REG - Integrated Diag Hdgs - Half-year Report
31/08/2023 07:00
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RNS Number : 8704K Integrated Diagnostics Holdings PLC 31 August 2023
Integrated Diagnostics Holdings Plc
1H 2023 Results
Thursday, 31 August 2023
Integrated Diagnostics Holdings Plc delivers robust 40% year-on-year
conventional revenue growth in 1H 2023
(Cairo and London) - Integrated Diagnostics Holdings ("IDH," "the Group," or
"the Company"), a leading provider of diagnostic services with operations in
Egypt, Jordan, Nigeria, Sudan, and soon launching in Saudi Arabia, announced
today its reviewed financial statements for the six-month period ended 30 June
2023, booking revenues of EGP 1,872 million, down 4% from the figure recorded
during the same period of 2022 when Covid-19-related testing(1) had
significantly boosted results. Excluding(2) the contributions made by IDH's
Covid-19-related offering in 1H 2022, the Company's conventional(3) business
recorded robust year-on-year growth of 40%, continuing to showcase the
underlying health of IDH's business.
The strong performance delivered by the Company's conventional segment was
driven by 24% and 13% year-on-year increases in average revenue per
conventional test and conventional test volumes, respectively. IDH posted a
net profit of EGP 211 million in 1H 2023, down 52% year-on-year due to
significant contributions from Covid-19-related testing (31% of 1H 2022
revenues) in the same period of the previous year.
On a quarterly basis, IDH recorded total revenues of EGP 957 million in Q2
2023, expanding 24% year-on-year and 5% quarter-on-quarter. Similarly, the
Company reported a solid 37% year-on-year conventional revenue expansion in Q2
2023. Net profit for the quarter stood at EGP 43 million, 66% below last
year's figure.
Financial Results (IFRS)(4)
EGP mn 1H 2022 1H 2023 Change
Revenues 1,954 1,872 -4%
Conventional Revenues 1,339 1,872 40%
Covid-19-related Revenues 615 - -
Cost of Sales (1,122) (1,214) 8%
Gross Profit 832 658 -21%
Gross Profit Margin 43% 35% -7 pts
Operating Profit 562 265 -53%
EBITDA(5) 709 462 -35%
EBITDA Margin 36% 25% -12 pts
Net Profit 439 211 -52%
Net Profit Margin 22% 11% -11 pts
Cash Balance 816 666 -18%
Note (1): Throughout the document, percentage changes between reporting
periods are calculated using the exact value (as per the Consolidated
Financials) and not the corresponding rounded figure.
Key Operational Indicators(6)
1H 2022 1H 2023 Change
Branches 538 588 50
Patients ('000) 4,541 3,917 -14%
Revenue per Patient (EGP) 430 478 11%
Tests ('000) 16,004 16,465 3%
Conventional Tests ('000) 14,547 16,465 13%
Covid-19-related Tests ('000) 1,458 - -
Revenue per Test 122 114 -7%
Revenue per Conventional Test (EGP) 92 114 24%
Revenue per Covid-19-related Test (EGP) 422 - -
Test per Patient 3.5 4.2 19%
( )
(1)Covid-19-related tests include both core Covid-19 tests (Polymerase Chain
Reaction (PCR), Antigen, and Antibody) as well as other routine inflammatory
and clotting markers including, but not limited to, Complete Blood Picture,
Erythrocyte Sedimentation Rate (ESR), D-Dimer, Ferritin and C-reactive Protein
(CRP), which the Company opted to include in the classification as "other
Covid-19-related tests" due to the strong rise in demand for these tests
witnessed following the outbreak of Covid-19.
(2)Starting Q1 2023, IDH has opted to stop reporting on its Covid-19-related
revenues and test volumes due to their material insignificance to the
consolidated figures and to Egypt's and Jordan's country-level results for the
quarter. In the comparable period of last year (1H 2022) IDH had recorded EGP
615 million in Covid-19-related revenues and had performed 1.4 million
Covid-19-related tests.
(3)Conventional (non-Covid) tests include all of the Group's test offering
with the exception of its Covid-19-related test offering outlined above.
(4)Important notice: In the Company's earnings releases covering the five
quarters starting from Q4 2021 and ending Q4 2022, management had opted to
present Alternative Performance Measures (APM) alongside IFRS-compliant
figures as outlined on page 2 of the Company's FY 2022 Earnings Release.
Starting in Q1 2023, due to the material insignificance of Covid-19-related
revenues on consolidated results, the Company will only report IFRS-compliant
figures. It is worth noting that revenues for the comparable period (Q1 2022),
include concession fees amounting to EGP 63 million paid by Biolab as part of
its agreement with QAIA and Aqaba Port.
(5)EBITDA is calculated as operating profit plus depreciation and
amortization.
(6)Key operational indicators are calculated based on revenues for the periods
of EGP 1,872 million and EGP 1,954 million for 1H 2023 and 1H 2022,
respectively.
Important notice: In the Company's earnings releases covering the five
quarters starting from Q4 2021 and ending Q4 2022, management had opted to
present Alternative Performance Measures (APM) alongside IFRS-compliant
figures as outlined on page 2 of the Company's FY 2022 Earnings Release.
Starting in Q1 2023, due to the material insignificance of Covid-19-related
revenues on consolidated results, the Company will only report IFRS-compliant
figures. It is worth noting that revenues for the comparable period (1H 2022)
include concession fees amounting to EGP 63 million paid by Biolab as part of
its agreement with QAIA and Aqaba Port.
Introduction
i. Financial Highlights
· Conventional(7) revenue booked EGP 1,872 million in the first half of
2023, a year-on-year increase of 40%. Conventional revenue growth was dual
driven as conventional test volumes and average revenue per conventional test
increased 13% and 24%, respectively, with the translation effect from a weaker
EGP contributing just 8% to growth for the period. On a quarterly basis, IDH
posted conventional revenues of EGP 957 million during Q2 2023, a 37%
year-on-year expansion driven by a 14% rise in test volumes and a 20% increase
in average revenue per test.
· Total revenues stood at EGP 1,872 million during 1H 2023, a 4%
year-on-year decline from 1H 2022's high base when Covid-19-related(8) testing
had made a significant EGP 615 million contribution(9) to the total revenue
figure. On a three-month basis, the Company recorded total revenues of EGP 957
million, representing a 24% year-on-year increase. It is important to note
that the Company recorded its strongest monthly revenue figures in the months
of May and June (when controlling for the Eid-related slowdown) signalling an
acceleration which it expects to carry into the second half of the year.
· Gross Profit during 1H 2023 recorded EGP 658 million, a 21%
year-on-year decrease versus the comparable period when gross profitability
had been boosted by IDH's Covid-19-related test offering. Gross profit margin
(GPM) recorded 35% in 1H 2023 versus 43% in 1H 2022. Lower gross profitability
in the first half of the year primarily reflected an increase in direct
salaries and wages resulting from new staff hires and higher than usual salary
increases for existing staff to compensate for increased inflation rates as
well as higher depreciation related to the roll out of new branches. On a
quarterly basis, gross profit booked EGP 333 million, increasing 11%
year-on-year. GPM recorded 35% in Q2 2023, down from the 39% recorded in Q2
2022 and unchanged compared to the figure reported in Q1 2023.
· EBITDA(10) came in at EGP 462 million during 1H 2023, declining 35%
year-on-year yielding an associated margin of 25%. Declining EBITDA
profitability for the period was mainly driven by the aforementioned decreased
gross profitability coupled with increased SG&A outlays including higher
salary, auditing, and consulting expenses, with the latter two reflecting the
impact of a weaker EGP, being USD-based. On a three-month basis, EBITDA
remained relatively stable at EGP 234 million in Q2 2023, with an associated
margin of 24%.
· Net Profit for the six-month period ended 30 June 2023 stood at EGP
211 million, down 52% year-on-year and with a net profit margin (NPM) of 11%.
On a quarterly basis, net profit booked EGP 43 million in Q2 2023, 66% below
the figure reported in Q2 2022. It is important to note that IDH's net profit
for 1H 2023 and Q2 2023 included a non-recurring expense of EGP 12 million
related to contributions owed to the Egyptian government vocational training
fund for the previous five-year period.
· In light of the ongoing uncertainty and lack of foreign currency
availability in Egypt, the Company will not be distributing a dividend to
shareholders in respect of the financial year ended 31 December 2022. The
Company remains committed to its long-term dividend policy that sees it return
to shareholders the maximum amount of excess cash after taking careful account
of the cash needed to support operations and expansions.
(7)Conventional (non-Covid) tests include IDH's full service offering
excluding the Covid-19 related tests outlined below.
(8)Covid-19-related tests include both core Covid-19 tests (Polymerase Chain
Reaction (PCR), Antigen, and Antibody) as well as other routine inflammatory
and clotting markers including, but not limited to, Complete Blood Picture,
Erythrocyte Sedimentation Rate (ESR), D-Dimer, Ferritin and C-reactive Protein
(CRP), which the Company opted to include in the classification as "other
Covid-19-related tests" due to the strong rise in demand for these tests
witnessed following the outbreak of Covid-19.
(9)Covid-19-related revenue in 1H 2022 includes EGP 63 million in concession
fees paid by Biolab to Queen Alia International Airport and Aqaba Port as part
of its revenue sharing agreement.
(10)EBITDA is calculated as operating profit plus depreciation and
amortization.
ii. Operational Highlights
· IDH's branch network stood at 588 branches as of 30 June 2023,
increasing by 50 branches compared to the same time last year. During Q2 2023,
IDH inaugurated 12 additional branches, 11 in its home market of Egypt and one
in Jordan.
· Conventional test volumes recorded 16.5 million tests in 1H 2023,
increasing 13% year-on-year. Total test volumes increased 3% year-on-year
versus last year's 16.0 million tests which had included 1.4 million
Covid-19-related tests.
· Average revenue per conventional test reached EGP 114 during 1H 2023,
a 24% year-on-year increase (out of which translation effect accounted for
8%). Consolidated average revenue per test decreased 7% year-on-year to EGP
114 from EGP 122 in 1H 2022 when the figure was boosted by contributions from
the Group's Covid-19-related offering.
· Total patients served by the Company during 1H 2023 came in at 3.9
million, down 14% from 1H 2022's high base. Meanwhile, following a
post-pandemic normalisation, average test per patient increased to 4.2 tests
in 1H 2023 from 3.5 tests in 1H 2022. This stands well above IDH's historical
average of 3.9 tests per patient.
· In Egypt (80.9% of total revenues) conventional business climbed 33%
year-on-year to record revenues of EGP 1,514 million during 1H 2023.
Conventional revenues were driven by a 14% year-on-year increase in test
volumes, which stood at 15.1 million tests, as well as a 16% year-on-year rise
in average revenue per test to EGP 100. Meanwhile, consolidated revenues in
Egypt remained largely unchanged, recording EGP 1,514 million for the
six-month period.
· In Jordan (15.5% of total revenues), Biolab continued its impressive
growth trend at its conventional business, posting year-on-year revenue growth
in JOD terms of 9% primarily supported by an 8% rise in conventional tests
performed versus last year. In EGP terms, conventional revenue grew 88%
year-on-year to reach EGP 290 million in 1H 2023, mainly reflecting the
translation effect resulting from a weakening EGP. Total revenues in EGP terms
declined 25% year-on-year versus 1H 2022 when Biolab's top-line had been
boosted by a large contribution from Covid-19-related testing.
· In Nigeria (3.1% of total revenues), Echo-Lab continued to witness
sustained growth in line with recent trends, as revenue in NGN terms expanded
19% year-on-year (EGP revenue growth was 73%).
· In Sudan (0.5% of total revenues), IDH's subsidiaries recorded a 3%
year-on-year revenue decline in EGP terms and 32% drop in SDG terms reflecting
the temporary closure of 16 out of 18 branches starting in April following the
start of the ongoing conflict in the country. As of 30 June 2023, IDH only had
two operational branches in Sudan, in Madani and Port Sudan.
iii. Management Commentary
Commenting on the Group's performance, IDH Chief Executive Officer Dr. Hend
El-Sherbini said: "I am delighted to report that IDH continued to build on a
strong start to the year to deliver yet another set of impressive operational
and financial results at our conventional business supported by solid
performances across our Egyptian, Jordanian and Nigerian subsidiaries. The
robust 40% year-on-year growth in conventional revenues for the six-month
period came despite a difficult macroeconomic environment faced across our
markets of operation as accelerating inflation, rising interest rates and
weakening local currencies continued to impact our patients' purchasing power
and our cost base. In parallel, during the second quarter of the year, patient
volumes were affected by the expected slowdown associated with the holy month
of Ramadan and Eid vacations which weighed on traffic in April and the last
week of June. Despite this, in the first six months of 2023 we performed 13%
more conventional tests than in the comparable period of 2022, supported by an
expanded branch network and an enhanced service offering. In parallel, we also
recorded a 24% year-on-year rise in average revenue per conventional test
reflecting the annual price hikes introduced at the start of 2023. On this
front, it is important to highlight that our price increases since the start
of the year have lagged behind inflation, a strategic decision taken to help
patients during the ongoing difficult times and build long-term loyalty in the
process. It is also worth mentioning that total revenues for the first half of
2023 declined just 4% year-on-year, a remarkable result when considering the
large contribution made by our Covid-19-related test offering during the first
part of last year.
