TIDMIDHC
RNS Number : 0844Z
Integrated Diagnostics Holdings PLC
12 September 2022
Integrated Diagnostics Holdings Plc
1H 2022 Results
Monday, 12 September 2022
Integrated Diagnostics Holdings Plc delivers robust growth in
traditional offering demonstrating underlying strength
(Cairo and London) - Integrated Diagnostics Holdings ("IDH,"
"the Group," or "the Company"), a leading consumer healthcare
company with operations in Egypt, Jordan, Sudan and Nigeria,
released today its reviewed financial statements and operational
performance for the six-month period ended 30 June 2022, recording
revenue (compliant with IFRS) of EGP 1,954 million and net profit
of EGP 439 million. During the period, IDH's conventional business
continued to demonstrate its underlying strength and growth
potential, recording robust year-on-year growth and helping to
offset the decline in Covid-19-related (1) revenues for the period.
More specifically, IDH's conventional business (comprising 69% of
total revenues) recorded a solid 13% year-on-year increase in
revenue during 1H 2022, on the back of a 6% rise in test volumes.
Similarly, in Q2-2022, IDH's conventional offering recorded a
remarkable 18% year-on-year and 9% quarter-on-quarter rise in
revenues, with the robust growth versus Q1-2022 coming despite the
seasonal slowdown related to the holy month of Ramadan and the Eid
holidays. Consolidated revenues for the quarter recorded EGP 774
million, while net profit stood at EGP 125 million in Q2 2022. As
noted above, consolidated results for the three- and six-month
periods ended 30 June 2022 were weighed down by a significant
slowdown in Covid-19-related business owing to a widespread decline
in infection rates, the lifting of mandatory testing for
international travellers, and a substantial decline in the average
price per Covid-19-related test.
Financial Results (IFRS)
EGP mn 1H 2021 1H 2022 Change
============================== ================ ======================= =========
Revenues 2,293 1,954 -15%
------------------------------ ---------------- ----------------------- ---------
Conventional Revenues 1,188 1,339 13%
------------------------------ ---------------- ----------------------- ---------
Covid-19-related Revenues 1,105 615 -44%
------------------------------ ---------------- ----------------------- ---------
Cost of Sales (988) (1,122) 14%
------------------------------ ---------------- ----------------------- ---------
Gross Profit 1,305 832 -36%
------------------------------ ---------------- ----------------------- ---------
Gross Profit Margin 57% 43% -14 pts.
------------------------------ ---------------- ----------------------- ---------
Operating Profit 1,094 562 -49%
------------------------------ ---------------- ----------------------- ---------
EBITDA (2) 1,203 709 -41%
------------------------------ ---------------- ----------------------- ---------
EBITDA Margin 52% 36% -16 pts.
------------------------------ ---------------- ----------------------- ---------
Net Profit 668 439 -34%
------------------------------ ---------------- ----------------------- ---------
Net Profit Margin 29% 22% -7 pts.
------------------------------ ---------------- ----------------------- ---------
Cash Balance 1,587 2,182 37%
------------------------------ ---------------- ----------------------- ---------
Note (1): Throughout the 1H 2022 Earnings Release, percentage
changes between reporting periods are calculated using the exact
value (as reported in the Company's Consolidated Financials) and
not the corresponding rounded figure.
Key Operational Indicators(3)
1H 2021 1H 2022 Change
================================== =============== ============== ==============
Branches 495 538 43
--------------------------------------- ---------- -------------- --------------
Patients ('000) 4,673 4,541 -3%
--------------------------------------- ---------- -------------- --------------
Revenue per Patient (EGP) 491 416 -15%
--------------------------------------- ---------- -------------- --------------
Tests ('000) 16,318 16,004 -2%
--------------------------------------- ---------- -------------- --------------
Conventional Tests ('000) 13,717 14,547 6%
--------------------------------------- ---------- -------------- --------------
Covid-19-related Tests ('000) 2,601 1,458 -44%
--------------------------------------- ---------- -------------- --------------
Revenue per Test (EGP) 141 118 -16%
--------------------------------------- ---------- -------------- --------------
Revenue per Conventional Test
(EGP) 87 92 6%
--------------------------------------- ---------- -------------- --------------
Revenue per Core Covid-19
Test (EGP) 425 389 -8%
--------------------------------------- ---------- -------------- --------------
Revenue per Other Covid-19-related
Test (EGP) 152 134 -12%
--------------------------------------- ---------- -------------- --------------
Test per Patient 3.5 3.5 N/A
---------------------------------- --------------- -------------- --------------
(1) Covid-19-related tests include both core Covid-19 tests
(Polymerase Chain Reaction (PCR), Antigen, and Antibody) as well as
other routine inflammatory and clotting markers including, but not
limited to, Complete Blood Picture, Erythrocyte Sedimentation Rate
(ESR), D-Dimer, Ferritin and C-reactive Protein (CRP), which the
Company opted to include in the classification as "other
Covid-19-related tests" due to the strong rise in demand for these
tests witnessed following the outbreak of Covid-19.
(2) EBITDA is calculated as operating profit plus depreciation
and amortization.
(3) Key operational indicators are calculated based on net sales
for the six month period of EGP 1,891 million. More details on the
difference between net sales and total revenues is available
below.
Important Notice: Treatment of Revenue Sharing Agreements and
Use of Alternative Performance Measures
As part of IDH's efforts to support local authorities in Egypt
and Jordan in the fight against the pandemic, Biolab (IDH's
Jordanian subsidiary) secured several revenue-sharing agreements to
operate testing stations, primarily dedicated to PCR testing for
Covid-19, in multiple locations across the country including Queen
Alia International Airport (QAIA) and Aqaba Port. These agreements
kicked off in May 2021 at Aqaba Port and in August 2021 at QAIA.
However, f ollowing the decision by Jordanian authorities on 1
March 2022 to end mandatory testing, testing booths across both
locations recorded sharp declines in patient traffic.
Under these agreements, Biolab received the full revenue (gross
sales) for each test performed and paid a proportion to QAIA (38%
of gross sales excluding sales tax) and Aqaba Port (36% of gross
sales) as concession fees to operate in the facilities, thus
effectively earning the net of these amounts (net sales) for each
test supplied. Starting in Q4 2021, the treatment of these
agreements was altered in accordance with IFRS 15 paragraph B34,
which considers Biolab as a Principal (and not an Agent).
Subsequently, revenues generated from these agreements are reported
in the Consolidated Financial Statements as gross (inclusive of
concession fees) and the fees paid to QAIA and Aqaba Port are
reported as a separate line item in the direct cost. It is
important to note that sales generated from these agreements were
reflected on the Company's results in Q1 2022 only as the
agreements were terminated starting in the second quarter of the
year.
In an effort to present an accurate picture of IDH's performance
for the six-month period ended 30 June 2022, throughout the report
management utilizes net sales of EGP 1,891 million for 1H 2022
(IFRS revenues stand at EGP 1,954 million for the six-month
period). Net sales for the first half of the year are calculated as
total gross revenues excluding concession fees and sales taxes paid
as part of Biolab's revenue sharing agreements with QAIA and Aqaba
Port.
It is important to note that aside from revenue and cost of
sales, all other figures related to gross profit, operating profit,
EBITDA, and net profit are identical in the APM and IFRS
calculations. However, the margins related to the aforementioned
items differ between the two sets of performance indicators due to
the use of Net Sales in the APM calculations and the use of
Revenues for the IFRS calculations.
Adjustments Breakdown
EGP mn 1H 2022
=============================================== ========
Net Sales 1,891
----------------------------------------------- --------
QAIA and Aqaba Port Concession Fees 63
----------------------------------------------- --------
Revenues (IFRS) 1,954
----------------------------------------------- --------
Cost of Net Sales (1,059)
----------------------------------------------- --------
Adjustment for QAIA and Aqaba Port Agreements (63)
----------------------------------------------- --------
Cost of Sales (IFRS) (1,122)
Adjustments by Country
EGP mn 1H 2022 1H 2022
(IFRS) (APM)
========== ======== =========
Egypt 1,524 1,524
---------- -------- ---------
Jordan 386 323
---------- -------- ---------
Sudan 10 10
---------- -------- ---------
Nigeria 33 33
---------- -------- ---------
Total 1,954 1,891
Note: differences between IFRS and APM figures are highlighted
in grey.
Financial Results (APM)
IFRS APM
========================= ============================= =============================
EGP mn 1H 2021 1H 2022 Change 1H 2021 1H 2022 Change
========================= ======== ========= ======== ======== ========= ========
Net Sales 2,293 1,954 -15% 2,293 1,891 -18%
------------------------- -------- --------- -------- -------- --------- --------
Conventional Net Sales 1,188 1,339 13% 1,188 1,339 13%
------------------------- -------- --------- -------- -------- --------- --------
Covid-19-related Net
Sales 1,105 615 -44% 1,105 552 -50%
------------------------- -------- --------- -------- -------- --------- --------
Cost of Net Sales (988) (1,122) 14% (988) (1,059) 7%
------------------------- -------- --------- -------- -------- --------- --------
Gross Profit 1,305 832 -36% 1,305 832 -36%
------------------------- -------- --------- -------- -------- --------- --------
Gross Profit Margin
on Net Sales 57% 43% -14 pts 57% 44% -13 pts
------------------------- -------- --------- -------- -------- --------- --------
Operating Profit 1,094 562 -49% 1,094 562 -49%
------------------------- -------- --------- -------- -------- --------- --------
EBITDA (4) 1,203 709 -41% 1,203 709 -41%
------------------------- -------- --------- -------- -------- --------- --------
EBITDA Margin on Net
Sales 52% 36% -16 pts 52% 38% -15 pts
------------------------- -------- --------- -------- -------- --------- --------
Net Profit 668 439 -34% 668 439 -34%
------------------------- -------- --------- -------- -------- --------- --------
Net Profit Margin on
Net Sales 29% 22% -7 pts 29% 23% -6 pts
------------------------- -------- --------- -------- -------- --------- --------
Cash Balance 1,587 2,182 37% 1,587 2,182 37%
------------------------- -------- --------- -------- -------- --------- --------
Note: differences between IFRS and APM figures are highlighted
in grey.
(4) EBITDA is calculated as operating profit plus depreciation
and amortization.
