branches in Egypt and two in KSA, while closing 1
branch in Jordan over the past 12-month period. It is important to note that
due to the ongoing conflict in Sudan, only one of IDH's 18 branches in the
country is currently operating, leading to a net growth in its branch network
of 14 branches in 9M 2024.
Introduction
i. Financial Highlights
· IDH reported consolidated revenue of EGP 4,107 million in the nine
months ended 30 September 2024. This represents a year-on-year expansion of
34% dually driven by a 9% year-on-year increase in tests performed and a 23%
year-on-year increase in average revenue per test in the period. On a
quarterly basis, revenue also increased by a solid 36% year-on-year to reach
EGP 1,609 million in Q3 2024.
· Gross profit recorded EGP 1,571 million in 9M 2024, up 38%
year-on-year and yielding a gross profit margin of 38% versus 37% in the same
period of last year. Improved gross profitability reflected lower direct wages
and salary expenses which as a share of revenue declined to 18.8% in 9M 2024
from 19.2% in 9M 2023. On a three-month basis, gross profit recorded EGP 646
million up 35% year-on-year and with a margin of 40%, largely in line with
last year's third quarter gross margin.
· EBITDA5 recorded EGP 1,249 million for 9M 2024, an increase of 43%
from last year's figure. EBITDA margin recorded 30% for the nine-month period,
up from 29% in the same nine-month period of last year. Improved EBITDA
profitability reflects higher gross profitability for 9M 2024 coupled with
lower SG&A expenses and impairment loss on receivables booked in the
period with the first owing to improved operating efficiency and the latter
reflecting an improvement in economic conditions and stability across IDH's
markets since the start of the year. In Q3 2024, EBITDA came in at EGP 581
million, up 41% year-on-year with a margin of 36% versus 35% in the same three
months of last year.
· Net profit came in at EGP 724 million in 9M 2024, up an
impressive 87% from the corresponding period of last year. IDH's NPM for the
period improved five percentage points to record 18% in 9M 2024 versus 13%
last year. Bottom-line profitability for the period was boosted by FX gains of
EGP 265 million in the period (up 166% year-on-year) and a 15% year-on-year
decline in net interest expenses for 9M 2024. On a quarterly basis, net profit
recorded EGP 244 million in 9M 2024, up 38% from Q3 2023. NPM for the quarter
came in unchanged from last year at 15%.
5 EBITDA is calculated as operating profit plus depreciation and amortization.
ii. Operational Highlights
· As of 30 September 2024, IDH's branch network stood at 608
branches, representing a net year-on-year increase of 14 branches compared to
its network as at 30 September 2023. In the nine-month period, IDH inaugurated
30 new branches in Egypt and two new branches in its new market of Saudi
Arabia. Meanwhile, in Sudan the Company reopened one branch during Q3 2024
with the remaining 17 still indefinitely shut as the country civil conflict
continues. Finally, during the year, IDH saw the closure of one of its airport
branches in Jordan as demand for Covid-19 testing continued its decline.
· During 9M 2024, IDH conducted 28.8 million tests across its
geographies, a 9% year-on-year increase from the 26.5 million tests performed
in the same period of last year.
· The average revenue per test reached EGP 142 in 9M 2024, an
increase of 23% compared to the EGP 115 figure recorded in 9M 2023. This
increase largely reflected to strategic price increases rolled out by IDH to
address inflationary pressures in its primary markets, including Egypt and
Nigeria.
· IDH served 6.6 million patients in 9M 2024, up 6% year-on-year.
Meanwhile, in line with recent trends and reflecting the success of IDH's
value extraction strategy, the average number of tests per patient reached a
new record-high of 4.4 tests in 9M 2024, versus 4.2 tests in 9M 2023 and 3.7
in 9M 2022. The continued rise in average tests per patient underscores the
effectiveness of IDH's initiatives, including its loyalty program introduced
in FY 2021, which remains a key driver behind the steady rise in tests per
patient.
iii. Updates by Geography
· In Egypt (82.1% of total revenue in 9M 2024), IDH recorded
revenue of EGP 3,373 million, an increase of 35% from the EGP 2,500 million
figure recorded in the same period of last year. Top-line growth in IDH's
largest market was fuelled by a 10% year-on-year increase in tests performed
combined with a 23% year-on-year rise in average revenue per test as IDH
successfully increased prices to combat rising inflation in the country. On a
quarterly basis, IDH's Egyptian operations reported revenue of EGP 1,304
million in Q3 2024, up 32% year-on-year.
· IDH's Jordanian subsidiary, Biolab (16.1% of total revenues in 9M
2024), saw revenue reach JOD 10.6 million in 9M 2024, just 2% below last
year's top-line figure. Lower revenue came on the back of a 3% year-on-year
decline in net revenue per test due to stringent pricing regulations imposed
on Jordan's health sector. In EGP terms, operations in Jordan reported
revenues of EGP 662 million in 9M 2024 and EGP 276 million in Q3 2024,
representing year-on-year rises of 43% and 59%, respectively, due to the
translation effect from a weakened EGP.
· In Nigeria (1.5% of total revenues in 9M 2024), Echo-Lab reported
revenue of NGN 2,012 million, an increase of 38% from last year's figure.
Higher revenue came on the back of a 63% year-on-year increase in average
revenue per test as Echo-Lab continued to raise prices in step with inflation.
Rising inflation weighed on patients purchasing power with test and patient
volumes for the nine-month period declining 15% and 14%, respectively. In
EGP-terms, revenue in Nigeria decline 23% year-on-year to EGP 61 million in 9M
2024 reflecting a weaker Naira during the period. In Q3 2024, revenue in the
country increased marginally year-on-year to reach EGP 22 million.
· Biolab KSA, IDH's newest venture in Saudi Arabia (0.2% of total
revenues in 9M 2024), which began operations in Q1 2024 with one branch
opening in January and another in March, reported revenue of SAR 790 thousand
in 9M 2024. Since inception, Biolab KSA has performed 21 thousand tests with
average revenue per test standing at SAR 38. Operations in the new market are
continuing to ramp up smoothly with revenue in Q3 2024 standing at SAR 450
thousand, up 60% from revenue recorded in Q2 2024 as Biolab KSA continue to
serve a growing number of patients across its two operational branches. IDH
views the Saudi Arabian market as a key driver of future growth for the
company thanks to the market's large, growing and increasingly
health-conscious population which is looking for access to high-quality
diagnostic services from a currently highly fragmented market.
· In Q3 2024, IDH reopened one branch in Sudan after temporarily
shutting down all branches earlier this year. It is worth noting that the
remaining 17 branches remain closed indefinitely as the civil conflict in the
countries continues.
iv. Management Commentary
Commenting on the Group's performance, IDH Chief Executive Officer Dr. Hend
El-Sherbini said: "As we enter the final weeks of the year, I am happy to
report another set of strong financial and operational figures across our
growing footprint. Since the start of the year, we have been hard at work to
deliver on our strategic vision and priorities, and I am pleased with the
progress achieved up to this point particularly when considering the
unprecedented challenges faced across our footprint. This not only leaves us
on track to meet our FY 2024 targets, but also enables us to enter the new
year in a strong position to drive further, sustainable growth in 2025 and
beyond.
Before diving further into our results, it is worth noting that during the
third quarter we successfully completed our delisting from the Egyptian
Exchange (EGX). Today, we maintain our standard listing on the London Stock
Exchange (LSE) and the entire IDH team remains committed to meeting the
disclosure requirements of companies listed on the LSE. While our listing on
the EGX has helped us increase our local visibility in the market where we
generate the majority of our business, we are excited to build on the original
path we started on the LSE. We look forward to continuing to create value for
all our shareholders who place their trust in our business and story.