Looking at our markets in more detail, in both Egypt and Jordan we continued
to observe growing demand for our conventional service offering with test
volumes expanding 14% and 8% versus 1H 2022, respectively. Combined with
rising average revenue per test, this translated in a robust 33% year-on-year
conventional revenue expansion in Egypt and a 9% year-on-year conventional
revenue growth in JOD terms in Jordan. Results like these continue to showcase
both countries' underlying growth potential and further validate the
effectiveness of our post-pandemic growth strategies. We were particularly
happy to note that across both markets during the months of May and June (once
adjusted for the Eid-related slowdown) we recorded the highest monthly revenue
figures since the start of 2023. The accelerating growth, which we observed
continue into July and August, displays the resilience of demand for our
service offering despite the continued inflationary pressures impacting our
patients and leaves us in a strong position heading into the second half of
the year. During the six-month period, we continued to expand our branch
network rolling out 31 new branches in Egypt and 4 new branches in Jordan,
further cementing our leadership position in each market. In line with recent
trends, we recorded robust contributions to revenue in Egypt made by our house
call service, which remains well-above its average pre-pandemic contribution.
In Egypt, we also remained committed to ramping up our radiology business,
which in the first half of the year reported a 78% year-on-year increase in
revenues and nearly doubled its contribution to the country's top-line.
Meanwhile, in Nigeria, Echo-Lab recorded strong revenue growth in both local
currency and EGP terms, supported by both its radiology and pathology
offerings. Finally, as expected, results in Sudan were significantly impacted
by the ongoing conflict which has seen 16 of our 18 branches temporarily shut
down starting in April. Our team has put in place robust mitigation strategies
to protect our people and operations, and regularly updates our response
protocols to reflect the evolving conditions on the ground.
Further down the income statement, we reported lower margins at all levels of
profitability primarily reflecting a post-Covid-19 normalisation and rising
salary and wage expenses as we rolled out higher than usual annual increases
to protect our staff against rising inflation as part of our talent retention
strategy. Meanwhile, we continued to record only moderate increases in raw
material outlays during the period, as we successfully leveraged our robust
supplier relationships to secure favourable test-kit prices. Despite our cost
base continuing to reflect the impacts of rising inflation and a weakening
EGP, in the coming months we see them progressively normalising heading into
2024.
With two thirds of 2023 now behind us, I am confident that we remain well
placed to deliver on our operational and financial targets for the year. In
the coming months, we are particularly looking forward to launching operations
in Saudi Arabia in December, while also making progress on our strategic
priorities and value-creation strategies across existing markets. Considering
our strong first half results, the solid strategies in place, and the positive
momentum enjoyed by our Egyptian and Jordian subsidiaries, we reaffirm our
guidance of full-year conventional revenue (excluding Covid-19-related
contributions) year-on-year growth of around 30% for FY 2023."
- End -
Analyst and Investor Call Details
An analyst and investor call will be hosted at 1pm (UK) | 3pm (Egypt) on
Monday, 4 September 2023. You can register for the call by clicking on this
link
(https://efghermesevents.webex.com/webappng/sites/efghermesevents/meeting/register/bef52f90ea164d3aa8f30b8f46b13ea8?ticket=4832534b00000006be4e82e92aa9dbaf4aa91a3820eb7ec6d2d21d16c293003d932fe78597d836d2×tamp=1693415633117&RGID=rcbd126d3793dccd452c9fb551c0196a6)
.
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 pathology and radiology tests to patients in Egypt,
Jordan, Nigeria and Sudan. The Group's core brands include Al Borg, Al Borg
Scan and Al Mokhtabar in Egypt, as well as Biolab (Jordan), Ultralab and Al
Mokhtabar Sudan (both in Sudan) and Echo-Lab (Nigeria). A long track record
for quality and safety has earned the Company a trusted reputation, as well as
internationally recognised accreditations for its portfolio of over 2,000
diagnostics tests. From its base of 552 branches as of 31 December 2022, IDH
served over 8.7 million patients and performs more than 32.7 million tests in
2022. IDH will continue to add laboratories through a Hub, Spoke and Spike
business model that provides a scalable platform for efficient expansion.
Beyond organic growth, the Group's expansion plans include acquisitions in new
Middle Eastern, African, and East Asian markets where its model is well-suited
to capitalise on similar healthcare and consumer trends and capture a
significant share of fragmented markets. IDH has been a Jersey-registered
entity with a Standard Listing on the Main Market of the London Stock Exchange
(ticker: IDHC) since May 2015 with a secondary listing on the EGX since May
2021 (ticker: IDHC.CA).
Shareholder Information
LSE: IDHC.L
EGX: IDHC.CA
Bloomberg: IDHC:LN
Listed on LSE: May 2015
Listed on EGX: May 2021
Shares Outstanding: 600 million
Contact
Nancy Fahmy
Investor Relations Director
T: +20 (0)2 3345 5530 | M: +20 (0)12 2255 7445 | nancy.fahmy@idhcorp.com
(mailto:nancy.fahmy@idhcorp.com)
Forward-Looking Statements
These results for the six-month period ended 30 June 2023 have been prepared
solely to provide additional information to shareholders to assess the group's
performance in relation to its operations and growth potential. These results
should not be relied upon by any other party or for any other reason. This
communication contains certain forward-looking statements. A forward-looking
statement is any statement that does not relate to historical facts and
events, and can be identified by the use of such words and phrases as
"according to estimates", "aims", "anticipates", "assumes", "believes",
"could", "estimates", "expects", "forecasts", "intends", "is of the opinion",
"may", "plans", "potential", "predicts", "projects", "should", "to the
knowledge of", "will", "would" or, in each case their negatives or other
similar expressions, which are intended to identify a statement as
forward-looking. This applies, in particular, to statements containing
information on future financial results, plans, or expectations regarding
business and management, future growth or profitability and general economic
and regulatory conditions and other matters affecting the Group.
Forward-looking statements reflect the current views of the Group's management
("Management") on future events, which are based on the assumptions of the
Management and involve known and unknown risks, uncertainties and other
factors that may cause the Group's actual results, performance or achievements
to be materially different from any future results, performance or
achievements expressed or implied by these forward-looking statements. The
occurrence or non-occurrence of an assumption could cause the Group's actual
financial condition and results of operations to differ materially from, or
fail to meet expectations expressed or implied by, such forward-looking
statements.
The Group's business is subject to a number of risks and uncertainties that
could also cause a forward-looking statement, estimate or prediction to differ
materially from those expressed or implied by the forward-looking statements
contained in this communication. The information, opinions and forward-looking
statements contained in this communication speak only as at its date and are
subject to change without notice. The Group does not undertake any obligation
to review, update, confirm or to release publicly any revisions to any
forward-looking statements to reflect events that occur or circumstances that
arise in relation to the content of this communication.
Important notice: In the Company's earnings releases covering the five
quarters starting from Q4 2021 and ending Q4 2022, management had opted to
present Alternative Performance Measures (APM) alongside IFRS-compliant
figures as outlined on page 2 of the Company's FY 2022 Earnings Release.
Starting in Q1 2023, due to the material insignificance of Covid-19-related
revenues on consolidated results, the Company will only report IFRS-compliant
figures. It is worth noting that revenues for the comparable period (1H 2022)
include concession fees amounting to EGP 63 million paid by Biolab as part of
its agreement with QAIA and Aqaba Port.
Group Operational & Financial Review
i. Revenue and Cost Analysis
Consolidated Revenue
IDH maintained its impressive performance during the first six months of 2023,
with revenues and volumes progressively picking up as the year progressed to
record their strongest monthly figures in May and June (once adjusting for the
Eid-related slowdown). During 1H 2023, conventional revenues expanded 40%
year-on-year to record EGP 1,872 million. Conventional revenue growth for the
period was driven by a 13% rise in test volumes and a 24% increase in average
revenue per test (translation effect only contributed 8% to growth for the
period). On a quarterly basis, IDH's conventional revenues grew 37%
year-on-year to EGP 957 million in Q2 2023 driven by increases in test volumes
and average revenue per test.
Meanwhile, IDH's total revenues reached EGP 1,872 million in 1H 2023, down 4%
year-on-year as Covid-19-related testing had impacted total results of 1H
2022. On a three-month basis, IDH recorded total revenues of EGP 957 million,
a 24% year-on-year increase from EGP 774 million one year prior.
Revenue Analysis
Q1 2022 Q1 2023 Q2 2022 Q2 2023 % 1H 2022 1H 2023 %
Total revenue (EGP mn) 1,180 915 774 957 24% 1,954 1,872 -4%
Conventional revenue (EGP mn) 640 915 699 957 37% 1,339 1,872 40%
Covid-19-related revenue (EGP mn) 540 - 75 - - 615 - -
Contribution to Consolidated Results
Conventional revenue 54% 100% 90% 100% 69% 100%
Covid-19-related revenue 46% - 10% - 31% -
Test Volume Analysis
Total tests (mn) 8.4 8.0 7.6 8.5 12% 16.0 16.5 3%
Conventional tests performed (mn) 7.1 8.0 7.4 8.5 13% 14.5 16.5 13%
Total Covid-19-related tests performed (mn) 1.3 - 0.2 - - 1.5 - -
Contribution to Consolidated Results
Conventional tests performed 85% 100% 97% 100% 91% 100%
Total Covid-19-related tests performed 15% - 3% - 9% -
Revenue per Test Analysis
Total revenue per test (EGP) 140 114 102 113 11% 122 114 -7%
Conventional revenue per test (EGP) 90 114 94 113 20% 92 114 24%
Covid-19-related revenue per test (EGP) 431 - 454 - 422 - -
Revenue Analysis: Contribution by Patient Segment
Contract Segment (64% of Group revenue)
The Company's contract segment booked conventional revenues of EGP 1,193
million during 1H 2023, a 44% year-on-year increase from the EGP 827 million
recorded one year prior. Conventional revenues at IDH's contract segment were
driven by increases in test volumes and average revenue per conventional test,
which increased 18% and 22% year-on-year (of which 4% was related to the
translation effect), respectively. During the period, IDH recorded a notable
increase in total tests per patient at the segment, which reached a record 4.4
tests in 1H 2023 from 4.0 last year. Higher tests per patient were supported
both by a post-Covid-19 patient mix normalisation coupled with the success of
a new loyalty programme introduced at the end of FY 2021.
Walk-in Segment (36% of Group revenue)
Meanwhile, IDH's walk-in segment reported conventional revenue growth of 33%
year-on-year during 1H 2023, booking revenues of EGP 679 million. While test
volumes remained relatively stable compared to the same period of the previous
year, declining 4% year-on-year, revenue growth was entirely driven by
increases in average revenue per conventional test, which expanded 38%
year-on-year to EGP 226 during 1H 2023 (of which 14% was related to the
translation effect) from EGP 163 one year prior. Similar to trends witnessed
at the contract segment, total walk-in tests per patient reached their highest
value on record at 3.6 tests up impressively from the 2.5 tests per patient
recorded in 1H 2022.
Detailed Segment Performance Breakdown
Walk-in Segment Contract Segment Total
1H22 1H23 Change 1H22 1H23 Change 1H22 1H23 Change
Revenue (EGP mn) 857 679 -21% 1,097 1,193 8% 1,954 1,872 -4%
Conventional Results (EGP mn) 512 679 33% 827 1,193 44% 1,339 1,872 40%
Total Covid-19-related revenue (EGP mn) 345 - - 270 - - 615 - -
Patients ('000) 1,513 833 -45% 3,027 3,084 2% 4,541 3,917 -14%
% of Patients 33% 21% 67% 79%
Revenue per Patient (EGP) 565 815 44% 363 387 7% 430 478 11%
Tests ('000) 3,849 3,008 -22% 12,155 13,457 11% 16,004 16,465 3%
% of Tests 24% 18% 76% 82%
Conventional tests ('000) 3,135 3,008 -4% 11,412 13,457 18% 14,547 16,465 13%
Total Covid-19-related tests ('000) 714 - - 744 - - 1,458 - -
Revenue per Test (EGP) 222 226 2% 90 89 -2% 122 114 -7%
Conventional Revenue per Test (EGP) 163 226 39% 72 89 23% 92 114 24%
Test per Patient 2.5 3.6 42% 4.0 4.4 9% 3.5 4.2 19%
Revenue Analysis: Contribution by Geography
Egypt (80.9% of Group revenue)
IDH's conventional business in Egypt continued delivering notable growth,
progressively picking up throughout the first six months of the year and
recording the strongest monthly revenue figures for the year in May and June
(once adjusting for the Eid-related slowdown). Revenues have remained strong
during July and August and the Company expects the trend to continue heading
further into the second half of the year.
More specifically, the Company recorded conventional revenue growth of 33%
year-on-year in 1H 2023, supported by simultaneous expansions in test volumes
and average revenue per conventional test, which grew 14% and 16%
year-on-year, respectively. Total revenues from IDH's Egyptian operations
remained relatively unchanged, declining just 1% year-on-year to EGP 1,514
million in 1H 2023.
On a quarterly basis, IDH recorded conventional revenues of EGP 783 million in
Q2 2023, up a solid 32% year-on-year and 7% quarter-on-quarter. Total revenues
also expanded by 21% year-on-year as the impact of Covid-19-related testing on
the comparable three-month period of 2022 significantly declined starting
April.
Al-Borg Scan
IDH's fast-growing radiology venture maintained its growth trend throughout
the second quarter of 2023, recording revenues of EGP 63 million in 1H 2023, a
78% year-on-year increase. Revenue expansion was primarily driven by increased
average revenue per test, which grew 44% year-on-year to EGP 807, and
increased test volumes, which climbed 23% year-on-year to 78 thousand tests
during the six-month period. Al-Borg Scan has also continued increasing its
contribution to Egypt's top-line figure, constituting 4% of Egypt revenues
during the first six months of 2023 versus only 2% in the same period of the
previous year. To capitalize on the growing demand for Al-Borg Scan's
offering, IDH has, over the last two years, launched four new branches taking
the total to six as at 30 June 2023. In the coming months, IDH plans to add an
additional seventh branch to its radiology venture in Egypt.
