3rd Quarter Results

Integrated Diagnostics Holdings PLC
16 November 2023
 

Integrated Diagnostics Holdings Plc

9M 2023 Results

Thursday, 16 November 2023

Integrated Diagnostics Holdings Plc reports impressive 44% year-on-year conventional revenue expansion in 9M 2023, with consolidated figures surpassing the high Covid base of 9M 2022

(Cairo and London) Integrated Diagnostics Holdings ("IDH," "the Group," or "the Company"), a leading provider of diagnostic services with operations in Egypt, Jordan, Nigeria, Sudan, and soon launching in Saudi Arabia, announced today its reviewed financial statements for the nine-month period ended 30 September 2023, booking its strongest quarter since the start of the year. IDH recorded consolidated revenues of EGP 1,182 in Q3 2023 million, yielding 40% year-on-year and 24% quarter-on-quarter growth rates.

When excluding1 Covid-19-related contributions from the previous period, conventional revenues recorded a 51% year-on-year growth in Q3 2023. Impressive top-line performance during the quarter translated to improved results down the income statement, with net profit coming in at EGP 176 million and yielding an NPM of 15% in Q3 2023. This represents a significant improvement from the net loss of EGP 36 million recorded in Q3 2022 when IDH's bottom-line profitability had been weighed down by a one-off expense.

On a year-to-date basis, IDH recorded consolidated revenues of EGP 3,054 million, a 9% year-on-year expansion versus the high base of 9M 2022, which had included EGP 678 million in Covid-19-related2 revenues (constituting 24% of the Company's top-line). Meanwhile, the Company booked conventional revenue growth of 44% year-on-year in 9M 2023, supported by a 16% year-on-year increases in test volumes coupled with a 24% year-on-year increase in average revenue per conventional test.

Further down the income statement, the Company posted a net profit of EGP 387 million in 9M 2023, representing a marginal 4% year-on-year decline from the figure reported in the same period of last year and yielding a net profit margin (NPM) of 13%.

Financial Results (IFRS)3

EGP mn

Q3 2022

Q3 2023

Change

9M 2022

9M 2023

Change

Revenues

846

1,182

40%

2,800

3,054

9%

    Conventional Revenues

784

1,182

51%

2,123

3,054

44%

    Covid-19-related Revenues

63

-

-

678

-

-

Cost of Goods Sold

(497)

(702)

41%

(1,619)

(1,916)

18%

Gross Profit

350

480

37%

1,182

1,138

-4%

Gross Profit Margin

41%

41%

-1 pts

42%

37%

-5 pts

Operating Profit

186

312

67%

749

577

-23%

Normalised EBITDA4

265

411

55%

974

873

-10%

EBITDA Margin

31%

35%

3 pts

35%

29%

-6 pts

Net Profit

(36)

176

-

403

387

-4%

Net Profit Margin

-4%

15%

19 pts

14%

13%

-2 pts

Cash Balance

816

794

-3%

816

794

-3%

Note: Throughout the document, percentage changes are calculated using the exact value (as per the Consolidated Financials) and not the corresponding rounded figure.

Key Operational Indicators5

EGP mn

9M 2022

9M 2023

Change

Branches

546

594

48

Patients ('000)

6,633

6,248

-6%

Revenue per Patient (EGP)

422

489

16%

Tests ('000)

24,359

26,468

9%

    Conventional Tests ('000)

22,728

26,468

16%

    Covid-19-related Tests ('000)

1,631

-

-

Revenue per Test

115

115

0%

    Revenue per Conventional Test (EGP)

93

115

24%

    Revenue per Covid-19-related Test (EGP)

416

-

-

Test per Patient

3.7

4.2

15%

 

 

[1] Starting Q1 2023, IDH has opted to stop reporting on its Covid-19-related revenues and test volumes due to their material insignificance to the consolidated figures and to Egypt's and Jordan's country-level results for the quarter. In the comparable period of last year (9M 2022) IDH had recorded EGP 678 million in Covid-19-related revenues and had performed 1.6 million Covid-19-related tests.

2 Covid-19-related tests include both core Covid-19 tests (Polymerase Chain Reaction (PCR), Antigen, and Antibody) as well as other routine inflammatory and clotting markers including, but not limited to, Complete Blood Picture, Erythrocyte Sedimentation Rate (ESR), D-Dimer, Ferritin and C-reactive Protein (CRP), which the Company opted to include in the classification as "other Covid-19-related tests" due to the strong rise in demand for these tests witnessed following the outbreak of Covid-19.

3 Important notice: In the Company's earnings releases covering the five quarters starting from Q4 2021 and ending Q4 2022, management had opted to present Alternative Performance Measures (APM) alongside IFRS-compliant figures as outlined on page 2 of the Company's FY 2022 Earnings Release. Starting in Q1 2023, due to the material insignificance of Covid-19-related revenues on consolidated results, the Company will only report IFRS-compliant figures. It is worth noting that revenues for the comparable period (9M 2022), include concession fees amounting to EGP 63 million paid by Biolab as part of its agreement with QAIA and Aqaba Port.

4 Normalised EBITDA is calculated as operating profit plus depreciation and amortization, excluding non-recurring expenses, specifically a EGP 12 million one-off expense owed to the Egyptian government for vocational training, EGP 6.5 million in pre-operating expenses in Saudi Arabia, and EGP 5.0 million impairment expense in Sudan due to the ongoing situation in the country.

5 Key operational indicators are calculated based on revenues for the periods of EGP 3,054 million and EGP 2,800 million for 9M 2023 and 9M 2022, respectively.



 

Important notice: In the Company's earnings releases covering the five quarters starting from Q4 2021 and ending Q4 2022, management had opted to present Alternative Performance Measures (APM) alongside IFRS-compliant figures as outlined on page 2 of the Company's FY 2022 Earnings Release. Starting in Q1 2023, due to the material insignificance of Covid-19-related revenues on consolidated results, the Company will only report IFRS-compliant figures. It is worth noting that revenues for the comparable period (9M 2022) include concession fees amounting to EGP 63 million paid by Biolab as part of its agreement with QAIA and Aqaba Port.

Introduction

 

i.    Financial Highlights

 

Quarterly Performance

·    IDH recorded its strongest quarterly performance since the start of the year in Q3 2023, capitalising on strong momentum seen during May and carrying on throughout the summer period. The quarter recorded a noticeable pickup in patient footfall and testing volumes, specifically in IDH's two largest markets, Egypt and Jordan.

·     IDH booked record test volumes in Q3 2023, surpassing the 10.0 million test mark for a single quarter for the first time. As a result, the Company booked total revenues of EGP 1,182 million, expanding 40% year-on-year and 24% quarter-on-quarter. Robust top-line performance compared to the previous quarter is a reflection of a normalisation in operations following a slow start to the year in 1H 2023 due to increased inflationary pressures, the holy month of Ramadan, and Eid vacations which affected operations.

·     In parallel, conventional revenues6 (excluding Covid-19 revenues in the comparative period) in Q3 2023 increased 51% year-on-year, up from EGP 784 million in Q3 2022.

 

 

Year-to-Date Performance

·     Conventional revenue during 9M 2023 amounted to EGP 3,054 million, representing a 44% year-on-year increase. Conventional revenue growth was driven by year-on-year increases of 16% and 24% in conventional test volumes and average revenue per conventional test, respectively.

·     Driven by strong quarterly performance, IDH recorded total revenues of EGP 3,054 million in 9M 2023, a 9% year-on-year increase.

·    This is a particularly noteworthy result when considering that the comparable 9M 2022 had included significant contributions from Covid-19-related78 testing, amounting to EGP 678 million and constituting 24% of consolidated revenues. Total revenue growth came on the back of a 9% year-on-year increase in test volumes with average revenue per test remaining stable due to the high Covid base of 9M 2022.

6 Conventional (non-Covid) tests include IDH's full service offering excluding the Covid-19 related tests outlined below.

7 Covid-19-related tests include both core Covid-19 tests (Polymerase Chain Reaction (PCR), Antigen, and Antibody) as well as other routine inflammatory and clotting markers including, but not limited to, Complete Blood Picture, Erythrocyte Sedimentation Rate (ESR), D-Dimer, Ferritin and C-reactive Protein (CRP), which the Company opted to include in the classification as "other Covid-19-related tests" due to the strong rise in demand for these tests witnessed following the outbreak of Covid-19.

8 Covid-19-related revenue in 9M 2022 includes EGP 63 million in concession fees paid by Biolab to Queen Alia International Airport and Aqaba Port as part of its revenue sharing agreement

 

·    Gross Profit in Q3 2023 booked EGP 480 million, 37% above the figure recorded in Q3 2022 and 44% above Q2 2023.Meanwhile, IDH reported a gross profit margin (GPM) of 41%, unchanged compared to Q3 2022 and 6 points above the GPM booked in Q2 2023. Significantly improving gross profitability compared to the first two quarters of the year reflect a normalisation of profitability as the initial effects of the devaluation in FY 2022 and early FY 2023 began to fade.

On a nine-month basis, gross profit stood at EGP 1,138 million, down 4% year-on-year, and with an associated margin (GPM) of 37% compared to 42% in 9M 2022. Lower gross profitability on a year-to-date basis partially reflected rises in raw material costs due to higher average costs per kit on the back of rising inflation and a weaker EGP, coupled with higher direct salaries and wages costs to provide greater-than-usual increases in compensation packages to existing staff to compensate for inflationary pressures, as well as higher depreciation expenses.

·    Normalised EBITDA9 booked EGP 411 million, recording a remarkable year-on-year growth of 55% and with an EBITDA margin of 35%, 4% higher compared to Q3 2022. EBITDA profitability also showed solid improvements compared to previous quarters, up from 25% and 24% in Q1 2023 and Q2 2023, respectively. Ona year-to-date basis, normalised EBITDA stood at EGP 873 million in 9M 2023, down 10% year-on-year, and with an associated margin of 29% compared to 35% in 9M 2022. Lower EBITDA profitability on a year-to-date basis came on the back of the decreased gross profitability coupled with increased SG&A outlays in part reflecting the impact of a weaker EGP on USD-denominated expenses.

It is worth noting that normalised EBITDA has been adjusted for several one-offs including an EGP 12 million expense related to contributions owed to the Egyptian government vocational training fund for the previous five-year period, EGP 7 million in pre-operating expenses booked by IDH's new Saudi venture, and EGP 5 million impairment expense for Sudanese operations following the unfortunate political situation in the country.

 

9 Normalised EBITDA is calculated as operating profit plus depreciation and amortization, excluding non-recurring expenses, specifically a EGP 12 million one-off expense owed to the Egyptian government for vocational training, EGP 6.5 million in pre-operating expenses in Saudi Arabia, and EGP 5.0 million impairment expense in Sudan due to the ongoing situation in the country.

 

·     Net Profit booked EGP 176 million and yielded an NPM of 15% in Q3 2023 compared to a net loss of EGP 36 million one year prior. Net profit during the quarter also posted robust figures compared to the previous quarter, more than tripling the EGP 43 million booked in Q2 2023 and yielding an associated margin 9 points above Q2 2023.

Net profit in 9M 2023 recorded EGP 387 million, a 4% year-on-year decrease. IDH's NPM recorded 13% in 9M 2023, largely stable versus last year.

 

ii.  Operational Highlights

·      As at 30 September 2023, IDH's total branch network across its four markets stood at 594 branches, an increase of 48 branches in the past twelve-month period. During Q3 2023, IDH rolled out 6 new branches in its home market of Egypt, including one new Al-Borg Scan branch which commenced operations in September.

·      Conventional tests (excluding Covid-19 contributions in the base year) booked a record-high in Q3 2023, reaching 10.0 million tests for the first time and expanding 22% year-on-year and 19% quarter-on-quarter, further highlighting its strong growth momentum coupled with the normalisation of patient behaviour following the Covid-19 pandemic. Meanwhile, conventional tests reached 26.5 million tests in 9M 2023, a 16% year-on-year increase. Consolidated test volumes, which in 9M 2022 included 1.6 million Covid-19-related tests, grew 9% year-on-year.

·      Average revenue per conventional test increased 24% year-on-year to book EGP 115 in 9M 2023. Average revenue per conventional test was driven by both direct and indirect price adjustments in Egypt and Nigeria in response to ongoing inflation. It is worth highlighting that this figure was partially boosted by a 10% contribution from the translation effect resulting from the devaluation of the EGP over the past twelve months.

·      The Company served a total of 6.2 million patients during 9M 2023, 6% below last year's figure. The decline reflects the comparable period's high base due to Covid-19 contributions. Meanwhile, average test per patient rose to a record high 4.2 tests in 9M 2023, up from 3.7 tests one year prior. Continually surging average tests per patient reflect a post-Covid-19 patient normalisation coupled with the continued success of IDH's loyalty programme which launched in FY 2021.

 

iii. Updates by Geography

·      In Egypt (81.9% of total revenues), IDH booked its strongest quarterly performance of FY 2023, with conventional revenues (excluding Covid-19 contributions from the base year) expanding 49% year-on-year and 26% quarter-on-quarter, as the Company continues to build off the strong momentum witnessed starting May. In parallel, consolidated revenues increased 39% year-on-year in Q3 2023.