Introduction
i. Financial Highlights
-- Net Sales recorded EGP 1,891 million in 1H 2022, 18% below
last year's figure which had been boosted by strong contributions
from Covid-19-related offering. During the period, IDH continued to
record robust year-on-year growth in conventional net sales, once
more displaying the business' underlying strength and growth
potential. This helped offset the significant decline in
Covid-19-related(5) net sales for the period, owing to lower
infection rates, the lifting of mandatory testing for international
passengers, and declining average test prices. On a quarterly
basis, consolidated net sales fell 34% year-on-year in Q2 2022 on
the back of a large contraction in Covid-19-related net sales.
Meanwhile, conventional net sales continued their steady expansion
during the second quarter, a particularly noteworthy result in
light of the expected seasonal slowdown related to the holy month
of Ramadan and Eid impacting results for April and May.
-- More specifically, IDH's conventional offering recorded EGP
1,339 million in 1H 2022 up 13% year-on-year and continuing to
support consolidated net sales for the six-month period. The
segment's continued growth now sees it contribute to 71% of
consolidated net sales up from 52% this time last year. The solid
year-on-year growth was supported by a robust 6% increase in both
test volumes and average revenue per test. On a quarterly basis,
conventional net sales expanded an impressive 18% year-on-year and
9% quarter-on-quarter continuing to display the business'
underlying strength. Growth was supported by growing test volumes
which expanded 7% year-on-year and 4% quarter-on-quarter.
-- During the six-month period, IDH's Covid-19-related net sales
recorded EGP 552 million versus the EGP 1,105 million recorded in
1H 2021. As such, the segment made up just 29% of total net sales
in 1H 2022 versus 48% in 1H 2021. The segment's performance in the
first six months of the year was significantly impacted by results
for the second quarter, with Covid-19-related net sales declining
87% year-on-year and 84% quarter-on-quarter to record EGP 75
million in Q2 2022.
-- Gross Profit recorded EGP 832 million in 1H 2022, down 36%
year-on-year. Gross profit margin on net sales stood at 44%
compared to 57% in 1H 2021. Lower gross profitability comes on the
back of a significant fall in the average price of Covid-19-related
tests (including a 52% fall in the average price of PCR tests)
which reflected in a rise in raw materials as percentage of net
sales for the period. The contraction in gross profitability is
also in part attributable to an increase in direct salaries and
wages versus last year related to additional staff employed at the
testing booths at Aqaba Port and QAIA and across IDH's newly rolled
out branches, as well as an annual salary increase for IDH's staff.
In Q2 2022, IDH recorded a gross profit of EGP 300 million, down
55% year-on-year and with an associated margin of 39%. Lower gross
profitability for the quarter in part reflects the expected
seasonal slowdown related to the holy month of Ramadan and Eid
vacation.
-- EBITDA(6) recorded EGP 709 million in the six-month period,
representing a 41% year-on-year decrease. EBITDA margin on net
sales stood at 38% compared to 52% in 1H 2021. The year-on-year
contraction comes on the back of lower gross profitability coupled
with higher SG&A outlays for the period mainly related to
marketing activities. On a quarterly basis, EBITDA recorded EGP 241
million in Q2 2022, down 60% year-on-year and with an associated
margin of 31%.
-- Net Profit recorded EGP 439 million in 1H 2022, down 34%
year-on-year. Net profit margin on net sales stood at 23% for the
period, in line with the Group's pre-Covid-19 averages.
(5) Covid-19-related tests include both core Covid-19 tests
(Polymerase Chain Reaction (PCR), Antigen, and Antibody) as well as
other routine inflammatory and clotting markers including, but not
limited to, Complete Blood Picture, Erythrocyte Sedimentation Rate
(ESR), D-Dimer, Ferritin and C-reactive Protein (CRP), which the
Company opted to include in the classification as "other
Covid-19-related tests" due to the strong rise in demand for these
tests witnessed following the outbreak of Covid-19.
(6) EBITDA is calculated as operating profit plus depreciation
and amortization.
ii. Operational Highlights
-- IDH's branch network reached 538 branches as at 30 June 2022,
up from 495 branches as at 30 June 2021 and 502 branches at
year-end 2021.
-- Conventional tests performed, which made up the majority of
total tests in 1H 2022, recorded 14.5 million, up a solid 6% versus
last year. This largely compensated for a 44% year-on-year decline
in Covid-19-related tests performed. As such total test volumes
contracted 2% year-on-year to record 16.0 million in 1H 2022.
-- Average revenue per test(7) recorded EGP 118 in 1H 2022, a
year-on-year decline of 16% driven by lower average revenue per
Covid-19-related(8) tests (down 11% year-on-year). On the other
hand, average revenue per conventional test increased 6%
year-on-year in 1H 2022.
-- Total patients served decreased 3% in 1H 2022 to record 4.5
million. Meanwhile, average test per patient stood unchanged at 3.5
in 1H 2022.
-- In Egypt (80.6% share of consolidated net sales), IDH
recorded revenue of EGP 1,524 million in 1H 2022, down 21%
year-on-year. IDH's Egyptian operations recorded a solid 12%
year-on-year increase in conventional revenues (75% of Egypt's
total revenues) on the back of rising test volumes. Meanwhile,
Covid-19-related revenues declined 58% year-on-year due to lower
test volumes as infections rates decreased, mandatory testing for
travellers was lifted, the average price for all Covid-19-related
tests decline substantially. Finally, Egypt's revenues were
supported by a 19% contribution from the Group's house call
services.
-- Al-Borg Scan recorded revenues of EGP 35 million,
representing a 78% year-on-year increase. Revenue growth was
supported by an 85% and 77% year-on-year increase in test and
patient volumes, respectively. Growing volumes at the venture have
come on the back of new branch rollouts (+3 over the last twelve
months). In the coming months, the Group is planning to expand its
radiology branch network further through the roll out of two
additional branches .
-- Wayak recorded a 364% year-on-year increase in consolidated
revenue, which stood at EGP 8.7 million in 1H 2022 versus EGP 1.9
million in 1H 2021. Higher revenues in part reflect a 47%
year-on-year rise in delivery orders which reached 64.3 thousand in
1H 2022. Combined with management's continued cost optimisation
efforts, this is driving a steady narrowing of the venture's
consolidated EBITDA losses. More specifically, EBITDA losses
contracted to EGP 1.7 million from EGP 3.41 million.
-- In Jordan (17.1% share of consolidated net sales), net sales
reached EGP 323 million (IFRS revenues(9) recorded EGP 386 million
in 1H 2022), unchanged from last year's figure. During the period,
Biolab recorded a 14% year-on-year increase in conventional net
sales, while Covid-19-related net sales contracted 10% reflecting
lower test prices.
-- IDH's Nigerian operations (1.8% share of consolidated net
sales) recorded revenues of EGP 33 million in 1H 2022, up 32% from
the comparable period of 2021, and reflecting the rising demand for
the generally higher-priced MRI and CT testing. Excluding the two
branches which were closed down earlier this year, test and
patients volumes would be up 25% and 19% year-on-year,
respectively.
-- In Sudan (0.6% share of consolidated net sales) , IDH
recorded a remarkable 13% year-on-year increase in revenues during
the first six months of 2022. This marked the first revenue
increase in EGP terms in over a year and came on the back of a 40%
increase in average revenue per test. In local currency terms
growth was even more pronounced with IDH's Sudanese operations
reporting a 125% year-on-year increase in revenue.
(7) Calculated on net sales for the period.
(8) Covid-19-related tests include both Core Covid-19 tests
(PCR, Antigen, and Antibody) as well as Other Covid-19-related
tests.
(9) Biolab's revenues for the quarter are calculated as net
sales and including concession fees paid to QAIA and Aqaba Port as
part of their revenue sharing agreements.
iii. Management Commentary
Commenting on the Group's performance, IDH Chief Executive
Officer Dr. Hend El-Sherbini said: "I am pleased to present another
set of solid financial and operational results, which saw us build
on a strong start to the year to deliver further growth in our
conventional business despite a difficult operating environment. I
was particularly happy to note the robust year-on-year and
quarter-on-quarter growth delivered by our conventional service
offering during the second quarter of the year, a noteworthy
achievement in light of the seasonal slowdown associated with the
holy month of Ramadan and Eid holiday. The segment's steady
expansion comes as a direct result of our multi-pronged growth and
investment strategy which has enabled us to continue delivering
exceptional value to our patients despite the unprecedented
challenges faced over the last several years. Looking at the
numbers in more detail, conventional net sales recorded a robust
13% year-on-year expansion in 1H 2022. Meanwhile in Q2 2022,
conventional net sales expanded 18% year-on-year and an impressive
9% quarter-on-quarter. In both periods, growth was supported by
higher test and patient volumes, once more showcasing the
attractiveness of our value proposition and the business' strong
future growth potential. Moreover, our ability to consistently grow
our business irrespective of ongoing challenges, has enabled our
conventional revenues to currently stand an impressive 32% above
pre-pandemic revenues recorded in the first half of 2019 once
controlling for contributions from the 100 Million Healthy Lives
campaign. Robust growth at the conventional segment is helping to
offset the significant decline in our Covid-19-related(10) net
sales both on a quarterly and year-to-date basis. More
specifically, starting in March we recorded sharp declines across
both Egypt and Jordan on the back of lower infection rates, a
lifting of mandatory testing for international travellers, and a
widespread decline in Covid-19 test prices.
On a geographic basis, across both Egypt and Jordan, we are
continuing to leverage our market leading position, expanded
product offering and patient base, increased service delivery
capabilities, and growing visibility to deliver robust growth in
our conventional business. We were very pleased to note the 12%
year-on-year growth in conventional revenues delivered by our home
of Egypt, which continued to expand in line with recent trends
despite rising inflation and an above-average number of public
holidays during the months of April and May. Egypt's performance
continued to be bolstered by rising contributions from our
fast-growing radiology venture, Al-Borg Scan, which in early August
obtained the prestigious ACR accreditation for its nuclear medicine
unit. Across both Egypt and Jordan, we are continuing to focus on
retaining the thousands of new patients acquired through our
Covid-19-related services over the past two years. Initiatives on
this front have included the launch of a dedicated loyalty
programme, the roll out of multiple marketing campaigns, and the
enhancement of our cross-selling capabilities through a more
effective use of patient data. In parallel, we are continuing to
invest in growing our direct-to-patient reach, further developing
our branch network, house call service, and digital offering. Here
it is worth highlighting that thanks to our efforts to ramp up our
house call capabilities over the last two years, the service is
continuing to make contributions to consolidated net sales well
above its pre-pandemic averages. Looking at our other geographies,
in Nigeria we recorded a solid year-on-year revenue growth
supported by a record-breaking second quarter performance, and
reflecting the growing popularity of the venture's radiology
offering. It is also worth stressing that when controlling for
branch closures in the first quarter of the year, both test and
patient volumes posted strong year-on-year growth proving that the
venture's revamp strategy is continuing to deliver the desired
results despite the fast-rising inflation experienced in recent
months. On an equally positive note, we witnessed the return to
year-on-year growth in EGP terms of our operations in Sudan
demonstrating the underlying potential of the Sudanese market.