Turning to our results, in 9M 2024, we reported consolidated revenue of EGP
4.1 billion, up a solid 34% from the same nine months of last year. Further
down the income statement, we reported improving profitability at all levels
as our proactive efforts to boost operational efficiencies across every aspect
of our operations continued to bear fruit. Notably, we were able to reduce the
ramp-up costs of our new venture in Saudi Arabia, achieving a
two-percentage-point improvement, which signals the continued normalization of
our profitability.
On a regional basis, our Egyptian operations continued to lead the pack, with
revenue growing an impressive 35% year-on-year on the back of both rising
volumes and prices. Testament to the success of our growth strategies in the
market, we saw average test per patient reach another record-high of 4.3
tests, up from 3.8 tests per patient recorded just two years ago in 9M 2022.
On a similar note, our radiology venture, Al-Borg Scan, remained a key revenue
driver, expanding 53% year-on-year and contributing 5% to the country's
top-line. In light of the continued growth seen in the market, we have
remained committed to our expansion targets and have thus far inaugurated 30
new branches in our home market. This not only sees us further cement our
leadership in the local market but also enables us to tap into new pockets of
growth as Egypt's population continues to expand both within and outside
Greater Cairo.
In our second-largest market of Jordan, geopolitical instability continued to
impact patient volumes which declined 4% year-on-year largely due to lower
demand from medical tourists from around the region. Combined with a marginal
fall in average revenue per test during 9M 2024, this saw Jordan's top-line in
local currency slightly contract from the same period of last year. On the
other hand, our Nigerian operations saw year-on-year revenue growth in local
currency terms of 38% as we continued to raise prices in line with inflation.
A weakening Nigerian Naira over the last year has, however, weighed on our
results in Egyptian Pound (EGP) terms as well as on patient's purchasing power
with volumes declining versus the previous year.
In our newly launched Saudi Arabian market, we continued to ramp up operations
in line with our targets. During the third quarter of the year, our two
operational branches located in Riyadh served a growing number of patients and
generated SAR 451 thousand in revenue for the three-month period. This marks a
60% quarter-on-quarter expansion from revenue generated in the second quarter
of this year and takes total revenue since inception to SAR 790 thousand. Thus
far, our performance in the market has been encouraging and has reaffirmed our
conviction that the market offers important growth opportunities for IDH to
capture in the future. In the coming months, our priority remains delivering
exceptional quality and service while building our profile in the market. On
the latter front, since the launch of our first branch back in January, we
have adopted a comprehensive brand awareness and marketing strategy, which has
included outdoor advertising, social media campaigns, community event
sponsorships, and partnerships with local healthcare providers, and which has
thus far yielded the desired results.
As we wrap up the final month and a half of 2024, our strategy and priorities
remain unchanged. In our home market, since the floatation of the EGP back in
March we have seen a steady improvement in the macroeconomic environment with
international investors increasingly looking to capitalize on the market's
attractive fundamentals. We have also seen a steady decline in inflation which
we expect to help patients' purchasing power and in turn boost demand for our
services. As always, we are prioritizing our patients' wellbeing and remain
committed to ensuring our tests and services remain affordable to as many
people as possible by sharing the inflationary burden with them. Meanwhile, we
are particularly excited to continue ramping up our Saudi Arabian venture as
we work to capture the market's full potential. As we close out 2024 and kick
start 2025, I look forward to working with everyone at IDH to continue
providing exceptional care for our patients and incremental value for all
stakeholders.
While we remain mindful of the challenges ahead, in particular around currency
fluctuations and inflationary pressures in some of our key markets, our
proactive risk management strategies, including price adjustments and cost
control measures, have thus far successfully shielded the business and we are
confident in our ability to sustain our growth trajectory. In light of this,
we are reaffirming our guidance of around 30% revenue growth in FY 2024, with
an expected EBITDA margin of approximately 30% for the year, excluding
non-recurring expenses and results from our newly inaugurated venture in Saudi
Arabia.
- End -
Analyst and Investor Call Details
An analyst and investor call will be hosted at 12:00 pm (UK) | 14:00 (Egypt)
on Tuesday, 19 November 2024. You can learn more details and register for the
call by clicking on this link.
(https://s3.amazonaws.com/resources.inktankir.com/idh/IDH-3Q24-results-conference-call.pdf)
For more information about the event, please contact: amoataz@EFG-HERMES.com
(mailto:amoataz@EFG-HERMES.com)
About Integrated Diagnostics Holdings (IDH)
IDH is a leading diagnostics services provider in the Middle East and Africa
offering a broad range of clinical pathology and radiology tests to patients
in Egypt, Jordan, Nigeria, Sudan, and Saudi Arabia. The Group's core brands
include Al Borg, Al Borg Scan and Al Mokhtabar in Egypt, as well as Biolab
(Jordan), Echo-Lab (Nigeria), Ultralab and Al Mokhtabar Sudan (both in Sudan),
and Biolab KSA (Saudi Arabia). With over 40 years of experience, a long track
record for quality and safety has earned the Company a trusted reputation, as
well as internationally recognised accreditations for its portfolio of over
3,000 diagnostics tests. From its base of 601 branches as of 31 December 2023,
IDH served over 8.5 million patients and performed more than 36.1 million
tests in 2023. IDH will continue to add laboratories through a Hub, Spoke and
Spike business model that provides a scalable platform for efficient
expansion. Beyond organic growth, the Group targets expansion in appealing
markets, including acquisitions in the Middle Eastern, African, and East Asian
markets where its model is well-suited to capitalise on similar healthcare and
consumer trends and capture a significant share of fragmented markets. IDH has
been a Jersey-registered entity (i) whose shares are admitted to the equity
shares (transition) category (previously, the standard listing segment) of the
Official List of the UK Financial Conduct Authority and admitted to trading on
the main market for listed securities of the London Stock Exchange (ticker:
IDHC) since May 2015.
Shareholder Information
LSE: IDHC.L
Bloomberg: IDHC:LN
Listed on LSE: May 2015
Shares Outstanding: 581,326,272
Contact
Tarek Yehia
Investor Relations Director
T: +20 (0)2 3332 1126 | M: +20 10 6882 6678 | tarek.yehia@idhcorp.com
(mailto:tarek.yehia@idhcorp.com)
Forward-Looking Statements
These results for the quarter ended 30 September 2024 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
Consolidated Revenue
In line with trends seen throughout the year, in 9M 2024 the Company delivered
consolidated revenue of EGP 4,107 million, representing a 34% year-on-year
increase from last year's EGP 3,054 million figure. Top-line growth for the
period continued to be dual-driven as test volumes increased 9% year-on-year
to reach 28.8 million and average revenue per test continued to climb, rising
23% from last year to EGP 142. The continued rise in average revenues per test
comes on the back of the strategic price increases rolled out by IDH across
its Egyptian and Nigerian markets to proactively counter the ongoing
inflationary pressures in both countries.
Q3 2023 Q3 2024 Change 9M 2023 9M 2024 Change
Revenue (EGP mn) 1,182 1,609 36% 3,054 4,107 34%
Tests performed (mn) 10.0 11.0 10% 26.5 28.8 9%
Revenue per test (EGP) 118 146 24% 115 142 23%
Revenue Analysis: Contribution by Patient Segment
Contract Segment (65% of Group revenue in 9M 2024)
At IDH's contract segment, revenue recorded EGP 2,679 million, an increase of
38% from the previous year. Similar to trends at the consolidated level, test
volumes increased by 12% year-on-year to 24.2 million tests with average
revenue per test also rising 23% to EGP 111 in 9M 2024.