On a year-to-date basis, Egyptian operations recorded 39% year-on-year growth, reaching EGP 2,500 million during 9M 2023, driven by 18% increases in both test volumes and average revenue per test. In parallel, consolidated revenues in 9M 2023 increased 12% year-on-year, an impressive result given Covid-19-related contributions of 19% during 9M 2022.

·      In Jordan (15.2% of total revenues), in line with trends observed in Egypt, Biolab's conventional revenues expanded 13% year-on-year and 18% quarter-on-quarter in Q3 2023 to reach JOD 4.1 million, maintaining the strong momentum seen starting May 2023. Consolidated revenues declined 1% year-on-year from the high Covid base of Q3 2022. In EGP terms, conventional revenue posted growth rates of 82% year-on-year and 19% quarter-on-quarter, partially reflecting the translation effect resulting from a weaker EGP. On a nine-month basis, conventional revenues rose 10% year-on-year in JOD terms in 9M 2023, supported by a 10% growth in conventional testing volumes.

·      In Nigeria (2.6% of total revenues) Echolab booked 10% year-on-year and 11% quarter-on-quarter revenue growths in NGN terms in Q3 2023. Top-line expansion was primarily driven by 29% year-on-year and 4% quarter-on-quarter increases in average revenue per test in NGN terms, as IDH applies strategic price hikes to compensate for increasing inflation. On a year-to-date basis, revenues booked NGN 1,457 million in 9M 2023, expanding 16% year-on-year in NGN terms and supported by a 22% year-on-year rise in average revenue per test in local currency terms.

·     IDH's Sudanese operations (0.4% of total revenues) recorded revenue declines of 88% year-on-year and 62% quarter-on-quarter in Q3 2023 in EGP terms. Meanwhile, revenues declined 27% year-on-year in 9M 2023. IDH's operations in the country continue to be impacted by the ongoing conflict which has seen the closure of 16 of the country's 18 branches starting April 2023.

·     IDH remains on schedule to launch its first two Saudi Arabian branches in December 2023. The two branches will be located in Riyadh, enabling the Company to capitalise on the important growth opportunities offered by the city's growing and increasingly health-conscious population. The new venture was jointly funded by IDH (30%), Biolab (20%) and Fawaz Alhokair's healthcare subsidiary, Izhoor (50%). The venture aims to establish itself as a full-fledged clinical pathology diagnostic services provider boasting a branch network covering the entire Kingdom. The new venture will be fully consolidated on IDH's accounts.


iv. Management Commentary

Commenting on the Group's performance, IDH Chief Executive Officer Dr. Hend El-Sherbini said: "With the end of the year fast approaching, I am delighted to report an exceptional quarter, characterised by unprecedented financial and operational success and continuing to showcase the strength of IDH's underlying business and its future growth potential. While our results from the first half of the year were somewhat diluted by increasing inflationary environments, particularly in our home market, Egypt, as well as several seasonal slowdowns due to the holy month of Ramadan and other holidays, the Company's strong performance in the third quarter of the year has significantly outpaced the past two quarters. Strong growth in Q3 2023 has also reflected positively down the income statement, with our margins expanding significantly compared to the same quarter last year as well as compared to the first half of 2023. I am also proud to announce that this exceptional performance has enabled our year-to-date results to surpass the comparable period of last year, which had included sizeable contributions from Covid-19-related testing.

During Q3 2023, the Company continued building on its strong momentum witnessed starting in May of this year, conducting 10.0 million tests during the quarter, 21% higher than the figure recorded in Q3 2022, and the highest figure recorded in a single quarter in IDH's history. This quarter saw IDH increase its average number of tests per patient to 4.2 tests, another record high for the Company as its patient mix begins to normalise following the Covid-19-pandemic and it begins to harvest the fruit of its loyalty programme, which was introduced in FY 2021. This impressive performance has led to 40% year-on-year and 24% quarter-on-quarter increases in our consolidated top-line in Q3 2023.

Turning to our markets' individual performances, Egypt and Jordan both saw similar trends, with growing demand for our traditional test offering translating in steady rises in both conventional revenues and test volumes. In Egypt, we recorded a 49% year-on-year increase in conventional revenues in Q3 2023, driven by 24% and 20% rises in test volumes and average revenue per test, respectively, despite patients' purchasing power being impacted by rising inflation. Egyptian operations also witnessed an increase in the average number of tests per patient, rising to a record high 4.2 tests in 9M 2023, continuing to be driven by our successful loyalty programme which was introduced in FY 2021. Our results in Egypt were further buoyed by the impressive near doubling of revenues at our radiology venture, Al-Borg Scan, which constituted 5% of Egypt's revenue in Q3 2023. On this front, in line with our ramp up strategy for the venture, in September we inaugurated the venture's seventh branch moving us a step closer to realising our vision of providing patients with a one-stop-shop service offering featuring both pathology and radiology.

In Jordan, Biolab booked a 13% year-on-year increase in its conventional top-line in JOD terms, fuelled by a 13% increase in conventional test volumes for the period. In Nigeria, our operations recorded revenue expansion in NGN terms of 10% compared to Q3 2022, on the back of higher average revenue per test. Finally, Sudan's operations continued to be hindered by the ongoing conflict which has caused the closure of 16 out of our 18 branches starting in April of this year. As always, we will continue to closely monitor the situation and will provide the market with updates when available.

Further down the income statement, we were pleased to note the start of a gradual normalisation during the third quarter as the initial shock of the multiple devaluations of the EGP began to ease. More specifically, results in Q3 2023 showed significant improvements in profitability, with both our gross and EBITDA margins improving remarkably versus the first two quarters of 2023. Improved profitability was also apparent compared to Q3 2022, where the Company booked significant increases in both its EBITDA and net margins.

Finally, I am pleased to report that in the coming weeks, we will be officially launching our operations in Saudi Arabia, adding a fifth geography to our portfolio and entering one of the region's most attractive markets. Our first two branches in the country will both be located in the Kingdom's capital city, Riyadh, allowing us to take advantage of the important growth opportunities offered by the city's growing and increasingly health-conscious population. In light of the continued strengths of our results, the solid strategies in place, and the positive momentum enjoyed by our operations in Egypt and Jordan, we reaffirm our guidance of 30% conventional revenue growth, boosting our consolidated revenues to the EGP 4 billion mark, with a normalised EBITDA margin excluding one-off expenses and pre-operating expenses in Saudi Arabia of 28-30% for FY 2023."

- End -



Analyst and Investor Call Details

An analyst and investor call will be hosted at 1pm (UK) | 3pm (Egypt) on Tuesday, 21 November 2023. You can register for the call by clicking on this link.

For more information about the event, please contact: amoataz@EFG-HERMES.com

About Integrated Diagnostics Holdings (IDH)

IDH is a leading diagnostics services provider in the Middle East and Africa offering a broad range of clinical pathology and radiology tests to patients in Egypt, Jordan, Nigeria and Sudan. The Group's core brands include Al Borg, Al Borg Scan and Al Mokhtabar in Egypt, as well as Biolab (Jordan), Ultralab and Al Mokhtabar Sudan (both in Sudan) and Echo-Lab (Nigeria). With over 40 years of experience, a long track record for quality and safety has earned the Company a trusted reputation, as well as internationally recognised accreditations for its portfolio of over 2,000 diagnostics tests. From its base of 552 branches as of 31 December 2022, IDH served over 8.7 million patients and performed more than 32.7 million tests in 2022. IDH will continue to add laboratories through a Hub, Spoke and Spike business model that provides a scalable platform for efficient expansion. Beyond organic growth, the Group targets expansion in appealing markets, including acquisitions in the Middle Eastern, African, and East Asian markets where its model is well-suited to capitalise on similar healthcare and consumer trends and capture a significant share of fragmented markets. IDH has been a Jersey-registered entity with a Standard Listing on the Main Market of the London Stock Exchange (ticker: IDHC) since May 2015 with a secondary listing on the EGX since May 2021 (ticker: IDHC.CA).

 

Shareholder Information

LSE: IDHC.L

EGX: IDHC.CA

Bloomberg: IDHC:LN

Listed on LSE: May 2015

Listed on EGX: May 2021

Shares Outstanding: 600 million

 

Contact

Nancy Fahmy

Investor Relations Director

T: +20 (0)2 3345 5530 | M: +20 (0)12 2255 7445 | nancy.fahmy@idhcorp.com

 

Forward-Looking Statements

These results for the nine-month period ended 30 September 2023 have been prepared solely to provide additional information to shareholders to assess the group's performance in relation to its operations and growth potential. These results should not be relied upon by any other party or for any other reason. This communication contains certain forward-looking statements. A forward-looking statement is any statement that does not relate to historical facts and events, and can be identified by the use of such words and phrases as "according to estimates", "aims", "anticipates", "assumes", "believes", "could", "estimates", "expects", "forecasts", "intends", "is of the opinion", "may", "plans", "potential", "predicts", "projects", "should", "to the knowledge of", "will", "would" or, in each case their negatives or other similar expressions, which are intended to identify a statement as forward-looking. This applies, in particular, to statements containing information on future financial results, plans, or expectations regarding business and management, future growth or profitability and general economic and regulatory conditions and other matters affecting the Group.

 

Forward-looking statements reflect the current views of the Group's management ("Management") on future events, which are based on the assumptions of the Management and involve known and unknown risks, uncertainties and other factors that may cause the Group's actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. The occurrence or non-occurrence of an assumption could cause the Group's actual financial condition and results of operations to differ materially from, or fail to meet expectations expressed or implied by, such forward-looking statements.

 

The Group's business is subject to a number of risks and uncertainties that could also cause a forward-looking statement, estimate or prediction to differ materially from those expressed or implied by the forward-looking statements contained in this communication. The information, opinions and forward-looking statements contained in this communication speak only as at its date and are subject to change without notice. The Group does not undertake any obligation to review, update, confirm or to release publicly any revisions to any forward-looking statements to reflect events that occur or circumstances that arise in relation to the content of this communication.

Important notice: In the Company's earnings releases covering the five quarters starting from Q4 2021 and ending Q4 2022, management had opted to present Alternative Performance Measures (APM) alongside IFRS-compliant figures as outlined on page 2 of the Company's FY 2022 Earnings Release. Starting in Q1 2023, due to the material insignificance of Covid-19-related revenues on consolidated results, the Company will only report IFRS-compliant figures. It is worth noting that revenues for the comparable period (9M 2022) include concession fees amounting to EGP 63 million paid by Biolab as part of its agreement with QAIA and Aqaba Port.

Group Operational & Financial Review

i.    Revenue and Cost Analysis

Consolidated Revenue

IDH's strong momentum observed starting in May 2023 carried into the summer, resulting in an exceptional set of results during Q3 2023. During Q3 2023, IDH booked conventional10 revenue growth of 51% year-on-year, reaching EGP 1,182 million. Conventional revenues were boosted by 22% and 23% year-on-year increases in test volumes and average revenue per conventional test, respectively. Strong growth during the third quarter of the year is also reflected in the Company's quarter-on-quarter performance, with IDH capitalising on strong growth momentum to record a 24% expansion compared to Q2 2023. Meanwhile, consolidated revenues increased 40% year-on-year, up from EGP 784 million one year prior.

In parallel, the Company booked consolidated revenues of EGP 3,054 million in 9M 2023, a remarkable 9% year-on-year increase especially when considering the EGP 678 million11 contribution made from Covid-19-related12 testing to consolidated revenues in 9M 2022. Positive consolidated revenue growth for the period is mainly a reflection of exceptionally strong quarterly performance in Q3 2023, which boosted results and enabled the Company to record positive consolidated growth. Conventional revenue on a year-to-date basis increased 44% year-on-year from EGP 2,123 million in 9M 2022.

 

[10]  Conventional (non-Covid) tests include IDH's full service offering excluding the Covid-19 related tests outlined below.

[11] Covid-19-related revenue in 9M 2022 includes EGP 63 million in concession fees paid by Biolab to Queen Alia International Airport and Aqaba Port as part of its revenue sharing agreement.

[12] Covid-19-related tests include both core Covid-19 tests (Polymerase Chain Reaction (PCR), Antigen, and Antibody) as well as other routine inflammatory and clotting markers including, but not limited to, Complete Blood Picture, Erythrocyte Sedimentation Rate (ESR), D-Dimer, Ferritin and C-reactive Protein (CRP), which the Company opted to include in the classification as "other Covid-19-related tests" due to the strong rise in demand for these tests witnessed following the outbreak of Covid-19.

