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Integrated Diag Hdgs (IDHC)

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Thursday 02 September, 2021

Integrated Diag Hdgs

Half-year Report

RNS Number : 4544K
Integrated Diagnostics Holdings PLC
02 September 2021
 

-Integrated Diagnostics Holdings Plc

1H 2021 Results

Thursday, 2 September 2021

 

Integrated Diagnostics Holdings Plc delivers exceptional growth on the back of strong demand across its entire service portfolio

 

 

(London) Integrated Diagnostics Holdings ("IDH," "the Group," or "the Company"), a leading consumer healthcare company with operations in Egypt, Jordan, Sudan and Nigeria, released today its reviewed financial statements and operational performance for the first half of 2021, recording revenue of EGP 2,293 million, up 141% versus the comparable period of last year. Normalised EBITDA1 recorded EGP 1,203 million in 1H 2021, representing a 227% year-on-year increase, while net profit expanded 283% year-on-year to reach EGP 668 million for the period. In the second quarter of 2021, revenues reached a new record-high of EGP 1,164 million, up 3% from an already impressive first quarter of the year, with net profit recording EGP 327 million and an associated margin of 28%.

 

Financial Results

 EGP mn

1H 2020

1H 2021

 Change

Revenues

  950

  2,293

141%

Cost of Sales

  (503)

  (988)

96%

Gross Profit

  446

  1,305

193%

Gross Profit Margin

47%

57%

9.9 pts

Operating Profit2

  277

  1,094

291%

Normalised EBITDA1

  367

1,203

227%

EBITDA Margin

39%

52%

13.8 pts

Net Profit

  175

  668

283%

Net Profit Margin

18%

29%

10.8 pts

Cash Balance

  719

  1,587*

121%

*Cash balance prior to payment of US$ 29.1 million dividend for year ended 31 December 2020, distributed on 29 July 2021.

 

Key Operational Indicators


1H 2020

1H 2021

change

Branches

462

495

33

Patients ('000)

2,890

4,673

62%

Revenue per Patient (EGP)

329

491

49%

Tests ('000)

11,234

16,318

45%

Revenue per Test (EGP)

85

141

66%

Test per Patient

3.9

3.5

-10%

 

1   Normalised EBITDA is calculated as operating profit plus depreciation and amortization and excluding one-off fees incurred in 1H 2021 (EGP 29.0 million) related to the Company's dual listing on the EGX completed in May 2021.

2   Operating Profit excludes one-off fees incurred in 1H 2021 (EGP 29.0 million) related to the Company's dual listing on the EGX completed in May 2021.

Introduction

 

i.  Financial Highlights

· Revenue recorded EGP 2,293 million in 1H 2021, up a remarkable 141% versus the comparable period of last year supported by both IDH's Covid-19-related3 tests and a sustained recovery in the Group's conventional test offering. Top-line growth for the first half of 2021 was dual-driven, as tests performed and average price per test posted year-on-year expansions of 45% and 66%, respectively. Covid-19-related tests contributed to 48% of IDH's top-line during the first six months of the year compared to the 9% contribution made during 1H 2020. Excluding Covid-19-related tests, the Group witnessed a 38% year-on-year expansion in revenue generated from its conventional test offering. The year-to-date performance was buoyed by an impressive second quarter, which saw IDH build on the strong momentum from the start of the year to record revenues of EGP 1,164 million for 2Q 2021, up 159% versus 2Q 2020 and 3% from 1Q 2021.

· Consolidated revenues continued to be supported by the Group's house call service in Egypt and Jordan, which in 1H 2021 contributed to 23% of total revenue versus the 18% contribution made this time last year. Through its house call service, IDH served more than 646,000 patients in 1H 2021 (up 88% versus 1H 2020), performing more than 3.4 million tests (up 49% versus 1H 2020). Leveraging an expanded reach, IDH was able to carry out an average of 3,600 house call visits per day in 1H 2021, up significantly from the 1,900 visits per day performed in 1H 2020.

· Gross Profit grew by 193% year-on-year in 1H 2021 to record EGP 1,305 million with an associated margin of 57% versus 47% in the same period last year. Improved gross profitability came on the back of strong top-line growth and the subsequent dilution of fixed costs for the period such as direct salaries and wages and other expenses. Gross profit for the second quarter of 2021 recorded EGP 667 million, up 4% from the previous quarter and with a gross margin of 57%.

· Operating Profit recorded EGP 1,094 million, a 295% year-on-year expansion, with an associated margin of 48% versus 29% last year. The remarkable growth in operating profit was supported by strong gross profitability, the dilution of SG&A outlays for the period due to their relatively fixed nature, and a normalisation of provisions booked in 1H 2021, which recorded EGP 10 million versus EGP 28 million in 1H 2020 to account for expected credit losses in accordance with IFRS 9.

· Normalised EBITDA4 reached EGP 1,203 million in 1H 2021, an increase of 227% from the comparable period of last year. EBITDA margin expanded to 52% for the period versus 39% in 1H 2020. Solid improvements in EBITDA profitability were driven by strong top-line growth in 1H 2021 and the subsequent dilution of IDH's fixed costs for the period. On a quarterly basis, normalised EBITDA recorded EGP 603 million, up 267% year-on-year and largely in line with last quarter's figure. Normalised EBITDA margin stood at 52% for the quarter, down from the 53% margin recorded in 1Q 2021 as IDH booked higher accounting fees (related to the EGX requirement to publish quarterly reviewed financial statements) and additional bonus payments to senior management during 2Q 2021. 

· Net Profit expanded 283% year-on-year to record EGP 668 million in 1H 2021, with a net profit margin of 29% versus 18% in 1H 2020. Net profit growth was supported by strong EBITDA level profitability and comes despite IDH booking EGP 29 million in one-off fees related to the Company's dual-listing in May 2021. In 2Q 2021, net profit stood at EGP 327 million with an associated margin of 28%.

· A dividend of US$ 29.1 million (US$ 0.0485 per share) for the year ended 31 December 2020 was distributed to shareholders on 29 July 2021. This represents an increase of 4% compared to a final dividend of US$ 28 million in aggregate in the previous financial year.

 

3   Covid-19-related tests include both core Covid-19 tests (Polymerase Chain Reaction (PCR), Antigen, and Antibody) as well as other Covid-19-related tests which include a bundle of routine inflammatory and clotting markers (which witnessed strong demand following the outbreak of Covid-19) such as Complete Blood Picture, Erythrocyte Sedimentation Rate (ESR), D-Dimer, Ferritin and C-reactive Protein (CRP), among others.

4   Normalised EBITDA is calculated as operating profit plus depreciation and amortization and minus one-off fees incurred in 1H 2021 (EGP 29 million) related to the Company's EGX listing completed in May 2021.

ii.  Operational Highlights

· IDH's branch network stood at 495 branches as of 30 June 2021, up from 462 branches and 481 branches as of 30 June 2020 and 31 December 2020, respectively.

· Total tests performed recorded 16.3 million in 1H 2021, up 45% year-on-year. Higher test volumes were supported by both IDH's Covid-19-related5 test offering as well as a sustained recovery in the Group's conventional test offering, with the latter up 29% versus the first six months of 2020. In 2Q 2021, IDH performed 8.3 million tests, up 2% from the previous quarter as IDH performed both more Covid-19-related and conventional tests during the second quarter of the year compared to the previous quarter. The quarter-on-quarter expansion is particularly noteworthy as the second quarter included the expected slowdown related to the holy month of Ramadan and Eid vacation.

· Average revenue per test expanded 66% year-on-year to EGP 141 in 1H 2021. Controlling for the generally higher value Covid-19-related4 tests, average revenue per test would have increased 7% versus last year.

· Total patients served reached 4.7 million in 1H 2021, a 62% year-on-year increase. Meanwhile, average test per patient declined to 3.5 in 1H 2021 from 3.9 last year as an increasing number of patients visit the Group's labs for single Covid-19 tests (PCR, Antigen and Antibody).

· Revenue generated by IDH's Egyptian operations expanded 140% year-on-year on the back of solid growth across both test and patient volumes. On a service basis, top-line growth was supported by both Covid-19-related5 and conventional tests, and was further bolstered by the Group's house call service which in 1H 2021 made up 25% of Egypt's top-line versus 20% last year. Excluding Covid-19-related contributions in 1H 2021, conventional tests performed and revenue generated in Egypt expanded 29% and 38% year-on-year, respectively.

· Al-Borg Scan recorded revenue of EGP 20 million in 1H 2021, an increase of 124% compared to last year.  The number of radiology tests performed during the first six months of 2021 reached 34,297, more than double the tests performed last year.

· Wayak turned EBITDA positive during 2Q 2021 on the back of growing revenue and optimised overhead costs. On a year-to-date basis, Wayak's revenue nearly tripled versus last year to reach EGP 4.3 million in 1H2021 supported by a growing customer base.

· In Jordan, revenue increased 176% year-on-year on the back of strong volume growth for the period. Top-line growth was supported by Biolab's Covid-19-related test offering coupled with solid growth in its conventional test offering, with the latter having made a full recovery from last year's slowdown. In fact, excluding Covid-19-related tests, the number of tests performed and revenue generated would have increased 43% and 41%, respectively.

· In August, Biolab was selected as the preferred bidder to operate testing stations in Amman's Queen Alia International Airport (QAIA). This landmark partnership will allow IDH to continue playing a frontline role in the fight against Covid-19, while helping to further expand Biolab's volumes and revenue in the coming period.

· In Nigeria, revenues continued their steady expansion, growing 68% year-on-year (76% in NGN terms) in 1H 2021 supported by a 47% increase in tests performed versus last year.

 

5   Covid-19-related tests include both core Covid-19 tests (Polymerase Chain Reaction (PCR), Antigen, and Antibody) as well as other Covid-19-related tests which include a bundle of routine inflammatory and clotting markers (which witnessed strong demand following the outbreak of Covid-19) such as Complete Blood Picture, Erythrocyte Sedimentation Rate (ESR), D-Dimer, Ferritin and C-reactive Protein (CRP), among others.

iii. Management Commentary

 

Commenting on the Group's performance for the six-month period, IDH Chief Executive Officer Dr. Hend El-Sherbini said: "Halfway through 2021, I am delighted with the Group's operational and financial performance, which has seen us continue to build on an impressive start to the year to deliver another set of record-breaking results. Our revenues expanded an impressive 141% versus last year on the back of growing patient and test volumes, improved pricing and an increasingly optimised service mix. While top-line growth continued to be bolstered by our Covid-19-related6 tests, I am happy to report that we have continued to witness robust growth in our conventional test offering for the second quarter in a row, signalling a sustained recovery which we expect to continue even as Covid-19-related volumes begin to taper off. It is particularly important to highlight that the Group's conventional test volumes in 1H 2021 surpassed pre-Covid-19 levels, coming in 4% higher than test volumes recorded in the same six months of 2019 after adjusting for the impact of the 100 Million Healthy Lives Campaign7. This is further evidence of the robust underlying demand for high quality diagnostic services present across our markets of operation, and of our continued ability to service this growing market."