While we expect the current operational challenges to persist
throughout the rest of 2022, I firmly believe that the robust
mitigation measures we have put in place provide ample protection
against possible future disruptions to the business. Coupled with
our flexible business model and the inherently counter-cyclical
nature of the healthcare industry, this sees us well placed to take
full advantage of the vast growth opportunities offered by our
markets. Looking at our mitigation strategy in more detail, as with
similar situations in the past, we expect protracted high
inflation, in particular in Egypt, to have the most significant
impact on patients who pay for their own healthcare. With this in
mind, we have been developing our marketing programs to target them
with a strong health awareness message in combination with a
compelling value component. This includes offering bundled
diagnostic test packages for lifestyle-related diseases and chronic
health conditions as well as an in-house point redemption system.
We are also exploring various solutions to offer more affordable
payment plans to help our patients during the ongoing difficulties.
At the same time, I am confident that the brand equity we have
built over many years has translated into strong loyalty, and I am
certain that patients will continue to choose us as their trusted
diagnostic services provider irrespective of the ongoing
inflationary pressures. Meanwhile, thanks to our proactive
inventory build-up and sourcing strategy we continue to face no
problems acquiring raw materials and we hold sufficient inventories
to cover four months of operations. Going forward, we are confident
that our long-lasting relationships with test kit suppliers we
enable us to continue procuring stock at competitive prices.
In light of the aforementioned and our robust performance in the
first half of the year, we are maintaining our full-year guidance,
with the Company on track to record conventional revenue
year-on-year growth of around 20%. It is worth noting that these
estimates assume no additional contributions from our
Covid-19-related offering.
On a similar note, I am happy to report that despite the
challenging conditions faced on the foreign exchange markets over
the past several months, we have successfully completed the payment
of the entire full-year 2021 dividend to all shareholders. The
distribution of a record-breaking USD 69.6 million dividend
reaffirms our trust in the business' fundamental strength and
sustainability, and its potential going forward."
(10) Covid-19-related tests include both core Covid-19 tests
(Polymerase Chain Reaction (PCR), Antigen, and Antibody) as well as
other routine inflammatory and clotting markers including, but not
limited to, Complete Blood Picture, Erythrocyte Sedimentation Rate
(ESR), D-Dimer, Ferritin and C-reactive Protein (CRP), which the
Company opted to include in the classification as "other
Covid-19-related tests" due to the strong rise in demand for these
tests witnessed following the outbreak of Covid-19.
- End -
Analyst and Investor Call Details
An analyst and investor call will be hosted at 2pm (UK) | 3pm
(Egypt) on Tuesday, 13 September 2022. You can register for the
call by clicking on this link , and you may dial in using the
conference call details below:
-- Webinar ID: 928 3447 8622
-- Webinar Passcode: 651028
For more information about the event, please contact:
amr.amin@cicapital.com
About Integrated Diagnostics Holdings (IDH)
IDH is a leading consumer healthcare company in the Middle East
and Africa with operations in Egypt, Jordan, Sudan and Nigeria. The
Group's core brands include Al Borg, Al Borg Scan and Al Mokhtabar
in Egypt, as well as Biolab (Jordan), Ultralab and Al Mokhtabar
Sudan (both in Sudan) and Echo-Lab (Nigeria). A long track record
for quality and safety has earned the Company a trusted reputation,
as well as internationally recognised accreditations for its
portfolio of over 2,000 diagnostics tests. From its base of 538
branches as of 30 June 2022, IDH will continue to add laboratories
through a Hub, Spoke and Spike business model that provides a
scalable platform for efficient expansion. Beyond organic growth,
the Group's expansion plans include acquisitions in new Middle
Eastern, African, and East Asian markets where its model is
well-suited to capitalise on similar healthcare and consumer trends
and capture a significant share of fragmented markets. IDH has been
a Jersey-registered entity with a Standard Listing on the Main
Market of the London Stock Exchange (ticker: IDHC) since May 2015
with a secondary listing on the EGX since May 2021 (ticker:
IDHC.CA).
Shareholder Information
LSE: IDHC.L
EGX: IDHC.CA
Bloomberg: IDHC:LN
Listed on LSE: May 2015
Listed on EGX: May 2021
Shares Outstanding: 600 million
Contact
Nancy Fahmy
Investor Relations Director
T: +20 (0)2 3345 5530 | M: +20 (0)12 2255 7445 |
nancy.fahmy@idhcorp.com
Forward-Looking Statements
These results for the six-month period ended 30 June 2022 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/Net Sales and Cost Analysis
Revenue/Net Sales
Consolidated Analysis
During both Q2 2022 and 1H 2022, IDH continued to record robust growth
in conventional revenues supported by both higher volumes and average
revenue per test. It is especially important to note that conventional
revenues in Q2 2022 expanded an impressive 18% year-on-year and 9% quarter-on-quarter
despite results for the months of April and May being weighed down by
the expected slowdown related to the holy month of Ramadan and Eid holidays.
The steady growth in IDH's conventional revenues further demonstrates
the business' underlying strength and future growth potential.
Meanwhile, IDH recorded a significant contract in Covid-19-related(11)
offering on the back of lower infection rates across both Egypt and
Jordan, the lifting of mandatory testing for international travellers,
and a substantial decline in the average price per Covid-19-related
test. In fact, during the first half of the year, the average price
of PCR tests fell 45% in Egypt and 44% in Jordan compared to 1H 2021.
It is worth noting that the segment's decline largely came in the second
quarter of the year, outweighing a strong start to the year which had
seen the Group's Covid-19-related offering record strong demand in the
months of January and February.
As such, IDH recorded total consolidated revenue of EGP 1,954 million
in the first half of the year, representing a 15% year-on-year decline.
Consolidated net sales(12) recorded EGP 1,891 million, down 18% from
the comparable period of last year which had included strong contributions
from the Group's Covid-19-related offering. On a quarterly basis, consolidated
net sales recorded EGP 774 million, down 34% versus Q2 2021 and 31%
versus the first quarter of 2022.
House Call Service
The Group's consolidated net sales were also supported by its house
call services in Egypt and Jordan, which recorded revenues of EGP 307
million in the first half of the year and contributed to 16% of consolidated
net sales for the six-month period. The service continued to make a
robust contribution, well above the service's pre-pandemic averages.
The robust set of results continue to reflect the significant investments
undertaken by the Group over the last two years to boost its house call
capacity and cater to the growing demand for the service.
(11) Covid-19-related tests include both core Covid-19 tests (Polymerase
Chain Reaction (PCR), Antigen, and Antibody) as well as other routine
inflammatory and clotting markers including, but not limited to, Complete
Blood Picture, Erythrocyte Sedimentation Rate (ESR), D-Dimer, Ferritin
and C-reactive Protein (CRP), which the Company opted to include in
the classification as "other Covid-19-related tests" due to the strong
rise in demand for these tests witnessed following the outbreak of Covid-19.
(12) A reconciliation between revenue and net sales is available earlier
in this announcement.
Detailed Consolidated Performance Breakdown
The table presents Alternative Performance Measures (APM) for
each period (further information available above)
Q1 Q1 Q2 Q2 1H 1H
2021 2022 Change 2021 2022 Change 2021 2022 Change
---------------------------- ------ ------ ------- ------ ------ ------- ------ ------ -------
Total net sales
(EGP mn) 1,130 1,117 -1% 1,164 774 -34% 2,293 1,891 -18%
Total tests (mn) 8.1 8.4 4% 8.3 7.6 -8% 16.3 16.0 -2%
============================ ====== ====== ======= ====== ====== ======= ====== ====== =======
Conventional test
net sales (EGP mn) 594 640 8% 594 699 18% 1,188 1,339 13%
Conventional tests
performed (mn) 6.8 7.1 5% 6.9 7.4 7% 13.7 14.5 6%
============================ ====== ====== ======= ====== ====== ======= ====== ====== =======
Total Covid-19-related
test net sales (EGP
mn) 536 477 -11% 569 75 -87% 1,105 552 -50%
============================ ====== ====== ======= ====== ====== ======= ====== ====== =======
Core Covid-19 tests
(PCR, Antigen, Antibody)
(EGP mn) 399 421 6% 431 62 -86% 830 483 -42%
Core Covid-19 tests
performed (k) 407 837 106% 387 109 -72% 793 946 19%
============================ ====== ====== ======= ====== ====== ======= ====== ====== =======
Other Covid-19-related
tests (EGP mn) 137 56 -59% 138 13 -91% 275 68 -75%
Other Covid-19-related
tests performed
(k) 874 417 -52% 933 95 -90% 1,807 512 -72%
---------------------------- ------ ------ ------- ------ ------ ------- ------ ------ -------
Contribution to Consolidated Results
Conventional test
net sales 53% 57% 51% 90% 52% 71%
Conventional tests
performed 84% 85% 84% 97% 84% 91%
============================ ====== ====== ======= ====== ====== ======= ====== ====== =======
Total Covid-19-related
tests 47% 43% 49% 10% 48% 29%
============================ ====== ====== ======= ====== ====== ======= ====== ====== =======
Core Covid-19 tests
(PCR, Antigen, Antibody) 35% 38% 37% 8% 36% 26%
Core Covid-19 tests
performed 5% 10% 5% 1% 5% 6%
============================ ====== ====== ======= ====== ====== ======= ====== ====== =======
Other Covid-19-related
tests 12% 5% 12% 2% 12% 4%
Other Covid-19-related
tests performed 11% 5% 11% 1% 11% 3%
Net Sales Analysis: Contribution by Patient Segment
Contract Segment (58% of total net sales)
Conventional revenues at IDH's contract segment expanded an impressive
24% year-on-year in 1H 2022 supported by an 11% increase in tests performed
and a 12% expansion in average net sales per test. However, a significant
decline in revenues from the segment's Covid-19-related(13) offering
saw total revenue at the contract segment (identical in value to net
sales for the period) contract 13% from 1H 2022.
Walk-in Segment (42% of total net sales)
The Group's walk-in segment recorded conventional revenues largely in
line with the figure recorded in the same six months of 2021 as lower
test volumes were offset by an increase in average revenue per test.