Revenue Analysis

 

Q1

2022

Q1 2023

Q2 2022

Q2 2023

Q3 2022

Q3 2023

%

9M 2022

9M 2023

%

Total revenue (EGP mn)

1,180

915

774

957

846

1,182

40%

2,800

3,054

9%

Conventional revenue (EGP mn)

640

915

699

957

784

1,182

51%

2,123

3,054

44%

Covid-19-related revenue (EGP mn)

540

-

75

-

63

-

-

678

-

-

Contribution to Consolidated Results

Conventional revenue

54%

100%

90%

100%

93%

100%

 

76%

100%

 

Covid-19-related revenue

46%

-

10%

-

7%

-

 

24%

-

 

Test Volume Analysis

Total tests (mn)

8.4

8.0

7.6

8.5

8.4

10.0

20%

24.4

26.5

9%

Conventional tests performed (mn)

7.1

8.0

7.4

8.5

8.2

10.0

22%

22.7

26.5

16%

Total Covid-19-related tests performed (mn)

1.3

-

0.2

-

0.2

-

-

1.6

-

-

Contribution to Consolidated Results

Conventional tests performed

85%

100%

97%

100%

98%

100%

 

93%

100%

 

Total Covid-19-related tests performed

15%

-

3%

-

2%

-

 

7%

-

 

Revenue per Test Analysis

Total revenue per test (EGP)

140

114

102

113

101

118

17%

115

115

-

Conventional revenue per test (EGP)

90

114

94

113

96

118

23%

93

115

24%

Covid-19-related revenue per test (EGP)

431

-

454

-

361

-

-

416

-

-

 

 

Revenue Analysis: Contribution by Patient Segment

 

Contract Segment (63% of Group revenue)

IDH's contract segment recorded conventional revenues of EGP 1,938 million during the nine-month period, expanding 49% year-on-year from the figure reported last year. Growth at the segment was driven by 21% and 23% increases in conventional test volumes and average revenue per conventional test, respectively.

 

Consolidated revenues at the segment recorded a 22% year-on-year increase in 9M 2023 on the back of increased volumes and prices. The contract segment's average tests per patient reached a record-high 4.4 tests, up from 4.1 tests in 9M 2022, reflecting a normalisation in patient mix following the Covid-19 pandemic and the success of IDH's loyalty programme which was introduced in FY 2021.

 

Walk-in Segment (37% of Group revenue)

In parallel, IDH's walk-in segment posted conventional revenues of EGP 1,116 million, increasing 34% year-on-year in 9M 2023. Growth came on the back of a 34% year-on-year increase in average revenue per conventional test, while test volumes remained unchanged compared to the same time last year.

 

Meanwhile, consolidated revenue at the walk-in segment declined 8% year-on-year on the back of lower test volumes and reflecting a high base effect in the comparable period of 2022. In line with the trend noted in the contract segment, tests per patient at the walk-in segment increased to 3.6 tests in 9M 2023, well above historical figures as the Company books another record high.

 

Detailed Segment Performance Breakdown


Walk-in Segment

Contract Segment

Total


9M22

9M23

Change

9M22

9M23

Change

9M22

9M23

Change

Revenue (EGP mn)

1,214

1,116

-8%

1,584

1,938

22%

2,800

3,054

9%

Conventional Results (EGP mn)

830

1,116

34%

1,293

1,938

49%

2,123

3,054

44%

Total Covid-19-related revenue (EGP mn)

384

-

-

294

-

-

678

-

-

Patients ('000)

2,112

1,343

-36%

4,522

4,905

8%

6,633

6,248

-6%

% of Patients

32%

21%

 

68%

79%

 



 

Revenue per Patient (EGP)

575

831

44%

351

395

13%

422

489

16%

Tests ('000)

5,712

4,894

-14%

18,648

21,574

16%

24,359

26,468

9%

% of Tests

23%

18%

 

77%

82%

 



 

Conventional tests ('000)

4,891

4,894

-

17,837

21,574

21%

22,728

26,468

16%

Total Covid-19-related tests ('000)

821

-

-

810

-

-

1,631

-

-

Revenue per Test (EGP)

213

228

7%

85

90

6%

115

115

0.4%

Conventional Revenue per Test (EGP)

170

228

34%

72

90

23%

93

115

24%

Test per Patient

2.7

3.6

35%

4.1

4.4

7%

3.7

4.2

15%

 

Revenue Analysis: Contribution by Geography

 

Egypt (81.9% of Group revenue)

IDH's home and largest market, Egypt, reported robust performance in Q3 2023, capitalising on the impressive growth trajectory witnessed starting in May 2023, and expanding both conventional and consolidated revenues on the back of increased test volumes and average revenue per conventional test. More specifically, Q3 2023 represented the strongest quarter for Egyptian operations in FY 2023, following anticipated seasonal slowdowns in the first half of the year.

 

On a conventional basis, revenue expanded 49% year-on-year and 26% quarter-on-quarter, reaching EGP 986 million on the back of increased test volumes and average revenue per test. Meanwhile, consolidated revenues increased 39% year-on-year compared to Q3 2022.

 

On a year-to-date basis, Egypt booked consolidated revenues of EGP 2,500 million, a 12% year-on-year expansion marking the full completion of the geography's post-Covid-19 recovery. This is particularly noteworthy when considering that the comparable period of last year included significant contributions of EGP 432 million from the Company's Covid-19-related testing. Consolidated revenue growth was supported by a 12% year-on-year increase in tests performed. Meanwhile, conventional revenues increased 39% year-on-year from EGP 1,803 in 9M 2022.

 

Al-Borg Scan

IDH's fast-growing radiology venture continued its steady ramp up throughout Q3 2023, posting revenues of EGP 108 million in 9M 2023 and booking a top-line year-on-year growth rate of 86%. Revenue growth for the period was primarily driven by increased test volumes, which grew 50% year-on-year, partially due to the ramp up of new branches across the Greater Cairo area. In parallel, average revenue per test also rose by 24% year-on-year, reaching EGP 705 in 9M 2023.

 

In line with the impressive performance recorded by Al-Borg Scan, and its maintained operational ramp-up, IDH rolled out the venture's seventh branch in September of this year. The branch, located in Cairo's underpenetrated Nasr City neighbourhood, falls in line with the Company's strategic direction to expand its radiology business and establish itself as a leading play in the fragmented market.

 

House Calls

In the nine months ended 30 September 2023, IDH's house call service in Egypt continued to make a robust contribution of 16% to total revenues in the country. This continues to be significantly ahead of the service's pre-pandemic contribution, highlighting the segment's growth potential, and the success of IDH's investment and ramp up strategy specifically throughout the Covid-19 pandemic.

 

Wayak

During 9M 2023, Wayak completed 122 thousand orders, representing a 30% year-on-year increase. On the profitability front, the venture's EBITDA losses continued to narrow steadily, recording EGP 659 thousand in 9M 2023 versus the EGP 2,780 million in EBITDA losses booked in the comparable period of FY 2022.

 

 

 

Detailed Egypt Performance Breakdown

Revenue Analysis

EGP mn

Q1 2022

Q1 2023

Q2 2022

Q2 2023

Q3 2022

Q3 2023

%

9M 2022

9M 2023

%

Total Revenue

879

731

645

783

711

986

39%

2,235

2,500

12%

Conventional Revenue

549

731

591

783

662

986

49%

1,803

2,500

39%

Pathology Revenue

532

703

573

748

639

941

47%

1,745

2,392

37%

Radiology Revenue

17

28

19

35

23

45

99%

58

108

86%

Total Covid-19-related Revenue

330

-

53

-

49

-

-

432

-

-

Contribution to Consolidated Results

Conventional revenue

62%

100%

92%

100%

93%

100%


81%

100%


Pathology Revenue

61%

96%

89%

96%

90%

95%

 

78%

96%

 

Radiology Revenue

1.9%

3.8%

2.9%

4.5%

3%

5%

 

3%

4%

 

Total Covid-19-related revenue

38%

-

8%

-

7%



19%



Test Volume Analysis

Total Tests

7.3

7.3

6.9

7.8

7.6

9.3

21%

21.8

24.4

12%

Conventional Tests

6.5

7.3

6.7

7.8

7.5

9.3

24%

20.7

24.4

18%

Total Covid-19-related Tests

0.8

-

0.2

-

0.2

-

-

1.1

-

 

Contribution to Consolidated Results

Conventional tests performed

89%

100%

97%

100%

98%

100%

 

95%

100%

 

Total Covid-19-related tests performed

11%

-

3%

-

2%

-

 

5%

-

 

Revenue per Test Analysis

Total Revenue per Test

120

99

94

101

93

107

14%

102

103

0.1%

Revenue per Conventional Test

84

99

88

101

89

107

20%

87

103

18%

 

Jordan (15.2% of Group revenue)

In Jordan, IDH's second-largest geography, the Company recorded conventional revenues of JOD 4.0 million in Q3 2023, increasing 13% year-on-year. This is primarily a reflection of increased conventional test volumes, which grew 13% year-on-year to reach 678 thousand tests in Q3 2023. Meanwhile, IDH recorded an 18% quarter-on-quarter revenue increase in local currency terms, fuelled by a 19% expansion in test volumes In EGP terms, conventional revenue growth for the quarter came in at 82% year-on-year, booking EGP 174 million for the quarter. Average revenue per conventional test was the main driver of growth in EGP terms, booking a 61% year-on-year expansion due to the weakening of the EGP since last year. It is worth noting that, in line with trends seen in Egypt, IDH's Jordanian operations have also started to see steady recovery starting May and throughout the summer period. Consolidated revenues declined 1% year-on-year during Q3 2023.

 

On a year-to-date basis, the Company recorded a conventional revenue growth of 10% year-on-year in local currency terms, reaching JOD 10.8 million in 9M 2023. Conventional growth for the period came on the back of a 10% year-on-year increase in conventional test volumes. In EGP terms, Jordanian operations booked an 86% year-on-year increase, reaching EGP 464 million compared to EGP 250 million one year prior. Growth in EGP terms includes significant contributions from the translation effect as a result of the devaluation of the EGP over the last twelve months. Consolidated revenue for the nine-month period remained 48% below last year's figure in JOD terms and 6% in EGP terms as the high base effect from Covid-19-related testing performed in the first part of 2022 continued to impact results.

 

Detailed Jordan Performance Breakdown

Revenue Analysis

EGP mn

Q1 2022

Q1 2023

Q2 2022

Q2 2023

Q3 2022

Q3 2023

%

9M 2022

9M 2023

%

Total Revenue

281

144

106

146

109

174

59%

496

464

-6%

Conventional Results

70

144

84

146

95

174

82%

250

464

86%

Total Covid-19-related Revenues (PCR and Antibody)

210

-

21

-

14

-

-

246

-

 

Contribution to Consolidated Results

Conventional Results

25%

100%

80%

100%

87%

100%

 

50%

100%

 

Total Covid-19-related Revenue (PCR and Antibody)

75%

-

20%

-

13%

-

 

50%

-

 

Test Volume Analysis

Total tests (k)

991

582

603

598

627

678

8%

2,221

1,858

-16%

Conventional tests performed (k)

519

582

572

598

599

678

13%

1,691

1,858

10%

Total Covid-19-related tests performed (k)

472

-

30

-

28

-

-

530

-

 

Contribution to Consolidated Results

Conventional tests performed

52%

100%

95%

100%

96%

100%

 

76%

100%

 

Total Covid-19-related tests performed

48%

-

5%

-

4%

-

 

24%

-

 

Revenue per Test Analysis

Total Revenue per Test

283

248

175

244

174

257

47%

223

250

12%

Revenue per Conventional Test

136

248

147

244

159

257

61%

148

250

69%

 

Nigeria (2.6% of revenue)

Echo-Lab, IDH's Nigerian subsidiary, reported sustained top-line growth, recording revenue expansion of 16% year-on-year in local currency terms to reach NGN 1,457 million in 9M 2023. In EGP terms, Echo-Lab booked revenue growth of 44% year-on-year, rising to EGP 79 million in the nine-month period. Growth was spurred by 22% and 52% year-on-year increases in average revenue per test in NGN and EGP terms, respectively, with the latter partially reflecting a weakening of the EGP in the last year. Revenue growth for the period came despite a 5% year-on-year decline in test volumes, which reached 204 thousand tests during 9M 2023.

 

Sudan (0.4% of revenue)

The Company's Sudanese operations continued to be impacted by the ongoing conflict which has led to the closure of 16 of the country's 18 branches starting in April 2023. More specifically, during 9M 2023, IDH booked revenues of SDG 207 million, 50% below the figure recorded the same time last year. In EGP terms, revenue reached EGP 11 million during the first nine months of the year, dropping 27% year-on-year from 9M 2023. IDH continues to closely monitor the situation as it unfolds and will update the market should any material aspects evolve.