 

"On a regional front, both our Egyptian and Jordanian operations continued to report strong revenue growth supported by our conventional and Covid-19-related service offering. Similar to the trend witnessed at the consolidated level, across both geographies we recorded robust growth in our conventional test portfolio supported by a widespread recovery of economic activity coupled with our multi-pronged efforts aimed at stimulating demand across the entirety of our service roster. Top-line growth in both countries was further buoyed by our home call services which continue to grow in popularity especially in our home market of Egypt, where tests performed directly in patient homes made up 25% of the country's top-line in the first half of 2021. Our ability to effectively ramp up the service in step with growing demand is enabling us to perform up to five thousand house visits per day, helping us to tap into new segments of the population while boosting our tests per patient as patients enjoy the added comfort of having the tests administered in their own homes. House call services represent an important driver of future growth for the Company well beyond the end of the Covid-19 crisis, and as such we are continuing our efforts to expand and further streamline the service. In parallel, we are also seeing growing contributions coming from our radiology venture, Al-Borg Scan, which recorded year-on-year revenue growth of 124% as tests performed more than doubled in the first half of the year. To capitalise on the attractive growth opportunities offered by the segment, we are currently aiming to launch at least three new Al-Borg Scan branches over the coming twelve months. Looking ahead, we expect to continue recording growing contributions to consolidated revenue and profitability as Al-Borg Scan's operations ramp up further."

 

"At our Nigerian operations, we witnessed sustained top-line growth of 68% for the first half of this year. This comes as our investments to revamp Echo-Lab's operations and strategic marketing efforts continue to bear fruit, attracting an increasing number of patients to our branches. This is a particularly noteworthy achievement in light of the multiple political and pandemic-related difficulties faced over the last year. Finally in Sudan, despite recording an impressive 217% year-on-year revenue expansion in local currency, the significant devaluation of the Sudanese Pound in February 2021 continued to weigh on the country's results. Despite this, we remain committed to the country in the long-term, with management hard at work to continue driving sustainable long-term growth beyond the current difficult operating environment."

 

"Further down the income statement, we reported impressive margin expansions at all levels of profitability supported by strong top-line and the subsequent dilution of IDH's fixed costs. Additionally, starting in the second quarter of this year we recorded a decline in raw material as percentage of revenues to 16.8% compared to 19.3% in the previous quarter. This was partially due to a decline in Jordan's Covid-19-positive cases requiring confirmatory retests, and is also directly attributable to our successful efforts to reduce PCR test kit costs. Overall, strong top-line growth combined with increased cost efficiencies, higher interest income, and lower provisions booked in the first half of 2021, helped drive a nearly fourfold increase in net profit for 1H 2021 which reached EGP 668 million with an associated margin of 29%."

 

"Heading into the second half of the year, our strategic priorities remain unchanged as we aim to capitalise on the positive momentum witnessed across both our operations and the wider macroeconomic context. In the short-term we will continue to assist governments in Egypt and Jordan in their fight against the Covid-19 pandemic providing our full roster of Covid-19-related services across both our branches and through our expanded house call service. On this front, I am very happy with our efforts to secure multiple new partnerships over the last few months to offer PCR testing to travellers in both Egypt and Jordan. Most importantly, I am pleased to note that Biolab, our Jordanian subsidiary, has been selected as the preferred bidder by Airport International Group (AIG), the operator of Amman's Queen Alia International Airport, to carry out PCR testing for passengers arriving in Jordan. As part of the agreement, Biolab will also offer rapid PCR testing for Covid-19 to departing passengers who were not able to do a PCR test prior to reaching the airport. Through this landmark partnership, we will be able to continue playing a frontline role in the fight against the Covid-19 virus in Jordan while further expanding our reach and patient base in the country. In parallel, we are looking to sign additional strategic deals with international air carriers to perform PCR tests for passengers similar to our existing agreements with National Air Services (NAS) and Pure Health UAE which see us conduct PCR testing for passengers flying from Egypt to Kuwait and the UAE. Our ability to secure such partnerships is proof positive of the strong reputation enjoyed by IDH both locally and internationally, and further strengthens our offering for international travellers which currently sees the Company offer internationally-accredited PCR tests to travellers within and outside the MENA region. Meanwhile, we are working tirelessly to deliver on our post-Covid-19 growth strategy which will see us leverage our expanded patient base, branch network, and service offering to drive new sustainable growth in the years to come. To this end, in the first six months of the year we successfully added 14 new branches in our home market of Egypt, keeping us on track to meet our goal of 30 to 35 new lab rollouts for 2021 and helping us to further cement our leadership position in the country's private sector diagnostics market. In parallel, we continue to assess potential growth opportunities across new African, Middle Eastern, and Asian markets, and have secured a USD 45 million loan from the International Finance Corporation (IFC) to finance our growth plans in the coming period."

 

"In light of our half-year results and the encouraging recovery witnessed across our markets, I am confident that the Group is on track to deliver a record-breaking performance in 2021, with year-on-year revenue growth surpassing the 70% mark and a normalised EBITDA8 margin of 47% to 49%. We expect our full-year performance to be supported by both our conventional test offering, which in 1H 2021 continued to witness a robust rebound, coupled with continued strong demand for our Covid-19-related portfolio. Moreover, with Egypt expected to record a new wave of infections later this year, we could see greater than forecasted demand for our Covid-19-related offering in the second half of 2021, with the segment potentially pushing consolidated top-line growth into the 80% range, with an EBITDA margin of around 50%."

 

6   Covid-19-related tests include both core Covid-19 tests (Polymerase Chain Reaction (PCR), Antigen, and Antibody) as well as other Covid-19-related tests which include a bundle of routine inflammatory and clotting markers (which witnessed strong demand following the outbreak of Covid-19) such as Complete Blood Picture, Erythrocyte Sedimentation Rate (ESR), D-Dimer, Ferritin and C-reactive Protein (CRP), among others.

7 The 100 Million Healthy Lives Campaign which ran from November 2018 through June 2019. As part of the Campaign, the Group performed 2.4 million tests in 1H 2019.

8 Normalised EBITDA is calculated as operating profit plus depreciation and amortization and minus one-off fees incurred in 1H 2021 (EGP 29 million) related to the Company's EGX listing completed in May 2021.

- End -

 



 

Analyst and Investor Call Details

An analyst and investor call will be hosted at 2pm (UK) | 3pm (Egypt) on Monday, 6 September 2021.

Web conference access details

You can register for the call by clicking on this link , and you may dial in using the conference call details below:

· Dial-in Number: 820 8840 0136

· Confirmation Number: 131242

Regular dial-in details

US dial-in number: +1 (646) 558-8656

UK dial-in number: +44 208 080 6592

Meeting ID: 820 8840 0136

Password: 131242

For more information about the event, please contact: [email protected]

 

About Integrated Diagnostics Holdings (IDH)

IDH is a leading consumer healthcare company in the Middle East and Africa with operations in Egypt, Jordan, Sudan and Nigeria. The Group's core brands include Al Borg, Al Borg Scan and Al Mokhtabar in Egypt, as well as Biolab (Jordan), Ultralab and Al Mokhtabar Sudan (both in Sudan) and Echo-Lab (Nigeria). A long track record for quality and safety has earned the Company a trusted reputation, as well as internationally recognised accreditations for its portfolio of over 2,000 diagnostics tests. From its base of 495 branches as of 30 June 2021, IDH will continue to add laboratories through a Hub, Spoke and Spike business model that provides a scalable platform for efficient expansion. Beyond organic growth, the Group's expansion plans include acquisitions in new Middle Eastern, African, and East Asian markets where its model is well-suited to capitalise on similar healthcare and consumer trends and capture a significant share of fragmented markets. IDH has been a Jersey-registered entity with a Standard Listing on the Main Market of the London Stock Exchange (ticker: IDHC) since May 2015 with a secondary listing on the EGX since May 2021 (ticker: IDHC.CA).

 

Shareholder Information

LSE: IDHC.L

EGX: IDHC.CA

Bloomberg: IDHC:LN

Listed on LSE: May 2015

Listed on EGX: May 2021

Shares Outstanding: 600 million

 

Contact

Nancy Fahmy

Investor Relations Director

T: +20 (0)2 3345 5530 | M: +20 (0)12 2255 7445 | [email protected]

 

Forward-Looking Statements

These results for the six-month period ended 30 June 2021 have been prepared solely to provide additional information to shareholders to assess the group's performance in relation to its operations and growth potential. These results should not be relied upon by any other party or for any other reason. This communication contains certain forward-looking statements. A forward-looking statement is any statement that does not relate to historical facts and events, and can be identified by the use of such words and phrases as "according to estimates", "aims", "anticipates", "assumes", "believes", "could", "estimates", "expects", "forecasts", "intends", "is of the opinion", "may", "plans", "potential", "predicts", "projects", "should", "to the knowledge of", "will", "would" or, in each case their negatives or other similar expressions, which are intended to identify a statement as forward-looking. This applies, in particular, to statements containing information on future financial results, plans, or expectations regarding business and management, future growth or profitability and general economic and regulatory conditions and other matters affecting the Group .

 

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

 

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

Group Operational & Financial Review

 

i.  Revenue and Cost Analysis

 

Revenue

IDH reported revenue of EGP 2,293 million in 1H 2021, up an impressive 141% from the comparable period of last year driven by both its Covid-19-related9 tests and a sustained recovery in the Group's conventional test offering. Year-on-year top-line growth continued to be dually-driven as tests performed in 1H 2021 expanded 45% versus last year and average revenue per test increased 66% compared to the same six months of 2020. Although strong and rising demand for IDH's Covid-19-related test offering saw it make up nearly half of IDH's consolidated top-line (48% in 1H 2021 vs 9% in 1H 2020), the Group's conventional test offering also recorded robust year-on-year growth of 38% of the period. Growth in conventional business came on the back of a 29% increase in tests performed and a 7% rise in average revenue per conventional test.

 

Looking at the Group's Covid-19-related offering in more detail, revenues generated from core Covid-19 tests (PCR, Antigen and Antibody) amounted to EGP 830 million in 1H 2021, making up 36% of consolidated top-line for the period. In parallel, revenue generated by IDH's other Covid-19-related tests reached EGP 275 million in 1H 2021.

 

IDH's consolidated top-line was also supported by its ramped-up house call service in Egypt and Jordan, which contributed to 23% to consolidated revenue for 1H 2021 compared to 18% in 1H 2020. Through its house call service, IDH served more than 646,000 patients in 1H 2021, up 88% versus 1H 2020, performing more than 3.4 million tests, 49% above the figure recorded in 1H 2021. Leveraging an expanded reach, IDH was able to carry out an average of 3,600 house call visits per day in 1H 2021, up significantly from the 1,900 visits per day performed in 1H 2020.

 

The Group's year-to-date performance was bolstered by a remarkable second quarter, which saw IDH build an already strong first three months of the year. In 2Q 2021, IDH recorded revenue of EGP 1,164 million, up 159% versus the previous year and 3% above revenue recorded in 1Q 2021. As with the year-to-date performance, growth was supported by IDH's full service roster, with the number of conventional tests performed increasing 2.3% quarter-on-quarter despite the typical slowdown associated with the holy month of Ramadan and Eid holiday during 2Q 2021.