House Calls
Throughout the first six months of the year, IDH's house call service in Egypt
continued to make a remarkable contribution of 16% to total revenues in the
country. This continues to be well-above the service's pre-pandemic
contribution, further showcasing the segment's growth potential, and the
success of IDH's investment strategy which has seen it significantly boost the
service's capabilities since 2020.
Wayak
During the six-month period ending 30 June 2023, Wayak recorded 83 thousand
orders, a 29% year-on-year increase compared to 64 thousand in the same
six-month period of the previous year. Meanwhile, the venture's EBITDA losses
continued to narrow to record EGP 746 thousand compared to EBITDA losses of
EGP 1.7 million booked in the six-month period ending 30 June 2022. It is also
worth noting that Wayak's EBITDA turned positive for the months of May and
June, a trend which IDH will look to maintain heading into the second half of
the year.
Detailed Egypt Performance Breakdown
Revenue Analysis
EGP mn Q1 2022 Q1 2023 Q2 2022 Q2 2023 % 1H 2022 1H 2023 %
Total Revenue 879 731 645 783 21% 1,524 1,514 -1%
Conventional Revenue 549 731 591 783 32% 1,140 1,514 33%
Pathology Revenue 532 703 573 748 31% 1,105 1,451 31%
Radiology Revenue 17 28 19 35 89% 35 63 78%
Total Covid-19-related Revenue 330 - 53 - 384 -
Contribution to Consolidated Results
Conventional revenue 62% 100% 92% 100% 75% 100%
Pathology Revenue 61% 96% 89% 96% 73% 96%
Radiology Revenue 1.9% 3.8% 2.9% 4.5% 2.3% 4.2%
Total Covid-19-related revenue 38% - 8% - 25% -
Test Volume Analysis
Total tests (mn) 7.3 7.3 6.9 7.8 13% 14.2 15.1 6%
Conventional tests performed (mn) 6.5 7.3 6.7 7.8 16% 13.2 15.1 14%
Total Covid-19-related tests performed (mn) 0.8 - 0.1 - 0.9 -
Contribution to Consolidated Results
Conventional tests performed 89% 100% 98% 100% 94% 100%
Total Covid-19-related tests performed 11% - 2% - 6% -
Jordan (15.5% of Group revenue)
Similar to trends seen in Egypt, IDH witnessed a steady rise in revenues
throughout the first half of 2023, with Biolab recording its highest monthly
revenue figures for the year in May and June (adjusting for the Eid-vacation
slowdown). Overall, in 1H 2023, Biolab recorded conventional year-on-year
revenue growth of 9% in JOD terms, supported by a solid 8% year-on-year rise
in conventional tests performed. In EGP terms, conventional revenues posted an
88% year-on-year rise, in part boosted by the translation effect which saw
average revenue per conventional test in EGP terms rise by 74% versus 1H 2022.
On a quarterly basis, Biolab recorded year-on-year conventional revenue growth
of 6% in JOD terms supported by a 4% year-on-year rise in conventional test
volumes for the quarter. In EGP terms, year-on-year conventional revenue
growth in Q2 2023 stood at 73% on the back of a significant rise in average
revenue per test following the devaluations of the EGP.
Detailed Jordan Performance Breakdown
Revenue Analysis
EGP mn Q1 2022 Q1 2023 Q2 2022 Q2 2023 % 1H 2022 1H 2023 %
Total Revenue 280 144 106 146 38% 386 290 -25%
Conventional Results 70 144 84 146 73% 155 290 88%
Total Covid-19-related Revenues (PCR and Antibody) 210 - 21 - 232 -
Contribution to Consolidated Results
Conventional Results 25% 100% 79% 100% 40% 100%
Total Covid-19-related Revenue (PCR and Antibody) 75% - 20% - 60% -
Test Volume Analysis
Total tests (k) 991 582 603 598 -1% 1,594 1,180 -26%
Conventional tests performed (k) 519 582 572 598 4% 1,091 1,180 8%
Total Covid-19-related tests performed (k) 472 - 30 - 502 -
Contribution to Consolidated Results
Conventional tests performed 52% 100% 95% 100% 68% 100%
Total Covid-19-related tests performed 48% - 5% - 32% -
Nigeria (3.1% of revenue)
IDH's Nigerian subsidiary, Echo-Lab, recorded robust revenue growth of 19%
year-on-year in NGN terms, booking revenues of NGN 937 million during the
six-month period. In EGP terms, the Company booked revenues of EGP 58 million,
increasing 73% year-on-year from the EGP 33 million booked during the same
period of the previous year. Revenue growth for the year was driven by a 71%
increase in average revenue per test in EGP terms and 18% in NGN terms. Test
volumes, on the other hand, increased a marginal 1% year-on-year to 136
thousand tests in 1H 2023.
Sudan (0.5% of revenue)
IDH's Sudanese operations recorded revenues of SDG 197 million, down 32%
year-on-year in 1H 2023. In EGP terms, revenue declined 3% year-on-year to
reach EGP 10 million from EGP 10.5 million one year prior. The decline in
revenues during 1H 2023 was primarily a result of the halting of operations in
16 of 18 branches in April of this year as a result of the ongoing conflict in
the country. The Company continues to monitor the situation closely and will
update the market should the situation evolve.
Revenue Contribution by Country
Q1 2022 Q1 2023 Q2 2022 Q2 2023 % 1H 2022 1H 2023 Change
Egypt Revenue (EGP mn) 879 731 645 783 21% 1,524 1,514 -1%
Conventional (EGP mn) 549 731 591 783 32% 1,140 1,514 33%
Pathology Revenue 532 703 573 748 31% 1,105 1,451 31%
Radiology Revenue 17 28 19 35 89% 35 63 78%
Covid-19-related (EGP mn) 330 - 53 - 384 -
Egypt Contribution to IDH Revenue 74.5% 79.9% 83.2% 81.8% 78.0% 80.1%
Jordan Revenue (EGP mn) 280 144 106 146 38% 386 290 -25%
Conventional (EGP mn) 70 144 84 146 73% 155 290 88%
Covid-19-related (EGP mn) 210 - 21 - 232 -
Jordan Revenues (JOD mn) 12.5 3.4 4.0 3.4 -16% 16.5 6.8 -59%
Conventional (JOD mn) 3.0 3.4 3.2 3.4 6% 6.2 6.8 9%
Jordan Revenue Contribution to IDH Revenue 23.7% 15.7% 13.7% 15.2% 19.8% 15.5%
Nigeria Revenue (EGP mn) 15 31 19 27 44% 33 58 73%
Nigeria Revenue (NGN mn) 371 468 416 469 13% 787 937 19%
Nigeria Contribution to IDH Revenue 1.3% 3.4% 2.5% 2.8% 1.7% 3.1%
Sudan Revenue (EGP mn) 5.7 8.8 4.8 1.4 -71% 10.5 10.2 -3%
Sudan Revenue (SDG mn) 152 169 137 27 -80% 289 197 -32%
Sudan Contribution to IDH Revenue 0.5% 1.0% 0.6% 0.1% 0.5% 0.5%
Average Exchange Rate
1H 2022 1H 2023 Change
USD/EGP 17.6 30.7 74.4%
JOD/EGP 24.7 42.8 73.4%
NGN/EGP 0.04 0.06 26.2%
SDG/EGP 0.04 0.05 42.0%
Patients Served and Tests Performed by Country
1H 2022 1H 2023 Change
Egypt Patients Served (mn) 3.8 3.7 -3%
Egypt Tests Performed (mn) 14.2 15.1 6.5%
Conventional tests (mn) 13.2 15.1 14%
Covid-19-related tests (mn) 1.0 - -
Jordan Patients Served (k) 670 183 -73%
Jordan Tests Performed (k) 1,594 1,180 -26%
Conventional tests (k) 1,091 1,180 8%
Covid-19-related tests (k) 502 - -
Nigeria Patients Served (k) 70 69 -2%
Nigeria Tests Performed (k) 135 136 1%
Sudan Patients Served (k) 46 14 -69%
Sudan Tests Performed (k) 84 40 -52%
Total Patients Served (mn) 4.5 3.9 -14%
Total Tests Performed (mn) 16.0 16.5 3%
Branches by Country
30 June 2022 30 June 2023 Change
Egypt 488 531 43
Jordan 21 27 6
Nigeria 12 12 -
Sudan 17 18 1
Total Branches 538 588 50
-Cost of Sales
Cost of sales increased 8% year-on-year in the first six months of 2023, to
record EGP 1,214 million. As a percentage of revenues, cost of sales increased
seven percentage points year-on-year in the six-month period ended 30 June
2023, to reach 64.9%. The year-on-year increase reflected primarily higher
salaries and wages, as well as partially increased raw material expenses and
higher direct depreciation booked in 1H 2023.
Cost of Sales Breakdown as a Percentage of Revenue
1H 2022 1H 2023
Raw Materials 20.3% 21.5%
Conventional raw material costs as % of conventional revenues 16.4% 21.5%
Covid-19-related raw material costs as % of Covid-19-related revenues 29.6% -
Wages & Salaries 16.8% 20.4%
Depreciation & Amortisation 6.7% 9.4%
Other Expenses 13.6% 13.5%
Total 57.4% 64.9%
Raw material costs (33% of consolidated cost of sales) was the largest
contributor to cost of sales during the period. Raw material costs recorded
EGP 402 million during 1H 2023, and amounted to 21% of total Group revenues.
During the period, the Company booked a rise in the average cost for
conventional test kits on the back of a weaker EGP and rising inflation across
its markets of operation. This saw conventional raw material costs as a share
of revenues reach 21.5% in 1H 2023, up five percentage points year-on-year. It
is important to note that the significant increase in the cost of conventional
test kits as a share of revenue is attributable to a delay in the delivery of
free test kits from IDH's main suppliers during Q2 2023 as part of special
arrangements to support the Company during the ongoing turbulent times. The
delivery of free test kits is expected to normalise in the third quarter of
the year.
Wages and salaries including employee share of profits (32% share of
consolidated cost of sales) was the second largest contributor to cost of
sales during 1H 2023, amounting to EGP 383 million in 1H 2023. During the
period, wages and salaries as a percentage of revenues stood at 20.4%,
increasing from 16.8% in the same period of the previous year. The
year-on-year increase in direct wages and salaries is attributable to new
staff hires across IDH's newly launch branches, coupled with higher than usual
compensation increases for existing staff to compensate for increased
inflationary pressures in IDH's home market of Egypt. Meanwhile, the
year-on-year rise in NGN terms of Nigeria's salary and wage expenses reflects
an increase in USD-denominated compensation of Echo-Lab's expat personnel on
the back of a weaker Naira and rising inflation.
Direct Wages and Salaries by Region
1H 2022 1H 2023
Egypt (EGP mn) 260 287
Jordan (EGP mn) 60 78
Jordan (JOD mn) 2 2
Nigeria (EGP mn) 8 16
Nigeria (NGN mn) 186 272
Sudan (EGP mn) 2 2
Sudan (SDG mn) 51 48
Direct depreciation and amortization costs (15% of consolidated cost of sales)
increased 34% year-on-year in 1H 2023 to EGP 176 million compared to EGP 132
million one year prior. Increases in depreciation and amortization expenses
were primarily due to the expansion of Al-Borg Scan's branches as well as the
rollout of additional branches throughout the Company's wider network. More
specifically, depreciation booked by Al-Borg Scan's branches contributed 28%
of total direct depreciation in 1H 2023.
Other expenses (21% of consolidated cost of sales) during the first half of
2023 recorded EGP 253 million, down 5% year-on-year from the EGP 266 million
recorded in 1H 2022. It is important to note that other expenses booked in 1H
2022 had included EGP 63 million paid in concession fees as part of Biolab's
agreement with Queen Alia International Airport and Aqaba Port to provide
Covid-19-related testing during January and February of last year. Excluding
these concession fees, other expenses increased by 25% year-on-year during 1H
2023, mainly on the back of increases recorded in Egypt and Nigeria. The
increase in Egypt primarily reflects a change in the treatment of
revenue-sharing hospital contracts starting in Q2 2023, which saw
revenue-sharing expenses in 1H 2023 rise by 330% year-on-year, contributing to
nearly half of other expenses growth for the period. In Nigeria, higher
gasoline prices and general inflation were the main contributors to the
increase in other expenses for the period.
Gross Profit
The Company booked gross profit of EGP 658 million in 1H 2023, down 21%
year-on-year from the high base of EGP 832 million posted during 1H 2022.
Meanwhile, IDH's gross profit margin came in at 35% compared to 43% in 1H
2022. Lower gross profitability during the period reflected both the
above-mentioned increase in direct salaries and wages and depreciation, as
well as an expected normalization of margins following the decline in
Covid-19-related testing.
On a quarterly basis, IDH booked gross profit of EGP 333 million, up 11%
year-on-year from EGP 300 million in Q2 2022 when contributions from the
Company's Covid-19-related offering had already begun to decline. IDH recorded
a GPM of 35% in Q2 2023, down four percentage points year-on-year, as gross
profitability was impacted by rising inflation and a weaker EGP. Meanwhile,
IDH's GPM remained relatively stable compared to Q1 2023.
Selling, General and Administrative Expenses
IDH's SG&A outlays during 1H 2023 amounted to EGP 367 million, up 43%
year-on-year. As a percentage of revenues, SG&A outlays stood at 20% in 1H
2023 versus 13% in 1H 2022. Increased SG&A expenses were mainly driven by:
· Increases in wages and salaries, which expanded by 53% year-on-year
to EGP 141 million during 1H 2023 primarily due to higher-than-usual annual
adjustments to employee compensation packages to support them during the
ongoing challenging period. Increased wages and salaries also partially
reflected an increase in USD-denominated directors' compensation and the
addition of a board member in March 2022 (who received compensation starting
March 2022). Wages and salaries as a share of revenue increased to 8% in 1H
2023 from 5% in 1H 2022.