 

 

 

 



 

Revenue Contribution by Country


Q1 2022

Q1 2023

Q2 2022

Q2 2023

Q3 2022

Q3 2023

%

9M 2022

9M 2023

%

Egypt Revenue (EGP mn)

879

731

645

783

711

986

39%

2,235

2,500

12%

Conventional (EGP mn)

549

731

591

783

662

986

49%

1,803

2,500

39%

Pathology Revenue

532

703

573

748

639

941

47%

1,745

2,392

37%

Radiology Revenue

17

28

19

35

23

45

99%

58

108

86%

Covid-19-related (EGP mn)

330

-

53

-

49

-

-

432

-

 

Egypt Contribution to IDH Revenue

74.5%

79.9%

83.2%

81.8%

84.0%

83.5%

 

78.0%

80.1%

 

Jordan Revenue (EGP mn)

281

144

106

146

109

174

59%

496

464

-6%

Conventional (EGP mn)

70

144

84

146

95

174

82%

250

464

86%

Covid-19-related (EGP mn)

210

-

21

-

14

-

-

246

-

 

Jordan Revenues (JOD mn)

12.5

3.4

4.0

3.4

4.1

4.0

-1%

20.6

10.8

-48%

Conventional (JOD mn)

3.0

3.4

3.2

3.4

3.5

4.0

13%

9.8

10.8

10%

Jordan Revenue Contribution to IDH Revenue

23.7%

15.7%

13.7%

15.2%

12.9%

14.7%

 

17.7%

15.2%

 

Nigeria Revenue (EGP mn)

15

31

19

27

21

21

-1%

55

79

44%

Nigeria Revenue (NGN mn)

371

468

416

469

473

520

10%

1,260

1,457

16%

Nigeria Contribution to IDH Revenue

1.3%

3.4%

2.5%

2.8%

2.5%

1.8%

 

2.0%

2.6%

 

Sudan Revenue (EGP mn)

5.7

8.8

4.8

1.4

4.3

0.5

-88%

14.8

10.7

-27%

Sudan Revenue (SDG mn)

152

169

137

27

128

10

-92%

417

207

-50%

Sudan Contribution to IDH Revenue

0.5%

1.0%

0.6%

0.1%

0.5%

0.05%

 

0.5%

0.4%

 

 

Average Exchange Rate


9M 2022

9M 2023

Change

USD/EGP

18.1

30.7

69.9%

JOD/EGP

25.5

43.0

68.9%

NGN/EGP

0.04

0.06

27.1%

SDG/EGP

0.04

0.05

45.7%

 

Patients Served and Tests Performed by Country


9M 2022

9M 2023

Change

Egypt Patients Served (mn)

5.7

5.8

3%

Egypt Tests Performed (mn)

21.8

24.4

12%

Conventional tests (mn)

20.7

24.4

18%

Covid-19-related tests (mn)

1.1

-

-

Jordan Patients Served (k)

789

286

-64%

Jordan Tests Performed (k)

2,221

1,858

-16%

Conventional tests (k)

1,691

1,858

10%

Covid-19-related tests (k)

530

-

-

Nigeria Patients Served (k)

110

102

-8%

Nigeria Tests Performed (k)

215

204

-5%

Sudan Patients Served (k)

59

14

-76%

Sudan Tests Performed (k)

112

40

-64%

Total Patients Served (mn)

6.6

6.2

-6%

Total Tests Performed (mn)

24.4

26.5

9%

 

Branches by Country


30 September 2022

30 September 2023

Change

Egypt

496

537

41

Jordan

21

27

6

Nigeria

12

12

-

Sudan

17

18

1

Total Branches

546

594

48



 

Cost of Goods Sold

Cost of goods sold during the nine-month period reached EGP 1,916 million, increasing 18% compared to the EGP 1,619 million booked during 9M 2022. As a percentage of revenue, cost of goods sold stood at 63% in 9M 2023, up from 58% in the same period of the previous year. Higher cost of goods sold as a percentage of revenues reflected higher raw material costs, increased direct wages and salaries costs, as well as higher depreciation expenses.

Cost of Goods sold Breakdown as a Percentage of Revenue


9M 2022

9M 2023

Raw Materials

20.1%

21.9%

Conventional raw material costs as % of conventional revenues

17.0%

21.9%

Covid-19-related raw material costs as % of Covid-19-related revenues

29.8%

-

Wages & Salaries

16.5%

19.2%

Depreciation & Amortisation

7.2%

8.7%

Other Expenses

14.1%

12.9%

Total

57.8%

62.7%

 

Raw material costs (35% of consolidated cost of goods sold) remained the single largest contributor to cost of goods sold during the period. Raw materials recorded costs of EGP 668 million during 9M 2023, expanding 19% year-on-year, and constituting a total of 22% of revenues for the period versus 20% in the same period of the previous year. During the nine-month period, IDH reported a rise in the average cost of conventional test kits (21.9% of revenues in 9M 2023 compared to 17% in 9M 2022) on the back of rising inflation and a weaker EGP. The Company expects test kit prices as a share of revenue to gradually normalize in the coming months as the initial impact of the EGP devaluation begins to fade. It is also important to highlight that raw material outlays in 9M 2023 include a one-off EGP 15.5 million expense related to expired Covid-19-related test kits.

Wages and salaries including employee share of profits (31% share of consolidated cost of goods sold) continued to be the second largest contributor to cost of goods sold during 9M 2023, coming at EGP 587 million, a year-on-year increase of 27%. Increased direct wages and salaries reflect higher than usual adjustments to compensation packages to compensate for unprecedented inflation as part of the Group's staff retention strategy. Furthermore, the translation effect due to a weaker EGP resulted in increased direct wages and salaries expenses in both Jordan and Nigeria.

Direct Wages and Salaries by Region


9M 2022

9M 2023

Change

Egypt (EGP mn)

362

445

23%

Jordan (EGP mn)

84

118

41%

Jordan (JOD mn)

3

3

-16%

Nigeria (EGP mn)

12

22

79%

Nigeria (NGN mn)

280

395

-41%

Sudan (EGP mn)

3

3

-6%

Sudan (SDG mn)

79

51

-35%

 

Direct depreciation and amortization costs (14% of consolidated cost of goods sold) rose 31% year-on-year, reaching EGP 266 million in 9M 2023. Higher depreciation and amortization costs for the period primarily reflect the addition of new branches to IDH's network, including the addition of the newly rolled out Al-Borg Scan branch.

Other expenses (21% of consolidated cost of goods sold) booked EGP 395 million during 9M 2023, increasing a marginal 0.5% year-on-year. It is worth noting that other expenses for the comparable period, 9M 2022, had included EGP 63 million paid in concession fees as part of Biolab's agreement with Queen Alia International Airport and Aqaba Port to provide Covid-19-related testing to passengers in January and February of 2022. Excluding these fees, other expenses increased 20% year-on-year from EGP 330 million in 9M 2022. The increase in other expenses is attributable to increased cleaning, transportation, and consulting expenses to support the expansion of IDH's branch network in Egypt, and specifically Al-Borg Scan's growth. Additionally, in Nigeria, higher gasoline prices and repair and maintenance costs pushed other expenses up continuing to reflect a weaker Naira (versus the US dollar) and an increasing inflationary environment.

Gross Profit

IDH's gross profit booked EGP 480 million in Q3 2023, increasing 37% year-on-year. GPM for the quarter stood unchanged compared to Q3 2022 at 41% reflecting a normalisation in margins as the initial impact of the multiple EGP devaluations throughout FY 2022 and early FY 2023 begin to fade. It is important to note that gross profitability witnessed tangible growth compared to the first half of the year, increasing from a GPM of 35% in Q1 2023 and Q2 2023.

On a year-to-date basis, the Company recorded gross profit of EGP 1,138 million during 9M 2023, down 4% year-on-year. The gross profit margin (GPM) stood at 37%, declining five percentage points from 42% in 9M 2022. Lower gross profitability during the period reflected the above-mentioned increase in cost of goods sold.

Selling, General and Administrative Expenses

SG&A outlays during 9M 2023 climbed to EGP 535 million, a 29% year-on-year increase. As a percentage of revenues, SG&A outlays constituted 18% of revenues, up from 15% in 9M 2022. Increased SG&A expenses came mainly on the back of:

·      Higher indirect wages and salaries expenses, which rose by 46% year-on-year to EGP 207 million. Indirect wages and salaries amounted to 7% of revenues in 9M 2023, compared to 5% one year prior. The increase can be attributed to USD-denominated directors' compensations, as well as the addition of a board member in the first quarter of last year (who received compensation starting March 2022). Indirect wages and salaries also reflect increased wage expenses in Jordan due to the translation effect from a weaker EGP.

·      Increased other expenses, which grew 36% year-on-year to EGP 222 million in 9M 2023. The increase in other expenses is mainly attributable to a weaker EGP which saw USD-denominated expenses (including auditor fees) at the holding level weigh on the consolidated figure.

·    One-off legal consultancy expenses related to the termination of the Pakistan deal in the first quarter of 2023 which stood at EGP 8 million.

Selling, General and Administrative Expenses


9M 2022

9M 2023

Change

Wages & Salaries

        141

207

46%

Accounting Fees

33

58

73%

Professional Services Fees

27

44

63%

Market - Advertisement expenses

87

77

-12%

Other Expenses

92

99

8%

Depreciation & Amortisation

23

30

28%

Travelling and transportation expenses

12

20

74%

Total

        415

535

29%

 

EBITDA

IDH reported normalised EBITDA13 of EGP 411 million, up an impressive 55% year-on-year and yielding an associated margin of 35% versus 31% in Q3 2022. Additionally, EBITDA profitability recorded significant improvement compared to the first two quarters of 2023, which booked EBITDA margins of 25% and 24% in Q1 2023 and Q2 2023, respectively. Higher EBITDA profitability is a direct reflection of IDH's gradual cost normalisation as the effects of the devaluation over the past year begin to fade.

On a nine-month basis, the Company recorded a normalised EBITDA of EGP 873 million during the first nine months of 2023, down 10% year-on-year from the high base of 9M 2022 when Covid-19-related testing had boosted results. IDH reported an associated margin of 29%, declining six percentage points from 35% in 9M 2022. Decreased EBITDA profitability mainly reflects lower gross profitability coupled with higher SG&A expenses as discussed above.

It is important to highlight that EBITDA is normalised for several one-off expenses, including an EGP 12 million non-recurring expense owed to the Egyptian government. expense is in accordance with article 134 of labour law on Vocational Guidance and Training issued by the Egyptian Government in 2003. In accordance with the law, IDH's Egyptian operations are required to provide 1% of net profits each year into a training fund. Integrated Diagnostics Holdings plc has taken legal advice and considered market practices in Egypt relating to the law, and more specifically whether vocational training courses undertaken by the Company's Egyptian subsidiaries suggest that obligations have been satisfied by in-house training programmes provided by those entities. Since the issue of the law, IDH's Egyptian subsidiaries have not been requested by the government to pay, nor have they voluntarily paid, any amounts into the external training fund.

[13] Normalised EBITDA is calculated as operating profit plus depreciation and amortization, excluding non-recurring expenses, specifically a EGP 12 million one-off expense owed to the Egyptian government for vocational training, EGP 6.5 million in pre-operating expenses in Saudi Arabia, and EGP 5.0 million impairment expense in Sudan due to the ongoing situation in the country.

EBITDA by Country

In Egypt, the Company booked normalised EBITDA of EGP 359 million with a margin of 36% in Q3 2023, 53% above the figure booked in Q3 2022 when the Company's EBITDA margin stood at 33%. Compared to the previous quarter, Egyptian operations posted a 72% quarter-on-quarter growth with its EBITDA margin expanding by 10 points.

Normalised EBITDA on a nine-month basis stood at EGP 766 million in 9M 2023, down 11% year-on-year. Meanwhile, IDH booked an EBITDA margin of 31%, down from 38% in 9M 2022. Lower EBITDA profitability is a reflection lower gross profitability coupled with increased SG&A outlays at the Company's Egyptian operations, which expanded 25% year-on-year in 9M 2023.

In Jordan, IDH's subsidiary, Biolab, recorded normalised EBITDA of JOD 1.3 million in Q3 2023, increasing 7% year-on-year and 18% quarter-on-quarter. The normalised EBITDA margin stood at 31%, up from 29% in Q3 2022 and 22% in Q2 2023. In EGP terms, Jordan's normalised EBITDA came in at EGP 54 million and yielded a margin of 31%, increasing 73% year-on-year and 66% quarter-on-quarter from Q3 2022 and Q2 2023, respectively. It is important to note that EBITDA results in EGP terms were partially affected by the translation effect from a weakened EGP compared to Q3 2022.

On a year-to-date basis, the Company booked a normalised EBITDA of JOD 2.9 million in 9M 2023, declining 44% year-on-year and yielding an associated margin of 26%. In EGP terms, normalised EBITDA remained marginally unchanged at EGP 123 million and with a margin of 26%, mainly due to the translation effect as a result of the weakening EGP. Lower EBITDA profitability is a result of lower gross profitability, which declined 45% year-on-year in JOD terms.

In Nigeria, despite growing revenues in EGP and NGN terms, the Company's EBITDA losses widened, reaching NGN 61 million in Q3 2023 from NGN 43 million during the same period last year. Compared to the previous quarter, the Company recorded a narrowing of EBITDA losses, compared to NGN 111 million in Q2 2023. In EGP terms, EBITDA losses reached EGP 2.5 million in Q3 2023, expanding from a loss of EGP 1.9 million one year prior. Widening EBITDA losses were fuelled by lower gross profitability in the country, due to rising gasoline prices and increased inflation on the back of a weakened Naira.

In Sudan, IDH booked normalised EBITDA loss of SDG 4 million, down from a loss of SDG 0.4 million in Q3 2022. In EGP terms, Sudanese operations yielded a normalised EBITDA loss of EGP 212 thousand during Q3 2023 compared to EGP 14 thousand one year prior. Widening EBITDA losses for the quarter were driven by the halting of operations in 16 of the country's 18 branches due to ongoing conflict since the beginning of the year.

Regional EBITDA in Local Currency

Mn


9M 2022

9M 2023

Change

Egypt EBITDA

EGP

857

766

-11%

Margin

 

38%

31%

 

Jordan

JOD

5.1

2.9

-44%

Margin

 

25%

26%

 

Nigeria

NGN

-122

-294

-140%

Margin

 

-10%

-20%

 

Sudan

SDG

4

20

445%

Margin

 

1%

10%

 

 

Interest Income / Expense

IDH's interest income in 9M 2023 reached EGP 46 million, down 44% from EGP 83 million during the comparable period of last year. Declined interest income for the period was mainly a result of lower cash balances due to the record cash dividends distributed during last year.