 

Detailed Consolidated Revenue Breakdown

EGP mn

1Q 2020

1Q 2021

2Q 2020

2Q 2021

1H 2020

1H2021

Total revenues

500

1,130

450

1,164

950

2,293

Conventional tests

495

594

367

595

862

1,189

Total Covid-19-related tests

5

536

83

569

88

1,105

Core Covid-19 tests (PCR, Antigen, Antibody)

5

399

26

431

31

830

Other Covid-19-related tests

0

137

57

138

57

275

Contribution to consolidated revenue

Conventional tests

99%

53%

82%

51%

91%

52%

Total Covid-19-related tests

1%

47%

18%

49%

9%

48%

Core Covid-19 tests (PCR, Antigen, Antibody)

1%

35%

6%

37%

3%

36%

Other Covid-19-related tests

0%

12%

13%

12%

6%

12%

 

9 Covid-19-related tests include both core Covid-19 tests (Polymerase Chain Reaction (PCR), Antigen, and Antibody) as well as other Covid-19-related tests which include a bundle of routine inflammatory and clotting markers (which witnessed strong demand following the outbreak of Covid-19) such as Complete Blood Picture, Erythrocyte Sedimentation Rate (ESR), D-Dimer, Ferritin and C-reactive Protein (CRP), among others.

 

Revenue Analysis: Contribution by Patient Segment

 

Contract Segment

At the Group's contract segment, revenue increased 149% year-on-year as test performed expanded 49% and average revenue per contract test increased 68% in 1H 2021. This saw the segment's contribution to total revenues reach 55% for the period versus 53% in the same six months of 2020. Covid-19-related10 testing contributed 47% of contract revenues in the first half of the year as the Company continued to witness strong demand for its offering in both Egypt and Jordan. Excluding Covid-19-related tests, the contract segment would have recorded an 45% year-on-year increase in revenue supported by a 33% rise in tests performed and a 9% increase in average revenue per test.

 

The contract segment's results continued to include contributions from IDH's agreement with Pure Health UAE (EGP 57 million), which saw IDH become the first lab to conduct PCR testing to screen passengers travelling from Egypt. In 1H 2021, PCR tests for Covid-19 performed as part of the agreement made up 5% of contract segment revenues and 7% of total core Covid-19 tests (PCR, Antigen, and Antibody) performed during the period.

 

Walk-in Segment

Revenue from IDH's walk-in segment recorded a 132% year-on-year expansion in 1H 2021, contributing to 45% of consolidated revenues for the period versus the 47% contribution in the comparable period of 2020. In the first six months of the year, average revenue per test at the walk-in segment increased 71% year-on-year, while tests performed increased by 36% versus 1H 2020. The walk-in segment's revenue was also bolstered by the Group's Covid-19-related test offering, which in 1H 2021 contributed to just under half of the segment's top-line at 49%. Controlling for contributions from Covid-19-related tests in both periods, walk-in revenues for 1H 2021 would have increased a solid 30% versus last year on the back of a 17% rise in tests performed and an 11% increase in average revenue per test.

 

Key Performance Indicators


Walk-in Segment

Contract Segment

Total


1H20

1H21

Change

1H20

1H21

Change

1H20

1H21

Change

Revenue^

(EGP mn)

443

1,029

132%

507

1,264

149%

950

2,293

141%

Covid-19-related revenue (EGP mn)

41

506


47

598


88

1,105


Patients ('000)

943

1,523

62%

1,947

3,150

62%

2,890

4,673

62%

% of Patients

33%

33%


67%

67%





Revenue per Patient (EGP)

470

676

44%

260

401

54%

329

491

49%

Tests ('000)

3,063

4,164

36%

8,171

12,153

49%

11,234

16,318

45%

% of Tests

27%

26%


73%

74%





Covid-19-related tests ('000)

161

758

372%

417

1,842

342%

577

2,600

350%

Revenue per Test (EGP)

145

247

71%

62

104

68%

85

141

66%

Test per Patient

3.3

2.7

-16%

4.2

3.9

-8%

3.9

3.5

-10%

 

1 0 Covid-19-related tests include both core Covid-19 tests (Polymerase Chain Reaction (PCR), Antigen, and Antibody) as well as other Covid-19-related tests which include a bundle of routine inflammatory and clotting markers (which witnessed strong demand following the outbreak of Covid-19) such as Complete Blood Picture, Erythrocyte Sedimentation Rate (ESR), D-Dimer, Ferritin and C-reactive Protein (CRP), among others.

 

Revenue Analysis: Contribution by Geography

 

Egypt

In Egypt, revenues recorded EGP 1,935 million in the first half of 2021, a 140% increase versus last year supported by a 44% year-on-year rise in tests performed and a 67% year-on-year rise in average revenue per test. Revenue growth for the period was supported by both  Covid-19-related11 test offering, which in 1H 2021 made up 47% of the country's revenue, and conventional test offering. More specifically, when controlling for contributions made by Covid-19-related tests, revenue increased 38% versus 1H 2020 on the back of a solid 29% rise in conventional tests performed during the period.

 

On a quarterly basis, Egypt recorded revenue of EGP 1,015 million in 2Q 2021, up 166% versus 2Q 2020 and 10% from 1Q 2021. During the quarter, IDH saw Covid-19-related revenues in Egypt reach a new all-time high of EGP 504 million versus EGP 414 million in 1Q 2021 and EGP 273 million in 4Q 2020, as the second quarter coincided with the peak of country's third wave of Covid-19 infections.

 

IDH's house call service, which throughout 2020 and the first half of 2021 has been successfully ramped up to capitalise on the service's growing popularity, continued to make a growing contribution to revenues, constituting 25% of Egypt's top-line in 1H 2021 (20% in 1H 2020).

 

IDH's Al-Borg Scan recorded robust revenue growth during the first half of 2021, with its top-line expanding to EGP 20 million, a 124% year-on-year rise. This came on the back of a 103% increase in the total number of radiology tests performed, coupled with a 10% increase in average revenue per test following the introduction of the higher-priced PET-CT scan in late 2020.

 

Overall, IDH served 4.1 million patients in Egypt and performed 14.6 million tests in 1H 2021, up by 56% and 44% year-on-year, respectively.

 

Detailed Egypt Revenue Breakdown

EGP mn

1Q 2020

1Q 2021

2Q 2020

2Q 2021

1H 2020

1H2021

Total revenues

424

920

381

1,015

805

1,935

Conventional tests

424

507

314

510

738

1,017

Total Covid-19-related tests

0

414

67

504

67

918

Core Covid-19 tests (PCR, Antigen, Antibody)

0

277

10

366

10

643

Other Covid-19-related tests

0

137

57

138

57

275

Contribution to Egypt revenue

Conventional tests

100%

55%

82%

50%

92%

53%

Total Covid-19-related tests

0%

45%

18%

50%

8%

47%

Core Covid-19 tests (PCR, Antigen, Antibody)

0%

30%

3%

36%

1%

33%

Other Covid-19-related tests

0%

15%

15%

14%

7%

14%

 

11 Covid-19-related tests include both core Covid-19 tests (Polymerase Chain Reaction (PCR), Antigen, and Antibody) as well as other Covid-19-related tests which include a bundle of routine inflammatory and clotting markers (which witnessed strong demand following the outbreak of Covid-19) such as Complete Blood Picture, Erythrocyte Sedimentation Rate (ESR), D-Dimer, Ferritin and C-reactive Protein (CRP), among others.

 

Jordan

Revenue generated by IDH's Jordanian operations grew 176% year-on-year in 1H 2021 to reach EGP 324 million. Top-line growth was driven by a 79% increase in test performed during the period and a 54% rise in Biolab's average revenue per test. In the first half the year, Covid-19-related tests (PCR, Antigen, and Antibody) contributed to 58% of Jordan's revenue and to 24% of Biolab's total tests performed. Meanwhile, controlling for contributions made by the Group's Covid-19-related offering, revenue grew by a robust 41% year-on-year on the back of a 43% increase in conventional tests performed in 1H 2021. Revenue generated by Biolab's house call service more than doubled versus last year to reach EGP 34 million in 1H 2021, continuing to make a significant contribution to Jordan's top-line at 11% versus the 13% contribution made in 1H 2020. House call's contribution to Jordan's top-line decreased versus last year in light of the strong growth recorded by Biolab's conventional business which had been impacted by curfews and other Covid-19-related restrictions during the comparable six months of last year.

 

On a quarterly basis, Jordan's revenue reached EGP 134 million, up 125% year-on-year but down 30% versus 1Q 2021. The quarter-on-quarter contraction comes as Covid-19-related revenue continued to decline on the back of lower infection rates as the country further ramps up its vaccination campaign. When combined with the strong recovery of Biolab's conventional test offering, this saw the contribution made by Covid-19-related tests to Biolab's top-line continue on its declining trajectory from 71% in 4Q 2020, to 64% in 1Q 2021 and 48% in 2Q 2021.

 

It is also worth noting, that in August 2021, Biolab was selected as the preferred bidder by Airport International Group (AIG), the operator of Amman's Queen Alia International Airport (QAIA), to operate testing stations in QAIA's departure and arrival terminals primarily dedicated to PCR testing for Covid-19. The main focus of the testing stations will be to offer PCR testing for Covid-19 to passengers arriving in Jordan, as well as additional diagnostic tests to patients including rapid Covid-19 testing for departing passengers and other, more generic diagnostic tests. The agreement, which came into effect on 1 August 2021, has a six-month duration with the option to renew for additional six-month periods.

 

Detailed Jordan Revenue Breakdown

EGP mn

1Q 2020

1Q 2021

2Q 2020

2Q 2021

1H 2020

1H2021

Total revenues

58

190

59

134

117

324

Conventional revenue

53

68

44

69

97

137

Total Covid-19-related revenue (PCR, Antigen, Antibody)

5

122

16

65

21

187

Contribution to Jordan revenue

Conventional revenue

91%

36%

74%

52%

82%

42%

Total Covid-19-related revenue (PCR, Antigen, Antibody)

9%

64%

26%

48%

18%

58%

 

Nigeria

At the Group's Nigerian subsidiary, revenue recorded EGP 25 million in the first half of 2021, up 68% from EGP 15 million in the first six months of last year. In local currency terms, growth was even more pronounced with revenues up 76% year-on-year on the back of a 47% year-on-year expansion in tests performed (patients served were up 25%) and a 14% increase in average revenue per test. The steady rise in volumes recorded in the last two years comes as a direct results of management's strategic investments to revamp Echo-Lab's branches coupled with effective marketing campaigns aimed at stimulating demand for the venture's services. Moreover, volumes are also benefitting from a gradual normalisation of traffic following the easing of restrictive measures enforced to curb the spread of Covid-19 throughout 2020, and the relative stability following protests in the final weeks of last year. On a quarterly basis, IDH's Nigeria operations reported revenues of EGP 13 million, more than double the figure recorded in the second quarter of last year and 3% above revenues reported in the first three months of 2021.