Meanwhile, Covid-19-related walk-in net sales declined 44% year-on-year
(revenue(14) declined 32% year-on-year) on the back of both lower test
volumes and average revenue per test. This saw total revenue at the
walk-in segment decline 17% year-on-year, and total walk-in net sales
for the period fall 23% year-on-year.
The walk-in segment's results were supported by Biolab's partnership
with Queen Alia International Airport (QAIA) which generated net sales
of EGP 140 million in the six months to 30 June 2022 . However, f ollowing
the decision by Jordanian authorities on 1 March 2022 to end mandatory
testing, Biolab's booths recorded sharp declines in patient traffic.
(13) Covid-19-related tests include both core Covid-19 tests
(Polymerase Chain Reaction (PCR), Antigen, and Antibody) as well as
other routine inflammatory and clotting markers including, but not
limited to, Complete Blood Picture, Erythrocyte Sedimentation Rate
(ESR), D-Dimer, Ferritin and C-reactive Protein (CRP), which the
Company opted to include in the classification as "other
Covid-19-related tests" due to the strong rise in demand for these
tests witnessed following the outbreak of Covid-19.
(14) A reconciliation between revenue and net sales is available
earlier in this announcement.
Key Performance Indicators
The table presents Alternative Performance Measures (APM) for
each period (further information available on above)
Walk-in Segment Contract Segment Total
========================= ======================= ========================= =========================
1H21 1H22 Change 1H21 1H22 Change 1H21 1H22 Change
========================= ====== ====== ======= ======= ======= ======= ======= ======= =======
Net sales^ (EGP mn) 1,029 794 -23% 1,264 1,097 -13% 2,293 1,891 -18%
Conventional net
sales (EGP mn) 522 512 -2% 666 827 24% 1,188 1,339 13%
Total Covid-19-related
net sales (EGP mn) 507 282 -44% 598 270 -55% 1105 552 -50%
Patients ('000) 1,523 1,513 -1% 3,150 3,027 -4% 4,673 4,541 -3%
% of Patients 33% 33% 67% 67%
Net sales per Patient
(EGP) 676 524 -22% 401 362 -10% 491 416 -15%
------------------------- ------ ------ ------- ------- ------- ------- ------- ------- -------
Tests ('000) 4,164 3,849 -8% 12,153 12,155 0% 16,318 16,004 -2%
% of Tests 26% 24% 74% 76%
Conventional tests
('000) 3,406 3,135 -8% 10,311 11,412 11% 13,717 14,547 6%
Total Covid-19-related
tests ('000) 758 714 -6% 1,843 744 -60% 2,601 1,458 -44%
Net Sales per Test
(EGP) 247 206 -17% 104 90 -13% 141 118 -16%
Test per Patient 2.7 3.0 -7% 3.9 4.0 4% 3.5 3.5 1%
------------------------- ------ ------ ------- ------- ------- ------- ------- ------- -------
Revenue Analysis: Contribution by Geography
Egypt (80.6% of net sales)
During the first six months of the year, IDH's Egyptian operations recorded
a robust 12% year-on-year expansion in conventional revenues, supported
by an increase in conventional tests performed and in the average revenue
per conventional test. This partially offset a significant decline in
Covid-19-related revenues for the period following both a fall in both
the demand for, and average price of, Covid-19-related test during the
period. For example, during 1H 2022 IDH performed 16% less PCR tests
than a year prior, and recorded a 45% decline in the average price per
PCR test versus 1H 2021. As such, consolidated revenue(15) in IDH's largest
market declined 21% year-on-year in the first six months of the year.
Similar trends held on a quarterly basis, with revenues down 36% year-on-year
on the back of an 89% year-on-year decline in Covid-19-related net sales.
Meanwhile, IDH's conventional offering in Egypt continued its steady
expansion in Q2 2022 increasing 16% year-on-year and 8% quarter-on-quarter.
The latter is an especially noteworthy result in light of the expected
seasonal slowdown related to the holy month of Ramadan and Eid holidays
which impacted results in the months of April and May this year.
House Call Service
IDH's house call service in Egypt recorded revenue of EGP 292 million
in 1H 2022, contributing to 19% of Egypt's revenues for the period, well
above the service's pre-pandemic contributions. The remarkable contribution
was recorded despite the fall in Covid-19-related revenue generated through
the house call service as infection rates in the country declined significantly
starting March.
Al-Borg Scan
IDH's fast-growing radiology venture continued to record remarkable results
with revenues expanding 78% year-on-year to record EGP 35 million in
1H 2022. Top-line growth came on the back of an 85% year-on-year rise
in radiology tests performed (patients served was up 77% for the six-month
period). Steady growth at the venture in directly attributable to the
significant investments undertaken by IDH since the venture's launch
back in 2018, with total investment costs as at 30 June 2022 having reached
EGP 382 million. More specifically, over the last twelve months IDH has
added three new branches, taking the total number of radiology branches
in Egypt to five. While all three new branches remain in their ramp up
phases, the Group is recording growing contributions from each one, with
all three helping to drive steady growth in test and patient volumes
as well as revenues. To build on this momentum, in the coming months
IDH is planning to inaugurate two additional branches to expand its reach
across Greater Cairo and capitalise on the service's increasing popularity.
Moreover, it is worth highlighting that in early August 2022, Al-Borg
Scan obtained ACR (American College of Radiology) accreditation for its
nuclear medicine unit. Al-Borg Scan is the first radiology company to
receive this certification in Africa and is testament to the high service
quality consistently delivered by the venture and the Group as a whole.
(15) It is important to note that revenues and net sales in Egypt, Nigeria
and Sudan are identical in absolute terms. A reconciliation between revenue
and net sales is available earlier in this announcement.
Detailed Egypt Revenue Breakdown
The table presents Alternative Performance Measures (APM) for
each period (further information available on page 2)
Q1 Q1 Q2 Q2 1H 1H
EGP mn 2021 2022 Change 2022 2022 Change 2021 2022 Change
---------------------------- ------ ------ ------- ------ ------ ------- ------ ------ -------
Total Revenue 920 879 -4% 1,015 645 -36% 1,935 1,524 -21%
Conventional Revenue 507 549 8% 510 591 16% 1,017 1,140 12%
Total Covid-19-related
Revenue 414 330 -20% 504 53 -89% 918 384 -58%
Core Covid-19 tests
(PCR, Antigen, Antibody) 277 274 -1% 366 41 -89% 643 315 -51%
Other Covid-19-related
tests 137 56 -59% 138 13 -91% 275 68 -75%
---------------------------- ------ ------ ------- ------ ------ ------- ------ ------ -------
Contribution to Consolidated Results
Conventional tests 55% 62% 50% 92% 53% 75%
Total Covid-19-related
tests 45% 38% 50% 8% 47% 25%
Core Covid-19 tests
(PCR, Antigen, Antibody) 30% 31% 36% 6% 33% 21%
Other Covid-19-related
tests 15% 6% 14% 2% 14% 4%
Jordan (17.1% of net sales)
In Jordan, IDH recorded revenue of EGP 386 million in 1H 2022, up 19%
versus the same period of 2021. Meanwhile, net sales(16) recorded EGP
323 million, unchanged from 1H 2021. During the period, solid growth
in conventional net sales fully offset a decline in Covid-19-related
net sales. The latter's decline came following a decrease in infection
rates, the removal of mandatory testing, and a fall in the average price
for the offering. It is worth noting that despite the decline in Covid-19-related
net sales for the period, the segment continued to make up the largest
proportion of Biolab's net sales (52% in 1H 2022 versus 58% last year).
It is also worth highlighting that strong demand for Covid-19-related
tests in the first part of the year supported a 47% year-on-year increase
in the number of Covid-19-related tests performed for the six-month
period. Finally, the country's net sales continued to be supported by
Biolab's house call service which generated EGP 15 million in net sales
in 1H 2022, making up 5% of total net sales in Jordan.
Covid-19-related net sales in Jordan were supported by contributions
of EGP 140 million from Biolab's partnership with QAIA. As part of the
agreement, Biolab carried out 293 thousand PCR tests, representing 59%
of total PCR tests performed in Jordan for the first half of the year.
At the same time, Biolab's agreements with KHIA and Aqaba Port contributed
an additional EGP 18 million to the segment. The stations recorded strong
demand in January and February before witnessing a sharp decline in
traffic following the end of mandatory testing in the country.
During the second quarter, Biolab recorded revenue (net sales were identical
for the quarter) of EGP 106 million, down 21% year-on-year. The decline
was fully driven by a contraction in Covid-19-related revenue for the
quarter, as Biolab shut down its testing booths in Aqaba Port and QAIA
and recorded a widespread decline in infections. Meanwhile, Biolab's
conventional net sales expanded an 23% year-on-year. It is worth highlighting
that strong year-on-year growth in second quarter largely reflects a
devaluation of the Egyptian pound during the period.
(16) Biolab's net sales for the period are calculated as revenues excluding
concession fees paid to QAIA and Aqaba Port as part of their revenue
sharing agreement.
Detailed Jordan Net Sales Breakdown
The table presents Alternative Performance Measures (APM) for
each period (further information available on page 2)
Q1 Q1 Q2 Q2 1H 1H
EGP mn 2021 2022 Change 2021 2022 Change 2021 2022 Change
------------------------ ------ ------ ------- ------ ------ ------- ------ ------ -------
Total Net Sales 190 217 14% 134 106 -21% 324 323 -
Conventional Net
Sales 68 70 4% 68 84 23% 136 155 14%
Total Covid-19-related
Net Sales (PCR and
Antibody) 122 147 20% 65 21 -67% 187 168 -10%
Contribution to Consolidated Results
Conventional Net
Sales 36% 32% 51% 80% 42% 48%
Total Covid-19-related
Net Sales (PCR and
Antibody) 64% 68% 49% 20% 58% 52%
Nigeria (1.8% of net sales)
Echo-Lab, the Group's Nigerian subsidiary, recorded revenues of EGP
33 million in 1H 2022, up 32% versus the same six months of last year.
In local currency terms, revenue was up 25% year-on-year on the back
of a 33% increase in average revenue per test during the period. The
increase reflects the increased number of CT and MRI exams performed
during the six-month period, both of which are relatively higher-priced
services. It is important to note that during Q4 2021 management decided
to shut down its operational activities in the PPP branches due to their
under-performance on the profitability level. This subsequently weighed
on tests volumes for the first half of 2022, with tests performed and
patients served down 1% and 6, respectively. Controlling for the branch
closures, Echo-Lab would record a 25% year-on-year increase in tests
performed and a 19% year-on-year rise in patients served in 1H 2021.