Interest expense14 came in at EGP 115 million, rising 15% year-on-year from EGP 100 million in 9M 2022. Higher interest expenses are mainly attributable to:

·      Higher interest on lease liabilities related to IFRS 16 due to the addition of new branches to IDH's network.

·   Higher interest expenses following the CBE decision to increase rates by 1,000 bps since March 2022. It is important to note that IDH's interest bearing debt balance decreased to EGP 94 million as at 30 September 2023, from EGP 117 million at year-end 2022. Earlier in the year, as part of IDH's strategy to reduce foreign currency risk, the Company agreed with General Electric (GE) for the early repayment of its contractual obligation of USD 5.7 million. To finance the settlement, IDH utilized a bridge loan facility, with half the amount being funded internally, while the other half (amounting to EGP 55 million) was provided through a bridge loan by Ahly United Bank- Egypt (AUBE). Interest expenses related to the AUBE facility recorded EGP 18 million in 9M 2023. The bridge loan was fully settled in Q2 2023.

Interest Expense Breakdown

EGP mn

9M 2022

9M 2023

Change

Interest on Lease Liabilities (IFRS 16)

53.8

69.0

28%

Interest Expenses on Leases

14.9

19.4

30%

Interest Expenses on Borrowings15

11.1

17.7

59%

Bank Charges

11.1

8.8

-20%

Loan-related Expenses on IFC facility16

8.9

-

-

Total Interest Expense

99.7

115.0

15%

 

14 Interest expenses on medium-term loans include EGP 18.0 related to the Group's facility with Ahli United Bank Egypt (AUBE). Meanwhile, the Group's facility with the Commercial International Bank (CIB) was fully repaid as of 5 April 2022.

15 Interest expenses on medium-term loans include EGP 18.0 related to the Group's facility with Ahli United Bank Egypt (AUBE). Meanwhile, the Group's facility with the Commercial International Bank (CIB) was fully repaid as of 5 April 2022.

16 Loan-related expenses on IFC facility represents commitment fees on the facility granted by IFC and Mashreq with a total value of USD 60 million. The facility was cancelled in May 2023.

Foreign Exchange

IDH recorded a foreign exchange gain of EGP 99 million during 9M 2023, up 80% year-on-year and partially reflecting intercompany balances revaluation.

 

Taxation

Tax expenses, including both income and deferred tax, stood at EGP 197 million during 9M 2023, a decrease of 22% year-on-year from the EGP 251 million reported in 9M 2022. IDH's effective tax rate came in at 34%, down from 38% in the same period of the previous year. It is worth mentioning that there is no tax payable for IDH's two holding-level companies. Meanwhile, tax was paid from the Group's operating subsidiaries (Egypt 31%, Jordan 28%, Nigeria 0.1%).

Taxation Breakdown by Region

EGP Mn

9M 2022

9M 2023

Change

Egypt

201.7

183.7

-9%

Jordan

18.5

12.4

-33%

Nigeria

30.5

-0.05

-

Sudan

0.4

0.5

24%

Total Tax Expenses

250.9

196.7

-22%

 

Net Profit

IDH's net profit in Q3 2023 stood at EGP 176 million in Q3 2023, up from a net loss of EGP 36 million in Q3 2022, and with a margin of 15%. Improved bottom-line profitability is also apparent on a quarter-on-quarter basis, with the Company's NPM increasing from 4% in Q2 2023. On a nine-month basis, net profit recorded EGP 387 million, down 4% year-on-year. The Company posted a net profit margin (NPM) of 13% compared to 14% in 9M 2022.

Non-Recurring Expenses

IDH recorded several one-off expenses during the period, namely:

·      EGP 12.2 million owed to the Egyptian government for vocational training.

·      EGP 6.5 million due to pre-operating expenses in Saudi Arabia.

·      EGP 5.0 million in impairment expenses due to the ongoing conflict in Sudan.

·      EGP 16 million due to the expiration of Covid-19 testing kits.

·      EGP 2 million due to an information strategy agreement which was executed in 2023 for USD 54 thousand.

·      EGP 1 million due to one-off legal reports.

·      EGP 8 million due to one-off expenses related to the termination of the Pakistan termination. It is important to note that these expenses have been impacted by the devaluation of the EGP.

Adjusting for these expenses, net profit would have booked EGP 191 million and yielded an NPM of 16% in Q3 2023 and EGP 437 million with an NPM of 14% in 9M 2023.

 

ii.  Balance Sheet Analysis

Assets

Property, Plant and Equipment

IDH booked gross property, plant and equipment (PPE) of EGP 2,453 million as at 30 September 2023, up from EGP 2,208 at 31 December 2022. The increase in CAPEX as a share of revenues during 9M 2023 is primarily attributable to the addition of branches to IDH's network (constituting 7% of revenues), while the remainder is due to the translation effect related to Jordan, Sudan, and Nigeria (constituting 1% of revenues).

 

Total CAPEX Addition Breakdown - 9M 2023


EGP mn

% of Revenue

Leasehold Improvements/new branches

138.9

4.6%

Al-Borg Scan Expansion

69.7

2.3%

Total CAPEX Additions Excluding Translation

208.9

6.8%

Translation Effect

36.2

1.2%

Total CAPEX Additions

245.1

8.0%

 

Accounts Receivable and Provisions

Accounts receivable as at 30 September 2023 amounted to EGP 602 million, up 52% year-to-date from the figure recorded as at year-end 2022. Meanwhile, IDH's receivables' Days on Hand (DoH) stood at 145 days, increasing from 124 days as at 31 December 2022.

Provision for doubtful account booked EGP 37 million during the first nine months of 2023, increasing from EGP 25 million in 9M 2022. Increases in provisions and receivable balance are a reflection of slower collection rates due to the economic downturns and inflationary environment which have characterized several of IDH's geographies throughout the past year, particularly in its largest market of Egypt.

Inventory

IDH's inventory balance as at the end of 9M 2023 amounted to EGP 365 million, up from EGP 265 million at year-end 2022. Meanwhile, Days Inventory Outstanding (DIO) stood at 135 days compared to 127 days at 31 December 2022. Increased DIO is a reflection of management strategy to accumulate inventory as a hedge against inflation over the past year.

Cash and Net Debt/Cash

Cash balances booked EGP 794 million at 30 September 2023, down from 816 million as at 31 December 2023. Declining cash balances are related to the previously discussed decision for the early repayment of IDH's contractual obligation of USD 5.7 million (equivalent to EGP 110 million) in line with its strategy to reduce foreign currency risk by utilizing internal resources coupled with a bridge loan facility provided by AUBE. The bridge loan facility was fully settled in the second quarter of the year.

 

EGP million

31 Dec 2022

30 Sep 2023

T-Bills

              296

272

Time Deposits 

                123

110

Current Accounts

              378

376

Cash on Hand

                18

37

Total

          816

794

 

IDH's net debt17 balance came in at EGP 356 million as of the end of 9M 2023, down 5% year-to-date from EGP 374 million as at year-end 2022.

 

17 The net cash/(debt) balance is calculated as cash and cash equivalent balances including financial assets at amortised cost, less interest-bearing debt (medium term loans), finance lease and Right-of-use liabilities.

 

EGP million

31 Dec 2022

30 Sep 2023

31 Dec 2021

Cash and Financial Assets at Amortised Cost18

816

794

2,350

Lease Liabilities Property

(727)

(814)

106

Total Financial Liabilities (Short-term and Long-term)

(335)

(233)


Interest Bearing Debt ("Medium Term Loans")

(127)

(98)


Net Cash/(debt) Balance

 (374)

 (356)

           1,483

Note: Interest Bearing Debt includes accrued interest for each period.

 

18 As outlined in Note 18 of IDH's Consolidated Financial Statements, some term deposits and treasury bills cannot be accessed for over 3 months and are therefore not treated as cash. Term deposits which cannot be accessed for over 3 months stood at EGP 113 million in Q1 2023, versus EGP 123 million as at year-end 2022. Meanwhile, treasury bills not accessible for over 3 months stood at EGP 342 million in Q1 2023, up from EGP 296 million in FY 2022.

 

Lease liabilities and financial obligations on property stood at EGP 814 million as at the end of 9M 2023, with the increase driven by the rollout of 48 new branches across IDH's network over the past 12-month period.

Meanwhile, financial obligations related to equipment came in at EGP 233 million as at 30 September 2023, down from EGP 335 million as at year-end 2023. The decline in financial obligations related to equipment is due to the early repayment of IDH's obligations with General Electric (GE) in line with the Company's efforts to hedge against foreign currency risk. Half of the settlement was financed by IDH internally, while the remainder was financed through a bridge loan facility from AUBE.

Finally, interest bearing debt19 recorded EGP 94 million at the end of 9M 2023, down from EGP 116 million as at 31 December 2022. The decrease primarily reflects the repayment of EGP 17 million in accordance with Al-Borg Scan's medium term loan repayment schedule.

19 IDH's interest bearing debt as at 31 March 2023 included EGP 172 million to its facility with Ahli United Bank Egypt (AUBE) (outstanding loan balances are excluding accrued interest for the period). It is worth noting that in order to finance the early repayment settlement with General Electric, the Company utilized a bridge loan facility of EGP 55 million. The facility was withdrawn in Q1 2023 and settled in Q2 2023.

 

 

Liabilities

Accounts Payable20

Accounts payable as at 30 September 2023 stood at EGP 370 million, up from EGP 270 as at year-end 2022. Meanwhile, Days Payable Outstanding (DPO) amounted to 137 days, down from 151 days nine months earlier.

20 Accounts payable is calculated based on average payables at the end of each period.

 

 

Put Option

The put option current liability is related to both:

·     The option granted in 2011 to Dr. Amid, Biolab's CEO, to sell his stake (40%) to IDH. The put option is in the money and exercisable since 2016 and is calculated as 7 times Biolab's LTM EBITDA minus net debt. Biolab's put option liability decreased following the significant decline in the venture's EBITDA for the period.

·    The option granted in 2022 to Izhoor, IDH, and Biolab as part of their JV agreement in Saudi Arabia. The option allows the non-defaulting party, at its sole and absolute discretion, to serve one or more written notices to the defaulting party. The notices enable the non-defaulting party to buy the defaulting party's shares at the fair price, sell its shares to the defaulting party at the fair price, or request the dissolution and liquidation of the JV company. It is important to note that the put option, which grants these rights to the non-defaulting party, does not have a specified expiration date.

The put option non-current liability is related to the option granted in 2018 to the International Finance Corporation from Dynasty - shareholders in Echo Lab - and it is exercisable in 2024. The put option is calculated based on fair market value (FMV).

 

 



 

 

 

 

 

 

 

 

 

 

INTEGRATED DIAGNOSTICS HOLDINGS plc - "IDH"

AND ITS SUBSIDIARIES

 

 

 

 

 

 

Consolidated Financial Statements

for the nine-month period ended 30 September 2023

 

 



 

 

Consolidated statement of financial position as at 30 September 2023

 

 

 

 

Notes

30 Sep 2023

 

31 Dec 2022

 

 

EGP'000

 

EGP'000

 Assets

 

 

 

 

Non-current assets

 




Property, plant and equipment

4

 1,372,233


 1,326,262

Intangible assets and goodwill

5

 1,724,471


 1,703,636

Right of use assets

6

 689,718


 622,975

Financial assets at fair value through profit and loss

7

 -  


 18,064

Total non-current assets

 

 3,786,422

 

 3,670,937

 

 

 

 

 

Current assets





Inventories

 

 365,433


 265,459

Trade and other receivables

8

 758,718


 543,887

Financial assets at amortized cost

9

180,088


 167,404

Current financial assets at fair value through profit and loss

7

24,534


 -  

Cash and cash equivalents

10

 614,180


 648,512

Total current assets

 

 1,942,953

 

 1,625,262

Total assets

 

 5,729,375

 

 5,296,199

Equity

 

 

 

 

Share capital

 

 1,072,500


 1,072,500

Share premium reserve


 1,027,706


 1,027,706

Capital reserves


 (314,310)


 (314,310)

Legal reserve


 51,641


 51,641

Put option reserve


 (336,303)


 (490,695)

Translation reserve


 (78,996)


 24,173

Retained earnings


 1,171,361


 783,081

Equity attributable to the owners of the Company

 

 2,593,599

  

 2,154,096

Non-controlling interests

 

 425,104


 292,885

Total equity

 

 3,018,703

 

 2,446,981

 

 

 

 

 

 










Non-current liabilities





Provisions


 17,455


 3,519

Non-current put option liability

12

 26,616


 51,000

Borrowings

13

 67,465


 93,751

Other financial obligations

14

 873,174


 914,191

Deferred tax liabilities

18-C

 356,739


 321,732

Total non-current liabilities

 

 1,341,449

 

 1,384,193

Current liabilities


 

 

 

Trade and other payables

11

 764,864


 701,095

Other financial obligations

14

 173,483


 148,705

Current put option liability

12

 309,687


 439,695

Borrowings

13

 40,104


 22,675

 Current tax liabilities


 81,085


 152,855

Total current liabilities

 

 1,369,223

 

 1,465,025

Total liabilities

 

 2,710,672

 

 2,849,218

Total equity and liabilities

 

 5,729,375

 

 5,296,199

 

 

 

 

 

 

 

The accompanying notes form an integral part of these consolidated financial statements.