 

Sudan

In Sudan, IDH reported a 25% year-on-year decline in revenues to EGP 9 million for 1H 2021. The country's results were significantly impacted by the devaluation of the Sudanese pound in early 2021 with the average SDG/EGP rate in 1H 2021 standing at 0.07 versus 0.30 this time last year. Nonetheless, management's success in increasing prices saw revenue in local currency terms expand a remarkable 217% year-on-year in 1H 2021.

 

Revenue Contribution by Country


1H 2020

1H 2021

Change

Egypt Revenue (EGP mn)

805

1,935

140%

Covid-19-related (EGP mn)

67

918

1,260%

Egypt Contribution

85%

84%


Jordan Revenue (EGP mn)

117

324

176%

Covid-19-related (EGP mn)

21

187

804%

Jordan Revenue (JOD mn)

5

15

177%

Jordan Contribution

12%

14%


Nigeria Revenue (EGP mn)

15

25

68%

Nigeria Revenue (NGN mn)

359

632

76%

Nigeria Contribution

2%

1%


Sudan Revenue (EGP mn)

12

9

-25%

Sudan Revenue (SDG mn)

41

129

217%

Sudan Contribution

1%

0.4%


---

Patients Served and Tests Performed by Country


1H 2020

1H 2021

Change

Egypt Patients Served (mn)

2.6

4.1

56%

Egypt Tests Performed (mn)

10.1

14.6

44%

Covid-19-related tests (mn)

0.5

2.3

318%

Jordan Patients Served (k)

160

502

214%

Jordan Tests Performed (k)

810

1,447

79%

Covid-19-related tests (k)

37

342

822%

Nigeria Patients Served (k)

60

75

25%

Nigeria Tests Performed (k)

92

136

47%

Sudan Patients Served (k)

59

33

-44%

Sudan Tests Performed (k)

188

104

-45%

Total Patients Served (mn)

2.9

4.7

62%

Total Tests Performed (mn)

11.2

16.3

45%

 

Branches by Country


30 June 2020

30 June 2021

Change

Egypt

410

443

33

Jordan

19

21

2

Nigeria

12

12

-

Sudan

21

19

-2

Total Branches

462

495

33

 

-Cost of Goods Sold

IDH's cost of goods sold increased 96% year-on-year to EGP 988 million in 1H 2021, a much slower increase than the 141% growth in revenues. As such, gross profit for the period increased 193% year-on-year to EGP 1,305 million in 1H 2021, with an associated margin of 57%, up 10 percentage points from 1H 2020.

 

 

COGS Breakdown as a Percentage of Revenue


1H 2020

1H 2021

Raw Materials

15.9%

18.1%

Wages & Salaries

17.0%

12.9%

Depreciation & Amortisation

8.4%

4.2%

Other Expenses

11.7%

7.8%

Total

53.0%

43.1%

 

Raw material costs, which include cost of specialized analysis at other laboratories, recorded EGP 414 million in 1H 2021, and continued to make up the largest share of total COGS at 42%. As a share of revenue, raw material costs increased to 18% in 1H 2021 compared to 16% in the same period of last year. The increase is partially attributable to the retesting of Covid-19 positive cases at IDH's Jordanian subsidiary. Moreover, the year-on-year growth also partially reflects the low base effect resulting from a one-off discount granted by suppliers during the comparable period of last year.

 

It is worth highlighting that in 2Q 2021, raw material costs as a percentage of revenue declined to 16.8% versus the 19.3% share recorded in the previous quarter. The fall comes on the back of lower Covid-19-positive cases in Jordan combined with management's success in driving down PCR test kit costs. It should be noted that Jordan's raw material costs contributed to around 26% of the consolidated raw material costs for 1H 2021 and to 20% in 2Q 2021. Meanwhile, Egypt's raw materials made up 71% of total raw material costs in the six-month period, with a stable raw material to revenues ratio of 14%.

 

Direct salaries and wages increased 84% year-on-year to EGP 296 million in 1H 2021 and made up the second largest share of total COGS for the six-month period at 30%. The increase is largely attributable to a rise in the share of profits allocated to direct salaries and wages to EGP 87 million in 1H 2021 from EGP 26 million 1H 2020 following higher net profit recorded at its Egyptian operations,12 in addition to higher bonuses/incentives paid during the period.

 

Direct depreciation and amortisation was up 22% year-on-year in 1H 2021 to EGP 97 million, largely due to the incremental amortisation of additional branches (IFRS 16 right-of-use assets).

 

EBITDA

IDH's normalised EBITDA13 grew a remarkable 227% year-on-year to reach EGP 1,203 million in 1H 2021. Normalised EBITDA margin expanded to 52% in 1H 2021 versus the 39% margin recorded in 1H 2020, on the back of strong top-line growth and the dilution of fixed costs. EBITDA growth was further bolstered by the normalization of provisions booked during the first six months of the year which in 1H 2021 stood at EGP 10 million versus the EGP 28 million booked in 1H 2020 to account for expected credit losses in accordance with IFRS 9. Normalised EBITDA excludes one-off listing fees of EGP 29 million incurred in 1H 2021 related to the Company's dual listing on the EGX completed in May 2021.

 

On a quarterly basis, normalised EBITDA recorded EGP 603 million in 2Q 2021, up 267% year-on-year and largely in line with the figure recorded in 1Q 2021. Normalised EBITDA margin stood at 52% for the quarter, down from the 53% margin recorded in 1Q 2021 as IDH booked higher accounting fees (related to the EGX requirement to publish quarterly reviewed financial statements) and additional bonus payments to senior management during 2Q 2021.

 

In Egypt, EBITDA recorded EGP 1,075 million in 1H 2021, up 223% year-on-year on the back of strong top-line growth. EBITDA margin increased to 56% for the first half of the year from 41% in 1H 2020.

 

IDH's Jordanian operations recorded a 240% year-on-year rise in EBITDA to EGP 131 million for 1H 2021 on the back of strong revenue growth for the six-month period. In local currency terms, EBITDA grew 242% compared to last year. EBITDA margin recorded 40% in the first half of 2021, up from the 33% margin recorded in the comparable period of 2020.

 

12 According to IAS 1, 10% of Egypt's net profit is allocated to direct wages and salaries.

13 Normalised EBITDA is calculated as operating profit plus depreciation and amortization and minus one-off fees incurred in 1H 2021 related to the Company's EGX listing completed in May 2021.

 

In Nigeria, EBITDA losses stood largely unchanged at EGP 4.3 million in 1H 2021. However, it is important to note that the figure includes a one-off adjustment related to the previous year of EGP 3.2 million. 

 

Finally, Sudan's EBITDA recorded EGP 0.7 million in 1H 2021, down 3% year-on-year with an EBITDA margin of 8% compared to 6% last year. EBITDA for the period was weighed down by the sharp SDG devaluation in February of this year. However, in SDG terms, EBITDA more than quadrupled to SDG 10 million supported by management's pricing strategy aimed at mitigating the impacts of the country's hyperinflationary environment.

 

Regional EBITDA in Local Currency

Mn



1H 2020

1H 2021

Change

Egypt


EGP

332

1,075

223%

margin



41%

56%


Jordan


JOD

1.7

5.9

242%

margin



33%

40%


Nigeria


NGN

-101

-108

7%

margin



-28%

-17%


Sudan


SDG

2

10

309%

margin



6%

8%


 

Interest Income / Expense

IDH recorded interest income of EGP 45 million in 1H 2021, up 34% year-on-year on the back of higher cash balances during the period.

 

Interest expense recorded EGP 54 million in the first half of 2021 versus EGP 37 million in 1H 2020. The year-on-year increase in largely attributable to the loan-related expenses incurred by IDH during the period as the Company secured a new eight-year US$ 45 million facility with the International Finance Corporation (IFC) in May 2021. During 1H 2021, IDH booked loan-related expenses of EGP 12.5 million including a front-end fee, syndication fee, and legal advisory fees. The facility will be used to finance IDH's growth plans across new and existing markets. The loan has a four year grace period and availability period of two years. Higher interest expenses for the period also partially reflect higher interest on lease liabilities related to IFRS 16 following the addition of new branches, as well as higher bank charges resulting from increased penetration of, and reliance on, POS machines and electronic payments during the period.

 

Interest Expense Breakdown

EGP Mn

1H 2020

1H 2021

Change

Interest on Lease Liabilities (IFRS 16)

26.4

  28.9

9%

Interest Expenses on Borrowings14

6.9

4.8

-31%

Loan-related Expenses on IFC facility

-

12.5

N/A

Interest Expenses on Leases

2.2

2.8

30%

Bank Charges

1.2

5.4

337%

Total Interest Expense

36.7

54.4

48%

 

14 Related to medium-terms loans for the Al Borg Scan expansion (EGP 3.0  million) and the Group's new headquarters in Cairo's Smart Village (EGP 1.7 million).

 

Foreign Exchange

IDH recorded a net foreign exchange loss of EGP 19 million in 1H 2021 compared to EGP 4 million in the same six months a year ago. The figure largely reflects FX losses on the back of the SDG devaluation versus the EGP in February 2021.

 

Taxation

Tax expenses recorded in 1H 2021 were EGP 367 million compared to EGP 95 million in the same period of last year. The effective tax rate stood at 35% in the period unchanged versus 1H 2020. It is important to note that there is no tax payable for IDH's two companies at the holding level, while tax was paid on profits generated by operating subsidiaries.

 

Net Profit

IDH's consolidated net profit recorded EGP 668 million in the first half of 2021, up an impressive 283% year-on-year. Improving net profitability was supported by strong revenue growth coupled with increased cost efficiencies, higher interest income and normalising provisions for the period. As such, net profit margin stood at 29% in 1H 2021, up from 18% last year.

 

 

ii.  Balance Sheet Analysis

Assets

Property, Plant and Equipment

IDH held gross property, plant and equipment (PPE) of EGP 1,365 million as at 30 June 2021, up from the EGP 1,247 million as of 31 December 2020. Meanwhile, CAPEX outlays represented around 5% of consolidated revenues in the first half of the year.

Accounts Receivable and Provisions

As at 30 June 2021, accounts receivables' Days on Hand (DOH) stood at 97 days compared to 144 days at year-end 2020, displaying a sustained improvement in collections during the first six months of the year versus 2020. Accounts receivables' DOH is calculated based on credit revenues amounting to EGP 637.9 million during 1H 2021.

Provision for doubtful accounts established during the first six months of 2021 amounted to EGP 10 million, down from the EGP 28 million booked in provisions in the comparable period of last year. This comes as collection cycles continue to normalise following a period of heightened uncertainty in the first stages of the Covid-19 crisis.

Inventory

As at 30 June 2021, the Group's inventory balance reached EGP 142 million, up from EGP 100 million as at year-end 2020. Days Inventory Outstanding (DIO) decreased to 54 days as at 30 June 2021 from 72 days as at year-end 2020. The decline is largely attributable the high turnover of PCR testing for Covid-19.

Cash and Net Debt/Cash

IDH's cash balances increased to EGP 1,58715 million as at 30 June 2021 compared to EGP 877 million as at 31 December 2020.

Net cash balance16 amounted to EGP 90417 million as at 30 June 2021, an increase of 181% compared to EGP 321 million as at 31 December 2020.