In line with the venture's growth strategy, Echo-Lab rolled out two
new branches during the second quarter of the year, bringing the total
number of operational branches to 12.
During Q2 2022, IDH's Nigeria operations recorded revenue growth of
45% on the back of a 2% year-on-year rise in tests performed and a 41%
increase in average revenue per test during the period.
Sudan (0.6% of net sales)
In Sudan, IDH recorded revenues of EGP 10 million, up 13% from the first
half of last year supported by a 40% year-on-year rise in average revenue
per test. This marks the first year-on-year increase in EGP terms recorded
by the Group's Sudanese operations in over a year, demonstrating the
underlying potential of the Sudanese market which has been impacted
by multiple political and economic crises over the last couple of years.
On a similar note, in local currency terms, revenue expanded a solid
125% in the first six months of the year.
In the second quarter of the year, IDH recorded revenue growth in EGP
terms of 91% in Sudan supported by a more than twofold year-on-year
increase in the average revenue per test for the quarter.
Net Sales Contribution by Country
The table presents Alternative Performance Measures (APM) for
each period (further information available on page 2)
1Q21 1Q22 Change 2Q21 2Q22 Change 1H21 1H22 Change
====================== ====== ====== ======= ====== ====== ======= ====== ====== =======
Egypt Net Sales
(EGP mn) 920 879 -4% 1,015 645 -36% 1,935 1,524 -21%
Conventional (EGP
mn) 507 549 8% 510 591 16% 1,017 1,140 12%
Covid-19-related
(EGP mn) 414 330 -20% 504 53 -89% 918 384 -58%
Egypt Contribution 81.5% 78.7% 87.2% 83.3% 84.4% 80.6%
====================== ====== ====== ======= ====== ====== ======= ====== ====== =======
Jordan Net Sales
(EGP mn) 190 217 14% 134 106 -21% 324 323 N/A
Conventional (EGP
mn) 68 70 4% 68 84 23% 136 155 14%
Covid-19-related
(EGP mn) 122 147 20% 65 21 -67% 187 168 -10%
Jordan Revenues
(EGP mn) (IFRS) 190 281 48% 134 106 -21% 324 386 19%
Jordan Net Sales
(JOD mn) 8.6 9.6 12% 6.0 4.0 -33% 14.6 13.7 -7%
Jordan Revenues
(JOD mn) (IFRS) 8.6 12.5 45% 6.1 4.0 -34% 14.7 16.5 12%
Jordan Contribution 16.8% 19.4% 11.5% 13.7% 14.1% 17.1%
====================== ====== ====== ======= ====== ====== ======= ====== ====== =======
Nigeria Net Sales
(EGP mn) 12.5 14.8 19% 12.9 18.6 45% 25 33 32%
Nigeria Net Sales
(NGN mn) 302 371 23% 330 416 27% 631 787 25%
Nigeria Contribution 1.1% 1.3% 1.1% 2.4% 1.1% 1.8%
Sudan Net Sales
(EGP mn) 6.8 5.7 -16% 2.5 4.8 91% 9 10 13%
Sudan Net Sales
(SDG mn) 61 152 149% 67 137 103% 129 289 125%
Sudan Contribution 0.6% 0.5% 0.2% 0.6% 0.4% 0.6%
====================== ====== ====== ======= ====== ====== ======= ====== ====== =======
Patients Served and Tests Performed by Country
1H 2021 1H 2022 Change
================================= ======== ======== =======
Egypt Patients Served (mn) 4.1 3.8 -8%
Egypt Tests Performed (mn) 14.6 14.2 -3%
Conventional tests (mn) 12.4 13.2 7%
Covid-19-related tests (mn) 2.3 1.0 -58%
================================= ======== ======== =======
Jordan Patients Served (k) 502 670 33%
Jordan Tests Performed (k) 1,447 1,594 10%
Conventional tests (k) 1,105 1,092 -1%
Covid-19-related tests (k) 342 502 47%
Nigeria Patients Served (k) 75 70 -6%
Nigeria Tests Performed (k) 136 135 -1%
Sudan Patients Served (k) 33 46 39%
Sudan Tests Performed (k) 104 84 -19%
================================= ======== ======== =======
Total Patients Served (mn) 4.7 4.5 -3%
Total Tests Performed (mn) 16.3 16.0 -2%
Branches by Country
30 June 30 June Change
2021 2022
================ ======== ======== ===============
Egypt 443 488 45
================ ======== ======== ===============
Jordan 21 21 N/A
================ ======== ======== ===============
Nigeria 12 12 N/A
================ ======== ======== ===============
Sudan 19 17 -2
================ ======== ======== ===============
Total Branches 495 538 43
================ ======== ======== ===============
Cost of Net Sales(17)
IDH's cost of net sales rose 7% year-on-year to record EGP 1,059 million
in 1H 2022. Combined with the year-on-year decrease in consolidated
net sales for the period, this weighed down on the Group's gross profit
which recorded EGP 832 million in 1H 2022, down 36% from last year.
It is important to note that gross profit for the first six months of
the year is identical in absolute terms between IFRS and APM measures.
IDH's gross profit margin(18) on revenue recorded 43% in 1H 2022 versus
57% last year. Meanwhile, IDH's gross profit margin on net sales(19)
recorded 44% in 1H 2022 versus 57% in the same six months of 2021.
In the second quarter of the year, IDH recorded cost of sales (identical
in value to cost of net sales) of EGP 473 million, down 5% year-on-year.
Gross profit for the quarter recorded EGP 300 million, with a margin
of 39% for the quarter versus 57% in Q2 2021 when a large contribution
from Covid-19-related tests had significantly boosted gross profitability.
Lower gross profitability for the quarter also partially reflects the
expected slowdown related to the holy month of Ramadan and Eid vacation.
Cost of Net Sales Breakdown as a Percentage of Net Sales 1H 2021 1H 2022
============================= ======== ========
Raw Materials 18.1% 20.9%
============================= ======== ========
Wages & Salaries 12.9% 17.4%
============================= ======== ========
Depreciation & Amortisation 4.2% 7.0%
============================= ======== ========
Other Expenses 7.8% 10.7%
============================= ======== ========
Total 43.1% 56.0%
============================= ======== ========
Raw material costs, which include cost of specialized analysis at other
laboratories, recorded EGP 396 million for the first half of the year,
continuing to make up the largest share of total COGS at 37%. As a share
of net sales , raw material costs increased to 20.9% in 1H 2022 compared
to 18.1% in the same six months of the previous year. This increase
is primarily reflective of the substantial reduction in the average
selling price of Covid-19-related tests during the period in both Egypt
and Jordan (PCR tests were priced 52% lower in 1H 2022 than in 1H 2021).
Direct salaries and wages rose 11% year-on-year to EGP 329 million in
1H 2022, making the second largest share of total COGS at 31%. The increase
versus last year is primarily attributable to the additional staff employed
at Aqaba Port and QAIA airport, an annual salary increase of around
15%, and the additional staff employed across the newly added branches
(+43 new branches vs 1H21). Additional salary expenses related to Biolab's
testing booths amounted to JOD 549 thousand (EGP 13.6 million) during
1H 2022, noting that starting April Biolab ceased its operational activities
across all booths.
Direct depreciation and amortisation increased 35% year-on-year in the
first half of the year to record EGP 132 million, largely due to the
incremental amortisation of new branches (IFRS 16 right-of-use assets).
Other expenses for the first six months of 2022 increased 13% to record
EGP 202 million. The increase principally reflected higher maintenance
costs in Egypt, as well as higher utility expenses related to the 43
additional branches rolled out in the twelve months to 30 June 2022.
(17) Cost of net sales is calculated as cost of sales (IFRS) for the
period excluding commission fees paid to QAIA and Aqaba Port by Biolab
as part of its revenue sharing agreements with the two terminals. According
to IFRS 15, cost of sales recorded EGP 1,122 million in 1H 2022 , up
14% year-on-year.
(18) It is important to note that while in absolute terms the Gross
Profit figure is identical when using IFRS or APM, its margin differs
between the two sets of performance indicators.
(19) A reconciliation between revenue and net sales is available earlier
in this announcement.
Selling, General and Administrative Expenses
Total SG&A outlays stood at EGP 269 million in 1H 2022, representing
a 27% year-on-year increase for the six-month period. The increase in
SG&A costs was mainly a result of rising salaries and marketing expenses,
as well as higher fees for external auditing services.
Marketing and advertising expenses came in at EGP 54 million in 1H 2022,
representing a 48% year-on-year increase. The increase reflects an overall
expansion in IDH's marketing and advertisement efforts which for the
last year has seen the Company roll out targeted campaigns across multiple
channels predominantly to support Al-Borg Scan's ramp up.
EBITDA
IDH's EBITDA(20) came in at EGP 709 million in the first half of 2022,
down 41% from the figure recorded this time last year. It is important
to note that EBITDA for the period is identical in absolute terms between
IFRS and APM measures. EBITDA margin on consolidated revenue recorded
36% in 1H 2022 versus 52% in the same six-month period of a year ago.
Meanwhile, EBITDA margin on net sales declined to 38% in 1H 2022 from
52% in 1H 2021.(21) The decline in EBITDA level profitability comes
on the back of lower gross profitability for the period coupled with
higher sales and marketing outlays versus the first six months of 2021.
In IDH's home market of Egypt, EBITDA recorded EGP 622 million in 1H
2022. EBITDA margin on net sales stood at 41% for the period versus
56% this time last year.
In Jordan, IDH recorded an EBITDA of EGP 91 million, down 31% from the
same six months of last year. In JOD terms, Biolab's EBITDA recorded
JOD 4.0 million, a 33% year-on-year decrease. EBITDA margin on revenue
recorded 24% in 1H 2022 down from 40% this time last year. Meanwhile,
EBITDA margin on net sales for the six-month period recorded 29% versus
41% in 1H 2021. The decrease in Biolab's EBITDA margin is mainly attributable
to lower gross profitability for the period as well as higher expenses
related to Biolab's testing booths in QAIA and Aqaba Port.
Operations in Nigeria posted an EBITDA loss of EGP 3.3 million in 1H
2022 compared to a loss of EGP 4.3 million this time last year. It is
important to highlight that EBITDA profitability during the period was
impacted by a 462% year-on-year increase in the country's diesel prices
(responsible for 11% of Echo-Lab's cost base). Controlling for this,
the venture would have been on track to turn positive in early 2022.