Average tests per patient climbed further in the nine-month period, coming in
at 4.6 tests per patient compared to 4.4 in 9M 2023 and 4.5 in 1H 2024. This
steady rise is supported by IDH's loyalty program, which was introduced back
in 2021, and which has, since then, successfully increased tests demanded by
single patients visiting IDH's branches.
Walk-in Segment (35% of Group revenue in 9M 2024)
Meanwhile, at IDH's walk-in segment, revenue reached EGP 1,428 million in 9M
2024, an increase of 28% from 9M 2023. During the nine-month period, IDH
recorded a 34% year-on-year rise in average revenue per walk-in test (EGP 306
in 9M 2024 versus EGP 228 in 9M 2023). This increase more than offset a 5%
y-o-y decline in test volumes, as more walk-in patients shifted to IDH's
contract segment and high inflation temporarily weighed on walk-in patients'
purchasing power across several of IDH's markets. The average tests per
patient at the segment recorded 3.5 in 9M 2024, largely in line with last
year's figure.
Revenue Analysis: Contribution by Patient Segment
Contract Segment (65% of Group revenue in 9M 2024)
At IDH's contract segment, revenue recorded EGP 2,679 million, an increase of
38% from the previous year. Similar to trends at the consolidated level, test
volumes increased by 12% year-on-year to 24.2 million tests with average
revenue per test also rising 23% to EGP 111 in 9M 2024.
Average tests per patient climbed further in the nine-month period, coming in
at 4.6 tests per patient compared to 4.4 in 9M 2023 and 4.5 in 1H 2024. This
steady rise is supported by IDH's loyalty program, which was introduced back
in 2021, and which has, since then, successfully increased tests demanded by
single patients visiting IDH's branches.
Walk-in Segment (35% of Group revenue in 9M 2024)
Meanwhile, at IDH's walk-in segment, revenue reached EGP 1,428 million in 9M
2024, an increase of 28% from 9M 2023. During the nine-month period, IDH
recorded a 34% year-on-year rise in average revenue per walk-in test (EGP 306
in 9M 2024 versus EGP 228 in 9M 2023). This increase more than offset a 5%
y-o-y decline in test volumes, as more walk-in patients shifted to IDH's
contract segment and high inflation temporarily weighed on walk-in patients'
purchasing power across several of IDH's markets. The average tests per
patient at the segment recorded 3.5 in 9M 2024, largely in line with last
year's figure.
Detailed Segment Performance Breakdown
Walk-in Segment Contract Segment Total
9M23 9M24 Change 9M23 9M24 Change 9M23 9M24 Change
Revenue (EGP mn) 1,116 1,428 28% 1,938 2,679 38% 3,054 4,107 34%
Patients ('000) 1,343 1,333 -1% 4,905 5,266 7% 6,248 6,598 6%
% of patients 21% 20% 79% 80%
Revenue per Patient (EGP) 831 1,072 29% 395 509 29% 489 622 27%
Tests ('000) 4,894 4,660 -5% 21,574 24,179 12% 26,468 28,839 9%
% of Tests 18% 16% 82% 84%
Revenue per Test (EGP) 228 306 34% 90 111 23% 115 142 23%
Test per Patient 3.6 3.5 -4% 4.4 4.6 4% 4.2 4.4 3%
Revenue Analysis: Contribution by Geography
Egypt (82.1% of Group revenue in 9M 2024)
IDH's home and largest market, Egypt, maintained its strong growth momentum,
delivering revenue of EGP 3,373 million, a growth of 35% versus the same nine
months of last year. Top-line growth was fuelled by a 10% year-on-year
increase in tests performed combined with a 23% year-on-year rise in average
revenue per test as IDH successfully increased prices to combat rising
inflation in the country.
On a quarterly basis, IDH's Egyptian operations reported revenue of EGP 1,304
million in Q3 2024, up 32% year-on-year.
Al-Borg Scan
IDH's rapidly growing radiology venture, Al-Borg Scan, saw revenue expand 53%
year-on-year in 9M 2024 to reach EGP 165 million. During the nine-month
period, IDH performed 191 thousand scans, 25% more than the previous year. In
parallel, average revenue per scan rose 23% year-on-year to record EGP 865.
Al-Borg Scan continues to operate seven branches strategically located across
Greater Cairo enabling it to position itself as the go-to provider in the
fragmented Egyptian radiology market.
House Calls
During 9M 2024, IDH's house call services continued its significant
contribution to the country's results, constituting 18% of total revenue in
Egypt. This contribution remains well above pre-pandemic averages, showcasing
the segment's growth potential and the effectiveness of the Group's
post-pandemic strategy.
Wayak
Finally, Wayak, which aims to leverage the Company's expanding patient
database to develop electronic medical records and provide personalized
services, achieved revenue of EGP 12 million, marking a 66% year-on-year
increase. This growth came on the back of 165 thousand fulfilled orders during
the period, up 37% year-on-year.
Detailed Egypt Performance Breakdown
9M 2023 9M 2024 Change
Revenue (EGP mn) 2,500 3,373 35%
Pathology Revenue (contribution to Egypt's results) 2,392 (95.7%) 3,208 (95.1%) 34%
Radiology Revenue (contribution to Egypt's results) 108 (4.3%) 165 (4.9%) 53%
Tests performed (mn) 24.4 26.8 10%
Revenue per test (mn) 103 126 23%
Jordan (16.1% of Group revenue in 9M 2024)
In IDH's second largest market, Jordan, Biolab saw revenue reach JOD 10.6
million in 9M 2024, just 2% below last year's top-line figure. Lower revenue
came on the back of a 3% year-on-year decline in net revenue per test due to
stringent pricing regulations imposed on Jordan's health sector. In EGP terms,
operations in Jordan reported revenues of EGP 662 million in 9M 2024
representing year-on-year rises of 43% due to the translation effect from a
weakened EGP.
On a quarterly basis, Biolab recorded JOD 4.0 million in Q3 2024, up 1%
year-on-year. In EGP terms, it recorded EGP 276 million, up 59% year-on-year.
Detailed Jordan Performance Breakdown
9M 2023 9M 2024 Change
Revenue (EGP mn) 464 662 43%
Revenue (JOD mn) 10.8 10.6 -2%
Tests performed (mn) 1.9 1.9 1%
Revenue per test (mn) 249.7 351.5 41%
Nigeria (1.5% of Group revenue in 9M 2024)
Echo-Lab, IDH's Nigerian subsidiary, reported revenue of NGN 2,012 million, an
increase of 38% from last year's figure. Higher revenue came on the back of a
63% year-on-year increase in average revenue per test as Echo-Lab continued to
raise prices in step with inflation. Rising inflation weighed on patients
purchasing power with test and patient volumes for the nine-month period
declining 15% and 14%, respectively. In EGP-terms, revenue in Nigeria decline
23% year-on-year to EGP 61 million in 9M 2024 reflecting a weaker Naira during
the period.
In Q3 2024, revenue in the country increased marginally year-on-year to reach
EGP 22 million.
Saudi Arabia (0.2% of Group revenue in 9M 2024)
Biolab KSA, IDH's newest venture in Saudi Arabia which began operations in Q1
2024 with one branch opening in January and another in March, reported revenue
of SAR 790 thousand in 9M 2024. Since inception, Biolab KSA has performed 21
thousand tests with average revenue per test standing at SAR 38.