· Increases in other expenses, which grew 59% year-on-year to EGP 153
million in 1H 2023 due to the increase of USD-denominated expenses (including
USD-denominated auditor fees) for the holding company.
· One-off legal consultancy expenses related to the termination of the
Pakistan deal in the first quarter of 2023.
Selling, General and Administrative Expenses
1H 2022 1H 2023 Change
Wages & Salaries 92 141 53%
Accounting Fees 18 38 111%
Professional Services Fees 18 32 78%
Market - Advertisement expenses 54 52 -4%
Other Expenses 53 70 32%
Depreciation & Amortisation 15 20 32%
Travelling and transportation expenses 7 14 100%
Total 257 367 43%
EBITDA
IDH posted EBITDA(11) of EGP 462 million in 1H 2023, down 35% year-on-year
from the figure reported in 1H 2022 when Covid-19-related testing has
significantly boosted results. The Company's EBITDA margin was 25% during the
six-month period, declining 12 points year-on-year on the back of lower gross
profitability as well as the 46% year-on-year increase in SG&A outlays
discussed above. It is worth highlighting that when controlling for
non-recurring items, such as a loss on expired Covid-19 kit inventory (EGP 12
million), one-off legal reports (EGP 3 million), legal fees related to the
termination of the Pakistan agreement (EGP 8 million), IDH would have recorded
an EBITDA of EGP 483 million and yielded an associated margin of 26%.
On a quarterly basis, the Company booked EBITDA of EGP 234 million in Q2 2023,
a 3% year-on-year decrease and with an associated margin of 24%.
(11)EBITDA is calculated as operating profit plus depreciation and
amortization. It is important to note that while in absolute terms the EBITDA
figure is identical when using IFRS or APM, its margin differs between the two
sets of performance indicators only for the comparable period of 2022. Margins
for Q1 2023 are identical across both IFRS and APM.
EBITDA by Country
In Egypt, IDH's operations recorded an EBITDA of EGP 407 million in 1H 2023,
down 35% from the figure recorded in 1H 2022 which had included a notable
contribution from Covid-19-related testing. EBITDA margin recorded 27% in 1H
2023 versus 41% in the same period of the previous year. Lower EBITDA
profitability reflects a post-pandemic normalisation in gross profits which
declined 20% year-on-year coupled with a 40% year-on-year increase in SG&A
expenses.
Biolab, IDH's Jordanian subsidiary, recorded EBITDA in local currency terms of
JOD 1.6 million, declining 60% year-on-year from 1H 2022 when Covid-19-related
testing had significantly contributed to results. Biolab recorded an EBITDA
margin of 24% compared to 29% in the same period of last year in local
currency terms. In EGP terms, EBITDA declined 25% year-on-year to EGP 69
million. EBITDA profitability declined during 1H 2023 due to a 26%
year-on-year decrease in gross profit and 48% year-on-year increase in
SG&A outlays during the period. It is worth highlighting that SG&A
expense increases partially reflect the translation effect from the
devaluation of the Egyptian Pound over the past year. In JOD terms, SG&A
expenses increased just 44% versus last year.
In Nigeria, IDH recorded an EBITDA loss of NGN 233 million in 1H 2023,
widening from NGN 80 million during the same period of last year. In EGP
terms, EBITDA losses widened to EGP 15 million in 1H 2023 from EGP 3.3 million
in the same six-month period of 2022. The widening in EBITDA losses for the
period was primarily driven by lower gross profitability in Nigeria. The rise
in Echo-Lab's cost of sales has been driven by higher gasoline and electricity
prices and have continued to weigh down on gross profitability since the start
of the year.
In Sudan, IDH recorded EBITDA of SDG 24 million, well above the EBITDA figure
of SDG 4 million recorded in the same six months of 2022. In EGP terms,
Sudan's operations generated an EBITDA of EGP 1.2 million, up from EGP 0.1
million in 1H 2022. Improved EBITDA profitability comes despite the notable
operational difficulties faced by IDH's Sudanese operations. More
specifically, 16 of IDH's 18 branches in the country have been temporarily
shut down since April due to the ongoing conflict.
Regional EBITDA in Local Currency
Mn 1H 2022 1H 2023 Change
Egypt EBITDA EGP 622 407 -35%
Margin 41% 27%
Jordan JOD 4.0 1.6 -60%
Margin 29% 24%
Nigeria NGN -80 -233 192%
Margin -10% -25%
Sudan SDG 4 24.1 494%
Margin 1% 12%
Interest Income / Expense
IDH's interest income during 1H 2023 stood at EGP 30 million, decreasing 60%
year-on-year from the EGP 75 million booked during the same six-month period
of last year. Lower interest income during the period was mainly due to the
Company's lower cash balances as a result of record cash dividends distributed
during last year.
Interest expense(12) amounted to EGP 76 million during 1H 2023, up 18%
year-on-year from EGP 64 million during 1H 3033. Increased interest expenses
were mainly driven by:
· Increased interest on lease liabilities related to IFRS 16 due to the
rollout of new branches.
· Higher interest expenses following the CBE decision to increase rates
by 1,000 bps since March 2022. It is important to note that IDH's interest
bearing debt balance decreased to EGP 108 million as at 30 June 2023, from EGP
117 million at year-end 2022. During the six-month period, as part of IDH's
strategy to reduce foreign currency risk the Company agreed with General
Electric (GE) for the early repayment of its contractual obligation of USD 5.7
million. To finance the settlement, IDH utilized a bridge loan facility, with
half the amount being funded internally, while the other half (amounting to
EGP 55 million) was provided through a bridge loan by Ahly United Bank- Egypt
(AUBE). Interest expenses related to the AUBE facility recorded EGP 12 million
in 1H 2023. The bridge loan was fully settled in Q2 2023.
Interest Expense Breakdown
EGP mn 1H 2022 1H 2023 Change
Interest on Lease Liabilities (IFRS 16) 34.9 45.2 29%
Interest Expenses on Leases 9.3 13.7 47%
Interest Expenses on Borrowings(13) 5.2 11.6 123%
Bank Charges 8.8 5.3 -39%
Loan-related Expenses on IFC facility(14) 5.9 - -
Total Interest Expense 64.1 75.9 18%
(12)Interest expenses on medium-term loans include EGP 12.0 related to the
Group's facility with Ahli United Bank Egypt (AUBE). Meanwhile, the Group's
facility with the Commercial International Bank (CIB) was fully repaid as of 5
April 2022.
(13)Interest expenses on medium-term loans include EGP 12.0 related to the
Group's facility with Ahli United Bank Egypt (AUBE). Meanwhile, the Group's
facility with the Commercial International Bank (CIB) was fully repaid as of 5
April 2022.
(14)Loan-related expenses on IFC facility represents commitment fees on the
facility granted by IFC and Mashreq with a total value of USD 60 million. The
facility was cancelled in May 2023.
Foreign Exchange
The Company recorded a foreign exchange gain of EGP 102 million during the
six-month period, a 47% year-on-year increase partially reflecting
intercompany balances revaluation.
Taxation
Tax expenses, which include income and deferred tax, amounted to EGP 98
million during 1H 2023, a 53% year-on-year decrease. The Company's effective
tax rate came in at 32%, unchanged versus the same six-month period of the
previous year. It is important to highlight that there is no tax payable for
IDH's two holding-level companies. Meanwhile, tax was paid on profits
resulting from the Group's operating subsidiaries (Egypt 27.5%, Jordan 36.6%,
Nigeria 0.2%, Sudan 11.4%).
Taxation Breakdown by Region
EGP Mn 1H 2022 1H 2023 Change
Egypt 196.0 91.1 -53%
Jordan 14.6 6.6 -55%
Nigeria -0.2 -0.1 -63%
Sudan 0.1 0.5 350%
Total Tax Expenses 210.5 98.1 -53%
Net Profit
IDH's net profit in 1H 2023 came in at EGP 211 million, down 52% year-on-year.
Meanwhile, the Company's net profit margin recorded 11%, down 11 percentage
points from 22% in the same six-month period last year. On a three-month
basis, the Company posted net profit of EGP 43 million, down 66% year-on-year.
IDH's bottom-line on both a year-to-date and quarterly basis was impacted by a
non-recurring expense of EGP 12 million related to contributions owed to the
Egyptian government vocational training fund for the previous five-year
period. Controlling for this, IDH would have booked a net profit of EGP 223
million in 1H 2023 and EGP 55 million in Q2 2023.
The EGP 12 million non-recurring expense is in accordance with article 134 of
labour law on Vocational Guidance and Training issued by the Egyptian
Government in 2003. In accordance with the law, IDH's Egyptian operations are
required to provide 1% of net profits each year into a training fund.
Integrated Diagnostics Holdings plc has taken legal advice and considered
market practices in Egypt relating to the law, and more specifically whether
vocational training courses undertaken by the Company's Egyptian subsidiaries
suggest that obligations have been satisfied by in-house training programmes
provided by those entities. Since the issue of the law, IDH's Egyptian
subsidiaries have not been requested by the government to pay, nor have they
voluntarily paid, any amounts into the external training fund.
Raw material costs (33% of consolidated cost of sales) was the largest
contributor to cost of sales during the period. Raw material costs recorded
EGP 402 million during 1H 2023, and amounted to 21% of total Group revenues.
During the period, the Company booked a rise in the average cost for
conventional test kits on the back of a weaker EGP and rising inflation across
its markets of operation. This saw conventional raw material costs as a share
of revenues reach 21.5% in 1H 2023, up five percentage points year-on-year. It
is important to note that the significant increase in the cost of conventional
test kits as a share of revenue is attributable to a delay in the delivery of
free test kits from IDH's main suppliers during Q2 2023 as part of special
arrangements to support the Company during the ongoing turbulent times. The
delivery of free test kits is expected to normalise in the third quarter of
the year.
Wages and salaries including employee share of profits (32% share of
consolidated cost of sales) was the second largest contributor to cost of
sales during 1H 2023, amounting to EGP 383 million in 1H 2023. During the
period, wages and salaries as a percentage of revenues stood at 20.4%,
increasing from 16.8% in the same period of the previous year. The
year-on-year increase in direct wages and salaries is attributable to new
staff hires across IDH's newly launch branches, coupled with higher than usual
compensation increases for existing staff to compensate for increased
inflationary pressures in IDH's home market of Egypt. Meanwhile, the
year-on-year rise in NGN terms of Nigeria's salary and wage expenses reflects
an increase in USD-denominated compensation of Echo-Lab's expat personnel on
the back of a weaker Naira and rising inflation.
Direct Wages and Salaries by Region
1H 2022 1H 2023
Egypt (EGP mn) 260 287
Jordan (EGP mn) 60 78
Jordan (JOD mn) 2 2
Nigeria (EGP mn) 8 16
Nigeria (NGN mn) 186 272
Sudan (EGP mn) 2 2
Sudan (SDG mn) 51 48
Direct depreciation and amortization costs (15% of consolidated cost of sales)
increased 34% year-on-year in 1H 2023 to EGP 176 million compared to EGP 132
million one year prior. Increases in depreciation and amortization expenses
were primarily due to the expansion of Al-Borg Scan's branches as well as the
rollout of additional branches throughout the Company's wider network. More
specifically, depreciation booked by Al-Borg Scan's branches contributed 28%
of total direct depreciation in 1H 2023.
Other expenses (21% of consolidated cost of sales) during the first half of
2023 recorded EGP 253 million, down 5% year-on-year from the EGP 266 million
recorded in 1H 2022. It is important to note that other expenses booked in 1H
2022 had included EGP 63 million paid in concession fees as part of Biolab's
agreement with Queen Alia International Airport and Aqaba Port to provide
Covid-19-related testing during January and February of last year. Excluding
these concession fees, other expenses increased by 25% year-on-year during 1H
2023, mainly on the back of increases recorded in Egypt and Nigeria. The
increase in Egypt primarily reflects a change in the treatment of
revenue-sharing hospital contracts starting in Q2 2023, which saw
revenue-sharing expenses in 1H 2023 rise by 330% year-on-year, contributing to
nearly half of other expenses growth for the period. In Nigeria, higher
gasoline prices and general inflation were the main contributors to the
increase in other expenses for the period.
Gross Profit
The Company booked gross profit of EGP 658 million in 1H 2023, down 21%
year-on-year from the high base of EGP 832 million posted during 1H 2022.
Meanwhile, IDH's gross profit margin came in at 35% compared to 43% in 1H
2022. Lower gross profitability during the period reflected both the
above-mentioned increase in direct salaries and wages and depreciation, as
well as an expected normalization of margins following the decline in
Covid-19-related testing.
On a quarterly basis, IDH booked gross profit of EGP 333 million, up 11%
year-on-year from EGP 300 million in Q2 2022 when contributions from the
Company's Covid-19-related offering had already begun to decline. IDH recorded
a GPM of 35% in Q2 2023, down four percentage points year-on-year, as gross
profitability was impacted by rising inflation and a weaker EGP. Meanwhile,
IDH's GPM remained relatively stable compared to Q1 2023.
Selling, General and Administrative Expenses
IDH's SG&A outlays during 1H 2023 amounted to EGP 367 million, up 43%
year-on-year. As a percentage of revenues, SG&A outlays stood at 20% in 1H
2023 versus 13% in 1H 2022. Increased SG&A expenses were mainly driven by:
· Increases in wages and salaries, which expanded by 53% year-on-year
to EGP 141 million during 1H 2023 primarily due to higher-than-usual annual
adjustments to employee compensation packages to support them during the
ongoing challenging period. Increased wages and salaries also partially
reflected an increase in USD-denominated directors' compensation and the
addition of a board member in March 2022 (who received compensation starting
March 2022). Wages and salaries as a share of revenue increased to 8% in 1H
2023 from 5% in 1H 2022.