 

 

These condensed consolidated interim financial information were approved and authorized for issue by the Board of Directors and signed on their behalf on 15 November 2023 by:

 

 

 

 


 

Dr. Hend El Sherbini


Hussein Choucri

 

Chief Executive Officer

 

Independent Non-Executive Director

 

 

 

 

 









 



 

Consolidated income statement for the quarter and nine-month periods ended 30 September 2023

 

 

 

For the three months period

ended 30 September

 

For the nine months period

ended 30 September

 

Notes

 

2023

 

2022

 

2023

 

2022




EGP'000

 

EGP'000

 

EGP'000

 

EGP'000











Revenue

21


 1,181,736

 

 846,251


 3,053,678

 

 2,800,316

Cost of sales



 (702,037)

 

 (496,581)


 (1,916,045)

 

 (1,618,776)

Gross profit

 

 

 479,699

 

 349,670

 

 1,137,633

 

 1,181,540











Marketing and advertising expenses



 (50,972)

 

 (58,641)


 (163,445)

 

 (151,209)

Administrative expenses

16


 (123,383)

 

 (99,626)


 (377,723)

 

 (263,818)

Impairment loss on trade and other receivable



 (13,854)

 

 (8,877)


 (37,123)

 

 (25,035)

Other income



 (3,402)

 

 3,834


 (5,965)

 

 7,305

Operating profit

 

 

 288,088

 

 186,360

 

 553,377

 

 748,783











Non-operating expense



 12,200

 

 -  


-

 

 -  

Net fair value losses on financial assets at fair value



-

 

(141,092)


-

 

(141,092)





 




 


Finance costs

17


 (41,831)

 

 (49,593)


 (114,957)

 

 (99,718)

Finance income

17


 16,264

 

 9,016


 145,745

 

 146,286

Net finance cost

 

 

 (25,567)

 

 (40,577)

 

 30,788

 

 46,568

Profit before tax

 

 

 274,721

 

 4,691

 

 584,165

 

 654,259











Income tax expense

18-B


 (98,310)

 

 (40,337)


 (196,704)

 

 (250,853)

Profit for the period

 

 

 176,411

 

 (35,646)

 

 387,461

 

 403,406











Profit attributed to:

 









Equity holders of the parent



 177,789

 

 (18,186)


 401,379

 

 404,034

Non-controlling interests



 (1,378)

 

 (17,460)


 (13,918)

 

 (628)




 176,411

 

 (35,646)


 387,461

 

 403,406

Earnings per share (expressed in EGP):

 









Basic and diluted earnings per share

20


0.30


(0.03)


 0.67


 0.67

 

The accompanying notes form an integral part of these condensed consolidated interim financial information.

 

Consolidated statement of comprehensive income/(expenses) for the quarter and six-month periods ended 30 September 2023

 



For the three months period ended 30 September

 

For the six months period ended 30 September

 


2023

 

2022

 

2023

 

2022

 


EGP'000

 

EGP'000

 

EGP'000

 

EGP'000

 


















Net profit

 

 176,411

 

 (35,646)

 

 387,461

 

 403,406

Items that may be reclassified to profit or loss:




 


 


 

Exchange difference on translation of foreign operations


 (8,117)


 34,378


 (2,034)


 111,686

Other comprehensive income / (Loss) for the period net of tax

 

 (8,117)

 

 34,378

 

 (2,034)

 

 111,686

Total comprehensive income for the period

 

 168,294

 

 (1,268)

 

 385,427

 

 515,092

 


 




 



Attributed to:

 

 




 



Equity holders of the parent


 168,294


 (13,640)


 298,210


 421,829

Non-controlling interests


 -  


 12,372


 87,217


 93,263

 

 

 168,294

 

 (1,268)

 

 385,427

 

 515,092

 

The accompanying notes form an integral part of these condensed consolidated interim financial information.

 



 

Consolidated statement of cash flows for the nine-month period ended 30 September 2023

 

Notes

 

30 September 2023

 

30 September 2022

 



EGP'000

 

EGP'000

 






Cash flows from operating activities

 





Profit for the period before tax



 584,165


 654,259

Adjustments

 





Depreciation of property, plant and equipment

4


 191,692


 146,433

Depreciation of right of use assets

6


 98,027


 73,959

Amortisation of intangible assets

5


 5,810


 5,211

Unrealised foreign currency exchange (gains) losses

17


 (99,406)


 85,736

Interest income

17


 (46,339)


 (83,194)

Interest expense

17


 106,155


 88,658

Bank Charges



 8,803


 11,060

Loss/(Gain) on disposal of Property, plant and equipment



 (697)


 312

Impairment in trade and other receivables



 37,123


 25,035

Impairment in goodwill



 -


 1,755

Equity settled financial assets at fair value



 (6,470)


 (3,427)

ROU Asset/Lease Termination



 (590)


 1,152

Hyperinflation (gains) losses

17


 -


 (7,736)

FV through P&L



 -


 141,092

Change in Provisions



 13,936


 406

Change in Inventories



 (95,202)


 (34,123)

Change in trade and other receivables



 (219,352)


 (158,214)

Change in trade and other payables



 30,672


 (223,795)

Cash generated from operating activities before income tax payment

 

 

 608,327

 

 724,579

 






Tax paid during period



          (231,863)


         (653,580)

Net cash generated from operating activities

 

 

            376,464

 

            70,999

 






Cash flows from investing activities

 





Interest received on financial asset at amortised cost



 46,795


 84,044

Payments for the purchase of financial assets at amortized cost



 (192,955)


 (348,139)

Proceeds for the sale of financial assets at amortized cost



 190,134


 1,656,815

Payments for acquisition of property, plant and equipment

4


 (218,271)


 (202,506)

Payments for acquisition of intangible assets

5


 (2,150)


 (2,382)

Proceeds from sale of Property, plant and equipment



 2,163


 9,552

Payments for shares bought



 -


 (999,376)

Proceeds for shares sold



 -


 858,284

Net cash flows generated (used in) from investing activities

 

 

 (174,284)

 

 1,056,292

 






Cash flows from financing activities

 





Proceeds from borrowings



             68,055


              7,411

Repayments of borrowings



            (76,911)


           (21,721)

Payment of finance lease liabilities



 (210,496)


 (41,912)

Dividends paid



 -


 (1,411,752)

Interest paid



 (107,994)


 (84,096)

Bank charge paid



 (8,803)


 (11,060)

Paid cash to non-controlling interest



 (3,112)


 -

Injection of cash to non-controlling interest



 48,114


 8,763

Net cash flows used in financing activities

 

 

 (291,147)

 

 (1,554,367)

 






Net increase in cash and cash equivalent

 

 

 (88,967)

 

 (427,076)

Cash and cash equivalents at the beginning of the year



 648,512


 891,451

Effect of exchange rate



 54,635


 65,215

Cash and cash equivalent at the end of the period

10

 

 614,180

 

 529,590

 

Non-cash investing and financing activities disclosed in other notes are:

·      Acquisition of right-of-use assets - note 6

·      Property plant and equipment - note 4

·      Put option liability - note 12

 

The accompanying notes form an integral part of these condensed consolidated interim financial information.


Consolidated statement of changes in equity for the nine-month period ended 30 September 2023

 

 

Attributable to owners of the Parent

EGP '000

 

Share
capital

Share
premium reserve

Capital
reserve

Legal
reserve*

Put option reserve

Translation
reserve

Retained earnings

Total attributable to the owners of the Parent

Non-controlling interests

Total equity

 


 

 

 

 

 

 

 

 

 

 

At 1 January 2023

 

 1,072,500

 1,027,706

(314,310)

51,641

 (490,695)

 24,173

 783,081

 2,154,096

 292,885

 2,446,981

Profit for the period


 -

 -

 -

 -

 -

 -

 401,379

 401,379

 (13,918)

 387,461

Other comprehensive income for the period


 -

 -

 -

 -

 -

 (103,169)

 -

 (103,169)

 101,135

 (2,034)

Total comprehensive income at 30 September 2023

 

 -

 -

 -

 -

 -

 (103,169)

 401,379

 298,210

 87,217

 385,427

Transactions with owners of the Company

 











Contributions and distributions

 











Dividends


 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

Legal reserve formed during the period


 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

Movement in put option liabilities


 -

 -

 -

 -

 154,392

 -

 -

 154,392

 -

 154,392

Impact of hyperinflation


 -

 -

 -

 -

 -

 -

 (13,099)

 (13,099)

 -

 (13,099)

Paid share from non-controlling interest










 (3,112)

 (3,112)

Non-controlling interests cash injection in subsidiaries during the period


 -

 -

 -

 -

 -

 -

 -

 -

 48,114

 48,114

Total contributions and distributions

 

 -

 -

 -

 -

 154,392

 -

 (13,099)

 141,293

 45,002

 186,295

Balance at 30 September 2023

 

 1,072,500

 1,027,706

 (314,310)

 51,641

 (336,303)

 (78,996)

 1,171,361

 2,593,599

 425,104

 3,018,703

 


 

 

 

 

 

 

 

 

 

 

At 1 January 2022

 

 1,072,500

 1,027,706

 (314,310)

51,641

 (956,397)

 150,730

 1,550,976

 2,582,846

 211,513

 2,794,359

Profit for the period


 -

 -

 -

 -

 -

 -

 404,034

 404,034

 (628)

 403,406

Other comprehensive income for the period


 -

 -

 -

 -

 -

 17,795

 -

 17,795

 93,891

 111,686

Total comprehensive income at 30 September 2022

 

 -

 -

 -

 -

 -

 17,795

 404,034

 421,829

 93,263

 515,092

Transactions with owners of the Company

 











Contributions and distributions

 











Dividends


 -

 -

 -

 -

 -

 -

 (1,304,805)

 (1,304,805)

 (106,947)

 (1,411,752)

Legal reserve formed during the period


 -

 -

 -

 -

 -

 -

 -

 -

 -

 -

Movement in put option liabilities


 -

 -

 -

 -

 266,958

 -

 -

 266,958

 -

 266,958

Impact of hyperinflation


 -

 -

 -

 -

 -

 -

 (6,910)

 (6,910)

 1,446

 (5,464)

Non-controlling interest cash injection in subsidiaries during the period


 -

 -

 -

 -

 -

 -


 -

 8,763

 8,763

Total contributions and distributions

 

 -

 -

 -

 -

 266,958

 -

 (1,311,715)

 (1,044,757)

 (96,738)

 (1,141,495)

Balance at 30 September 2022

 

 1,072,500

 1,027,706

(314,310)

 51,641

 (689,439)

 168,525

 643,295

 1,959,918

 208,038

 2,167,956

 

*Under Egyptian Law, each subsidiary in Egypt must set aside at least 5% of its annual net profit into a legal reserve until such time that this represents 50% of each subsidiary's issued capital. This reserve is not distributable to the owners of the Company.

 

The accompanying notes form an integral part of these condensed consolidated interim financial information.


 

(In the notes all amounts are shown in Egyptian Pounds "EGP'000" unless otherwise stated)

1.    Reporting entity

 

Integrated Diagnostics Holdings plc "IDH" or "the Company" is a Company which was incorporated in Jersey on 4 December 2014 and established according to the provisions of the Companies (Jersey) Law 1991 under Registered No. 117257.  These condensed consolidated interim financial information as at and for the nine months ended 30 September 2023 comprise the Company and its subsidiaries (together referred as the 'Group'). The Company is a dually listed entity, in both London Stock Exchange (since 2015) and in the Egyptian Exchange (during May 2021).

The principal activities of the Company and its subsidiaries (together "The Group") include investments in all types of the healthcare field of medical diagnostics (the key activities are pathology and Radiology related tests), either through acquisitions of related business in different jurisdictions or through expanding the acquired investments they have. The key jurisdictions that the Group operates are in Egypt, Jordan, Nigeria, Sudan and Saudi Arabia.

The Group's financial year starts on 1 January and ends on 31 December of each year.

This condensed consolidated interim financial information were approved for issue by the Directors of the Company on 15 November 2023.

2.    Basis of preparation

 

A)   Statement of compliance

These condensed consolidated interim financial information have been prepared as per IAS 34 'Interim Financial Reporting' (As adopted by the IASB). as the accounting policies adopted are consistent with those of the previous financial year ended 31 December 2022 and corresponding interim reporting period.

These condensed consolidated interim financial information do not include all the information and disclosures in the annual consolidated financial Statement, and should be read in conjunction with the financial Statement published as at and for the year ended 31 December 2022 which is available at www.idhcorp.com,. In addition, results of the nine month period ended 30 September 2023 are not necessary indicative for the results that may be expected for the financial year ending 31 December 2023.

B)    Basis of measurement

The condensed consolidated interim financial information has been prepared on the historical cost basis except where adopted IFRS mandates that fair value accounting is required which is related to the financial assets and liabilities measured at fair value.

C)    Functional and presentation currency

These condensed consolidated interim financial information is presented in Egyptian Pounds (EGP'000). The functional currency of the majority of the Group's entities is the Egyptian Pound (EGP) and is the currency of the primary economic environment in which the Group operates.