Operations in the new market are continuing to ramp up smoothly with revenue
in Q3 2024 standing at SAR 451thousand, up 60% from revenue recorded in Q2
2024 as Biolab KSA continue to serve a growing number of patients across its
two operational branches.
Sudan
In Q3 2024, IDH reopened one branch in Sudan after temporarily shutting down
all branches earlier this year. It is worth noting that the remaining 17
branches remain closed indefinitely as the civil conflict in the countries
continues. During the first nine months of the year, IDH's Sudanese operations
generate revenue of EGP 1.6 million.
Jordan (16.1% of Group revenue in 9M 2024)
In IDH's second largest market, Jordan, Biolab saw revenue reach JOD 10.6
million in 9M 2024, just 2% below last year's top-line figure. Lower revenue
came on the back of a 3% year-on-year decline in net revenue per test due to
stringent pricing regulations imposed on Jordan's health sector. In EGP terms,
operations in Jordan reported revenues of EGP 662 million in 9M 2024
representing year-on-year rises of 43% due to the translation effect from a
weakened EGP.
On a quarterly basis, Biolab recorded JOD 4.0 million in Q3 2024, up 1%
year-on-year. In EGP terms, it recorded EGP 276 million, up 59% year-on-year.
Detailed Jordan Performance Breakdown
9M 2023 9M 2024 Change
Revenue (EGP mn) 464 662 43%
Revenue (JOD mn) 10.8 10.6 -2%
Tests performed (mn) 1.9 1.9 1%
Revenue per test (mn) 249.7 351.5 41%
Nigeria (1.5% of Group revenue in 9M 2024)
Echo-Lab, IDH's Nigerian subsidiary, reported revenue of NGN 2,012 million, an
increase of 38% from last year's figure. Higher revenue came on the back of a
63% year-on-year increase in average revenue per test as Echo-Lab continued to
raise prices in step with inflation. Rising inflation weighed on patients
purchasing power with test and patient volumes for the nine-month period
declining 15% and 14%, respectively. In EGP-terms, revenue in Nigeria decline
23% year-on-year to EGP 61 million in 9M 2024 reflecting a weaker Naira during
the period.
In Q3 2024, revenue in the country increased marginally year-on-year to reach
EGP 22 million.
Saudi Arabia (0.2% of Group revenue in 9M 2024)
Biolab KSA, IDH's newest venture in Saudi Arabia which began operations in Q1
2024 with one branch opening in January and another in March, reported revenue
of SAR 790 thousand in 9M 2024. Since inception, Biolab KSA has performed 21
thousand tests with average revenue per test standing at SAR 38.
Operations in the new market are continuing to ramp up smoothly with revenue
in Q3 2024 standing at SAR 451thousand, up 60% from revenue recorded in Q2
2024 as Biolab KSA continue to serve a growing number of patients across its
two operational branches.
Sudan
In Q3 2024, IDH reopened one branch in Sudan after temporarily shutting down
all branches earlier this year. It is worth noting that the remaining 17
branches remain closed indefinitely as the civil conflict in the countries
continues. During the first nine months of the year, IDH's Sudanese operations
generate revenue of EGP 1.6 million.
Revenue Contribution by Country
9M 2023 9M 2024 Change
Egypt Revenue (EGP mn) 2,500 3,373 35%
Pathology Revenue (EGP mn) 2,392 3,208 34%
Radiology Revenue (EGP mn) 108 165 53%
Egypt Contribution to IDH Revenue 81.9% 82.1%
Jordan Revenue (EGP mn) 464 662 43%
Jordan Revenues (JOD mn) 10.8 10.6 -2%
Jordan Revenue Contribution to IDH Revenue 15.2% 16.1%
Nigeria Revenue (EGP mn) 79 61 -23%
Nigeria Revenue (NGN mn) 1,457 2,012 38%
Nigeria Contribution to IDH Revenue 2.6% 1.5%
Saudi Arabia Revenue (EGP mn) - 10 -
Saudi Arabia Revenue (SAR k) - 790 -
Saudi Arabia Contribution to IDH Revenue - 0.2%
Sudan Revenue (EGP mn) 11 2 -85%
Sudan Revenue (SDG mn) 207 53 -75%
Sudan Contribution to IDH Revenue 0.4% 0.04%
Average Exchange Rate
9M 2023 9M 2024 Change
USD/EGP 30.7 44.1 44%
JOD/EGP 43.02 62.13 44%
NGN/EGP 0.05 0.03 -46%
SAR/EGP - 11.78
Patients Served and Tests Performed by Country
9M 2023 9M 2024 Change
Egypt Patients Served (mn) 5.8 6.2 7%
Egypt Tests Performed (mn) 24.4 26.8 10%
Jordan Patients Served (k) 286 274 -4%
Jordan Tests Performed (k) 1,858 1,883 1%
Nigeria Patients Served (k) 102 88 -14%
Nigeria Tests Performed (k) 204 173 -15%
Saudi Arabia Patients Served (k) - 2.2 -
Saudi Arabia Tests Performed (k) - 21.0 -
Total Patients Served (mn) 6.2 6.6 6%
Total Tests Performed (mn) 26.5 28.8 9%
Operational Branches by Country
30 September 2023 30 September 2024 Change
Egypt 537 567 +30
Jordan 27 26 -1
Nigeria 12 12 -
KSA - 2 +2
Sudan 18 1 -17
Total 594 608 +14
Cost of Goods Sold
IDH recorded cost of goods sold for the nine-month period of EGP 2,536
million, up 32% from the same time last year. As a percentage of consolidate
revenue, cost of goods sold accounted for 62%, just below last year's 63%
figure. The marginal year-on-year reduction comes on the back of lower direct
wages and salary expenses coupled with lower depreciation as a share of
revenue for the nine-month period.
Cost of Goods sold Breakdown as a Percentage of Revenue
9M 2023 9M 2024
Raw Materials 21.9% 21.9%
Wages & Salaries 19.2% 18.8%
Depreciation & Amortisation 8.7% 7.9%
Other Expenses 12.9% 13.2%
Total 62.7% 61.7%
Raw material costs (35% of consolidated cost of goods sold in 9M 2024) was the
largest contributor to cost of goods sold in 9M 2024, having increased 34%
year-on-year to reach EGP 898 million. As a share of revenue, raw materials
stood at 21.9% unchanged from last year's figure as the Company's proactive
inventory management and strong supplier relationships continued to shield its
cost base from inflationary pressures and a weaker EGP.
Wages and salaries, which include employee share of profits (30% share of
consolidated cost of goods sold in 9M 2024), remained the second largest
contributor to IDH's total cost of goods sold during the nine-month period,
recording EGP 770 million, a 31% year-on-year increase. However, as a
percentage of revenue, direct wages and salaries accounted for 18.8% in 9M
2024, down from 19.2% in 9M 2023. This decline reflects IDH's efforts since
the start of the year to optimize headcount.
Direct Wages and Salaries by Region
9M 2023 9M 2024 Change
Egypt (EGP mn) 445 562 26%
Jordan (EGP mn) 118 174 48%
Jordan (JOD mn) 2.8 2.8 0%
Nigeria (EGP mn) 22 16 -26%
Nigeria (NGN mn) 416 537 29%
Saudi Arabia (EGP mn) 0 17 0%
Saudi Arabia (SAR k) 0 185 N/A
Direct depreciation and amortization costs (13% of consolidated cost of goods
sold in 9M 2024) increased 22% year-on-year to EGP 324 million in 9M 2024. As
a percentage of revenue, direct depreciation and amortization declined to 7.9%
in 9M 2024 from 8.7% in the same period of last year. The rise in depreciation
expenses is attributed to the expansion of IDH's branch network, which saw the
addition of 30 new branches in Egypt and two in Saudi Arabia compared to this
time last year.