Finally, in Sudan the Company recorded an EBITDA of EGP 0.1 million
in 1H 2022, down from the EGP 0.7 million in EBITDA recorded this time
last year. In SDG terms EBITDA stood at SDG 4.1 million in 1H 2022 compared
to an EBITDA loss of SDG 14 million in the same six months of 2021.
Regional EBITDA in Local Currency Mn 1H 2021 1H 2022 Change
-------------------------------------------- -------- -------- --------
Egypt EGP 1,075 622 -42%
Margin on net sales 56% 41%
Jordan JOD 5.9 4.0 -33%
Margin on net sales 41% 29%
Margin on revenues (IFRS) 40% 24%
Nigeria NGN -111 -80 -28%
Margin on net sales -18% -10%
Sudan SDG -14 4.1 N/A
Margin on net sales -11% 1%
(20) 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.
(21) It is important to note that while in absolute terms the Normalised
EBITDA figure is identical when using IFRS or APM, its margin differs
between the two sets of performance indicators.
Interest Income / Expense
The Group reported interest income of EGP 75 million in 1H 2022, up
67% year-on-year reflecting higher cash balances during the period,
an optimised cash allocation between T-bills and time deposits, and
a 300 basis point cumulative interest rate hike enacted by the CBE during
the six-month period.
Interest expense recorded EGP 64 million in the first six months of
the year, up 18% versus 1H 2021. The increase in attributable to:
* Higher interest on lease liabilities related to IFRS
16 following the addition of new branches in Egypt
and Jordan and the renewal of medical equipment
agreements with the Group's main equipment suppliers.
* Higher bank charges reflecting an increased
penetration of, and reliance on, POS machines and
electronic payments in both Egypt and Jordan during
the six-month period.
* Higher interest expenses following the CBE decision
to increase rates by 300 bps year-to-date.
* Fees amounting to EGP 5.9 million related to the US$
45 million facility with the International Finance
Corporation (IFC) granted in May 2021 and the US$ 15
million IFC syndicated facility from Mashreq Bank in
December 2021. Fees include commitment and
supervisory fees.
Interest Expense Breakdown EGP mn 1H 2021 1H 2022 Change
=============================== ======== ======== =======
Interest on Lease Liabilities
(IFRS 16) 28.9 34.9 21%
=============================== ======== ======== =======
Interest Expenses on
Borrowings(22) 4.8 5.2 8%
=============================== ======== ======== =======
Loan-related Expenses
on IFC facility 12.5 5.9 -53%
=============================== ======== ======== =======
Interest Expenses on
Leases 2.8 9.3 231%
=============================== ======== ======== =======
Bank Charges 5.4 8.8 64%
=============================== ======== ======== =======
Total Interest Expense 54.4 64.1 18%
=============================== ======== ======== =======
(22) Interest expenses on medium-term loans include EGP 4.2 million
related to the Group's facility with Ahli United Bank Egypt (AUBE).
Meanwhile, the Group's facility with the Commercial International Bank
(CIB) was fully repaid as of 5 April 2022.
Foreign Exchange
IDH recorded a net foreign exchange gain of EGP 69 million in the first
half of 2022 compared to an EGP 19 million FX loss in the comparable
period of last year partially reflecting intercompany balances revaluation.
Taxation
Tax expenses recorded EGP 211 million in the first half of the year
versus EGP 367 million in 1H 2021. The effective tax rate stood at 32%
for the six months to 30 June 2022 versus 35% in the same period of
last year. The lower effective tax rate principally reflects the large
balance of Treasury bills held by IDH's Egyptian subsidiaries.
Taxation Breakdown by Region EGP Mn 1H 2021 1H 2022 Change
==================== ======== ======== =======
Egypt 342.5 196.0 -43%
==================== ======== ======== =======
Jordan 24.4 14.6 -40%
==================== ======== ======== =======
Nigeria (0.1) (0.2) N/A
==================== ======== ======== =======
Sudan 0.0 0.1 N/A
==================== ======== ======== =======
Total Tax Expenses 366.8 210.5 -43%
==================== ======== ======== =======
Net Profit
IDH's consolidated net profit for the first half of the year stood at
EGP 439 million, down 34% from the same six months of last year. It
is important to note that net profit for the period was identical in
absolute terms between IFRS and APM measures. Net profit margin on consolidated
revenue recorded 22% in 1H 2022, versus 29% in 1H 2021. Meanwhile, net
profit margin on net sales(23) stood at 23% in 1H 2022, in line with
the Group's pre-pandemic averages, but down six percentage points compared
to 29% this time last year. The decline in net profitability for the
six-month period comes on the back of lower EBITDA profitability. In
Q2 2022, net profit recorded EGP 125 million, down 62% from Q2 2021
and with a net profit margin of 16%. Lower net profitability for the
quarter also in part reflected the seasonal slowdown related to the
holy month of Ramadan and Eid vacation which impacted the months of
April and May.
(23) It is important to note that while in absolute terms the net profit
figure is identical when using IFRS or APM, its margin differs between
the two sets of performance indicators.
ii. Balance Sheet Analysis
Assets
Property, Plant and Equipment
IDH held gross property, plant and equipment (PPE) of EGP 1,888 million
as at 30 June 2022, up from the EGP 1,653 million as at year-end 2021.
The increase in CAPEX outlays as a share of total net sales for the
six-month period is in part attributable to EGP 67 million spent on
new radiology branches (Capital Business Park Branch in West Cairo)
during the period and EGP 69 million translation effect (mainly related
to Jordan) resulting from the depreciation of the Egyptian Pound since
the start of the year.
Total CAPEX Breakdown EGP Mn 1H 2022 % of Net
Sales
===================================== ======== =========
Al-Borg Scan Expansion 66.7 3.5%
===================================== ======== =========
Translation Effect 68.6 3.6%
===================================== ======== =========
Leasehold Improvements/new branches 100.3 5.3%
===================================== ======== =========
Total CAPEX Additions 235.6 12.5%
===================================== ======== =========
Accounts Receivable and Provisions
As at 30 June 2022, accounts receivables' Days on Hand (DOH) recorded
at 118 days compared to 107 days at year-end 2021. The increase reflects
the large balance related to the airlines deals in QAIA airport, characterized
by a relatively higher credit period. Accounts receivables' DOH is calculated
based on credit revenues(24) amounting to EGP 592 million during 1H
2022.
The receivables balance in Egypt and Jordan stood at EGP 374 million
as at 30 June 2022. More specifically, in Egypt account receivables'
DOH increased to 104 days as at the end of the current reporting period
compared to 96 days as at year-end 2021. Accounts receivables' DOH for
Egypt is calculated based on credit revenues amounting to EGP 500 million
during the six-month period. Meanwhile, in Jordan accounts receivables'
DOH increased to 203 days as at 30 June 2022 from 154 days as at year-end
2021 largely due to agreements with various airline companies as part
of QAIA and KHIA agreements. Accounts receivables' DOH for Jordan is
calculated based on credit revenues amounting to EGP 79 million during
the first half of 2022.
Provision for doubtful accounts established during the first half of
2022 amounted to EGP 16 million, up from EGP 10 million in the same
six months of last year. The increase in provisions reflects the slowdown
in collections during the holy month of Ramadan and Eid vacation.
(24) Credit revenues relates to patients who paid for IDH's services
on credit.
Inventory
As at 30 June 2022, the Group's inventory balance reached EGP 243 million,
up from EGP 223 million as at year-end 2021. Meanwhile, days Inventory
Outstanding (DIO) increased to 109 days as at 30 June 2022 from 61 days
as at year-end 2021. The increase largely reflects management's decision
to accumulate inventory as part of its proactive strategy to shield
the business from any disruption that might result from the global supply
chain challenges and protect the Company's margins from a potential
devaluation of the Egyptian pound. It should be noted that as at 31
July 2022, IDH held sufficient inventory to cover the Group's needs
for a four-month period.
Cash and Net Debt/Cash
IDH's cash balances increased to EGP 2,182 million as at 30 June 2022
up from EGP 2,350 million as at 31 December 2021. EGP million 31 Dec 30 Jun
2021 2022
================== ======= =======
Time Deposits 628 68
================== ======= =======
T-Bills 1,461 525
================== ======= =======
Current Accounts 239 1,572
================== ======= =======
Cash on Hand 22 18
================== ======= =======
Total 2,350 2,182
================== ======= =======
Net cash balance(25) amounted to EGP 1,321 million as at 30 June 2022
compared to EGP 1,488 million as of 31 December 2021.
EGP million 31 Dec 30 Jun
2021 2022
======================================== ======= =======
Cash and Financial Assets at Amortised
Cost(26) 2,350 2,182
======================================== ======= =======
Interest Bearing Debt ("Medium
Term Loans")(27) 102 89
======================================== ======= =======
Lease Liabilities Property 532 602
======================================== ======= =======
Long-term Equipment Liabilities 229 260
======================================== ======= =======
Net Cash Balance 1,488 1,321
======================================== ======= =======
Note: Interest Bearing Debt includes accrued interest for each period.
Lease liabilities on property recorded EGP 602 million as at 30 June
2022, up from the EGP 532 million booked as at year-end 2021. The increase
is driven by the addition of new branches throughout the first half
of the year. Meanwhile, financial obligations related to equipment recorded
EGP 260 million as at the end of the current reporting period, up from
EGP 229 million as of year-end 2021, for the most part reflecting the
renewal of the Company's contracts and the addition of new equipment.
Total financial obligations related to equipment for the period includes
EGP 121 million for equipment at Al-Borg Scan. Meanwhile, interest-bearing
debt declined to EGP 89 million as at 30 June 2022 from EGP 102 million
as at 31 December 2021. More specifically, IDH's interest-bearing debt
as at 30 June 2022 comprised EGP 84.4 million related to its facility
with AUBE. It is worth highlighting that interest-bearing debt in both
periods excludes accrued interest. It is also important to note that
the Company's facility with the Commercial International Bank (CIB)
was fully repaid as of April 2022.
(25) The net cash balance is calculated as cash and cash equivalent
balances including includes financial assets at amortised cost, less
interest-bearing debt (medium term loans), finance lease and Right-of-use
liabilities.
(26) As outlined in Note 9 of IDH's Consolidated Financial Statements,
some term deposits and treasury bills cannot be accessed for over 90
days and are therefore not treated as cash. Term deposits which cannot
be accessed for over 90 days stood at EGP 4 million in 1H 2022, versus
EGP 148 million as at year-end 2021. Meanwhile, treasury bills not accessible
for over 90 days stood at EGP 511 million in 1H 2022, down from EGP
1,310 million in FY 2021.