· Increases in other expenses, which grew 59% year-on-year to EGP 153
million in 1H 2023 due to the increase of USD-denominated expenses (including
USD-denominated auditor fees) for the holding company.
· One-off legal consultancy expenses related to the termination of the
Pakistan deal in the first quarter of 2023.
Selling, General and Administrative Expenses
1H 2022 1H 2023 Change
Wages & Salaries 92 141 53%
Accounting Fees 18 38 111%
Professional Services Fees 18 32 78%
Market - Advertisement expenses 54 52 -4%
Other Expenses 53 70 32%
Depreciation & Amortisation 15 20 32%
Travelling and transportation expenses 7 14 100%
Total 257 367 43%
EBITDA
IDH posted EBITDA(11) of EGP 462 million in 1H 2023, down 35% year-on-year
from the figure reported in 1H 2022 when Covid-19-related testing has
significantly boosted results. The Company's EBITDA margin was 25% during the
six-month period, declining 12 points year-on-year on the back of lower gross
profitability as well as the 46% year-on-year increase in SG&A outlays
discussed above. It is worth highlighting that when controlling for
non-recurring items, such as a loss on expired Covid-19 kit inventory (EGP 12
million), one-off legal reports (EGP 3 million), legal fees related to the
termination of the Pakistan agreement (EGP 8 million), IDH would have recorded
an EBITDA of EGP 483 million and yielded an associated margin of 26%.
On a quarterly basis, the Company booked EBITDA of EGP 234 million in Q2 2023,
a 3% year-on-year decrease and with an associated margin of 24%.
(11)EBITDA is calculated as operating profit plus depreciation and
amortization. It is important to note that while in absolute terms the EBITDA
figure is identical when using IFRS or APM, its margin differs between the two
sets of performance indicators only for the comparable period of 2022. Margins
for Q1 2023 are identical across both IFRS and APM.
EBITDA by Country
In Egypt, IDH's operations recorded an EBITDA of EGP 407 million in 1H 2023,
down 35% from the figure recorded in 1H 2022 which had included a notable
contribution from Covid-19-related testing. EBITDA margin recorded 27% in 1H
2023 versus 41% in the same period of the previous year. Lower EBITDA
profitability reflects a post-pandemic normalisation in gross profits which
declined 20% year-on-year coupled with a 40% year-on-year increase in SG&A
expenses.
Biolab, IDH's Jordanian subsidiary, recorded EBITDA in local currency terms of
JOD 1.6 million, declining 60% year-on-year from 1H 2022 when Covid-19-related
testing had significantly contributed to results. Biolab recorded an EBITDA
margin of 24% compared to 29% in the same period of last year in local
currency terms. In EGP terms, EBITDA declined 25% year-on-year to EGP 69
million. EBITDA profitability declined during 1H 2023 due to a 26%
year-on-year decrease in gross profit and 48% year-on-year increase in
SG&A outlays during the period. It is worth highlighting that SG&A
expense increases partially reflect the translation effect from the
devaluation of the Egyptian Pound over the past year. In JOD terms, SG&A
expenses increased just 44% versus last year.
In Nigeria, IDH recorded an EBITDA loss of NGN 233 million in 1H 2023,
widening from NGN 80 million during the same period of last year. In EGP
terms, EBITDA losses widened to EGP 15 million in 1H 2023 from EGP 3.3 million
in the same six-month period of 2022. The widening in EBITDA losses for the
period was primarily driven by lower gross profitability in Nigeria. The rise
in Echo-Lab's cost of sales has been driven by higher gasoline and electricity
prices and have continued to weigh down on gross profitability since the start
of the year.
In Sudan, IDH recorded EBITDA of SDG 24 million, well above the EBITDA figure
of SDG 4 million recorded in the same six months of 2022. In EGP terms,
Sudan's operations generated an EBITDA of EGP 1.2 million, up from EGP 0.1
million in 1H 2022. Improved EBITDA profitability comes despite the notable
operational difficulties faced by IDH's Sudanese operations. More
specifically, 16 of IDH's 18 branches in the country have been temporarily
shut down since April due to the ongoing conflict.
Regional EBITDA in Local Currency
Mn 1H 2022 1H 2023 Change
Egypt EBITDA EGP 622 407 -35%
Margin 41% 27%
Jordan JOD 4.0 1.6 -60%
Margin 29% 24%
Nigeria NGN -80 -233 192%
Margin -10% -25%
Sudan SDG 4 24.1 494%
Margin 1% 12%
Interest Income / Expense
IDH's interest income during 1H 2023 stood at EGP 30 million, decreasing 60%
year-on-year from the EGP 75 million booked during the same six-month period
of last year. Lower interest income during the period was mainly due to the
Company's lower cash balances as a result of record cash dividends distributed
during last year.
Interest expense(12) amounted to EGP 76 million during 1H 2023, up 18%
year-on-year from EGP 64 million during 1H 3033. Increased interest expenses
were mainly driven by:
· Increased interest on lease liabilities related to IFRS 16 due to the
rollout of new branches.
· Higher interest expenses following the CBE decision to increase rates
by 1,000 bps since March 2022. It is important to note that IDH's interest
bearing debt balance decreased to EGP 108 million as at 30 June 2023, from EGP
117 million at year-end 2022. During the six-month period, as part of IDH's
strategy to reduce foreign currency risk the Company agreed with General
Electric (GE) for the early repayment of its contractual obligation of USD 5.7
million. To finance the settlement, IDH utilized a bridge loan facility, with
half the amount being funded internally, while the other half (amounting to
EGP 55 million) was provided through a bridge loan by Ahly United Bank- Egypt
(AUBE). Interest expenses related to the AUBE facility recorded EGP 12 million
in 1H 2023. The bridge loan was fully settled in Q2 2023.
Interest Expense Breakdown
EGP mn 1H 2022 1H 2023 Change
Interest on Lease Liabilities (IFRS 16) 34.9 45.2 29%
Interest Expenses on Leases 9.3 13.7 47%
Interest Expenses on Borrowings(13) 5.2 11.6 123%
Bank Charges 8.8 5.3 -39%
Loan-related Expenses on IFC facility(14) 5.9 - -
Total Interest Expense 64.1 75.9 18%
(12)Interest expenses on medium-term loans include EGP 12.0 related to the
Group's facility with Ahli United Bank Egypt (AUBE). Meanwhile, the Group's
facility with the Commercial International Bank (CIB) was fully repaid as of 5
April 2022.
(13)Interest expenses on medium-term loans include EGP 12.0 related to the
Group's facility with Ahli United Bank Egypt (AUBE). Meanwhile, the Group's
facility with the Commercial International Bank (CIB) was fully repaid as of 5
April 2022.
(14)Loan-related expenses on IFC facility represents commitment fees on the
facility granted by IFC and Mashreq with a total value of USD 60 million. The
facility was cancelled in May 2023.
Foreign Exchange
The Company recorded a foreign exchange gain of EGP 102 million during the
six-month period, a 47% year-on-year increase partially reflecting
intercompany balances revaluation.
Taxation
Tax expenses, which include income and deferred tax, amounted to EGP 98
million during 1H 2023, a 53% year-on-year decrease. The Company's effective
tax rate came in at 32%, unchanged versus the same six-month period of the
previous year. It is important to highlight that there is no tax payable for
IDH's two holding-level companies. Meanwhile, tax was paid on profits
resulting from the Group's operating subsidiaries (Egypt 27.5%, Jordan 36.6%,
Nigeria 0.2%, Sudan 11.4%).
Taxation Breakdown by Region
EGP Mn 1H 2022 1H 2023 Change
Egypt 196.0 91.1 -53%
Jordan 14.6 6.6 -55%
Nigeria -0.2 -0.1 -63%
Sudan 0.1 0.5 350%
Total Tax Expenses 210.5 98.1 -53%
Net Profit
IDH's net profit in 1H 2023 came in at EGP 211 million, down 52% year-on-year.
Meanwhile, the Company's net profit margin recorded 11%, down 11 percentage
points from 22% in the same six-month period last year. On a three-month
basis, the Company posted net profit of EGP 43 million, down 66% year-on-year.
IDH's bottom-line on both a year-to-date and quarterly basis was impacted by a
non-recurring expense of EGP 12 million related to contributions owed to the
Egyptian government vocational training fund for the previous five-year
period. Controlling for this, IDH would have booked a net profit of EGP 223
million in 1H 2023 and EGP 55 million in Q2 2023.
The EGP 12 million non-recurring expense is in accordance with article 134 of
labour law on Vocational Guidance and Training issued by the Egyptian
Government in 2003. In accordance with the law, IDH's Egyptian operations are
required to provide 1% of net profits each year into a training fund.
Integrated Diagnostics Holdings plc has taken legal advice and considered
market practices in Egypt relating to the law, and more specifically whether
vocational training courses undertaken by the Company's Egyptian subsidiaries
suggest that obligations have been satisfied by in-house training programmes
provided by those entities. Since the issue of the law, IDH's Egyptian
subsidiaries have not been requested by the government to pay, nor have they
voluntarily paid, any amounts into the external training fund.
ii. Balance Sheet Analysis
Assets
Property, Plant and Equipment
The Company recorded gross property, plant and equipment (PPE) of EGP 2,411
million as at 30 June 2023, increasing from EGP 2,208 million at year-end
2022. The rise in CAPEX as a share of revenues during 1H 2023 was driven
mainly by the addition of new branches to IDH's network (contributing 9% of
revenues), while the rest is attributable to the translation effect related to
Jordan, Sudan, and Nigeria (contributing 2% of revenues).
Total CAPEX Addition Breakdown - 1H 2023
EGP mn % of Revenue
Leasehold Improvements/new branches 154.9 8.3%
Al-Borg Scan Expansion 14.1 0.8%
Total CAPEX Additions Excluding Translation 169.5 9.1%
Translation Effect 34.3 1.8%
Total CAPEX Additions 203.4 10.9%
Accounts Receivable and Provisions
Accounts receivable as at 30 June 2023 stood at EGP 532 million, increasing
35% year-to-date from EGP 395 million. IDH's receivables' Days on Hand (DoH)
came in at 136 days, increasing from 124 days as at 31 December 2022.
Provisions for doubtful accounts recorded EGP 23 million in 1H 2023, up from
EGP 16 million in the same period of the previous year. Increased provisions
and receivable balance during the six-month period are mainly attributable to
slower collection rates as a result of sustained economic downturns in IDH's
geographies and, mainly, in the Company's home market of Egypt.
Inventory
IDH's inventory balance as of the end of the first six months of 2023 recorded
EGP 361 million, increasing from EGP 265 million as of the end of 2022.
Meanwhile, Days Inventory Outstanding (DIO) came in at 148 days, up from 127
days on a year-to-date basis. Increases in DIO were mainly driven by
management strategy to accumulate inventory as a hedge against inflation over
the past year.
Cash and Net Debt/Cash
Cash balances stood at EGP 666 million as of 30 June 2023, declining from EGP
816 million as of year-end 2022. The decline in cash balances is primarily
related to the aforementioned decision for the early repayment of IDH's
contractual obligation of USD 5.7 million (equivalent to EGP 110 million) to
reduce exposure to foreign currency risk using internal resources as well as a
bridge loan facility provided by AUBE, where the latter was also fully settled
in Q2 2023.
EGP million 31 Dec 2022 30 Jun 2023
T-Bills 296 238
Time Deposits 123 95
Current Accounts 378 313
Cash on Hand 18 21
Total 816 666
IDH's net debt(15) balance came in at EGP 482 million as of the end of 1H
2023, increasing 29% year-to-date from EGP 374 million as of year-end 2022.
(15)The net cash/(debt) balance is calculated as cash and cash equivalent
balances including financial assets at amortised cost, less interest-bearing
debt (medium term loans), finance lease and Right-of-use liabilities.
EGP million 31 Dec 2022 30 Jun 2023 31 Dec 2021
Cash and Financial Assets at Amortised Cost(16) 816 666 2,350
Lease Liabilities Property (727) (777) 106
Total Financial Liabilities (Short-term and Long-term) (335) (249)
Interest Bearing Debt ("Medium Term Loans") (127) (122)
Net Cash/(debt) Balance (374) (482) 1,483
Note: Interest Bearing Debt includes accrued interest for each period.
Lease liabilities and financial obligations on property came in at EGP 777
million as at 31 June 2023, up from EGP 727 million as at year-end 2022.
Higher lease liabilities were driven by the launch of 50 new branches across
IDH's branch network in the twelve months to 30 June 2023.
Meanwhile, financial obligations related to equipment recorded EGP 249 million
as at the end of 1H 2023, down from EGP 335 million as at the end of 2022.
Declining financial obligations related to equipment is a result of the early
repayment of IDH's obligations with General Electric (GE) as part of the
Company's efforts to hedge against foreign currency risk. Half of the
settlement was financed internally by the Company, while the other half was
financed through a bridge loan facility from AUBE.
Finally, interest bearing debt(17) recorded EGP 108 million, down from EGP 117
million as at year-end 2022. The decrease is mainly attributable to the
repayment of EGP 8.5 million in accordance with Al-Borg Scan's medium term
loan repayment schedule.
Liabilities
Accounts Payable(18)
Accounts payable stood at EGP 377 million as at the end of 1H 2023, increasing
from EGP 270 million six months earlier. In parallel, IDH's Days Payable
Outstanding (DPO) came in at 153 days, up from 151 days as at year-end 2022.