15 The figure does not include dividend payments of US$ 29.1 million distributed to shareholders on 29 July 2021.

16 The net cash balance is calculated as cash and cash equivalent balances less interest-bearing debt (medium term loans), finance lease and Right-of-use liabilities.

17 Pre-dividend distribution.

EGP million

FY 2020

1H 2021

Cash and Investments at Amortised Cost

 876.8

 1,587.0

Interest Bearing Debt ("Medium Term Loans")18

 96.5

 86.0

Lease Liabilities Property

 389.9

 468.0

Lease Liabilities Equipment

 69.1

128.8

Net Cash Balance

 321.3

904.2

 

18 IDH's interest bearing debt as at 30 June 2021 is split as EGP 26 million related to its medium term facility with the Commercial International Bank (CIB) and EGP 57 million to its facility Ahli United Bank Egypt (AUBE).

Lease liabilities on property stood at EGP 468.0 million as at 1H 2021 versus the EGP 389.9 million booked in FY 2020. The increase is attributable to the addition of new branches during the first six months of 2021 as well as Al-Borg Scan's third branch which is expected to come online in September of this year. Meanwhile, financial obligations related to equipment recorded EGP 128.8 million as at 30 June 2021, up from EGP 69.1 million as at year-end 2020. The increase comes following the renewal of the Company's contracts and the addition of new equipment.

Liabilities

Accounts Payable

As at 30 June 2021, accounts payable balance stood at EGP 225 million up from EGP 178 million as at year-end 2020. However, the Group's days payable outstanding (DPO) stood at 91 days as at 30 June 2021 down from 127 days as year-end 2020. The decline primarily reflects the fact that PCR testing kit suppliers are paid within a period of 15 days.

 

iii. Cash Flow Analysis

Net cash flow from operating activities recorded EGP 866 million in the first half of 2021 compared to EGP 149 million in 1H 2020, demonstrating the company's continued strong cash generation ability.

 

iv. Dividend

A dividend of US$ 29.1 million (US$ 0.0485 per share) for the year ended 31 December 2020 was distributed to shareholders on 29 July 2021. This represents an increase of 4% compared to a final dividend of US$ 28 million in aggregate in the previous financial year.

 

Principal Risks and Uncertainties

As in any corporation, IDH has exposure to risks and uncertainties that may adversely affect its performance. The Board and senior management agree that the principal risks and uncertainties facing the Group include political and economic risks in Egypt, the Middle East and Nigeria, foreign currency exchange rate variability and associated risks, changes in regulation and regulatory actions, damage to the Group's reputation, failure to maintain the Group's high quality standards and accreditations, failure to maintain good relationships with healthcare professionals and end-users, pricing pressures and business interruption of the Group's testing facilities, among others.

 

Other short-term risks include operational disruptions related the Covid-19 pandemic; delays in branch openings and renovations in Nigeria and difficulties in growing Echo-Lab's customer base; prolonged political unrest in Sudan that  can adversely affect patient and test volumes, while further currency devaluation risks will limit the compensatory effect of price increases.

 

Statement of Directors' Responsibilities

Responsibility statement of the directors in respect of the half-yearly financial report

We confirm that to the best of our knowledge, the interim management report includes a fair review of the information required by:

(a) DTR 4.2.7R of the Disclosure Guidance and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and

(b) DTR 4.2.8R of the Disclosure Guidance and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last annual report that could do so.

 

For and on behalf of the Board of Directors:

 

Dr. Hend El Sherbini

Executive Director

 

1 September 2021

 

- Ends --


 

INTEGRATED DIAGNOSTICS HOLDINGS plc - "IDH"

AND ITS SUBSIDIARIES

 

 

 

 

 

 

CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

 

FOR THE SIX MONTHS ENDED

30 JUNE 2021

 

 




 

Index to the condensed consolidated interim financial statements

Pages



Condensed consolidated interim statement of financial position

20

Condensed consolidated interim statement of profit or loss

21

Condensed consolidated interim statement of comprehensive income

22

Condensed consolidated interim statement of changes in equity

23

Condensed consolidated interim statement of cash flows

24

Report on review of the condensed consolidated interim financial statements

25

Notes to the condensed consolidated interim financial statements

26-43

 

 



 

Condensed Consolidated Interim Statement of Financial Position as of 30 June 2021

(All amounts in Egyptian Pounds "EGP'000")



30 June


31 December

 


Notes


2021


2020

 




EGP'000


EGP'000

 




(Reviewed)


(Audited)

 

ASSETS






 

Non-current assets






 

Property, plant and equipment

4


 848,419


 787,590

 

Intangible assets and goodwill

5


 1,654,098


 1,659,755

 

Right of use assets

6


 415,717


 354,688

 

Financial investments

7


 10,282


 9,604

 

Total non-current assets



 2,928,516


 2,811,637

 







 

Current assets






 

Inventories



 141,559


 100,115

 

Trade and other receivables

8


 477,432


 388,903

 

Investments at amortized cost

9


 329,056


 276,625

 

Cash and cash equivalents

10


 1,257,983


 600,130

 

Total current assets



 2,206,030


 1,365,773

 

Total assets



 5,134,546


 4,177,410

 







 

LIABILITIES AND EQUITY






 

Equity






 

Share Capital



 1,072,500


 1,072,500

 

Share premium reserve



 1,027,706


 1,027,706

 

Capital reserve



 (314,310)


 (314,310)

 

Legal reserve



 51,641


 49,218

 

Put option reserve



 (618,047)


 (314,057)

 

Translation reserve



 155,760


 145,617

 

Retained earnings



 777,068


 603,317

 

Equity attributable to the equity holders of the parent



 2,152,318


 2,269,991

 

Non-controlling interest



 152,110


 156,383

 

Total equity



 2,304,428


 2,426,374

 







 

Non-current liabilities






 

Deferred tax liabilities

19-C


 324,800


 240,333

 

Provisions



 3,479


 3,408

 

Loans and borrowings

13


 56,996


 67,617

 

Long-term financial obligations

15


 512,235


 398,525

 

Long-term financial liability at fair value

14


 32,168


 31,790

 

Total non-current liabilities



 929,678


 741,673

 







 

Current liabilities






 

Trade and other payables

11


 473,515


 383,623

 

Shareholders dividend



 454,472


 - 

 

Short-term financial obligations

15


 84,554


 60,517

 

Short-term financial liability at fair value

12


 585,880


 282,267

 

Loans and borrowings

13


 25,946


 25,416

 

Current tax liabilities



 276,073


 257,540

 

Total current liabilities



 1,900,440


 1,009,363

 

Total liabilities



 2,830,118


 1,751,036

 

Total equity and liabilities



 5,134,546


 4,177,410

 







 

These condensed consolidated interim financial statements were approved and authorised for issue by the Board of Directors and signed on their behalf on 1 September 2021 by:

 

 

 

 


____________________

 ________________________________


Dr. Hend El Sherbini

Hussein Choucri




Chief Executive Officer

Board member of the audit committee









 

The accompanying notes on pages 26-43 form an integral part of these condensed consolidated interim financial statements.


 



 

Condensed Consolidated Interim Statement of Profit or Loss for the Three and Six Months Period Ended 30 June 2021

(All amounts in Egyptian Pounds "EGP'000")




















For the three months period ended 30 June


For the six months period ended 30 June


Notes


2021


2020


2021


2020




EGP'000


EGP'000


EGP'000


EGP'000




(Reviewed)


(Unaudited)/(Unreviewed)


(Reviewed)


(Unaudited)/(Unreviewed)











Revenue

23


  1,163,632


  449,931


  2,293,170


  949,687

Cost of sales



  (496,742)


  (246,969)


  (987,873)


  (503,490)

Gross profit



  666,890


  202,962


  1,305,297


  446,197











Marketing and advertising expenses



  (37,848)


  (20,677)


  (66,655)


  (45,675)

General and administrative expenses

17


  (105,212)


  (53,654)


  (176,132)


  (103,263)

Impairment loss on trade and other receivable



  (5,181)


  (28,281)


  (10,265)


  (28,281)

Other income



  8,346


  17,527


  12,431


  7,890

Operating profit



  526,995


  117,877


  1,064,676


  276,868











Finance income

18


  24,975


  15,421


  45,248


  33,765

Finance cost

18


  (39,212)


  (17,167)


  (74,900)


  (40,972)

Net finance cost



  (14,237)


  (1,746)


  (29,652)


  (7,207)

Profit before tax



  512,758


  116,131


  1,035,024


  269,661











Income tax expense

19-B


  (186,142)


  (44,003)


  (366,814)


  (95,036)

Profit for the period



  326,616


  72,128


  668,210


  174,625











Profit attributed to:










Equity holders of the parent



  320,410


  74,856


  646,440


  178,768

Non-controlling interests



  6,206


  (2,728)


  21,770


  (4,143)




 326,616


  72,128


  668,210


  174,625

Earnings per share (expressed in EGP):




 



Basic and diluted earnings per share

21












  0.53


  0.12


  1.08


  0.30











The accompanying notes on pages 26-43 form an integral part of these condensed consolidated interim financial statements.



Condensed Consolidated Interim Statement of Comprehensive Income for the Three and Six Month Period Ended 30 June 2021

(All amounts in Egyptian Pounds "EGP'000")
















For the three months period ended 30 June


For the six months period ended 30 June


2021


2020


2021


2020


EGP'000


EGP'000


EGP'000


EGP'000


(Reviewed)


(Unaudited)/(Unreviewed)


(Reviewed)

(Unaudited)/(Unreviewed)









Net profit

  326,616


  72,128


  668,210


  174,625

Items that may be reclassified to profit or loss:








Currency translation differences

  (2,062)


  (6,074)


  12,375


  (21,790)

Other comprehensive income for the period net of tax

  (2,062)


  (6,074)


  12,375


  (21,790)

Total comprehensive income for the period

  324,554


  66,054


  680,585


  152,835









Attributed to:








Equity holders of the parent

  320,692


  67,080


  656,583


  165,941

Non-controlling interests

  3,862


  (1,026)


  24,002


  (13,106)


  324,554


  66,054


  680,585


  152,835

The accompanying notes on pages 26-43 form an integral part of these condensed consolidated interim financial statements.