(27) IDH's interest bearing debt as at 30 June 2022 included EGP 84.4
million to its facility with Ahli United Bank Egypt (AUBE) (outstanding
loan balances are excluding accrued interest for the period).
Liabilities
Accounts Payable(28)
As at the end of 30 June 2022, accounts payable balance recorded EGP
230 million down from EGP 311 million as of 31 December 2021. Despite
this, the Group's days payable outstanding (DPO) increased to 126 days
from 93 days as at 31 December 2021. The increase largely reflects both
lower Covid-19-related kits consumption and the renegotiation of extended
payment terms with the Company's test kit suppliers.
(28) Accounts payable is calculated based on average payables at the
end of each year.
Put Option
The put option current liability is related to the option granted in
2011 to Dr. Amid, Biolab's CEO, to sell his stake (40%) to IDH. The
put option is in the money and exercisable since 2016 and is calculated
as 7 times LTM EBITDA minus net debt. Biolab's put option liability
increased following the depreciation of the Egyptian pound by around
20% as at 30 June 2022 compared to year-end 2021.
The put option non-current liability is related to the option granted
in 2018 to the International Finance Corporation from Dynasty - shareholders
in Echo Lab - and it is exercisable in 2024. The put option is calculated
based on fair market value (FMV).
Dividend Payment
During the Company's annual general meeting (AGM) held in London on
7 June 2022, IDH's shareholders approved a record-breaking dividend
distribution for the financial year ended 31 December 2022 of EGP 2.17
per share, or EGP 1.3 billion (US$ 69.5 million(29) ) in aggregate.
The dividend's payment date was scheduled for 27 July 2022. In light
of the ongoing difficulties in obtaining US dollars in the foreign exchange
markets, IDH's management agreed to distribute the Dividend over two
tranches. The first tranche was paid out to all minority shareholders
on 27 July, as originally schedule. Meanwhile, the Company signed a
deferral agreement with its two largest shareholders, HENA Holdings
Ltd and Actis IDH Limited, to postpone their payment date. IDH distributed
the second tranche to the dividend to its two largest shareholders over
two instalments on the 11 August and 18 August 2022.
(29) Calculated on a USD/EGP exchange rate of 18.70/1 as of 7 June
2022.
iii. Cash Flow Analysis
Net cash flow from operating activities recorded EGP 34 million in
1H 2022 continuing to demonstrate IDH's strong cash generation ability.
Net cash flow from operating activities declined from EGP 866 million
the same six months of last 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; rising
inflation and continued supply chain disruptions may weigh on the
Group's cost base in the short-term.
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
11 September 2022
-End-
INTEGRATED DIAGNOSTICS HOLDINGS plc - "IDH"
AND ITS SUBSIDIARIES
Consolidated Financial Statements
for the six month period ended 30 June 2022
Consolidated statement of financial position as at 30 June
2022
30 June 31 December
Notes 2022 2021
EGP'000 EGP'000
------------------------------------------- ------ -------------------- -------------------
ASSETS
Non-current assets
Property, plant and equipment 4 1,173,807 1,061,808
Intangible assets and goodwill 5 1,672,444 1,658,867
Right of use assets 6 519,711 462,432
Financial assets at fair value through
profit and loss 7 13,018 10,470
Total non-current assets 3,378,980 3,193,577
-------------------- -------------------
Current assets
Inventories 242,840 222,612
Trade and other receivables 8 491,577 469,727
Financial assets at amortized cost 9 514,497 1,458,724
Cash and cash equivalents 10 1,667,624 891,451
Total current assets 2,916,538 3,042,514
-------------------- -------------------
Total assets 6,295,518 6,236,091
==================== ===================
EQUITY AND LIABILITIES
Equity
Share Capital 1,072,500 1,072,500
Share premium reserve 1,027,706 1,027,706
Capital reserve (314,310) (314,310)
Legal reserve 51,641 51,641
Put option reserve (936,896) (956,397)
Translation reserve 177,195 150,730
Retained earnings 663,686 1,550,976
Equity attributable to the equity holders
of the parent 1,741,522 2,582,846
Non-controlling interests 199,244 211,513
Total equity 1,940,766 2,794,359
-------------------- -------------------
Non-current liabilities
Provisions 3,708 4,088
Borrowings 13 76,345 76,345
Other financial obligations 15 724,200 645,196
Non-current put option liability 14 39,733 35,037
Deferred tax liabilities 19-C 264,114 332,149
Total non-current liabilities 1,108,100 1,092,815
-------------------- -------------------
Current liabilities
Trade and other payables 11 610,907 777,354
Shareholders dividend 24 1,304,805 -
Other financial obligations 15 137,022 115,478
Current put option liability 12 897,163 921,360
Borrowings 13 8,483 21,721
Current tax liabilities 288,272 513,004
Total current liabilities 3,246,652 2,348,917
-------------------- -------------------
Total liabilities 4,354,752 3,441,732
-------------------- -------------------
Total equity and liabilities 6,295,518 6,236,091
==================== ===================
These condensed consolidated interim financial information were approved
and authorized for issue by the Board of Directors and signed on their
behalf on 11 September 2022 by:
__________________ ___________________
Dr. Hend El Sherbini Hussein Choucri
Chief Executive Officer Independent Non-Executive Director
The accompanying notes form an integral part of these condensed
consolidated interim financial information.
Consolidated income statement for the quarter and six-month
periods ended 30 June 2022
For the three months For the six months
period period
ended 30 June ended 30 June
Notes 2022 2021 2022 2021
EGP'000 EGP'000 EGP'000 EGP'000
--------------------------- ------ ------------------ ----------------- ---------------- ----------------
Revenue 23 773,586 1,163,632 1,954,065 2,293,170
Cost of sales (473,402) (496,742) (1,122,195) (987,873)
Gross profit 300,184 666,890 831,870 1,305,297
Marketing and advertising
expenses (51,804) (37,848) (92,568) (66,655)
Administrative expenses 17 (77,892) (105,212) (164,192) (176,132)
Impairment loss on
trade and other
receivable (8,980) (5,181) (16,158) (10,265)
Other income 4,553 8,346 3,471 12,431
Operating profit 166,061 526,995 562,423 1,064,676
------------------ ----------------- ---------------- ----------------
Finance costs 18 (31,087) (39,212) (64,147) (74,900)
Finance income 18 43,247 24,975 151,292 45,248
Net finance cost 12,160 (14,237) 87,145 (29,652)
------------------ ----------------- ---------------- ----------------
Profit before tax 178,221 512,758 649,568 1,035,024
================== ================= ================ ================
Income tax expense 19-B (53,302) (186,142) (210,516) (366,814)
Profit for the period 124,919 326,616 439,052 668,210
================== ================= ================ ================
Profit attributed
to:
Equity holders of the
parent 125,611 320,410 422,220 646,440
Non-controlling interests (692) 6,206 16,832 21,770
124,919 326,616 439,052 668,210
================== ================= ================ ================
Earnings per share
(expressed in EGP):
Basic and diluted earnings
per share 22 0.21 0.53 0.70 1.08
------------------ ----------------- ---------------- ----------------
The accompanying notes form an integral part of these condensed
consolidated interim financial information.
Consolidated statement of comprehensive income/(expenses) for
the quarter and six-month periods ended 30 June 2022
For the three For the six months
months period ended period ended 30
30 June June
2022 2021 2022 2021
EGP'000 EGP'000 EGP'000 EGP'000
------------------------------------- ----------- ------------ ----------- -----------
Net profit 124,919 326,616 439,052 668,210
Items that may be reclassified
to profit or loss:
Exchange difference on translation
of foreign operations 25,983 (2,062) 103,291 12,375
Other comprehensive income / (Loss)
for the period net of tax 25,983 (2,062) 103,291 12,375
----------- ------------ ----------- -----------
Total comprehensive income for
the period 150,902 324,554 542,343 680,585
=========== ============ =========== ===========
Attributed to:
Equity holders of the parent 138,135 320,692 448,685 656,583
Non-controlling interests 12,767 3,862 93,658 24,002
150,902 324,554 542,343 680,585
=========== ============ =========== ===========
The accompanying notes form an integral part of these condensed
consolidated interim financial information.
Consolidated statement of cash flows for the six month period
ended 30 June 2022
30 June 30 June
Notes 2022 2021
EGP'000 EGP'000
----------------------------------------------- ------ ----------------------- ----------------------
Cash flows from operating activities
Profit for the period before tax 649,568 1,035,024
Adjustments
Depreciation of property, plant and equipment 95,184 59,068
Depreciation of right of use assets 48,215 46,677
Amortisation of intangible assets 3,439 3,049
loss/(Gain )on disposal of Property, plant
and equipment 523 (45)
Impairment in trade and other receivables 16,158 10,265
Interest income 18 (75,443) (45,248)
Interest expense 18 55,342 49,011
Bank Charges 8,805 -
Equity settled financial assets at fair
value (2,548) (678)
ROU Asset/Lease Termination (408) (464)
Hyperinflation 18 (6,471) 1,204
Unrealised foreign currency exchange loss 18 (69,378) 19,321
Change in Provisions (380) 72
Change in Inventories (15,888) (41,444)
Change in trade and other receivables (81,073) (103,537)
Change in trade and other payables (85,084) 74,710
Cash generated from operating activities
before income tax payment 540,562 1,106,985
----------------------- ----------------------
Tax paid during period (506,375) (240,624)
Net cash generated from operating activities 34,187 866,361
----------------------- ----------------------
Cash flows from investing activities
Proceeds from sale of Property, plant
and equipment 5,999 3,036
Interest received on financial asset at
amortised cost 25,224 44,866
Payments for acquisition of property,
plant and equipment 4 (143,424) (86,530)
Payments for acquisition of intangible
assets 5 (1,505) (1,104)
Payments for the purchase of financial
assets at amortized cost (309,952) (309,835)
Proceeds for the sale of financial assets
at amortized cost 1,266,048 257,404
Net cash flows generated from/ (used
in)investing activities 842,390 (92,163)
----------------------- ----------------------
Cash flows from financing activities
Proceeds from borrowings - 2,617
Repayments of borrowings (13,238) (12,708)
Payment of finance lease liabilities (17,239) (32,401)
Dividends paid (88,766) (21,998)
Interest paid (58,276) (48,640)
Bank charge paid (8,805) -
Net cash flows used in financing activities (186,324) (113,130)
----------------------- ----------------------
Net increase in cash and cash equivalent 690,253 661,068
Cash and cash equivalents at the beginning
of the year 891,451 600,130
Effect of exchange rate 85,920 (3,215)
Cash and cash equivalent at the end of
the period 10 1,667,624 1,257,983
======================= ======================
The accompanying notes form an integral part of these condensed
consolidated interim financial information.