The Group also operates in Jordan, Sudan, Nigeria and Saudi Arabia and the functional currencies of those foreign operations are the local currencies of those respective territories, however due to the size of these operations, there is no significant impact on the functional currency of the Group, which is the Egyptian Pound (EGP).



 

 

3.    Significant accounting policies

 

In preparing these condensed consolidated interim financial information, the significant judgments made by the management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that were applied to the consolidated financial information for the year ended 31 December 2022."The preparation of these condensed consolidated interim financial information requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expense. Actual results may differ from these estimates. Information about significant areas of estimation uncertainty and critical judgement in applying accounting policies that have the most significant effect on the amount recognised in the condensed consolidated interim financial statement is described in note 3.2 of the annual consolidated financial information published for the year ended 31 December 2022. In preparing these condensed consolidated interim financial information, the significant judgments made by the management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that were applied to the consolidated financial information for the year ended 31 December 2022".


 

4.        Property, plant and equipment

 


Land & buildings

Medical, electric
 & information
 system equipment

Leasehold
improvements

Fixtures, fittings & vehicles

Project under construction

Payment on account

Total

Cost

 







At 1 January 2023

426,961

1,111,867

507,442

133,195

28,589

10,614

2,218,668

Additions

 8,554

 88,320

 45,285

 16,104

 69,148

 270

 227,681

Hyperinflation effect

 -  

 (13,098)

 -  

 -  

 -  

 -  

 (13,098)

Disposals

 -  

 (3,316)

 (503)

 (1,852)


 -  

 (5,671)

Exchange differences

 2,727

 2,966

 23,095

 7,373

 33

 -  

 36,194

Transfers

-

 36,300

 29,918


 (66,218)

-

-

At 30 September 2023

438,242

1,223,039

605,237

154,820

31,552

10,884

2,463,774

Depreciation

 







At 1 January 2023

61,578

513,869

261,705

55,254

-

 

892,406

Depreciation for the period

 5,339

 113,197

 61,121

 12,035

 -  

 -  

191,692

Disposals

 -  

 (2,275)

 (440)

 (1,490)

-

-

 (4,205)

Exchange differences

 632

 1,031

 8,243

 1,742

-

-

 11,648

At 30 September 2023

67,549

625,822

330,629

67,541

 -  

 -  

1,091,541

 

 

 

 

 

 

 

 

 

Net book value at 30 September

370,693

597,217

274,608

87,279

31,552

10,884

1,372,233

At 31 December 2022

365,383

597,998

245,737

77,941

28,589

10,614

1,326,262

















5.  Intangible assets and goodwill

 

Intangible assets represent goodwill acquired through business combinations and brand names.

 


Goodwill

Brand name

Software

Total

Cost

 

 

 

 

Balance at 1 January 2023

1,291,823

395,551

92,836

1,780,210

Additions

 -  

 -  

2150

2,150

Effect of movements in exchange rates

14,552

7,911

4,102

26,565

Balance at 30 September 2023

1,306,375

403,462

99,088

1,808,925


 

 

 

 

Amortisation and impairment

 

 

 

 

Balance at 1 January 2023

6,373

381

69,820

76,574

Amortisation

 -  

 -  

5,810

5,810

Effect of movements in exchange rates

80

11

1,979

2,070

Balance at 30 September 2023

6,453

392

77,609

84,454


 

 

 

 

Carrying amount

 

 

 

 

Balance at 30 September 2023

1,299,922

403,070

21,479

1,724,471

Balance at 31 December 2022

1,285,450

395,170

23,016

1,703,636

 

Goodwill impairment reviews are undertaken annually or more frequently if events or changes in circumstances indicate a potential impairment. No indicators of impairment have been identified during the nine months ended 30 September 2023.  

 

6.    Right-of-use assets

 

30 September 2023

 

31 December 2022

Balance at 1 January

622,975


462,432

Addition for the period / year

 127,261


214,846

Depreciation charge for the period / year

 (98,027)


(103,099)

Terminated contracts

 (5,092)


(13,564)

Exchange differences

 42,601


62,360

Balance

689,718

 

622,975

 



 

7.    Financial asset at fair value through profit and loss

 


30 September 2023

 

31 December 2022

Non-current equity investments

-


18,064

Current equity investments

24,534


-

 

24,534

 

18,064

 

*On August 17, 2017, Almakhbariyoun AL Arab (seller) has signed IT purchase Agreement with JSC Mega Lab (Buyer) to transfer and install the Laboratory Information Management System (LIMS) for a purchase price amounted to USD 400 000, which will be in the form of 10% equity stake in JSC Mega Lab. In case the valuation of the project is less or more than USD 4,000,000, the seller stake will be adjusted accordingly, in a way that the seller equity stake shall not fall below 5% of JSC Mega Lab.

-    Ownership percentage in JSC Mega Lab at the transaction date on April 8, 2019, and as of September 30, 2023, was 8.25%.

-     On April 8, 2019, Al Mokhabariyoun Al Arab (Biolab) has signed a Shareholder Agreement with JSC Mega Lab and JSC Georgia Healthcare Group (CHG), whereas, BioLab Shall have a put option, exercisable within 12 months immediately after the expiration of five(5) year period from the signing date, These assets have therefore been reclassified as current assets in the financial information as of June 30, 2023, which allows BioLab stake to be bought out by CHG at a price of the equity value being USD 400,000 plus 15% annual Interred Rate of Return (IRR).

-  In case the Management Agreement or the Purchase Agreement and/or the Service level Agreement is terminated/cancelled within 6 months period from the date of such termination/cancellation, CHG shall have a call option, which allows the CHG to purchase Biolab's Strake in JSC Megalab having value of USD 400,000.00 plus 20% annual Interred Rate of Return (IRR).

-      If JCI accreditation is not obtained, immediately after the expiration of the 12 months period, CHG shall have a call option (the Accreditation Call option), exercisable within 6 months period, allowing CHG to purchase BioLab's Shares in JSC Mega Lab at a price of the equity value of  USD 400,00.00 plus the 20% annual IRR.

-      After 12 months from the date of the put option period expiration, CHG to purchase Biolab's Stake in JSC Megalab having value of USD 400,000 plus higher of 20% annual IRR or 6X EV/EBITDA (of the financial year immediately preceding the call option exercise date).

 

8.    Trade and other receivables

 

30 September 2023

 

31 December 2022

Trade receivables - net

601,525


395,220

Prepayments

60,119


34,081

Due from related parties note (15)

1,562


5,930

Other receivables

93,677


106,363

Accrued revenue

1,835


2,293


758,718

 

543,887



 

9.    Financial assets at amortised cost

 

 

30 September 2023

 

31 December 2022

Term deposits (more than 3 months)

49,245


60,200

Treasury bills (more than 3 months)

130,843


107,204


180,088

 

167,404

 

The maturity date of the treasury bills and Fixed-term deposits are between 3-12 months and have average interest rates treasury bills of EGP 22.03% and Fixed-term deposits of EGP and JOD 5.20 and 5.38% respectively.

 

10.  Cash and cash equivalents

 

 

30 September 2023

 

31 December 2022

Cash at banks and on hand

412,815


399,957

Treasury bills (less than 3 months)

140,971


185,513

Term deposits (less than 3 months)

 60,394


63,042


614,180

 

648,512

 

 

11.  Trade and other payables

 

 

30 September 2023

 

31 December 2022

 

 

 


Trade payable

370,089


269,782

Accrued expenses

215,193


241,060

Due to related parties note (15)

28,661


25,058

Other payables

95,118


98,204

Deferred revenue

52,097


60,948

Accrued finance cost

3,706


6,043


764,864

 

701,095

 



 

12.  Put option liability


30 September 2023

 

31 December 2022


 


 

Current put option - Biolab Jordan

271,136


439,695

Current put option - Eagle Eye-Echo scan

38,551


-


309,687

 

439,695

 

 


30 September 2023

 

31 December 2022


 


 

Non-current put option - Eagle Eye-Echo scan

-


51,000

Non-current put option - Medical Health Development

26,616


-


26,616

 

51,000

 

Put option - Biolab Jordan

The accounting policy for put options after initial recognition is to recognise all changes in the carrying value of the put option liability within equity.

 

Through the historic acquisitions of Makhbariyoun Al Arab the Group entered into separate put option arrangements to purchase the remaining equity interests from the vendors at of a subsequent date. At acquisition, a put option liability has been recognised at the net present value of the exercise price of the option.

 

The option is calculated at seven times EBITDA of the last 12 months minus Net Debt and its exercisable in whole starting the fifth anniversary of completion of the original purchase agreement, which fell due in June 2016. The vendor has not exercised this right at 30 September 2023. It is important to note that the put option liability is treated as current as it could be exercised at any time by the NCI. However, based on discussions and ongoing business relationships, there is no expectation that this will happen in next 18 months. The option has no expiry date.

 

Put option - Eagle Eye-Echo scan

According to the definitive agreements signed on 15 January 2018 between Dynasty Group Holdings Limited and the International Finance Corporation (IFC) related to the Eagle Eye-Echo scan transaction, IFC has the option to put it is shares to Dynasty in year 2024. The put option price will be calculated on the basis of the fair market value determined by an independent valuator.

 

Put option - Medical Health Development

According to this joint venture agreement made on October 27th, 2022, between Business Flower Holding LLC, Integrated Diagnostics Holdings plc and al Makhbaryoun al Arab LLC, in cases of bankruptcy and stumbling, a non-struggling party is entitled to implement any of the following options for a struggling party's share without reference to it:

 

(A) sell to the Non-Defaulting Party its Shares at the Fair Price of such Shares.

(B) buy the Non-Defaulting Party's Shares at the Fair Price of such Shares.

(C) requesting the dissolution and liquidation of the Company.

 

Due to the execution of the put option in the case specified above, the option has been classified as a non-current liability in exchange for equity rights for the Group.



 

13.  Loans and borrowings

 

 

Currency

Nominal interest rate

Maturity

30 September 2023

 

31 December 2022

 







AUB - Bank

EGP

CBE corridor rate+1%

26 January 2027

94,451


116,426

AUB - Bank

EGP

Secured 7%

3 December 2023

13,118


-





107,569

 

116,426

Amount held as:




 



Current liability




40,104


22,675

Non- current liability




67,465


93,751





107,569


116,426

 

A)            In July 2018, AL-Borg lab, one of IDH subsidiaries, was granted a medium term loan amounting to EGP 130.5m from Ahli United Bank "AUB Egypt" to finance the investment cost related to the expansion into the radiology segment. As at 30 September 2023 only EGP 108 M had been drawn down from the total facility available with 72M had been repaid. Loan withdrawal availability period was extended till July 2023 and the loan will be fully repaid by January 2027.

The loan contains the following financial covenants which if breached will mean the loan is repayable on demand:

1.     The financial leverage shall not exceed 0.7 throughout the period of the loan

"Financial leverage": total bank debt divided by net equity.

2.     The debt service ratios (DSR) shall not be less than 1.35 starting 2020

"Debt service ratio": cash operating profit after tax plus depreciation for the financial year less annual maintenance on machinery and equipment adding cash balance (cash and cash equivalent ) divided by total financial payments.

"Cash operating profit": Operating profit after tax, interest expense, depreciation and amortisation, is calculated as follows: Net income after tax and unusual items adding Interest expense, Depreciation, Amortisation and provisions excluding tax related provisions less interest income and Investment income and gains from extraordinary items.

"Financial payments": current portion of long-term debt including finance lease payments, interest expense and fees and dividends distributions.

3.     The current ratios shall not be less than 1.

"Current ratios": Current assets divided current liabilities.

The terms and conditions of outstanding loans are as follows:

*             As at 30 September 2023 corridor rate 20.25% (2022: 17.25%) 

 



 

13.  Loans and borrowings (continued)

AL- Borg company didn't breach any covenants for MTL agreements. 

IDH opted to reduce its exposure to foreign currency risk by agreeing with General Electric (GE) for the early repayment of its dollar obligation. The Group and GE have agreed to settle this balance early for USD 3.55 million, payable in EGP, equivalent to EGP 110 million.

To finance the settlement, IDH utilized a bridge loan facility, with half of the amount (EGP 55 million) being funded internally and the other half (EGP 55 million) provided by a loan from Ahly United Bank - Egypt, this credit facility was fully repaid during the six-month period ending 30 June 2023.