Put Option
The put option current liability is related to the option granted in 2011 to
Dr. Amid, Biolab's CEO, to sell his stake (40%) to IDH. The put option is in
the money and exercisable since 2016 and is calculated as 7 times Biolab's LTM
EBITDA minus net debt. Biolab's put option liability decreased following the
significant decline in the venture's EBITDA for the period.
The put option non-current liability is related to the option granted in 2018
to the International Finance Corporation from Dynasty - shareholders in Echo
Lab - and it is exercisable in 2024. The put option is calculated based on
fair market value (FMV).
(16)As outlined in Note 18 of IDH's Consolidated Financial Statements, some
term deposits and treasury bills cannot be accessed for over 3 months and are
therefore not treated as cash. Term deposits which cannot be accessed for over
3 months stood at EGP 113 million in Q1 2023, versus EGP 123 million as at
year-end 2022. Meanwhile, treasury bills not accessible for over 3 months
stood at EGP 342 million in Q1 2023, up from EGP 296 million in FY 2022.
(17)IDH's interest bearing debt as at 31 March 2023 included EGP 172 million
to its facility with Ahli United Bank Egypt (AUBE) (outstanding loan balances
are excluding accrued interest for the period). It is worth noting that in
order to finance the early repayment settlement with General Electric, the
Company utilized a bridge loan facility of EGP 55 million. The facility was
withdrawn in Q1 2023 and settled in Q2 2023.
(18)Accounts payable is calculated based on average payables at the end of
each period.
Accounts Receivable and Provisions
Accounts receivable as at 30 June 2023 stood at EGP 532 million, increasing
35% year-to-date from EGP 395 million. IDH's receivables' Days on Hand (DoH)
came in at 136 days, increasing from 124 days as at 31 December 2022.
Provisions for doubtful accounts recorded EGP 23 million in 1H 2023, up from
EGP 16 million in the same period of the previous year. Increased provisions
and receivable balance during the six-month period are mainly attributable to
slower collection rates as a result of sustained economic downturns in IDH's
geographies and, mainly, in the Company's home market of Egypt.
Inventory
IDH's inventory balance as of the end of the first six months of 2023 recorded
EGP 361 million, increasing from EGP 265 million as of the end of 2022.
Meanwhile, Days Inventory Outstanding (DIO) came in at 148 days, up from 127
days on a year-to-date basis. Increases in DIO were mainly driven by
management strategy to accumulate inventory as a hedge against inflation over
the past year.
Cash and Net Debt/Cash
Cash balances stood at EGP 666 million as of 30 June 2023, declining from EGP
816 million as of year-end 2022. The decline in cash balances is primarily
related to the aforementioned decision for the early repayment of IDH's
contractual obligation of USD 5.7 million (equivalent to EGP 110 million) to
reduce exposure to foreign currency risk using internal resources as well as a
bridge loan facility provided by AUBE, where the latter was also fully settled
in Q2 2023.
EGP million 31 Dec 2022 30 Jun 2023
T-Bills 296 238
Time Deposits 123 95
Current Accounts 378 313
Cash on Hand 18 21
Total 816 666
IDH's net debt(15) balance came in at EGP 482 million as of the end of 1H
2023, increasing 29% year-to-date from EGP 374 million as of year-end 2022.
(15)The net cash/(debt) balance is calculated as cash and cash equivalent
balances including financial assets at amortised cost, less interest-bearing
debt (medium term loans), finance lease and Right-of-use liabilities.
EGP million 31 Dec 2022 30 Jun 2023 31 Dec 2021
Cash and Financial Assets at Amortised Cost(16) 816 666 2,350
Lease Liabilities Property (727) (777) 106
Total Financial Liabilities (Short-term and Long-term) (335) (249)
Interest Bearing Debt ("Medium Term Loans") (127) (122)
Net Cash/(debt) Balance (374) (482) 1,483
Note: Interest Bearing Debt includes accrued interest for each period.
Lease liabilities and financial obligations on property came in at EGP 777
million as at 31 June 2023, up from EGP 727 million as at year-end 2022.
Higher lease liabilities were driven by the launch of 50 new branches across
IDH's branch network in the twelve months to 30 June 2023.
Meanwhile, financial obligations related to equipment recorded EGP 249 million
as at the end of 1H 2023, down from EGP 335 million as at the end of 2022.
Declining financial obligations related to equipment is a result of the early
repayment of IDH's obligations with General Electric (GE) as part of the
Company's efforts to hedge against foreign currency risk. Half of the
settlement was financed internally by the Company, while the other half was
financed through a bridge loan facility from AUBE.
Finally, interest bearing debt(17) recorded EGP 108 million, down from EGP 117
million as at year-end 2022. The decrease is mainly attributable to the
repayment of EGP 8.5 million in accordance with Al-Borg Scan's medium term
loan repayment schedule.
Liabilities
Accounts Payable(18)
Accounts payable stood at EGP 377 million as at the end of 1H 2023, increasing
from EGP 270 million six months earlier. In parallel, IDH's Days Payable
Outstanding (DPO) came in at 153 days, up from 151 days as at year-end 2022.
Put Option
The put option current liability is related to the option granted in 2011 to
Dr. Amid, Biolab's CEO, to sell his stake (40%) to IDH. The put option is in
the money and exercisable since 2016 and is calculated as 7 times Biolab's LTM
EBITDA minus net debt. Biolab's put option liability decreased following the
significant decline in the venture's EBITDA for the period.
The put option non-current liability is related to the option granted in 2018
to the International Finance Corporation from Dynasty - shareholders in Echo
Lab - and it is exercisable in 2024. The put option is calculated based on
fair market value (FMV).
(16)As outlined in Note 18 of IDH's Consolidated Financial Statements, some
term deposits and treasury bills cannot be accessed for over 3 months and are
therefore not treated as cash. Term deposits which cannot be accessed for over
3 months stood at EGP 113 million in Q1 2023, versus EGP 123 million as at
year-end 2022. Meanwhile, treasury bills not accessible for over 3 months
stood at EGP 342 million in Q1 2023, up from EGP 296 million in FY 2022.
(17)IDH's interest bearing debt as at 31 March 2023 included EGP 172 million
to its facility with Ahli United Bank Egypt (AUBE) (outstanding loan balances
are excluding accrued interest for the period). It is worth noting that in
order to finance the early repayment settlement with General Electric, the
Company utilized a bridge loan facility of EGP 55 million. The facility was
withdrawn in Q1 2023 and settled in Q2 2023.
(18)Accounts payable is calculated based on average payables at the end of
each period.
-End-
INTEGRATED DIAGNOSTICS HOLDINGS plc - "IDH"
AND ITS SUBSIDIARIES
Consolidated Financial Statements
for the six-month period ended 30 June 2023
Consolidated statement of financial position as at 30 June 2023
Notes 31 Mar 2023 31 Dec 2022
EGP'000 EGP'000
Assets
Non-current assets
Property, plant and equipment 4 1,392,293 1,326,262
Intangible assets and goodwill 5 1,723,582 1,703,636
Right of use assets 6 653,008 622,975
Financial assets at fair value through profit and loss 7 - 18,064
Total non-current assets 3,768,883 3,670,937
Current assets
Inventories 360,847 265,459
Trade and other receivables 8 651,528 543,887
Financial assets at amortized cost 9 189,931 167,404
Current financial assets at fair value through profit and loss 7 23,590 -
Cash and cash equivalents 10 475,580 648,512
Total current assets 1,701,476 1,625,262
Total assets 5,470,359 5,296,199
Equity
Share capital 1,072,500 1,072,500
Share premium reserve 1,027,706 1,027,706
Capital reserves (314,310) (314,310)
Legal reserve 51,641 51,641
Put option reserve (286,152) (490,695)
Translation reserve (84,765) 24,173
Retained earnings 1,006,671 783,081
Equity attributable to the owners of the Company 2,473,291 2,154,096
Non-controlling interests 379,132 292,885
Total equity 2,852,423 2,446,981
Non-current liabilities
Provisions 16,163 3,519
Non-current put option liability 12 - 51,000
Borrowings 13 79,560 93,751
Other financial obligations 14 873,998 914,191
Deferred tax liabilities 18-C 332,953 321,732
Total non-current liabilities 1,302,674 1,384,193
Current liabilities
Trade and other payables 11 766,773 701,095
Other financial obligations 14 152,159 148,705
Current put option liability 12 286,152 439,695
Borrowings 13 28,384 22,675
Current tax liabilities 81,794 152,855
Total current liabilities 1,315,262 1,465,025
Total liabilities 2,617,936 2,849,218
Total equity and liabilities 5,470,359 5,296,199
The accompanying notes form an integral part of these consolidated financial
statements.
These condensed consolidated interim financial information were approved and
authorized for issue by the Board of Directors and signed on their behalf on
30 August 2023 by:
Dr. Hend El Sherbini Hussein Choucri
Chief Executive Officer Independent Non-Executive Director
Consolidated income statement for the quarter and six-month periods ended 30
June 2023
For the three months period For the six months period
ended 30 June ended 30 June
Notes 2023 2022 2023 2022
EGP'000 EGP'000 EGP'000 EGP'000
Revenue 21 956,651 773,586 1,871,942 1,954,065
Cost of sales (623,291) (473,402) (1,214,008) (1,122,195)
Gross profit 333,360 300,184 657,934 831,870
Marketing and advertising expenses (49,178) (51,804) (112,473) (92,568)
Administrative expenses 16 (127,857) (77,892) (254,340) (164,192)
Impairment loss on trade and other receivable (12,586) (8,980) (23,269) (16,158)
Other income (7,260) 4,553 (2,563) 3,471
Operating profit 136,479 166,061 265,289 562,423
Non-operating expense (12,200) - (12,200) -
Finance costs 17 (33,084) (31,087) (75,879) (64,147)
Finance income 17 7,746 43,247 132,234 151,292
Net finance cost (25,338) 12,160 56,355 87,145
Profit before tax 98,941 178,221 309,444 649,568
Income tax expense 18-B (56,277) (53,302) (98,394) (210,516)
Profit for the period 42,664 124,919 211,050 439,052
Profit attributed to:
Equity holders of the parent 50,681 125,611 223,590 422,220
Non-controlling interests (8,017) (692) (12,540) 16,832
42,664 124,919 211,050 439,052
Earnings per share (expressed in EGP):
Basic and diluted earnings per share 20 0.08 0.21 0.37 0.70
The accompanying notes form an integral part of these condensed consolidated
interim financial information.
Consolidated statement of comprehensive income/(expenses) for the quarter and
six-month periods ended 30 June 2023
For the three months period ended 30 June For the six months period ended 30 June
2023 2022 2023 2022
EGP'000 EGP'000 EGP'000 EGP'000
Net profit 42,664 124,919 211,050 439,052
Items that may be reclassified to profit or loss:
Exchange difference on translation of foreign operations (42,604) 25,983 (10,151) 103,291
Other comprehensive income / (Loss) for the period net of tax (42,604) 25,983 (10,151) 103,291
Total comprehensive income for the period 60 150,902 200,899 542,343
Attributed to:
Equity holders of the parent 27,642 138,135 114,652 448,685
Non-controlling interests (27,582) 12,767 86,247 93,658
60 150,902 200,899 542,343
The accompanying notes form an integral part of these condensed consolidated
interim financial information.
Consolidated statement of cash flows for the six-month period ended 30 June
2023
Notes 30 June 2023 30 June 2022
EGP'000 EGP'000
Cash flows from operating activities
Profit for the period before tax 309,444 649,568
Adjustments
Depreciation of property, plant and equipment 126,755 95,184
Depreciation of right of use assets 65,632 48,215
Amortisation of intangible assets 3,872 3,439
Unrealised foreign currency exchange (gains) losses 17 (102,159) (69,378)
Interest income 17 (30,075) (75,443)
Interest expense 17 70,496 55,342
Bank Charges 5,383 8,805
Loss/(Gain) on disposal of Property, plant and equipment (603) 523
Impairment in trade and other receivables 23,269 16,158
Equity settled financial assets at fair value (5,526) (2,548)
ROU Asset/Lease Termination (348) (408)
Hyperinflation (gains) losses 17 - (6,471)
Change in Provisions 12,644 (380)
Change in Inventories (90,933) (15,888)
Change in trade and other receivables (103,219) (81,073)
Change in trade and other payables 33,226 (85,084)
Cash generated from operating activities before income tax payment 317,858 540,562
Tax paid during period (157,734) (506,375)
Net cash generated from operating activities 160,124 34,187
Cash flows from investing activities
Interest received on financial asset at amortised cost 30,494 25,224
Payments for the purchase of financial assets at amortized cost (150,423) (309,952)
Proceeds for the sale of financial assets at amortized cost 138,815 1,266,048
Payments for acquisition of property, plant and equipment 4 (164,174) (143,424)
Payments for acquisition of intangible assets 5 (1,401) (1,505)
Proceeds from sale of Property, plant and equipment 1,874 5,999
Net cash flows generated (used in) from investing activities (144,815) 842,390
Cash flows from financing activities
Proceeds from borrowings 54,936 -
Repayments of borrowings (63,418) (13,238)
Payment of finance lease liabilities (67,735) (58,276)
Dividends paid - (88,766)
Interest paid (5,383) (8,805)
Bank charge paid (161,410) (17,239)
Net cash flows used in financing activities (243,010) (186,324)
Net increase in cash and cash equivalent (227,701) 690,253
Cash and cash equivalents at the beginning of the year 648,512 891,451
Effect of exchange rate 54,769 85,920
Cash and cash equivalent at the end of the period 10 475,580 1,667,624
Non-cash investing and financing activities disclosed in other notes are:
· Acquisition of right-of-use assets - note 6
· Property plant and equipment - note 4
· Put option liability - note 12
The accompanying notes form an integral part of these condensed consolidated
interim financial information.