 



 


 

 

 

 

Condensed Consolidated Interim Statement of Change in Equity for the Six Month Period Ended 30 June 2021

 

 



Attributable to owners of the Parent

(All amounts in Egyptian Pounds "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 2021


1,072,500

1,027,706

 (314,310)

  49,218

 (314,057)

  145,617

603,317

  2,269,991

  156,383

2,426,374

Profit for the period


-

-

  -

  -

  -

  -

646,440

  646,440

  21,770

668,210

Other comprehensive income for the period


-

-

  -

  -

  -

  10,143

  -

  10,143

  2,232

  12,375

Total comprehensive income


-

-

  -

  -

  -

  10,143

646,440

  656,583

  24,002

680,585

Transactions with owners of the Company












Contributions and distributions












Dividends


-

-

  -

  -

  -

  -

 (454,472)

  (454,472)

  (21,998)

 (476,470)

Legal reserve formed during the period


-

-

  -

  2,423

  -

  -

 (2,423)

-

  -

  -

Movement in put option liability


-

-

  -

-

 (303,990)

  -

  -

 (303,990)

  -

 (303,990)

Restatement for impact of hyperinflation


-

-

  -

  -

  -

  -

 (15,794)

 (15,794)

  (6,277)

 (22,071)

Total contributions and distributions


-

-

  -

  2,423

 (303,990)

  -

 (472,689)

 (774,256)

  (28,275)

 (802,531)

Balance at 30 June 2021 (Reviewed)


1,072,500

1,027,706

 (314,310)

  51,641

 (618,047)

155,760

777,068

2,152,318

  152,110

2,304,428













At 1 January 2020


1,072,500

1,027,706

 (314,310)

  46,330

 (229,163)

155,823

456,661

2,215,547

  144,710

2,360,257

Profit for the period


-

-

  -

  -

  -

  -

178,768

178,768

  (4,143)

174,625

Other comprehensive loss for the period


-

-

  -

  -

  -

 (12,827)

  -

 (12,827)

  (8,963)

 (21,790)

Total comprehensive income


-

-

  -

  -

  -

 (12,827)

178,768

165,941

  (13,106)

152,835

Transactions with owners of the Company












Contributions and distributions












Legal reserve formed during the period


-

-

  -

  575

  -

  -

 (575)

-

  -

  -

Movement in put option liability


-

-

  -

  -

19,348

  -

  -

19,348

  -

  19,348

Restatement for impact of hyperinflation


-

-

  -

  -

  -

  -

 (2,064)

 (2,064)

  790

 (1,274)

Non-controlling interest cash injection in

subsidiaries during the period


-

-

  -

  -

  -

  -

-

-

  17,372

  17,372

Total contributions and distributions


-

-

  -

  575

19,348

  -

 (2,639)

17,284

  18,162

  35,446

Balance at 30 June 2020 (Unaudited)/(Unreviewed)


1,072,500

1,027,706

 (314,310)

  46,905

 (209,815)

  142,996

632,790

2,398,772

  149,766

2,548,538

 

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

The accompanying notes on pages 26-43 form an integral part of these condensed consolidate interim financial statements.


Condensed Consolidated Interim Statement of Cash Flow For the Six Month Period Ended 30 June 2021

 

(All amounts in Egyptian Pounds "EGP'000")

Note


30 June 2021


30 June 2020

 




EGP'000


EGP'000




(Reviewed)


(Unaudited)/(Unreviewed)

Cash flows from operating activities






Profit for the period before tax



  1,035,024


  269,661

Adjustments



  -


  -

Depreciation, property, plant and equipment and right of use



  105,745


  87,814

Amortization



  3,049


  2,672

Gain on disposal of Property, plant and equipment



  (45)


  (65)

Impairment in trade receivables



  10,265


  28,281

Interest expense

18


  49,011


  36,685

Interest income

18


  (45,248)


  (33,765)

Equity settled shares financial investments



  (678)


  (3,464)

ROU Asset/Lease Termination



  (464)


  -

Loss in hyperinflationary net monetary position

18


  1,204


  (192)

Unrealised foreign currency exchange loss

18


  19,321


  4,479

Net cash from operating activities before changes in working capital



  1,177,184


  392,106







Change in Provisions



  72


  (851)

Change in inventory



  (41,444)


  (35,273)

Change in trade and other receivables



  (103,537)


  34,429

Change in trade and other payables



  74,710


  (77,723)

Cash generated from operating activities before income tax payment



  1,106,985


  312,688

Income tax paid during period



  (240,624)


  (163,571)

Net cash from operating activities



  866,361


  149,117







Cash flows from investing activities






Interest received



  44,866


  33,606

Decrease in restricted cash



  -


  247

Payments for the purchase of short term investments



  (309,835)


  (251,956)

Proceeds for the sale of short term investments



  257,404


  221,617

Acquisition of Property, plant and equipment

4


  (86,530)


  (58,600)

Acquisition of intangible assets

5


  (1,104)


  (1,770)

Proceeds from sale of Property, plant and equipment



  3,036


  193

Net cash flows used in investing activities



  (92,163)


  (56,663)







Cash flows from financing activities






Proceeds from borrowings



  2,617


  -

Repayments of borrowings



  (12,708)


  (5,612)

Interest paid



  (48,640)


  (35,743)

Dividends paid



  (21,998)


  -

Payment of finance lease liabilities



  (32,401)


  (43,869)

Injection of cash by non controlling interest



  -


  17,372

Net cash flows used in financing activities



  (113,130)


  (67,852)







Net increase in cash and cash equivalent



  661,068


  24,602

Cash and cash equivalent at the beginning of the period



  600,130


  408,892

Effect of exchange rate fluctuations on cash held



  (3,215)


  33,935

Cash and cash equivalent at the end of the period

10


  1,257,983


  467,429


The accompanying notes on pages 26-43 form an integral part of these condensed consolidated interim financial statements.



 

Review report on the condensed consolidated interim financial statements

 

To: The board of directors of Integrated Diagnostics Holdings PLC "IDH"

 

Introduction

We have reviewed the accompanying condensed consolidated interim statement of financial position of Integrated Diagnostics Holdings plc "IDH" (the "Company") and its subsidiaries (together the "Group") as at 30 June 2021, and the related condensed consolidated statements of profit or loss and comprehensive income for the three-month and six-month periods then ended, and condensed consolidated statements of changes in equity and cash flows for the six-month period then ended, and explanatory notes. Management is responsible for the preparation and presentation of these condensed consolidated interim financial statements in accordance with International Accounting Standard 34, 'Interim financial reporting' ("IAS 34") as issued by the International Accounting Standards Board (IASB). Our responsibility is to express a conclusion on this condensed consolidated interim financial information based on our review.

 

Scope of review

We conducted our review in accordance with International Standard on Review Engagements 2410, 'Review of interim financial information performed by the independent auditor of the entity'. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

 

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the accompanying condensed consolidated interim financial information are not prepared, in all material respects, in accordance with IAS 34 "Interim Financial Reporting".

 

Other matter

As Integrated Diagnostics Holdings plc "IDH"   was listed in the Egyptian stock exchange for the first time on May 5,2021, the Company did not prepare and publish the condensed consolidated interim financial statements for the three month period ended 31 March 2021. The comparative information for the condensed consolidated interim statement of financial position is based on the audited consolidated financial statements as at 31 December 2020. The comparative information for the condensed consolidated interim statements of profit or loss, comprehensive income for the three-month s and six-month s periods then ended 30 June 2020 ,   and condensed consolidated statements of changes in equity and cash flows for the six-month period then ended 30 June 2020 , and related explanatory notes, have not been audited or reviewed.

 

Ashraf Mamdouh

R.A.A. 26231

F.R.A. 383

 

1 September 2021

Cairo



 

(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 statements as at and for the six months ended 30 June 2021 comprise the Company and its subsidiaries (together referred as the 'Group'). The Company is a dually listed entity, in both London stock exchange (since 2015) and in the Egyptian stock exchange (during May 2021).

 

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

 

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

 

These condensed consolidated interim financial statements were approved for issue by the Directors of the Company on 01 September 2021.

 

2.  Basis of preparation

 

A)  Statement of compliance

These condensed consolidated interim financial statements have been prepared as per IAS 34 'Interim Financial Reporting' (As adopted by the IASB). The group's assessment for the differences with IAS 34 'Interim Financial Reporting' (As adopted by the EU) concluded that there are no material differences on the consolidated financial position and consolidated financial performance of the Group for the period then ended the accounting policies adopted are consistent with those of the previous financial year ended 31 December 2020 and corresponding interim reporting period.

 

These condensed consolidated interim financial statements do not include all the information and disclosures in the annual consolidated financial statements, and should be read in conjunction with the financial statements published as at and for the year ended 31 December 2020 which is available at www.idhcorp.com , In addition, results of the six month period ended 30 June 2021 are not necessary indicative for the results that may be expected for the financial year ending 31 December 2021.

 

B)  Basis of measurement

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

 

C)  Functional and presentation currency

 

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

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

 

 

D)  Use of estimates and judgements

 

The preparation of interim financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income, and expense. Actual results may differ from these estimates.

The significant judgments made by management in applying the Group's accounting policies and key sources of estimation uncertainty were the same as those described in the last consolidated financial statements published as at and for the year ended 31 December 2020.

3.  Significant accounting policies

 

In preparing these condensed consolidated interim financial statements, 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 statements for the year ended 31 December 2020 "The preparation of these condensed consolidated interim financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expense. Actual results may differ from these estimates. Information about significant areas of estimation uncertainty and critical judgement in applying accounting policies that have the most significant effect on the amount recognised in the condensed consolidated interim financial statement is described in note 2.2 of the annual consolidated financial statements published for the year ended 31 December 2020. In preparing these condensed consolidated interim financial statements, 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 statements for the year ended 31 December 2020".


 

 

 

4.  Property, plant and equipment

 


Land & Buildings

Medical, electric
 & information
 system equipment*

Leasehold
improvements

Fixtures, fittings &vehicles

Building & Leasehold Assets in the course of construction

Total

Cost







At 1 January 2021

332,345

565,697

254,474

73,261

21,207

1,246,984

Additions

-

112,970

24,395

9,297

2,654

149,316

Hyperinflation effect

-

(13,330)

-

-

-

(13,330)

Disposals

-

(1,417)

(749)

(591)

-

(2,757)

Transfers

-

-

2,594

-

(2,594)

-

Translation differences

(351)

(9,891)

(2,379)

(1,682)

(1,084)

(15,387)

At 30 June 2021 (Reviewed)

331,994

654,029

278,335

80,285

20,183

1,364,826








Depreciation







At 1 January 2021

47,724

245,929

138,511

27,230

-

459,394

Charge for the period

2,688

43,211

17,348

3,249

-

66,496

On disposals

-

(1,282)

(612)

(466)

-

(2,360)

Translation differences

(33)

(4,950)

(910)

(1,230)

-

(7,123)

At 30 June 2021 (Reviewed)

50,379

282,908

154,337

28,783

-

516,407








Net book value

281,615

371,121

123,998

51,502

20,183

848,419








At 31 December 2020 (Audited)

284,621

319,768

115,963

46,031

21,207

787,590


Property, plant and equipment (continued)

 

*  Laboratory equipment

The group entered into purchase agreement with an external party to supply medical equipment. These equipment are supplied to service the Group's new state-of-the-art Mega Lab. The agreement provides for annual base payments, The Group entered into new agreements for the period ended 30 June 2021 to replace the current equipment in use.

 

5.  Intangible assets and goodwill

 

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

 


Goodwill

Brand Name

Software


Total


EGP'000

EGP'000

EGP'000


EGP'000

Cost






Balance at 1 January 2021

1,261,808

383,922

67,157


1,712,887

Additions

-

-

1,104


1,104

Effect of movements in exchange rates

(3,274)

(388)

(57)


(3,719)

Balance at 30 June 2021 (Reviewed)

1,258,534

383,534

68,204


1,710,272







Amortisation and impairment






Balance at 1 January 2021

1,849

-

51,283


53,132

Amortisation

-

-

3,049


3,049

Effect of movements in exchange rates

-

-

(7)


(7)

Balance at 30 June 2021 (Reviewed)

1,849

-

54,325


56,174







Carrying amount






Balance at 31 December 2020 (Audited)

1,259,959

383,922

15,874


1,659,755







Balance at 30 June 2021 (Reviewed)

1,256,685

383,534

13,879


1,654,098

 

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 six months ended 30 June 2021.