14.  Other Financial obligations


30 September 2023

 

31 December 2022

Lease liabilities building

813,717


727,426

Financial liability- laboratory equipment

232,940


335,470


1,046,657

 

1,062,896

 

The financial obligations for the laboratory equipment and building are payable as follows:


30 September 2023

 

Minimum payments

 

Interest

 

Principal

 

 

 

 

 

Less than one year

 282,085


 108,602


Between one and five years

 1,016,173


 288,382


More than five years

 184,256


 38,873


 145,383


 1,482,514

 

 435,857

 

 1,046,657

 


31 December 2022

 

Minimum payments

 

Interest

 

Principal

 

 

 

 

 

 

Less than one year

285,962


137,257


148,705

Between one and five years

1,030,750


314,656


716,094

More than Five years

227,715


29,618


198,097


1,544,427

 

481,531

 

1,062,896

 

Amounts recognised in profit or loss:


For the three months ended
30 September

 

For the nine months ended
30 September

 

2023

 

2022

 

2023

 

2022

Interest on lease liabilities

23,823


9,111


69,044


44,037

Expenses related to short-term lease

3,116


4,644


8,307


19,788



 

14.  Related party transactions

 

The significant transactions with related parties, their nature volumes and balance during the period 30 September 2023 are as follows:







30 September 2023

Related Party

 

Nature of transaction

 

Nature of relationship

 

Transaction amount of the year

 

Amount due from / (to)

 

 






EGP'000

 

EGP'000

ALborg Scan (S.A.E)*


Expenses paid on behalf


Affiliate


(351)


-










International Fertility (IVF)**


Expenses paid on behalf


Affiliate


(1,771)


-










H.C Security


Provide service


Entity owned by Company's board member


(7)


(106)










Life Health Care


Provided service


Entity owned by Company's CEO


(5,505)


(2,987)










Dr. Amid Abd Elnour


Put option liability


Bio. Lab C.E.O and shareholder


168,560


(271,135)



Current account


Bio. Lab C.E.O and shareholder


6,345


(13,663)










International Finance corporation (IFC)


Put option liability


Echo-Scan shareholder


12,448


(38,551)










International Finance corporation (IFC)


Current account


Echo-Scan shareholder


623


-










Integrated Treatment for Kidney Diseases (S.A.E)


Collection


Entity owned by Company's CEO


(200)





Medical Test analysis




72


1,562










Hena Holdings Ltd


shareholders' dividends deferral agreement


shareholder


(63)


(2,435)










Actis IDH Limited


shareholders' dividends deferral agreement


shareholder


(1,005)


(2,960)

Medical Health Development


Put option liability


Affiliate


(26,616)


(26,616)

Dr. Kalid Ismail


Current account


Wayak C.E.O and shareholder


(6,510)


(6,510)

 

 


 

 






(363,401)

 



 

15.  Related party transactions (continued)

 




31 December 2022


Related Party

Nature of transaction

Nature of relationship

Transaction amount of the year

 

Amount due from / (to)



 



EGP'000

 

EGP'000


AL borg Scan (S.A.E)*

Expenses paid on behalf

Affiliate

-


351









International Fertility (IVF)**

Expenses paid on behalf

Affiliate

4


1,771









H.C Security

Provide service

Entity owned by Company's board member

220


(99)









Life Health Care

Provided service

Entity owned by Company's CEO

424


2,518









Dr. Amid Abd Elnour

Put option liability

Bio. Lab C.E.O and shareholder

481,665


(439,695)



Current account

Bio. Lab C.E.O and shareholder

(20,008)


(20,008)









International Finance corporation (IFC)

Put option liability

Echo-Scan shareholder

(15,963)


(51,000)









International Finance corporation (IFC)

Current account

Echo-Scan shareholder

12,292


(623)









Integrated Treatment for Kidney Diseases (S.A.E)

Rental income

Entity owned by Company's CEO

116


1,290



Medical Test analysis


381


-









Dr. Hend El Sherbini

Loan arrangement

CEO

17,025


-









HENA HOLDINGS LTD

shareholders' dividends deferral agreement

shareholder

(2,373)


(2,373)









ACTIS IDH LIMITED

shareholders' dividends deferral agreement

shareholder

(1,955)


(1,955)


 





(509,823)


 

*    ALborg Scan is a company whose shareholders include Dr. Moamena Kamel (founder of IDH subsidiary Al-Mokhtabar Labs).

**   International Fertility (IVF) is a company whose shareholders include Dr. Moamena Kamel (founder of IDH subsidiary Al-Mokhtabar Labs).

 

Compensation of key management personnel of the Group

 

The amounts disclosed in the table are the amounts recognised as an expense during the reporting period related to key management personnel.


30 September 2023

 

30 September 2022

Short-term employee benefits

52,872


39,027


52,872


39,027

 

 

16.  General and administrative expenses

 



For the three months ended 30 September

 

For the nine months ended 30 September

 


2023

 

2022

 

2023

 

2022

 









Wages and salaries


52,720


34,352


 159,931


 101,262

Depreciation


7,936


6,867


 24,576


 19,782

Amortisation


1,560


1,031


 4,649


 2,959

Consulting fees


32,066


23,800


 100,420


 57,864

Other expenses


29,101


33,576


 88,147


 81,951

Total

 

123,383


99,626


377,723


263,818

 

 

17.  Net finance cost

 


For the three months ended 30 September

 

For the nine months ended 30 September

 

 

2023

 

2022

 

2023

 

2022

Finance income








Interest income

16,264


7,751


46,339


83,194

Net foreign exchange gain

-


-


99,406


55,356

Gain on hyperinflationary net monetary position

-


1,265


-


7,736

Total finance income

16,264

 

9,016

 

145,745

 

146,286


 




 



 

Finance cost

 




 



 

Net foreign exchange loss

(2,753)


(14,022)


-


-

 

Bank charges

(3,420)


(2,255)


(8,803)


(11,060)

 

Interest expense

(35,658)


(33,316)


(106,154)


(88,658)

 

Total finance cost

(41,831)

 

(49,593)

 

(114,957)

 

(99,718)

 

Net finance (cost)/income

(25,567)

 

(40,577)

 

30,788

 

46,568

 




























 

18.  Tax

 

A.    Tax expense

Tax expense is recognised based on management's best estimate of the weighted-average annual income tax rate expected for the full financial year multiplied by the pre-tax income of the interim reporting period.



 

 

B.    Income tax

Amounts recognised in profit or loss as follow:


For the three months ended 30 September

 

For the nine months ended 30 September

 

2023

 

2022

 

2023

 

2022

 

Current tax:

 







 

Current period

(74,558)


(20,292)


(162,126)


(180,131)

 

WHT suffered

-


(100,906)


-


(100,906)

 

Current tax

(74,558)

 

(121,198)

 

(162,126)

 

(281,037)

 

Deferred tax:








 

Deferred tax arising on undistributed reserves in subsidiaries

 (23,157)


 113,285


 (34,064)


 64,732

 

Relating to origination and reversal of temporary differences

 (595)


 (32,424)


 (514)


 (34,548)

 

Total Deferred tax expense

 (23,752)

 

 80,861

 

 (34,578)

 

 30,184

 

Tax expense recognised in profit or loss

  (98,310)

 

(40,337)

 

(196,704)

 

(250,853)

 












 

C.    Deferred tax liabilities

Deferred tax relates to the following:   


30 September 2023

 

31 December 2022

 

 

 

 

Property, plant and equipment

 (34,500)


(35,804)

Intangible assets

 (111,365)


(109,118)

Undistributed reserves from Group subsidiaries

 (210,874)


(176,810)

Net deferred tax liabilities

(356,739)

 

(321,732)

 

19.  Financial instruments

 

The Group has reviewed the financial assets and liabilities held at 30 September 2023. It has been deemed that the carrying amounts for all financial instruments are a reasonable approximation of fair value. All financial instruments are deemed Level 3.



 

20.  Earnings per share

 


For the three months ended 30 September

 

For the nine months ended 30 September

 

2023

 

2022

 

2023

 

2022

 

 

 

 

 

 

 

 

Profit attributed to owners of the parent

177,789


(18,186)


401,379


404,034

Weighted average number of ordinary shares in issue

600,000


600,000


600,000


600,000

Basic and diluted earnings per share

0.30


(0.03)


0.67


0.67

 

The Company has no potential diluted shares as at 30 September 2023 and 30 September 2022, therefore; the earnings per diluted share are equivalent to basic earnings per share.

21.  Segment reporting

 

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the steering committee that makes strategic decisions.

The Group has five operating segments based on geographical location rather than two operating segments based on service provided, as the Group's Chief Operating Decision Maker (CODM) reviews the internal management reports and KPIs of each geography.

The Group operates in five geographic areas, Egypt, Sudan, Jordan, Nigeria and Saudi Arabia. As a provider of medical diagnostic services, IDH's operations in Sudan are not subject to sanctions. The revenue split, EBITDA split (being the key profit measure reviewed by CODM) net profit and loss between the five regions is set out below.


Revenue by geographic location

For the three months ended

Egypt region

Sudan region

Jordan region

Nigeria region

Saudi Arabia

Total

30-September-23

986,160

532

173,992

21,052

             -  

1,181,736

30-September-22

711,195

4,317

109,372

21,367

             -  

846,251

 


Revenue by geographic location

For the nine months period ended

Egypt region

Sudan region

Jordan region

Nigeria region

Saudi Arabia

Total

30-September-23

2,499,833

10,726

464,247

78,872

-

3,053,678

30-September-22

2,235,235

14,786

495,507

54,788

-

2,800,316

 


EBITDA by geographic location

For the three months ended

Egypt region

Sudan region

Jordan region

Nigeria region

Saudi Arabia

Total

30-September-23

347,223

(5,227)

54,344

(2,471)

(6,511)

387,358

30-September-22

235,623

(14)

31,447

(1,931)

-

265,125

 

21. Segment reporting (continued)


EBITDA by geographic location

For the nine months period ended

Egypt region

Sudan region

Jordan region

Nigeria region

Saudi Arabia

Total

30-September-23

754,085

(3,978)

122,846

(17,536)

(6,511)

848,906

30-September-22

857,363

49

122,237

(5,263)

-

974,386

 

 


Net profit / (loss) by geographic location

For the three months ended

Egypt region

Sudan region

Jordan region

Nigeria region

Saudi Arabia

Total

30-September-23

175,813

21,243

(8,652)

(6,544)

176,411

30-September-22

(13,555)

14,718

(37,356)

-

(35,646)

 


Net profit / (loss) by geographic location

For the nine months period ended

Egypt region

Sudan region

Jordan region

Nigeria region

Saudi Arabia

Total

30-September-23

401,734

(1,812)

32,555

(38,472)

(6,544)

387,461

30-September-22

380,005

4,825

62,189

(43,613)

-

403,406

 


Revenue by type

For the three months

ended 30 September

 

Net profit by type

For the three months

ended 30 September

 

 

 

2023

2022

 

2023

2022

 

 

 

 

 

 

Pathology

1,115,644

802,245


198,065

(2,876)

Radiology

66,092

44,006


(21,652)

(32,770)

 

1,181,736

846,251

 

176,413

(35,646)

 


Revenue by type

 

Net profit by type

 

For the nine months

 

For the nine months

ended 30 September

ended 30 September

 

2023

2022

 

2023

2022

 

 

 

 

 

 

Pathology

2,866,836

2,687,516


485,870

474,842

Radiology

186,842

112,800


 (98,407)

(71,436)

 

3,053,678

2,800,316

 

387,463

403,406

 

 

 

 

21. Segment reporting (continued)


Non-current assets by geographic location

 

Egypt region

Sudan region

Jordan region

Nigeria region

Saudi Arabia

Total

30-September-23

3,070,167

3,847

606,928

80,423

25,057

31-December-22

3,039,930

14,993

494,244

121,770

-

3,670,937

 

The operating segment profit measure reported to the CODM is EBITDA, as follows:


For the three months ended 30 September

 

For nine months period ended 30 September

 

2023

2022

 

2023

2022

 






Profit from operations

288,088

186,360

 

553,377

748,783

 






Property, plant and equipment depreciation

64,937

51,249


191,692

146,433

Right of use depreciation

32,395

25,744


98,027

73,959

Amortization of Intangible assets

 1,938

 1,772


5,810

5,211

EBITDA

387,358

265,125

 

848,906

974,386

Non-recurring expenses

23,730

 -  


23,730

 -  

Normalised EBITDA

 411,088

 265,125

 

 872,636

 974,386

 

 

22.          Distributions made

 


30 September

2023

 

31 December 2022


EGP'000

 

EGP'000

Cash dividends on ordinary shares declared and paid:

 



Nil per qualifying ordinary share US$ 0.116 per share

-


1,304,805


-


1,304,805

 

During the year ended December 31, 2022 during the Company's annual general meeting (AGM) held in London on 7 June 2022, IDH's shareholders approved a record-breaking dividend distribution of 0.116 US$ per share or US$ 69.6 million in aggregate.

 

 

23.          Important events

 

On March 8, 2023, the Group completed the establishment of Medical Health Development Company, a limited liability company based in Saudi Arabia with a total stake of 51% directly and indirectly through one of the Group's subsidiaries, where Integrated Diagnostics Holdings (IDH) owns 30% and Al Makhbaryoun Al Arab LLC ("Biolab")-Jordan a subsidiary owns 21%.

The Central Bank of Egypt increased the interest rate by 200 points, to reach 19.25% instead of 17.25%. This was by a decision of the Monetary Policy Committee, according to the meeting held on March 30, 2023. And increased the interest rate by 100 points, to reach 20.25% instead of 19.25%. This was by a decision of the Monetary Policy Committee, according to the meeting held on 6 August 2023. 

During April 2023, an armed conflict began in Sudan that led to security unrest across the country. Business has been temporarily frozen in the branches of the Sudan Laboratory Company and Ultra Lab until further notice, which will greatly affect the profits of the geographical sector in the subsequent period. The Group's management is closely monitoring the situation and is currently evaluating the impact of these events on the Group's business results and activities. Therefore, the company's management has evaluated the business results, and a provision has been formed for 5 M.

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