Other expenses (21% of consolidated cost of goods sold in 9M 2024) recorded
EGP 543 million in 9M 2024, a 37% year-on-year rise. Other expenses as a
percentage of revenues stood at 13.2% largely consistent with the same period
last year. The main components of other expenses during this time were repair
and maintenance fees, hospital contracts, cleaning costs, transportation, and
license expenses.
Gross Profit
IDH recorded a gross profit of EGP 1,571 million in 9M 2024, up 38%
year-on-year. Gross profit margin (GPM) also improved to 38%, reflecting a
decline in cost of goods sold as a percentage of revenue, lower depreciation
thanks to enhanced fixed asset utilization, decreased direct salary expenses
relative to revenue as a result of IDH's efforts to optimize headcount over
the past year.
Selling, General and Administrative (SG&A) Expenses
SG&A outlays for the nine-month period ended 30 September 2024 reached EGP
677 million, marking a 21% year-on-year increase. As a percentage of revenues,
SG&A accounted for 16%, down from 18% in 9M 2023. The rise in SG&A
expenses was mainly due to:
· Indirect wages and salaries reached EGP 280 million, a 35% increase
compared to the previous year. This rise was driven by annual wage increases
and the translation effect from Jordanian salaries as well as Saudi Arabian
salaries due to a weakened EGP. However, indirect salaries and wages as a
percentage of revenue remained stable at 6.8% owing to IDH's headcount
optimization strategy.
· Other G&A expenses rose by 18% year-on-year to EGP 219 million,
primarily due to increased accounting fees (which are quoted in foreign
currency) and traveling expenses.
· Advertising expenses increased by 47% year-on-year as the Company
invested in the ramp-up of its operations in Saudi Arabia, which kicked off in
Q1 2024. These expenses represented 34% of the Company's total advertising
costs for 9M 2024.
Selling, General and Administrative Expenses
EGP mn 9M 2023 9M 2024 Change
Wages & Salaries 207 280 35%
Accounting and Professional Fees 103 112 9%
Market - Advertisement expenses 77 113 47%
Other Expenses 98 122 24%
Depreciation & Amortisation 30 31 4%
Impairment loss on trade and other receivable 37 19 -48%
Travelling and transportation expenses 20 28 36%
Other (income)/expense (11) (27) 142%
Total 561 677 21%
EBITDA
In 9M 2024, IDH recorded an EBITDA of EGP 1,249 million, representing a
year-on-year increase of 43% supported by the gradual and consistent
normalization over the last twelve months. The EBITDA margin also improved to
30% in the nine-month period.
It is worth noting that EBITDA has been impacted by the recent expansion of
IDH's operations in Saudi Arabia and the EGX delisting fees of EGP 131
million. Adjusting for non-recurring items, IDH's EBITDA for the period would
stand at EGP 1,380 million, with an associated margin of 34%.
EBITDA by Country
In Egypt, IDH recorded an EBITDA of EGP 1,182 million in 9M 2024, 54% above
its EBITDA in 9M 2023, and with an associated margin of 35%, four percentage
points above last year's figure. Improved EBITDA profitability came on the
back of enhanced gross profitability in the market coupled with lower SG&A
expenses for the period, with notable declines versus last year in advertising
outlays and accounting fees.
In Jordan, Biolab reported an EBITDA of JOD 2.8 million for 9M 2024, just 2%
below last year's EBITDA, and with an associated margin of 27% versus 26% in
9M 2023. In EGP terms, EBITDA amounted to EGP 178 million, marking a 45%
year-on-year increase. The growth in EBITDA when converted to EGP reflects the
devaluation of the EGP over the past year.
In Nigeria, ongoing economic challenges and rising inflation have negatively
weighed on IDH's cost base, resulting in increased EBITDA losses for the
nine-month period. In 9M 2024, EBITDA losses amounted to NGN 573 million, down
from the NGN 294 million in EBITDA losses recorded in 9M 2023. When converted
to EGP, EBITDA losses were EGP 18 million in 9M 2024, unchanged from the
previous year.
In Saudi Arabia, EBITDA losses amounted to SAR 8 million (EGP 93 million) as
the business remains in its early ramp up phase.
Regional EBITDA in Local Currency
9M 2023 9M 2024 Change
Egypt EBITDA (EGP mn) 766 1,182 54%
Margin 30.7% 35.0% 4.3 pts.
Jordan EBITDA (JOD mn) 2.9 2.8 -2%
Margin 26.4% 26.5% 0.1 pts.
Nigeria EBITDA (NGN mn) (294) (573) 95%
Margin -20.2% -28.5% -8.3 pts.
Saudi Arabia EBITDA (SAR mn) - (8) -
Margin - - -
Sudan EBITDA (SDG mn) 20 6 -72%
Margin 9.6% 10.6 1.0 pts.
Interest Income / Expense
IDH's interest income came in at EGP 85 million in 9M 2024, increasing 83%
year-on-year. Higher interest income during the period reflects the rise in
interest rates imposed by the Central Bank of Egypt (CBE) during the past
twelve months.
Interest expense6 stood at EGP 143 million, up 25% year-on-year in 9M 2024.
The marginal increase in interest expenses were mainly driven by:
· Higher interest on lease liabilities related to IFRS 16 due to
the addition of new branches to IDH's network.
· Higher interest expenses following the CBE decision to increase
rates in February and March 2024. It is important to note that IDH's interest
bearing debt7 (excluding accrued interest) decreased to EGP 81 million as at
30 September 2024, from EGP 111 million at year-end 2023. In 2023, as part of
IDH's strategy to reduce foreign currency risk, the Company agreed with
General Electric (GE) for the early repayment of its contractual obligation of
USD 5.7 million. Half the settlement was settled utilising internal funds,
while the remaining amount (EGP 55 million) was financed through a bridge loan
by Ahly United Bank- Egypt (AUBE). Interest expenses related to the AUBE
facility recorded EGP 5.2 million in Q3 2024. The bridge loan was fully
settled in Q2 2023.
· Fast track payments worth EGP 6.5 million, which encompass
discounts provided for the rapid payment of receivables in 9M 2024.
Interest Expense Breakdown
EGP mn 9M 2023 9M 2024 Change
Interest on Lease Liabilities (IFRS 16) 69 83 20%
Interest Expenses on Leases 19 24 21%
Interest Expenses on Borrowings8 18 18 1%
Bank Charges 9 12 41%
Fast Track Payment - 7 -
Total Interest Expense 115 143 25%
Foreign Exchange
IDH booked a foreign exchange gain of EGP 265 million in 9M 2024, up from EGP
99 million during the same nine-month period of last year. The foreign
exchange gain was due to intercompany balances revaluation.
Taxation
Tax expenses, including income and deferred tax, came in at EGP 355 million in
9M 2024, up 80% year-on-year. IDH's effective tax rate slightly declined to
33% in 9M 2024. The decline in this latest period's effective tax rate is
primarily due to the increase in foreign exchange gain recorded during the
periods as a result of intercompany transactions. It is important to highlight
that there is no tax payable for IDH's two holding-level companies.
Taxation Breakdown by Region
EGP mn 9M 2023 9M 2024 Change
Egypt 184 332 81%
Jordan 13 23 83%
Nigeria (0.05) 0.01 -128%
KSA - - -
Sudan 0.5 0.0 -
Total Tax Expenses 197 355 80%
6 Interest expenses on medium-term loans include EGP 16.2 million related to
the Group's facility with Ahli United Bank Egypt (AUBE).