 



 

6.  Right of use assets

 


30 June 2021


31 December 2020


EGP'000


EGP'000


(Reviewed)


(Audited)

Balance at 1 January

354,688


264,763

Addition for the period / year

105,914


152,030

Depreciation charge for the period / year

(39,249)


(60,803)

Terminated contracts

(1,952)


(1,302)

Translation

(3,684)


-

Balance at 31 December

415,717


354,688

 

 

7.  Financial investments

 


30 June

2021


31 December 2020


EGP'000


EGP'000


(Reviewed)


(Audited)





Equity i nvestments *

10,282


9,604


10,282


9,604

 

*   On August 17, 2017, Almakhbariyoun AL Arab (seller) has signed IT purchase Agreement with JSC Mega Lab (Buyer) to transfer and installation of 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 Labat the transaction date on April 8, 2019, and as of December 31, 2020, was 8.25%

On April 8,2019 Almakhbariyoun AL Arab (Biolab) has signed a shareholders Agreement with JSC Mega Lab (the company) and JSC Georgia healthcare group (GHG), whereas Biolab shall have a put option, exercisable within 12 months immediately after the expiration of (5) year period from the signing date, which allows Biolab's all shares at a price of equity value of biolab's stake (have value of USD 400,000) plus higher of 20 % annual IRR or 6X EV/EBITDA (of the financial year immediately preceding the call option exercise date. In case the Management Agreement or the purchase Agreement and /or the SLA is terminated /cancelled within 6 months period from the date of such termination /cancellation, GHG shall have a call option , which allows the GHG to purchase Biolab's all Share at a price of the equity value of Biolab's stake in the company (have value of USD 400,000)plus 20% annual IRR, if JCI accreditation is not obtained, immediately after the expiration of the addition 12 months period the GHG shall have a call option ( the Accelerated Call Option ) exercisable within 6 months period the GHG to purchase Biolab's all shares at price of the equity value of biolab's stake in the company ( having value of USD 400,000) plus 20% annual IRR.



 

8.  Trade and other receivables

 


30 June 2021


31 December 2020


EGP'000


EGP'000


(Reviewed)


(Audited)





Trade receivables - net

342,505


325,770

Prepayments

29,202


19,363

Due from related parties

3,083


2,910

Other receivables*

101,255


39,854

Accrued revenue

1,387


1,006


  477,432


  388,903

 

*  Other receivables during the period ended 30 June 2021, including EGP 26m related to advance to suppliers for purchasing fixed assets and leasehold improvement the new and existing pathology branches.

 

Capital commitment

The Group has capital commitments (off balance sheet) as of 30 June 2021 of EGP56M.

 

 

9.  Investments at amortised cost

 


30 June 2021


31 December 2020


EGP'000


EGP'000


(Reviewed)


(Audited)





Fixed-term deposits

27,970


-

Treasury bills

301,086


276,625


329,056


276,625

 

The maturity date of the treasury bills and Fixed-term deposits is between 3-12 months and have settled average interest rates of 12.53% and 7.85% respectively. Treasury bills are classified as held to collect.

 

 

10.  Cash and cash equivalents

 


30 June 2021


31 December 2020


EGP'000


EGP'000


(Reviewed)


(Audited)





Short-term deposits (less than 90 days)

30,220


162,380

Treasury bills (less than 90 days)

-


184,525

Cash at banks and on hand

1,227,763


253,225


1,257,983


600,130

 



 

11.  Trade and other payables

 


30 June 2021


31 December 2020


EGP'000


EGP'000


(Reviewed)


(Audited)





Trade payable

221,994


177,602

Accrued expenses

190,919


151,201

Due to related parties

2,715


439

Other payables

54,800


50,959

Accrued finance cost

3,087


3,422


473,515


383,623

 

 

12.  Short-term financial liability at fair value

 


30 June 2021


31 December 2020


EGP'000


EGP'000


(Reviewed)


(Audited)





Put option liability

585,880


282,267


585,880


282,267

 

The accounting policy for put options after initial recognition is to recognise all changes in the carrying value of the put liability within equity as all these transactions are with the non-controlling interests of the Group.

 

During the historic acquisitions of Makhbariyoun Al Arab (Biolabs) which took place at 31 December 2011, the Group entered into separate put option arrangements to purchase the remaining equity interests from the vendors at a subsequent date. At acquisition, a put option liability has been recognised for the net present value for the exercise price of the option. The options are exercisable in whole from the fifth anniversary of the completion of the original purchase agreement, which fell due in June 2016. The vendor has not exercised this right at 30 June 2021.

 

 



 

13.  Loan and borrowings

 

A)  In April 2017 AL-Mokhtabar for medical lab, one of IDH subsidiaries, was granted a medium-term loan amounting to EGP 110m from Commercial international bank "CIB Egypt" to finance the purchase of the new administrative building for the group. As at 30 June 2021, loan amount EGP 110m had been drawn down in full. The loan contains the following financial covenants which if breached will mean the loan is repayable on demand:

 

1.  The financial leverage shall not exceed the following percentages    

Year


2017

2018

2019

2020

2021

2022









%


2.33

1.71

2.31

1.95

1.64

1.47

 

" Financial leverage ": total liabilities divided by net equity

 

2.  The debt service ratios   (DSR) shall not be less than 1.

" Debt service ratios ": cash operating profit after tax plus Depreciation for the financial year less annual maintenance on machinery and equipment divided by total distributions plus accrued interest and loan instalments.

 

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

" Current ratios ": Current assets divided current liabilities.

 

4.  The capital expansions in AL Mokhtabar company shall not exceed EGP 50m per year, other than year 2017 which includes in addition the value of the building financed by EGP 110m loan facility . This   condition is valid throughout the term of the loan.

 

The agreement includes other non-financial covenants which relate to the impact of material events on the Company and the consequential ability to repay the loan.

 

B)  In July 2018, AL-Borg lab, one of IDH subsidiaries, was granted a medium term loan amounting to EGP 130.5m from Ahli united bank "AUB Egypt" to finance the investment cost related to the expansion into the radiology segment. As at 30 June 2021 only EGP 57m had been drawn down from the total facility available. The loan contains the following financial covenants which if breached will mean the loan is repayable on demand:

 

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

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

 

2.  The debt service ratios   (DSR) shall not be less than 1.35starting 2019

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

 

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

 

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



Loan and borrowings (continued)

 

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

"Current ratios": Current assets divided current liabilities.

 

The terms and conditions of outstanding loans are as follows:


Currency

Nominal interest rate

Maturity

30 June 2021


31 December 2020





EGP'000


EGP'000








CIB - Bank

EGP

Secured rate 9.5%

5 April 2022

25,946


38,654

 

AUB - Bank

EGP

CBE corridor rate+1%

26 April 2026

56,996


54,379

 





82,942


93,033

 

Amount held as:







 

Current liability




25,946


25,416

 

Non- current liability




56,996


67,617

 





82,942


93,033

 

 

*  As at 30-June-21 corridor rate 9.25% (2020: 9.25%) 

 

The companies (Mokhtabar and Borg) didn't breach any covenants for both MTL agreements. 

 

C)  On 25 May 2021, IDH has secured an 8 years USD 45 million debt financing package from the International Finance Corporation (IFC).  The eight-year loan will be used to finance IDH's growth plans across new and existing markets and help expand access to high-quality diagnostic services in high growth emerging markets, in addition to its current presence in Egypt, Jordan, Nigeria and Sudan.  The loan has an availability period of two years.  As of June 30, 2021, the USD 45 million debt has not been withdrawn by IDH .

 

 



 

14.  Long-term financial liability at fair value

 


30 June 2021


31 December 2020


EGP'000


EGP'000


(Reviewed)


(Audited)





Put option liability*

32,168


31,790


32,168


31,790

 

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

 

There are multiple ways to calculate the put option including Discounted Cash Flow, Multiples, Net assets.  Multiple valuation was applied and EGP 32.1 million was calculated as the valuation as at 30 June 2021 EGP 32m (2020; EGP 31.7m). 

 

 

15.  Financial obligations

 

 


30 June 2021


31 December 2020


EGP'000


EGP'000


(Reviewed)


(Audited)





Lease liabilities building

467,954


389,920

Financial obligations- laboratory equipment

128,835


69,122


596,789


459,042

 

 

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

 


30 June 2021


Minimum

payments


Interest


Principal


EGP'000


EGP'000


EGP'000


(Reviewed)


(Reviewed)


(Reviewed)







Less than one year

150,979


66,425


84,554

Between one and five years

551,972


218,691


333,281

More than five years

215,944


36,990


178,954


918,895


322,106


596,789

 



Financial obligations (continued)


31 December 2020


Minimum payments


Interest


Principal


EGP'000


EGP'000


EGP'000


(Audited)


(Audited)


(Audited)







Less than one year

126,998


66,481


60,517

Between one and five years

463,646


176,312


287,334

More than 5 years

131,605


20,414


111,191


722,249


263,207


459,042

 

 

Amounts recognised in profit or loss:


For the three months ended 30 June


For the six months ended 30 June

 


2021

2020


2021

2020


EGP'000

EGP'000


EGP'000

EGP'000


(Reviewed)

(Unaudited)


(Reviewed)

(Unaudited)







Interest on lease liabilities

14,597

14,131


28,872

26,388

Expenses related to short-term lease

3,420

3,148


8,639

4,294

 

16.  Related party transactions

 

The significant transactions with related parties, their nature volumes and balance during the period 30 June 2021 are as follows: 







30 June 2021

 

Related Party


Nature of transaction


Nature of relationship


Transaction amount of the period


Balance

 







EGP'000


EGP'000

 










 

Life Scan (S.A.E.)*


Expenses paid on behalf


Affiliate


-


350

 










 

International Fertility (IVF)**


Expenses paid on behalf


Affiliate


-


1,767

 










 

H.C Security


Provide service


Entity owned by Company's board member


132


(231)

 










 

Life Health Care


Medical Test analysis


Entity owned by Company's CEO


371


-

 










 



Provide service "Medical insurance"




(8,136)


(2,484)

 










 










 

Dr. Amid Abd Elnour


Put option liability


Bio. Lab C.E.O and shareholder


(303,612)


(585,879)

 










 

 

Related party transactions (continued)

 







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


Rental income


Entity owned by Company's CEO


(17)


-

 



Medical Test analysis




155


966

 

Total








(585,511)

 

 







31 December 2020

Related Party


Nature of transaction


Nature of relationship


Transaction amount of the year


Balance

 







EGP'000


EGP'000

 

Life Scan (S.A.E) *


Expenses paid on behalf


Affiliate


6


350

 










 

International Fertility (IVF)**


Expenses paid on behalf


Affiliate


(3,449)


1,767

 










 

H.C Security


Provide service


Entity owned by Company's board member


(412)


(76)

 










 

Life Health Care


Provide service


Entity owned by Company's CEO


(11,058)


(363)

 










 

Dr. Amid Abd Elnour


Put option liability


Bio. Lab C.E.O and shareholder


(83,126)


(282,267)

 










 










 

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


Rental income


Entity owned by Company's CEO


344


-

 



Medical Test analysis




377


793

 









(279,796)

 

 

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

 

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

 

Compensation of key management personnel of the Group

 

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

 


30-Jun


30-Jun

2021

2020

EGP'000

EGP'000

(Reviewed)

(Unaudited)




(Unreviewed)





Short-term employee benefits

  35,617


  29,196

Total compensation paid to key management personnel

  35,617


  29,196

 



 

17.  General and administrative expenses

 


For the three months ended 30 June



2021

2020


2021

2020


EGP'000

EGP'000


EGP'000

EGP'000


(Reviewed)

(Unaudited)


(Reviewed)

(Unaudited)



(Unreviewed)



(Unreviewed)

Wages and Salaries

34,623

25,272


61,636

49,383

Depreciation

5,659

5,271


11,187

10,414

Other expenses*

64,930

23,111


103,309

43,466

Total

105,212

53,654


176,132

103,263

 

*   Other expenses included EGP 29m related to dual listing expenses in Egyptian Exchange.