Consolidated statement of changes in equity for the six-month period ended 30
June 2023
Attributable to owners of the Parent
EGP '000 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 2023 1,072,500 1,027,706 (314,310) 51,641 (490,695) 24,173 783,081 2,154,096 292,885 2,446,981
Profit for the period - - - - - - 223,590 223,590 (12,540) 211,050
Other comprehensive income for the period - - - - - (108,938) - (108,938) 98,787 (10,151)
Total comprehensive income at 30 June 2023 - - - - - (108,938) 223,590 114,652 86,247 200,899
Transactions with owners of the Company
Contributions and distributions
Movement in put option liabilities - - - - 204,543 - - 204,543 - 204,543
Total contributions and distributions - - - - 204,543 - - 204,543 - 204,543
Balance at 30 June 2023 1,072,500 1,027,706 (314,310) 51,641 (286,152) (84,765) 1,006,671 2,473,291 379,132 2,852,423
At 1 January 2022 1,072,500 1,027,706 (314,310) 51,641 (956,397) 150,730 1,550,976 2,582,846 211,513 2,794,359
Profit for the period - - - - - - 422,220 422,220 16,832 439,052
Other comprehensive income for the period - - - - - 26,465 - 26,465 76,826 103,291
Total comprehensive income at 30 June 2022 - - - - - 26,465 422,220 448,685 93,658 542,343
Transactions with owners of the Company
Contributions and distributions
Dividends - - - - - - (1,304,805) (1,304,805) (106,947) (1,411,752)
Movement in put option liabilities - - - - 19,501 - - 19,501 - 19,501
Impact of hyperinflation - - - - - - (4,705) (4,705) 1,020 (3,685)
Total contributions and distributions - - - - 19,501 - (1,309,510) (1,290,009) (105,927) (1,395,936)
Balance at 30 June 2022 1,072,500 1,027,706 (314,310) 51,641 (936,896) 177,195 663,686 1,741,522 199,244 1,940,766
*Under Egyptian Law, each subsidiary in Egypt must set aside at least 5% of
its annual net profit into a legal reserve until such time that this
represents 50% of each subsidiary's issued capital. This reserve is not
distributable to the owners of the Company.
The accompanying notes form an integral part of these condensed consolidated
interim financial information.
(In the notes all amounts are shown in Egyptian Pounds "EGP'000" unless
otherwise stated)
1. Reporting entity
Integrated Diagnostics Holdings plc "IDH" or "the Company" is a Company which
was incorporated in Jersey on 4 December 2014 and established according to the
provisions of the Companies (Jersey) Law 1991 under Registered No. 117257.
These condensed consolidated interim financial information as at and for the
six months ended 30 June 2023 comprise the Company and its subsidiaries
(together referred as the 'Group'). The Company is a dually listed entity, in
both London Stock Exchange (since 2015) and in the Egyptian Exchange (during
May 2021).
The principal activities of the Company and its subsidiaries (together "The
Group") include investments in all types of the healthcare field of medical
diagnostics (the key activities are pathology and Radiology related tests),
either through acquisitions of related business in different jurisdictions or
through expanding the acquired investments they have. The key jurisdictions
that the Group operates are in Egypt, Jordan, Nigeria and Sudan.
The Group's financial year starts on 1 January and ends on 31 December of each
year.
These condensed consolidated interim financial information were approved for
issue by the Directors of the Company on 30 August 2023.
2. Basis of preparation
A) Statement of compliance
These condensed consolidated interim financial information have been prepared
as per IAS 34 'Interim Financial Reporting' (As adopted by the IASB). As the
accounting policies adopted are consistent with those of the previous
financial year ended 31 December 2022 and corresponding interim reporting
period.
These condensed consolidated interim financial information do not include all
the information and disclosures in the annual consolidated financial
Statement, and should be read in conjunction with the financial Statement
published as at and for the year ended 31 December 2022 which is available at
www.idhcorp.com (http://www.idhcorp.com) ,. In addition, results of the
six-month period ended 30 June 2023 are not necessary indicative for the
results that may be expected for the financial year ending 31 December 2023.
B) Basis of measurement
The condensed consolidated interim financial information has been prepared on
the historical cost basis except where adopted IFRS mandates that fair value
accounting is required which is related to the financial assets and
liabilities measured at fair value.
C) Functional and presentation currency
These condensed consolidated interim financial information is presented in
Egyptian Pounds (EGP'000). The functional currency of the majority of the
Group's entities is the Egyptian Pound (EGP) and is the currency of the
primary economic environment in which the Group operates.
The Group also operates in Jordan, Sudan and Nigeria and the functional
currencies of those foreign operations are the local currencies of those
respective territories, however due to the size of these operations, there is
no significant impact on the functional currency of the Group, which is the
Egyptian Pound (EGP).
3. Significant accounting policies
In preparing these condensed consolidated interim financial information, the
significant judgments made by the management in applying the Group's
accounting policies and the key sources of estimation uncertainty were the
same as those that were applied to the consolidated financial information for
the year ended 31 December 2022."The preparation of these condensed
consolidated interim financial information requires management to make
judgements, estimates and assumptions that affect the application of
accounting policies and the reported amounts of assets, liabilities, income
and expense. Actual results may differ from these estimates. Information about
significant areas of estimation uncertainty and critical judgement in applying
accounting policies that have the most significant effect on the amount
recognised in the condensed consolidated interim financial statement is
described in note 3.2 of the annual consolidated financial information
published for the year ended 31 December 2022. In preparing these condensed
consolidated interim financial information, the significant judgments made by
the management in applying the Group's accounting policies and the key sources
of estimation uncertainty were the same as those that were applied to the
consolidated financial information for the year ended 31 December 2022".
4. Property, plant and equipment
Land & buildings Medical, electric Leasehold Fixtures, fittings & vehicles Project under construction Payment on account Total
& information
improvements
system equipment
Cost
At 1 January 2023 426,961 1,111,867 507,442 133,195 28,589 10,614 2,218,668
Additions 8,554 64,416 35,237 14,783 50,162 432 173,584
Disposals - (2,578) (317) (1,192) - - (4,087)
Exchange differences 2,278 5,398 20,320 6,266 23 - 34,285
Transfers - - 15,276 - (15,276) - -
At 30 June 2023 437,793 1,179,103 577,958 153,052 63,498 11,046 2,422,450
Depreciation
At 1 January 2023 61,578 513,869 261,705 55,254 - 892,406
Depreciation for the period 3,548 75,350 39,950 7,907 - - 126,755
Disposals - (1,643) (262) (911) - - (2,816)
Exchange differences 568 5,053 7,006 1,185 - - 13,812
At 30 June 2023 65,694 592,629 308,399 63,435 - - 1,030,157
Net book value at 30 June 372,099 586,474 269,559 89,617 63,498 11,046 1,392,293
At 31 December 2022 365,383 597,998 245,737 77,941 28,589 10,614 1,326,262
5. Intangible assets and goodwill
Intangible assets represent goodwill acquired through business combinations
and brand names.
Goodwill Brand name Software Total
Cost
Balance at 1 January 2023 1,291,823 395,551 92,836 1,780,210
Additions - - 1401 1,401
Effect of movements in exchange rates 13,176 7,315 3,908 24,399
Balance at 30 June 2023 1,304,999 402,866 98,145 1,806,010
Amortisation and impairment
Balance at 1 January 2023 6,373 381 69,820 76,574
Amortisation - - 3,872 3,872
Effect of movements in exchange rates 86 12 1,884 1,982
Balance at 30 June 2023 6,459 393 75,576 82,428
Carrying amount
Balance at 30 June 2023 1,298,540 402,473 22,569 1,723,582
Balance at 31 December 2022 1,285,450 395,170 23,016 1,703,636
Goodwill impairment reviews are undertaken annually or more frequently if
events or changes in circumstances indicate a potential impairment. No
indicators of impairment have been identified during the three months ended 30
June 2023.
6. Right-of-use assets
30 June 2023 31 December 2022
Balance at 1 January 622,975 462,432
Addition for the period / year 60,074 214,846
Depreciation charge for the period / year (65,632) (103,099)
Terminated contracts (4,246) (13,564)
Exchange differences 39,837 62,360
Balance 653,008 622,975
7. Financial asset at fair value through profit and loss
30 June 2023 31 December 2022
Non-current equity investments - 18,064
Current equity investments 23,590 -
23,590 18,064
* On August 17, 2017, Almakhbariyoun AL Arab (seller) has signed IT
purchase Agreement with JSC Mega Lab (Buyer) to transfer and install the
Laboratory Information Management System (LIMS) for a purchase price amounted
to USD 400 000, which will be in the form of 10% equity stake in JSC Mega Lab.
In case the valuation of the project is less or more than USD 4,000,000, the
seller stake will be adjusted accordingly, in a way that the seller equity
stake shall not fall below 5% of JSC Mega Lab.
- Ownership percentage in JSC Mega Lab at the transaction date on
April 8, 2019, and as of June 30, 2023, was 8.25%.
- On April 8, 2019, Al Mokhabariyoun Al Arab (Biolab) has signed a
Shareholder Agreement with JSC Mega Lab and JSC Georgia Healthcare Group
(CHG), whereas, BioLab Shall have a put option, exercisable within 12 months
immediately after the expiration of five(5) year period from the signing date,
These assets have therefore been reclassified as current assets in the
financial information as of June 30, 2023, which allows BioLab stake to be
bought out by CHG at a price of the equity value being USD 400,000 plus 15%
annual Interred Rate of Return (IRR).
- In case the Management Agreement or the Purchase Agreement and/or
the Service level Agreement is terminated/cancelled within 6 months period
from the date of such termination/cancellation, CHG shall have a call option,
which allows the CHG to purchase Biolab's Strake in JSC Megalab having value
of USD 400,000.00 plus 20% annual Interred Rate of Return (IRR).
- If JCI accreditation is not obtained, immediately after the
expiration of the 12 months period, CHG shall have a call option (the
Accreditation Call option), exercisable within 6 months period, allowing CHG
to purchase BioLab's Shares in JSC Mega Lab at a price of the equity value of
USD 400,00.00 plus the 20% annual IRR.
- After 12 months from the date of the put option period expiration,
CHG to purchase Biolab's Stake in JSC Megalab having value of USD 400,000 plus
higher of 20% annual IRR or 6X EV/EBITDA (of the financial year immediately
preceding the call option exercise date).
8. Trade and other receivables
30 June 2023 31 December 2022
Trade receivables - net 532,482 395,220
Prepayments 41,247 34,081
Due from related parties note (15) 4,366 5,930
Other receivables 71,559 106,363
Accrued revenue 1,874 2,293
651,528 543,887
9. Financial assets at amortised cost
30 June 2023 31 December 2022
Term deposits (more than 3 months) 47,977 60,200
Treasury bills (more than 3 months) 141,954 107,204
189,931 167,404
The maturity date of the treasury bills and Fixed-term deposits are between
3-12 months and have average interest rates of EGP, and JOD 21.75% and 5.50%
respectively.
10. Cash and cash equivalents
30 June 2023 31 December 022
Cash at banks and on hand 333,201 399,957
Treasury bills (less than 3 months) 95,611 185,513
Term deposits (less than 3 months) 46,768 63,042
475,580 648,512
11. Trade and other payables
30 June 2023 31 December 2022
Trade payable 377,453 269,782
Accrued expenses 185,930 241,060
Due to related parties note (15) 25,242 25,058
Other payables 122,602 98,204
Deferred revenue 47,192 60,948
Accrued finance cost 8,354 6,043
766,773 701,095
12. Put option liability
30 June 2023 31 December 2022
Current put option - Biolab Jordan 249,947 439,695
Current put option - Eagle Eye-Echo scan 36,205 -
286,152 490,695
30 June 2023 31 December 2022
Non-current put option - Eagle Eye-Echo scan - 51,000
- 51,000
Put option - Biolab Jordan
The accounting policy for put options after initial recognition is to
recognise all changes in the carrying value of the put option liability within
equity.
Through the historic acquisitions of Makhbariyoun Al Arab the Group entered
into separate put option arrangements to purchase the remaining equity
interests from the vendors at of a subsequent date. At acquisition, a put
option liability has been recognised at the net present value of the exercise
price of the option.
The option is calculated at seven times EBITDA of the last 12 months minus Net
Debt and its exercisable in whole starting the fifth anniversary of completion
of the original purchase agreement, which fell due in June 2016. The vendor
has not exercised this right at 30 June 2023. It is important to note that the
put option liability is treated as current as it could be exercised at any
time by the NCI.
However, based on discussions and ongoing business relationship, there is no
expectation that this will happen in next 18 months. The option has no expiry
date.
Put option - Eagle Eye-Echo scan
According to the definitive agreements signed on 15 January 2018 between
Dynasty Group Holdings Limited and the International Finance Corporation (IFC)
related to the Eagle Eye-Echo scan transaction, IFC has the option to put it
is shares to Dynasty in year 2024. The put option price will be calculated on
the basis of the fair market value determined by an independent valuator. This
commitment has been reclassified as a working obligation as the put option
ends within one year of the Group's financial position on June 30, 2023.
13. Loans and borrowings
Currency Nominal interest rate Maturity 30 June 2023 31 December 2022
AUB - Bank EGP CBE corridor rate+1% 26 January 2027 107,944 116,426
107,944 116,426
Amount held as:
Current liability 28,384 22,675
Non- current liability 79,560 93,751
107,944 116,426
A) In July 2018, AL-Borg lab, one of IDH subsidiaries, was
granted a medium term loan amounting to EGP 130.5m from Ahli United Bank "AUB
Egypt" to finance the investment cost related to the expansion into the
radiology segment. As at 30 June 2023 only EGP 108 M had been drawn down from
the total facility available with 8.5 M had been repaid. Loan withdrawal
availability period was extended till July 2023 and the loan will be fully
repaid by January 2027.