7 IDH's interest bearing debt as at 30 September 2024 included EGP 91 million
related to its facility with Ahli United Bank Egypt (AUBE) (outstanding loan
balances are excluding accrued interest for the period). It is worth noting
that in order to finance the early repayment settlement with General Electric,
the Company utilized a bridge loan facility of EGP 55 million. The facility
was withdrawn in Q1 2023 and settled in Q2 2023.
8 Interest expenses on medium-term loans include EGP 16.2 million related to
the Group's facility with Ahli United Bank Egypt (AUBE).
Net Profit
IDH recorded net profit of EGP 724 million in 9M 2024, an 87% year-on-year
increase boosted by the substantial increase in foreign exchange gain from
intercompany transactions. Meanwhile, the Company's NPM came in at 18%
compared to 13% in the comparable period of last year.
When accounting for contributions from foreign exchange gains during both
periods, IDH booked an adjusted net profit of EGP 459 million in 9M 2024,
growing 60% year-on-year from EGP 288 million during 9M 2023. The Company's
adjusted net profit margin stood at 11% during the period, up from 9% in 9M
2023.
Raw material costs (35% of consolidated cost of goods sold in 9M 2024) was the
largest contributor to cost of goods sold in 9M 2024, having increased 34%
year-on-year to reach EGP 898 million. As a share of revenue, raw materials
stood at 21.9% unchanged from last year's figure as the Company's proactive
inventory management and strong supplier relationships continued to shield its
cost base from inflationary pressures and a weaker EGP.
Wages and salaries, which include employee share of profits (30% share of
consolidated cost of goods sold in 9M 2024), remained the second largest
contributor to IDH's total cost of goods sold during the nine-month period,
recording EGP 770 million, a 31% year-on-year increase. However, as a
percentage of revenue, direct wages and salaries accounted for 18.8% in 9M
2024, down from 19.2% in 9M 2023. This decline reflects IDH's efforts since
the start of the year to optimize headcount.
Direct Wages and Salaries by Region
9M 2023 9M 2024 Change
Egypt (EGP mn) 445 562 26%
Jordan (EGP mn) 118 174 48%
Jordan (JOD mn) 2.8 2.8 0%
Nigeria (EGP mn) 22 16 -26%
Nigeria (NGN mn) 416 537 29%
Saudi Arabia (EGP mn) 0 17 0%
Saudi Arabia (SAR k) 0 185 N/A
Direct depreciation and amortization costs (13% of consolidated cost of goods
sold in 9M 2024) increased 22% year-on-year to EGP 324 million in 9M 2024. As
a percentage of revenue, direct depreciation and amortization declined to 7.9%
in 9M 2024 from 8.7% in the same period of last year. The rise in depreciation
expenses is attributed to the expansion of IDH's branch network, which saw the
addition of 30 new branches in Egypt and two in Saudi Arabia compared to this
time last year.
Other expenses (21% of consolidated cost of goods sold in 9M 2024) recorded
EGP 543 million in 9M 2024, a 37% year-on-year rise. Other expenses as a
percentage of revenues stood at 13.2% largely consistent with the same period
last year. The main components of other expenses during this time were repair
and maintenance fees, hospital contracts, cleaning costs, transportation, and
license expenses.
Gross Profit
IDH recorded a gross profit of EGP 1,571 million in 9M 2024, up 38%
year-on-year. Gross profit margin (GPM) also improved to 38%, reflecting a
decline in cost of goods sold as a percentage of revenue, lower depreciation
thanks to enhanced fixed asset utilization, decreased direct salary expenses
relative to revenue as a result of IDH's efforts to optimize headcount over
the past year.
Selling, General and Administrative (SG&A) Expenses
SG&A outlays for the nine-month period ended 30 September 2024 reached EGP
677 million, marking a 21% year-on-year increase. As a percentage of revenues,
SG&A accounted for 16%, down from 18% in 9M 2023. The rise in SG&A
expenses was mainly due to:
· Indirect wages and salaries reached EGP 280 million, a 35% increase
compared to the previous year. This rise was driven by annual wage increases
and the translation effect from Jordanian salaries as well as Saudi Arabian
salaries due to a weakened EGP. However, indirect salaries and wages as a
percentage of revenue remained stable at 6.8% owing to IDH's headcount
optimization strategy.
· Other G&A expenses rose by 18% year-on-year to EGP 219 million,
primarily due to increased accounting fees (which are quoted in foreign
currency) and traveling expenses.
· Advertising expenses increased by 47% year-on-year as the Company
invested in the ramp-up of its operations in Saudi Arabia, which kicked off in
Q1 2024. These expenses represented 34% of the Company's total advertising
costs for 9M 2024.
Selling, General and Administrative Expenses
EGP mn 9M 2023 9M 2024 Change
Wages & Salaries 207 280 35%
Accounting and Professional Fees 103 112 9%
Market - Advertisement expenses 77 113 47%
Other Expenses 98 122 24%
Depreciation & Amortisation 30 31 4%
Impairment loss on trade and other receivable 37 19 -48%
Travelling and transportation expenses 20 28 36%
Other (income)/expense (11) (27) 142%
Total 561 677 21%
EBITDA
In 9M 2024, IDH recorded an EBITDA of EGP 1,249 million, representing a
year-on-year increase of 43% supported by the gradual and consistent
normalization over the last twelve months. The EBITDA margin also improved to
30% in the nine-month period.
It is worth noting that EBITDA has been impacted by the recent expansion of
IDH's operations in Saudi Arabia and the EGX delisting fees of EGP 131
million. Adjusting for non-recurring items, IDH's EBITDA for the period would
stand at EGP 1,380 million, with an associated margin of 34%.
EBITDA by Country
In Egypt, IDH recorded an EBITDA of EGP 1,182 million in 9M 2024, 54% above
its EBITDA in 9M 2023, and with an associated margin of 35%, four percentage
points above last year's figure. Improved EBITDA profitability came on the
back of enhanced gross profitability in the market coupled with lower SG&A
expenses for the period, with notable declines versus last year in advertising
outlays and accounting fees.
In Jordan, Biolab reported an EBITDA of JOD 2.8 million for 9M 2024, just 2%
below last year's EBITDA, and with an associated margin of 27% versus 26% in
9M 2023. In EGP terms, EBITDA amounted to EGP 178 million, marking a 45%
year-on-year increase. The growth in EBITDA when converted to EGP reflects the
devaluation of the EGP over the past year.
In Nigeria, ongoing economic challenges and rising inflation have negatively
weighed on IDH's cost base, resulting in increased EBITDA losses for the
nine-month period. In 9M 2024, EBITDA losses amounted to NGN 573 million, down
from the NGN 294 million in EBITDA losses recorded in 9M 2023. When converted
to EGP, EBITDA losses were EGP 18 million in 9M 2024, unchanged from the
previous year.
In Saudi Arabia, EBITDA losses amounted to SAR 8 million (EGP 93 million) as
the business remains in its early ramp up phase.
Regional EBITDA in Local Currency
9M 2023 9M 2024 Change
Egypt EBITDA (EGP mn) 766 1,182 54%
Margin 30.7% 35.0% 4.3 pts.
Jordan EBITDA (JOD mn) 2.9 2.8 -2%
Margin 26.4% 26.5% 0.1 pts.
Nigeria EBITDA (NGN mn) (294) (573) 95%
Margin -20.2% -28.5% -8.3 pts.