 

18.  Net finance income

 


For the three months ended 30 June


For the six months ended 30 June


2021

2020


2021

2020


EGP'000

EGP'000


EGP'000

EGP'000


(Reviewed)

(Unaudited)


(Reviewed)

(Unaudited)



(Unreviewed)



(Unreviewed)

Finance income






Interest income

24,975

15,421


45,248

33,765

Total finance income

24,975

15,421


45,248

33,765







Finance cost






(Loss) / gain on hyperinflationary net monetary position

(1,204)

192


(1,204)

192

Bank charges

(2,848)

(414)


(5,364)

(1,228)

Interest expense

(30,574)

(18,193)


(49,011)

(35,457)

Net foreign exchange (loss) / gain

(4,586)

1,248


(19,321)

(4,479)

Total finance cost

(39,212)

(17,167)


(74,900)

(40,972)







Net finance cost

(14,237)

(1,746)


(29,652)

(7,207)

 

 

19.  Tax

 

A)  Tax expense

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

 



 

Tax (Continued)

 

B)  Income tax

Amounts recognised in profit or loss as follow:

 


For the three months ended 30 June


For the six months ended 30 June


2021

2020


2021

2020


EGP'000

EGP'000


EGP'000

EGP'000


(Reviewed)

(Unaudited)


(Reviewed)

(Unaudited)



(Unreviewed)



(Unreviewed)

Current tax:






Current year

  (143,535)

  (40,637)


  (282,345)

  (86,209)

Deferred tax:






Deferred tax arising on undistributed reserves in subsidiaries

  (43,068)

  (4,058)


  (83,780)

  (10,390)

Relating to origination and reversal of temporary differences

  461

  692


  (689)

  1,563

Total Deferred tax expense)

 

(42,607)

 

  (3,366)

  - 

  (84,469)

  (8,827)







Tax expense recognised in profit or loss

  (186,142)

  (44,003)


  (366,814)

  (95,036)

 

 

C)  Deferred tax liabilities

 

Deferred tax relates to the following:

 


30-Jun-21


31-Dec-20


Liabilities


Liabilities

EGP'000


EGP'000


(Reviewed)


(Audited)





Property, plant and equipment

  (18,697)


  (18,334)

Intangible assets

  (105,840)


  (106,702)

Undistributed reserves from group subsidiaries

  (200,336)


  (116,657)

Provisions and finance lease liabilities

  73


  1,360

Net deferred tax assets (liabilities)

  (324,800)


  (240,333)

 

 

20.  Financial Instruments

 

The Group has reviewed the financial assets and liabilities held at 30 June 2021. It has been deemed that the carrying amounts for all financial instruments are a reasonable approximation of fair value. All financial instruments are deemed Level 3.

 

Contingent liabilities

As required by article 134 of the labour law on Vocational Guidance and Training issued by the Egyptian Government in 2003, Al Borg Laboratory Company and Al Mokhtabar Company for Medical Labs are required to conform to the requirements set out by that law to provide 1% of net profits each year into a training fund. During the year, Integrated Diagnostics Holdings plc have taken legal advice and considered market practice in Egypt relating to this and more specifically whether the vocational training courses undertaken by Al Borg Laboratory Company and Al Mokhtabar Company for Medical Labs suggest that obligations have been satisfied through training programmes undertaken in-house by those entities. Since the issue of the law on Vocational Guidance and Training, Al Borg Laboratory Company and Al Mokhtabar Company for Medical Labs have not been requested by the government to pay or have voluntarily paid any amounts into the external training fund. The board of Integrated Diagnostics Holdings plc have concluded that an outflow of funds is not probable.

Should a claim be brought against Al Borg Laboratory Company and Al Mokhtabar Company for Medical Labs, an amount of between EGP 19.5m to EGP 49 m could become payable, however this is not considered probable.

 

21.  Distributions made and proposed

 


30 June

2021


31 December 2020


EGP'000


EGP'000


(Reviewed)


(Unaudited)

Cash dividends on ordinary shares declared and paid:



(Unreviewed)

US$ 0.0485 per share (2020 nil)

454,472


-


454,472


-

After the balance sheet date, the following dividends were proposed by the directors (the dividends have not been provided for):

-


450,024

Nil per qualifying ordinary share (2020: 0.187) per share

-


450,024

 

 

22.  Earnings per share

 


For the three months ended 30 June


For the six months ended 30 June


2021

2020


2021

2020


EGP'000

EGP'000


EGP'000

EGP'000


(Reviewed)

(Unaudited)


(Reviewed)

(Unaudited)



(Unreviewed)



(Unreviewed)

Profit attributed to owners of the parent

320,410

74,856


646,440

178,768

Weighted average number of ordinary shares in issue

600,000

600,000


600,000

600,000

Basic and diluted earnings per share

0.53

0.12


1.08

0.30

 

There is no dilutive effect from equity.

 

*   At the Extraordinary General Meeting on 4 December 2020, the Company decided to the following share split: The existing issued ordinary share capital of 150,000,000 ordinary shares of US$1.00 each (the "Existing Ordinary Shares") have been split into four new ordinary shares of US$0.25 each (the "New Ordinary Shares"). The comparative figures have been updated.



 

23.  Segment reporting

 

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

 

The Group operates in four geographic areas, Egypt, Sudan, Jordan and Nigeria. The revenue split between the four regions is set out below.


Revenue by geographic location

For the three months ended

Egypt region

Sudan region

Jordan region

Nigeria region

Total


EGP'000

EGP'000

EGP'000

EGP'000

EGP'000







30 June 2021 (Reviewed)

1,014,597

2,514

133,648

12,873

1,163,632

30 June 2020 (Unaudited)/ (Reviewed)

381,473

2,571

59,495

6,392

449,931

 


Revenue by geographic location

For six months period ended

Egypt region

Sudan region

Jordan region

Nigeria region

Total


EGP'000

EGP'000

EGP'000

EGP'000

EGP'000







30 June 2021 (Reviewed)

1,935,059

9,267

323,518

25,326

2,293,170

30 June 2020 (Unaudited)/ (Reviewed)

804,994

12,291

117,343

15,059

949,687

 


Net profit / (loss) by geographic location

For the three months ended

Egypt region

Sudan region

Jordan region

Nigeria region

Total


EGP'000

EGP'000

EGP'000

EGP'000

EGP'000







30 June 2021 (Reviewed)

324,939

(4,487)

31,731

(10,790)

341,393

30 June 20 (Unaudited)/ (Reviewed)

76,098

(3,832)

8,644

(8,782)

72,128

 


Net profit / (loss) by geographic location

 

For six month period ended

Egypt region

Sudan region

Jordan region

Nigeria region

Total


EGP'000

EGP'000

EGP'000

EGP'000

EGP'000







30 June 2021 (Reviewed)

628,033

(14,801)

83,247

(16,449)

680,030

30 June 20 (Unaudited)/ (Reviewed)

179,204

(4,537)

15,062

(15,104)

174,625

 



Segment reporting (continued)

 


Revenue by type


Net profit by type


For the three months ended 30 June


For the three months ended 30 June


2021

2020


2021

2020


EGP'000

EGP'000


EGP'000

EGP'000


(Reviewed)

(Unaudited)


(Reviewed)

(Unaudited)



(Unreviewed)



(Unreviewed)

Pathology

1,140,057

436,522


353,703

80,811

Radiology

23,575

13,409


(12,310)

(8,683)


1,163,632

449,931


341,393

72,128

 


Revenue by type


Net profit by type


For the six months ended 30 June


For the six months ended 30 June


2021

2020


2021

2020


EGP'000

EGP'000


EGP'000

EGP'000


(Reviewed)

(Unaudited)


(Reviewed)

(Unaudited)



(Unreviewed)



(Unreviewed)

Pathology*

2,247,984

925,757


701,395

194,864

Radiology

45,186

23,930


(21,365)

(20,239)


2,293,170

949,687


680,030

174,625

 


Revenue by categories


Revenue by categories


For the three months ended 30 June


For the six months ended 30 June


2021

2020


2021

2020


EGP'000

EGP'000


EGP'000

EGP'000


(Reviewed)

(Unaudited)


(Reviewed)

(Unaudited)



(Unreviewed)



(Unreviewed)

Walk-in

499,678

215,753


1,029,039

442,987

Corporate

663,954

234,178


1,264,131

506,700


1,163,632

449,931


2,293,170

949,687

 

*   On 30 June 2021 includes Covid-19 related Pathology tests amounted to EGP 1,104m (30 June 2020: EGP 88m).

 


Non-current assets by geographic location


Egypt region

Sudan region

Jordan region

Nigeria region

Total


EGP'000

EGP'000

EGP'000

EGP'000

EGP'000






30 June 21 (Reviewed)

2,598,967

286,419

98,443

2,986,679

31 December 2020

2,415,220

24,132

263,767

113,941

2,817,060

 



Segment reporting (continued)

 

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

 


For the three months period ended 30 June


For the six months period ended 30 June


2021


2020


2021


2020


EGP'000


EGP'000


EGP'000


EGP'000


(Reviewed)


(Unaudited)


(Reviewed)


(Unaudited)




(Unreviewed)




(Unreviewed)

Profit from operations

  526,995


  117,877


  1,064,676


  276,868

Property, plant and equipment depreciation

  26,608


  35,064


  59,068


  58,359

Amortisation of right of use

  28,711


  15,673


  46,677


  29,455

Amortisation of Intangible assets

  1,528


  (2,003)


  3,049


  2,672

EBITDA

  583,842


  166,611


  1,173,470


  367,354

Non-recurring expenses

  18,797


  - 


  29,034


  - 

Normalised EBITDA

  602,639


  166,611


  1,202,504


  367,354

 

 

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