The loan contains the following financial covenants which if breached will
mean the loan is repayable on demand:
1. The financial leverage shall not exceed 0.7 throughout the period of
the loan
"Financial leverage": total bank debt divided by net equity.
2. The debt service ratios (DSR) shall not be less than 1.35 starting
2020
"Debt service ratio": cash operating profit after tax plus depreciation for
the financial year less annual maintenance on machinery and equipment adding
cash balance (cash and cash equivalent) divided by total financial payments.
"Cash operating profit": Operating profit after tax, interest expense,
depreciation and amortisation, is calculated as follows: Net income after tax
and unusual items adding Interest expense, Depreciation, Amortisation and
provisions excluding tax related provisions less interest income and
Investment income and gains from extraordinary items.
"Financial payments": current portion of long-term debt including finance
lease payments, interest expense and fees and dividends distributions.
3. The current ratios shall not be less than 1.
"Current ratios": Current assets divided current liabilities.
The terms and conditions of outstanding loans are as follows:
* As at 30 June 2023 corridor rate 20.25% (2022:
17.25%)
13. Loans and borrowings (continued)
AL- Borg company didn't breach any covenants for MTL agreements.
IDH opted to reduce its exposure to foreign currency risk by agreeing with
General Electric (GE) for the early repayment of its dollar obligation. The
Group and GE have agreed to settle this balance early for USD 3.55 million,
payable in EGP, equivalent to EGP 110 million.
To finance the settlement, IDH utilized a bridge loan facility, with half of
the amount (EGP 55 million) being funded internally and the other half (EGP 55
million) provided by a loan from Ahly United Bank - Egypt, this credit
facility was fully repaid during the six-month period ending 30 June 2023.
14. Other Financial obligations
30 June 2023 31 December 2022
Lease liabilities building 777,198 727,426
Financial liability- laboratory equipment 248,959 335,470
1,026,157 1,062,896
The financial obligations for the laboratory equipment and building are
payable as follows:
30 June 2023
Minimum payments Interest Principal
Less than one year 254,680 102,521 152,159
Between one and five years 1,010,080 287,655 722,425
More than five years 185,611 34,038 151,573
1,450,371 424,214 1,026,157
31 December 2022
Minimum payments Interest Principal
Less than one year 285,962 137,257 148,705
Between one and five years 1,030,750 314,656 716,094
More than Five years 227,715 29,618 198,097
1,544,427 481,531 1,062,896
14. Other Financial obligations (continued)
Amounts recognised in profit or loss:
For the three months ended 30 June For the six months ended
30 June
2023 2022 2023 2022
Interest on lease liabilities 22,898 18,065 45,221 34,926
Expenses related to short-term lease 2,515 9,387 5,191 15,144
15. Related party transactions
The significant transactions with related parties, their nature volumes and
balance during the period 30 June 2023 are as follows:
30 June 2023
Related Party Nature of transaction Nature of relationship Transaction amount of the year Amount due from / (to)
EGP'000 EGP'000
ALborg Scan (S.A.E)* Expenses paid on behalf Affiliate - 351
International Fertility (IVF)** Expenses paid on behalf Affiliate - 1,771
H.C Security Provide service Entity owned by Company's board member 70 (29)
Life Health Care Provided service Entity owned by Company's CEO (1,740) 778
Dr. Amid Abd Elnour Put option liability Bio. Lab C.E.O and shareholder 189,748 (249,947)
Current account Bio. Lab C.E.O and shareholder 191 (19,817)
International Finance corporation (IFC) Put option liability Echo-Scan shareholder 14,794 (36,205)
International Finance corporation (IFC) Current account Echo-Scan shareholder 623 -
Integrated Treatment for Kidney Diseases (S.A.E) Collection Entity owned by Company's CEO (103)
Medical Test analysis 72 1,466
Hena Holdings Ltd shareholders' dividends deferral agreement shareholder (63) (2,436)
Actis IDH Limited shareholders' dividends deferral agreement shareholder (1,005) (2,960)
(307,028)
15. Related party transactions (continued)
31 December 2022
Related Party Nature of transaction Nature of relationship Transaction amount of the year Amount due from / (to)
EGP'000 EGP'000
AL borg Scan (S.A.E)* Expenses paid on behalf Affiliate - 351
International Fertility (IVF)** Expenses paid on behalf Affiliate 4 1,771
H.C Security Provide service Entity owned by Company's board member 220 (99)
Life Health Care Provided service Entity owned by Company's CEO 424 2,518
Dr. Amid Abd Elnour Put option liability Bio. Lab C.E.O and shareholder 481,665 (439,695)
Current account Bio. Lab C.E.O and shareholder (20,008) (20,008)
International Finance corporation (IFC) Put option liability Echo-Scan shareholder (15,963) (51,000)
International Finance corporation (IFC) Current account Echo-Scan shareholder 12,292 (623)
Integrated Treatment for Kidney Diseases (S.A.E) Rental income Entity owned by Company's CEO 116 1,290
Medical Test analysis 381 -
Dr. Hend El Sherbini Loan arrangement CEO 17,025 -
HENA HOLDINGS LTD shareholders' dividends deferral agreement shareholder (2,373) (2,373)
ACTIS IDH LIMITED shareholders' dividends deferral agreement shareholder (1,955) (1,955)
(509,823)
* ALborg Scan is a company whose shareholders include Dr. Moamena Kamel
(founder of IDH subsidiary Al-Mokhtabar Labs).
** International Fertility (IVF) is a company whose shareholders include
Dr. Moamena Kamel (founder of IDH subsidiary Al-Mokhtabar Labs).
15. Related party transactions (continued)
Compensation of key management personnel of the Group
The amounts disclosed in the table are the amounts recognised as an expense
during the reporting period related to key management personnel.
30 June 2023 30 June 2022
Short-term employee benefits 22,203 25,424
22,203 25,424
16. General and administrative expenses
For the three months ended 30 June For the six months ended 30 June
2023 2022 2023 2022
Wages and salaries 55,449 32,979 107,211 66,910
Depreciation 8,181 6,432 16,640 12,915
Amortisation 1,535 1,008 3,089 1,928
Consulting fees 31,503 17,184 68,354 34,064
Other expenses 31,189 20,289 59,046 48,375
Total 127,857 77,892 254,340 164,192
17. Net finance cost
For the three months ended 30 June For the six months ended 30 June
2023 2022 2023 2022
Finance income
Interest income 14,907 30,196 30,075 75,443
Net foreign exchange gain (7,161) 8,244 102,159 69,378
Gain on hyperinflationary net monetary position - 4,807 - 6,471
Total finance income 7,746 43,247 132,234 151,292
Finance cost
Bank charges (2,975) (1,661) (5,383) (8,805)
Interest expense (30,109) (29,426) (70,496) (55,342)
Total finance cost (33,084) (31,087) (75,879) (64,147)
Net finance (cost)/income (25,338) 12,160 56,355 87,145
18. Tax
A) Tax expense
Tax expense is recognised based on management's best estimate of the
weighted-average annual income tax rate expected for the full financial year
multiplied by the pre-tax income of the interim reporting period.
B) Income tax
Amounts recognised in profit or loss as follow:
For the three months ended 30 June For the six months ended 30 June
2023 2022 2023 2022
Current tax:
Current period (46,432) (58,479) (87,568) (159,839)
Deferred tax:
Deferred tax arising on undistributed reserves in subsidiaries (11,097) 6,672 (10,907) (48,553)
Relating to origination and reversal of temporary differences 1,252 (1,495) 81 (2,124)
Total Deferred tax expense (9,845) 5,177 (10,826) (50,677)
Tax expense recognised in profit or loss (56,277) (53,302) (98,394) (210,516)
C) Deferred tax liabilities
Deferred tax relates to the following:
30 June 2023 31 December 2022
Property, plant and equipment (33,890) (35,804)
Intangible assets (111,345) (109,118)
Undistributed reserves from Group subsidiaries (187,779) (176,871)
Provisions and financial obligation 61 61
Net deferred tax liabilities (332,953) (321,732)
19. Financial instruments
The Group has reviewed the financial assets and liabilities held at 30 June
2023. It has been deemed that the carrying amounts for all financial
instruments are a reasonable approximation of fair value. All financial
instruments are deemed Level 3.
20. Earnings per share
For the three months ended 30 June For the six months ended 30 June
2023 2022 2023 2022
Profit attributed to owners of the parent 50,681 125,611 223,590 422,220
Weighted average number of ordinary shares in issue 600,000 600,000 600,000 600,000
Basic and diluted earnings per share 0.08 0.21 0.37 0.70
The Company has no potential diluted shares as at 30 June 2023 and 30 June
2022, therefore; the earnings per diluted share are equivalent to basic
earnings per share.
21. Segment reporting
Operating segments are reported in a manner consistent with the internal
reporting provided to the chief operating decision-maker. The chief operating
decision-maker who is responsible for allocating resources and assessing
performance of the operating segments, has been identified as the steering
committee that makes strategic decisions.
The Group has four operating segments based on geographical location rather
than two operating segments based on service provided, as the Group's Chief
Operating Decision Maker (CODM) reviews the internal management reports and
KPIs of each geography.
The Group operates in four geographic areas, Egypt, Sudan, Jordan, and
Nigeria. As a provider of medical diagnostic services, IDH's operations in
Sudan are not subject to sanctions. The revenue split, EBITDA split (being the
key profit measure reviewed by CODM) net profit and loss between the four
regions is set out below.
Revenue by geographic location
For the three months ended Egypt region Sudan region Jordan region Nigeria region Total
30-Jun-23 782,633 1,414 145,782 26,822 956,651
30-Jun-22 644,550 4,797 105,621 18,618 773,586
Revenue by geographic location
For the six months period ended Egypt region Sudan region Jordan region Nigeria region Total
30-Jun-23 1,513,673 10,194 290,255 57,820 1,871,942
30-Jun-22 1,524,040 10,469 386,135 33,421 1,954,065
EBITDA by geographic location
For the three months ended Egypt region Sudan region Jordan region Nigeria region Total
30-Jun-23 208,915 (373) 32,670 (7,042) 234,170
30-Jun-22 226,684 (23) 16,478 (2,163) 240,976
EBITDA by geographic location
For the six months period ended Egypt region Sudan region Jordan region Nigeria region Total
30-Jun-23 406,862 12,49 68,502 (15,065) 461,548
30-Jun-22 621,740 63 90,790 (3,332) 709,261
21. Segment reporting (continued)
Net profit / (loss) by geographic location
For the three months ended Egypt region Sudan region Jordan region Nigeria region Total
30-Jun-23 54,684 (435) 4,920 (16,505) 42,664
30-Jun-22 124,044 1,522 2,441 (3,088) 124,919
Net profit / (loss) by geographic location
For the six months period ended Egypt region Sudan region Jordan region Nigeria region Total
30-Jun-23 225,921 3,637 11,312 (29,820) 211,050
30-Jun-22 393,560 4,278 47,471 (6,257) 439,052
Revenue by type Net profit by type
For the three months For the three months
ended 30 June ended 30 June
2023 2022 2023 2022
Pathology 894,756 736,467 79,465 147,694
Radiology 61,895 37,119 (36,801) (22,775)
956,651 773,586 42,664 124,919
Revenue by type Net profit by type
For the six months For the six months
ended 30 June ended 30 June
2023 2022 2023 2022
Pathology 1,751,192 1,885,271 287,805 477,718
Radiology 120,750 68,794 (76,755) (38,666)
1,871,942 1,954,065 211,050 439,052
Non-current assets by geographic location
Egypt region Sudan region Jordan region Nigeria region Total
30 June 2023 3,064,395 16,988 602,761 84,739 3,768,883
31 December 2022 3,039,930 14,993 494,244 121,770 3,670,937
21. Segment reporting (continued)
The operating segment profit measure reported to the CODM is EBITDA, as
follows:
For the three months ended 30 June For six months period ended 30 June
2023 2022 2023 2022
Profit from operations 136,479 166,061 265,289 562,423
Property, plant and equipment depreciation 63,038 49,136 126,755 95,184
Right of use depreciation 32,694 24,289 65,632 48,215
Amortization of Intangible assets 1,959 1,490 3,872 3,439
EBITDA 234,170 240,976 461,548 709,261
22. Important events
On March 8, 2023, the Group completed the establishment of Medical Health
Development Company, a limited liability company based in Saudi Arabia with a
total stake of 51% directly and indirectly through one of the Group's
subsidiaries, where Integrated Diagnostics Holdings (IDH) owns 31% and Al
Makhbaryoun Al Arab LLC ("Biolab")-Jordan a subsidiary owns 20%. The company's
activity did not begin until the period ending June 30, 2023.
The Central Bank of Egypt increased the interest rate by 200 points, to reach
19.25% instead of 17.25%. This was by a decision of the Monetary Policy
Committee, according to the meeting held on March 30, 2023.
During April 2023, an armed conflict began in Sudan that led to security
unrest across the country. Business has been temporarily frozen in the
branches of the Sudan Laboratory Company and Ultra Lab until further notice,
which will greatly affect the profits of the geographical sector in the
subsequent period. There is no damage to the material assets to date. The
Group's management is closely monitoring the situation and is currently
evaluating the impact of these events on the Group's business results and
activities.
23. Subsequent event
The Central Bank of Egypt increased the interest rate by 100 points, to reach
20.25% instead of 19.25%. This was by a decision of the Monetary Policy
Committee, according to the meeting held on 6 August 2023.
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. END IR BCGDIXGXDGXGRecent news on Integrated Diagnostics Holdings
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