Saudi Arabia EBITDA (SAR mn) - (8) -
Margin - - -
Sudan EBITDA (SDG mn) 20 6 -72%
Margin 9.6% 10.6 1.0 pts.
Interest Income / Expense
IDH's interest income came in at EGP 85 million in 9M 2024, increasing 83%
year-on-year. Higher interest income during the period reflects the rise in
interest rates imposed by the Central Bank of Egypt (CBE) during the past
twelve months.
Interest expense6 stood at EGP 143 million, up 25% year-on-year in 9M 2024.
The marginal increase in interest expenses were mainly driven by:
· Higher interest on lease liabilities related to IFRS 16 due to
the addition of new branches to IDH's network.
· Higher interest expenses following the CBE decision to increase
rates in February and March 2024. It is important to note that IDH's interest
bearing debt7 (excluding accrued interest) decreased to EGP 81 million as at
30 September 2024, from EGP 111 million at year-end 2023. In 2023, as part of
IDH's strategy to reduce foreign currency risk, the Company agreed with
General Electric (GE) for the early repayment of its contractual obligation of
USD 5.7 million. Half the settlement was settled utilising internal funds,
while the remaining amount (EGP 55 million) was financed through a bridge loan
by Ahly United Bank- Egypt (AUBE). Interest expenses related to the AUBE
facility recorded EGP 5.2 million in Q3 2024. The bridge loan was fully
settled in Q2 2023.
· Fast track payments worth EGP 6.5 million, which encompass
discounts provided for the rapid payment of receivables in 9M 2024.
Interest Expense Breakdown
EGP mn 9M 2023 9M 2024 Change
Interest on Lease Liabilities (IFRS 16) 69 83 20%
Interest Expenses on Leases 19 24 21%
Interest Expenses on Borrowings8 18 18 1%
Bank Charges 9 12 41%
Fast Track Payment - 7 -
Total Interest Expense 115 143 25%
Foreign Exchange
IDH booked a foreign exchange gain of EGP 265 million in 9M 2024, up from EGP
99 million during the same nine-month period of last year. The foreign
exchange gain was due to intercompany balances revaluation.
Taxation
Tax expenses, including income and deferred tax, came in at EGP 355 million in
9M 2024, up 80% year-on-year. IDH's effective tax rate slightly declined to
33% in 9M 2024. The decline in this latest period's effective tax rate is
primarily due to the increase in foreign exchange gain recorded during the
periods as a result of intercompany transactions. It is important to highlight
that there is no tax payable for IDH's two holding-level companies.
Taxation Breakdown by Region
EGP mn 9M 2023 9M 2024 Change
Egypt 184 332 81%
Jordan 13 23 83%
Nigeria (0.05) 0.01 -128%
KSA - - -
Sudan 0.5 0.0 -
Total Tax Expenses 197 355 80%
6 Interest expenses on medium-term loans include EGP 16.2 million related to
the Group's facility with Ahli United Bank Egypt (AUBE).
7 IDH's interest bearing debt as at 30 September 2024 included EGP 91 million
related to its facility with Ahli United Bank Egypt (AUBE) (outstanding loan
balances are excluding accrued interest for the period). It is worth noting
that in order to finance the early repayment settlement with General Electric,
the Company utilized a bridge loan facility of EGP 55 million. The facility
was withdrawn in Q1 2023 and settled in Q2 2023.
8 Interest expenses on medium-term loans include EGP 16.2 million related to
the Group's facility with Ahli United Bank Egypt (AUBE).
Net Profit
IDH recorded net profit of EGP 724 million in 9M 2024, an 87% year-on-year
increase boosted by the substantial increase in foreign exchange gain from
intercompany transactions. Meanwhile, the Company's NPM came in at 18%
compared to 13% in the comparable period of last year.
When accounting for contributions from foreign exchange gains during both
periods, IDH booked an adjusted net profit of EGP 459 million in 9M 2024,
growing 60% year-on-year from EGP 288 million during 9M 2023. The Company's
adjusted net profit margin stood at 11% during the period, up from 9% in 9M
2023.
ii. Balance Sheet Analysis
Assets
Property, Plant and Equipment
IDH recorded property, plant and equipment (PPE) cost of EGP 2,982 million as
of 30 September 2024, up from EGP 2,554 million at the end of 2023. The
increase in CAPEX as a share of revenue in the nine-month period is largely
due to the addition of new branches, renovation of existing branches,
improvements of IDH's headquarters (constituting 3.1% of revenues), in
addition to the translation effect related to Jordan, Nigeria, Saudi Arabia,
and Sudan (comprising 7.2% of revenues).
Total CAPEX Addition Breakdown - 9M 2024
EGP mn 9M 2024 % of Revenue
Leasehold Improvements/new branches 104.9 2.6%
Al-Borg Scan Expansion 22.8 0.6%
Total CAPEX Additions Excluding Translation 127.7 3.1%
Translation Effect 296.0 7.2%
Total CAPEX Additions 423.7 10.3%
Trade Receivables and Provisions
Net trade receivables at 30 September 2024 amounted to EGP 806 million, up 42%
year-to-date. Meanwhile, IDH's net receivables' Days on Hand (DoH) booked 149
days, up from 134 days at the end of 2023.
Provision for doubtful accounts in 9M 2024 was recorded at EGP 19 million, a
decrease from EGP 37 million booked in 9M 2023. This reduction is attributable
to an improvement in overall economic conditions, increased stability, and
reduced inflation across IDH's markets of operation which have supported a
noticeable increase in collected amounts during the current accounting period.
Inventory
At 30 September 2024, IDH booked an inventory balance of EGP 400 million, up
7% compared to the end of 2023. Meanwhile, Days Inventory Outstanding (DIO)
decreased to 123 days, from 133 days at 31 December 2023. With improvements in
the economic situation and a continued positive outlook, the company has been
reducing DIO as the previous stockpiling is no longer necessary.
Cash and Net Debt
Cash balances and financial assets at amortised cost at 30 September 2024
reached EGP 1,338 million, up from EGP 835 million at year-end 2023.
EGP mn 31 Dec 2023 30 September 2024
Treasury Bills 133 95
Time Deposits 289 770
Current Accounts 391 447
Cash on Hand 21 26
Total 835 1,338
IDH's net debt9 balance came in at EGP 74 million as of the end of 9M 2024,
down from EGP 361 million as at year-end 2023.
EGP mn 31 December 2023 30 September 2024
Cash and Financial Assets at Amortised Cost1(0) 835 1,338
Lease Liabilities Property* (828) (917)
Total Financial Liabilities (Short-term and Long-term) (240) (257)
Interest Bearing Debt ("Medium Term Loans") (128) (90)
Net Debt Balance (361) (74)
Note: Interest Bearing Debt includes accrued interest for each period.
*If excluding Lease Liabilities Property (IFRS 16), IDH would have recorded
net cash of EGP 991 million.
9 The net debt balance is calculated as cash and cash equivalent balances
including financial assets at amortised cost, less interest-bearing debt
(medium term loans), finance lease and Right-of-use liabilities.
1(0) As outlined in Note 9 of IDH's Consolidated Financial Statements, some
term deposits and treasury bills cannot be accessed for over three months and
are therefore not treated as cash. Term deposits which cannot be accessed for
over three months stood at EGP 42 million at 30 September 2024 (2023: EGP 49
million). Meanwhile, treasury bills not accessible for over three months stood
at EGP 70million (2023: EGP 112 million).
Lease liabilities and financial obligations on property recorded EGP 917
million at 30 September 2024, with the rise versus year-end 2023 attributable
to the translation effect of JOD-denominated liabilities in Jordan following
the devaluation of the EGP in early 2024.
Meanwhile, financial obligations related to equipment stood at EGP 257 million
as at 30 September 2024, with the increase reflecting the increases in
USD-linked contracts with equipment suppliers following the devaluation of the
EGP.
Finally, interest bearing debt1(1) (excluding accrued interest) reached EGP 81
million at the end of Q3 2024, down from EGP 111 million at year-end 2023.
Liabilities
Trade Payable1(2)
Trade payable as of 30 September 2024 stood at EGP 321 million, up from EGP
272 million at the end of 2023. Meanwhile, Days Payable Outstanding (DPO) came
in at 94 days, down from 113 days at 31 December 2023.
Put Option
The put option current liability stood at EGP 447 million as at 30 September
2024, up from EGP 314 million at 31 December 2023, and is related to both:
· The option granted in 2011 to Dr. Amid, Biolab's CEO, to sell his
stake (40%) to IDH. The put option is in the money and exercisable since 2016
and is calculated as seven times Biolab's LTM EBITDA minus net debt.
· The option granted in 2018 to the International Finance
Corporation from Dynasty - shareholders in Echo Lab - and it is exercisable in
2024. The put option is calculated based on fair market value (FMV).
The put option non-current liability amounted to EGP 26 million at the end of
9M 2024, down from EGP 43 million at 31 December 2023, and is related to the
option granted in 2022 to Izhoor, IDH, and Biolab as part of their JV
agreement in Saudi Arabia. The option allows the non-defaulting party, at its
sole and absolute discretion, to serve one or more written notices to the
defaulting party. The notices enable the non-defaulting party to buy the
defaulting party's shares at the fair price, sell its shares to the defaulting
party at the fair price, or request the dissolution and liquidation of the JV
company. It is important to note that the put option, which grants these
rights to the non-defaulting party, does not have a specified expiration date.
1(1) IDH's interest bearing debt as at 30 September 2024 included EGP 71
million to its facility with Ahli United Bank Egypt (AUBE) (outstanding loan
balances are excluding accrued interest for the period). It is worth noting
that in order to finance the early repayment settlement with General Electric,
the Company utilized a bridge loan facility of EGP 55 million. The facility
was withdrawn in Q1 2023 and settled in Q2 2023.
1(2) Accounts payable is calculated based on average payables at the end of
each period.
Trade Receivables and Provisions
Net trade receivables at 30 September 2024 amounted to EGP 806 million, up 42%
year-to-date. Meanwhile, IDH's net receivables' Days on Hand (DoH) booked 149
days, up from 134 days at the end of 2023.
Provision for doubtful accounts in 9M 2024 was recorded at EGP 19 million, a
decrease from EGP 37 million booked in 9M 2023. This reduction is attributable
to an improvement in overall economic conditions, increased stability, and
reduced inflation across IDH's markets of operation which have supported a
noticeable increase in collected amounts during the current accounting period.
Inventory
At 30 September 2024, IDH booked an inventory balance of EGP 400 million, up
7% compared to the end of 2023. Meanwhile, Days Inventory Outstanding (DIO)
decreased to 123 days, from 133 days at 31 December 2023. With improvements in
the economic situation and a continued positive outlook, the company has been
reducing DIO as the previous stockpiling is no longer necessary.
Cash and Net Debt
Cash balances and financial assets at amortised cost at 30 September 2024
reached EGP 1,338 million, up from EGP 835 million at year-end 2023.
EGP mn 31 Dec 2023 30 September 2024
Treasury Bills 133 95
Time Deposits 289 770
Current Accounts 391 447
Cash on Hand 21 26
Total 835 1,338
IDH's net debt9 balance came in at EGP 74 million as of the end of 9M 2024,
down from EGP 361 million as at year-end 2023.
EGP mn 31 December 2023 30 September 2024
Cash and Financial Assets at Amortised Cost1(0) 835 1,338
Lease Liabilities Property* (828) (917)
Total Financial Liabilities (Short-term and Long-term) (240) (257)
Interest Bearing Debt ("Medium Term Loans") (128) (90)
Net Debt Balance (361) (74)
Note: Interest Bearing Debt includes accrued interest for each period.
*If excluding Lease Liabilities Property (IFRS 16), IDH would have recorded
net cash of EGP 991 million.
9 The net debt balance is calculated as cash and cash equivalent balances
including financial assets at amortised cost, less interest-bearing debt
(medium term loans), finance lease and Right-of-use liabilities.
1(0) As outlined in Note 9 of IDH's Consolidated Financial Statements, some
term deposits and treasury bills cannot be accessed for over three months and
are therefore not treated as cash. Term deposits which cannot be accessed for
over three months stood at EGP 42 million at 30 September 2024 (2023: EGP 49
million). Meanwhile, treasury bills not accessible for over three months stood
at EGP 70million (2023: EGP 112 million).
Lease liabilities and financial obligations on property recorded EGP 917
million at 30 September 2024, with the rise versus year-end 2023 attributable
to the translation effect of JOD-denominated liabilities in Jordan following
the devaluation of the EGP in early 2024.
Meanwhile, financial obligations related to equipment stood at EGP 257 million
as at 30 September 2024, with the increase reflecting the increases in
USD-linked contracts with equipment suppliers following the devaluation of the
EGP.
Finally, interest bearing debt1(1) (excluding accrued interest) reached EGP 81
million at the end of Q3 2024, down from EGP 111 million at year-end 2023.
Liabilities
Trade Payable1(2)
Trade payable as of 30 September 2024 stood at EGP 321 million, up from EGP
272 million at the end of 2023. Meanwhile, Days Payable Outstanding (DPO) came
in at 94 days, down from 113 days at 31 December 2023.
Put Option
The put option current liability stood at EGP 447 million as at 30 September
2024, up from EGP 314 million at 31 December 2023, and is related to both:
· The option granted in 2011 to Dr. Amid, Biolab's CEO, to sell his
stake (40%) to IDH. The put option is in the money and exercisable since 2016
and is calculated as seven times Biolab's LTM EBITDA minus net debt.
· The option granted in 2018 to the International Finance
Corporation from Dynasty - shareholders in Echo Lab - and it is exercisable in
2024. The put option is calculated based on fair market value (FMV).
The put option non-current liability amounted to EGP 26 million at the end of
9M 2024, down from EGP 43 million at 31 December 2023, and is related to the
option granted in 2022 to Izhoor, IDH, and Biolab as part of their JV
agreement in Saudi Arabia. The option allows the non-defaulting party, at its
sole and absolute discretion, to serve one or more written notices to the
defaulting party. The notices enable the non-defaulting party to buy the
defaulting party's shares at the fair price, sell its shares to the defaulting
party at the fair price, or request the dissolution and liquidation of the JV
company. It is important to note that the put option, which grants these
rights to the non-defaulting party, does not have a specified expiration date.
1(1) IDH's interest bearing debt as at 30 September 2024 included EGP 71
million to its facility with Ahli United Bank Egypt (AUBE) (outstanding loan
balances are excluding accrued interest for the period). It is worth noting
that in order to finance the early repayment settlement with General Electric,
the Company utilized a bridge loan facility of EGP 55 million. The facility
was withdrawn in Q1 2023 and settled in Q2 2023.
1(2) Accounts payable is calculated based on average payables at the end of
each period.
- End -
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. END QRTEAEFDFDFLFAARecent news on Integrated Diagnostics Holdings
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