Consolidated statement of changes in equity for the six month
period ended 30 June 2022
Attributable to owners of the Parent
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
EGP '000 Share Share Capital Legal Put option Translation Retained Total Non-controlling Total
capital premium reserve reserve* reserve reserve earnings attributable interests equity
reserve to the
owners
of the
Parent
---------------- ----------------- ----------------- --------------- ----------------- -------------------
At 1 January
2022 1,072,500 1,027,706 (314,310) 51,641 (956,397) 150,730 1,550,976 2,582,846 211,513 2,794,359
----------------- ----------------- --------------- ------------------ ------------------- ------------------ ------------------ -------------------- ----------------- -------------------
Profit for the
period - - - - - - 422,220 422,220 16,832 439,052
Other
comprehensive
income for the
period - - - - - 26,465 - 26,465 76,826 103,291
Total
comprehensive
income at 30
June 2022 - - - - - 26,465 422,220 448,685 93,658 542,343
----------------- ----------------- --------------- ------------------ ------------------- ------------------ ------------------ -------------------- ----------------- -------------------
Transactions
with owners
of the Company
Contributions
and
distributions
Dividends - - - - - - (1,304,805) (1,304,805) (106,947) (1,411,752)
Movement in put
option
liabilities - - - - 19,501 - - 19,501 - 19,501
Impact of
hyperinflation - - - - - - (4,705) (4,705) 1,020 (3,685)
Total
contributions
and
distributions - - - - 19,501 - (1,309,510) (1,290,009) (105,927) (1,395,936)
----------------- ----------------- --------------- ------------------ ------------------- ------------------ ------------------ -------------------- ----------------- -------------------
Balance at 30
June
2022 1,072,500 1,027,706 (314,310) 51,641 (936,896) 177,195 663,686 1,741,522 199,244 1,940,766
================= ================= =============== ================== =================== ================== ================== ==================== ================= ===================
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 at 30
June 2021 - - - - - 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
liabilities - - - - (303,990) - - (303,990) - (303,990)
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 1,072,500 1,027,706 (314,310) 51,641 (618,047) 155,760 777,068 2,152,318 152,110 2,304,428
================= ================= =============== ================== =================== ================== ================== ==================== ================= ===================
*Under Egyptian Law, each subsidiary in Egypt must set aside at
least 5% of its annual net profit into a legal reserve until such
time that this represents 50% of each subsidiary's issued capital.
This reserve is not distributable to the owners of the Company.
The accompanying notes form an integral part of these condensed
consolidated interim financial information.
1. Reporting entity
Integrated Diagnostics Holdings plc "IDH" or "the Company" is a
Company which was incorporated in Jersey on 4 December 2014 and
established according to the provisions of the Companies (Jersey)
Law 1991 under Registered No. 117257. These condensed consolidated
interim financial information as at and for the six months ended 30
June 2022 comprise the Company and its subsidiaries (together
referred as the 'Group'). The Company is a dually listed entity, in
both London Stock Exchange (since 2015) and in the Egyptian
Exchange (during May 2021).
The principal activities of the Company and its subsidiaries
(together "The Group") include investments in all types of the
healthcare field of medical diagnostics (the key activities are
pathology and Radiology related tests), either through acquisitions
of related business in different jurisdictions or through expanding
the acquired investments they have. The key jurisdictions that the
Group operates are in Egypt, Jordan, Nigeria and Sudan.
The Group's financial year starts on 1 January and ends on 31
December of each year.
These condensed consolidated interim financial information were
approved for issue by the Directors of the Company on 11 September
2022.
2. Basis of preparation
A) Statement of compliance
These condensed consolidated interim financial information have
been prepared as per IAS 34 'Interim Financial Reporting' (As
adopted by the IASB). as the accounting policies adopted are
consistent with those of the previous financial year ended 31
December 2021 and corresponding interim reporting period.
These condensed consolidated interim financial information do
not include all the information and disclosures in the annual
consolidated financial Statement, and should be read in conjunction
with the financial Statement published as at and for the year ended
31 December 2021 which is available at www.idhcorp.com . In
addition, results of the six month period ended 30 June 2022 are
not necessary indicative for the results that may be expected for
the financial year ending 31 December 2022.
B) Basis of measurement
The condensed consolidated interim financial information has
been prepared on the historical cost basis except where adopted
IFRS mandates that fair value accounting is required which is
related to the financial assets and liabilities measured at fair
value.
C) Functional and presentation currency
These condensed consolidated interim financial information is
presented in Egyptian Pounds (EGP'000). The functional currency of
the majority of the Group's entities is the Egyptian Pound (EGP)
and is the currency of the primary economic environment in which
the Group operates.
The Group also operates in Jordan, Sudan and Nigeria and the
functional currencies of those foreign operations are the local
currencies of those respective territories, however due to the size
of these operations, there is no significant impact on the
functional currency of the Group, which is the Egyptian Pound
(EGP).
3. Significant accounting policies
In preparing these condensed consolidated interim financial
information, the significant judgments made by the management in
applying the Group's accounting policies and the key sources of
estimation uncertainty were the same as those that were applied to
the consolidated financial information for the year ended 31
December 2021."The preparation of these condensed consolidated
interim financial information requires management to make
judgements, estimates and assumptions that affect the application
of accounting policies and the reported amounts of assets,
liabilities, income and expense. Actual results may differ from
these estimates. Information about significant areas of estimation
uncertainty and critical judgement in applying accounting policies
that have the most significant effect on the amount recognised in
the condensed consolidated interim financial statement is described
in note 3.2 of the annual consolidated financial information
published for the year ended 31 December 2021. In preparing these
condensed consolidated interim financial information, the
significant judgments made by the management in applying the
Group's accounting policies and the key sources of estimation
uncertainty were the same as those that were applied to the
consolidated financial information for the year ended 31 December
2021".
4. Property, plant, and equipment
Land & Medical, Leasehold Fixtures, Building & Payment on Total
buildings electric improvements fittings & Leasehold account
& vehicles assets in
information the course
system of
equipment construction
-------------- ------------- -------------- ------------- ------------- ------------- ----------
Cost
At 1 January
2022 380,883 824,628 335,203 95,966 15,937 6,761 1,659,378
Additions 38,275 71,111 44,936 6,177 13,504 1,063 175,066
Hyper
inflation - 1,784 - - - - 1,784
Disposals - (674) (453) (7,675) - - (8,802)
Transfers - - 2,669 - (2,669) - -
Exchange
differences 2,810 37,155 18,894 8,078 1,677 - 68,614
-------------- ------------- -------------- ------------- ------------- ------------- ----------
At 30 June
2022 421,968 934,004 401,249 102,546 28,449 7,824 1,896,040
-------------- ------------- -------------- ------------- ------------- ------------- ----------
Depreciation
At 1 January
2022 53,490 333,806 177,230 33,044 - 597,570
Depreciation
for the
period 3,224 62,253 24,861 4,846 - - 95,184
Disposals - (613) (414) (1,253) - - (2,280)
Exchange
differences 454 17,496 8,860 4,949 - - 31,759
-------------- ------------- -------------- ------------- ------------- ------------- ----------
At 30 June
2022 57,168 412,942 210,537 41,586 - 722,233
-------------- ------------- -------------- ------------- ------------- ------------- ----------
Net book
value at 30
June 2022 364,800 521,062 190,712 60,960 28,449 7,824 1,173,807
============== ============= ============== ============= ============= ============= ==========
At 31
December
2021 327,393 490,822 157,973 62,922 15,937 6,761 1,061,808
============== ============= ============== ============= ============= ============= ==========
5. Intangible assets and goodwill
Intangible assets represent goodwill acquired through business
combinations and brand names.
Goodwill Brand name Software Total
--------- ------------- --------- ------------
Cost
Balance at 1 January 2022 1,260,965 383,909 77,394 1,722,268
Additions - - 1,505 1,505
Effect of movements in exchange rates 11,031 3,652 1,444 16,127
------------- ---------- ------------ ------------
Balance at 30 June 2022 1,271,996 387,561 80,343 1,739,900
------------- ---------- ------------ ------------
Amortisation and impairment
Balance at 1 January 2022 4,552 372 58,477 63,401
Amortisation - - 3,439 3,439
Effect of movements in exchange rates - - 616 616
------------- ---------- ------------ ------------
Balance at 30 June 2022 4,552 372 62,532 67,456
------------- ---------- ------------ ------------
Carrying amount
Balance at 30 June 2022 1,267,444 387,189 17,811 1,672,444
============= ========== ============ ============
Balance at 31 December 2021 1,256,413 383,537 18,917 1,658,867
============= ========== ============ ============
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 2022.
6. Right-of-use assets
30 June 2022 31 December 2021
------------- -----------------
Balance at 1 January 462,432 354,688
Addition for the period / year 94,959 198,402
Depreciation charge for the period / year (48,215) (79,617)
Terminated contracts (8,406) (7,643)
Exchange differences 18,941 (3,398)
519,711 462,432
============= =================
7. Financial asset at fair value through profit and loss
30 June 2022 31 December 2021
------------- -----------------
Equity i nvestments* 13,018 10,470
-------------
13,018 10,470
============= =================
* On August 17, 2017, Almakhbariyoun AL Arab (seller) has signed
IT purchase Agreement with JSC Mega Lab (Buyer) to transfer and
install the Laboratory Information Management System (LIMS) for a
purchase price amounted to USD 400 000 in the form of 10% equity
stake in JSC Mega Lab. In case the valuation of the project is less
or more than USD 4,000,000, the seller stake will be adjusted
accordingly, in a way that the seller equity stake shall not fall
below 5% of JSC Mega Lab.
- ownership percentage in JSC Mega Lab at the transaction date
on April 8, 2019, and as of June 30, 2022, was 8.25%.
- On April 8, 2019, Al Mokhabariyoun Al Arab (Biolab) has signed
a Shareholder Agreement with JSC Mega Lab and JSC Georgia
Healthcare Group (CHG), whereas, BioLab Shall have a put option,
exercisable within 12 months immediately after the expiration of
five(5) year period from the signing date, which allows BioLab
stake to be bought out by CHG at a price of the equity value being
USD 400,000 plus 15% annual Interred Rate of Return (IRR). In case
the Management Agreement or the Purchase Agreement and/or the
Service level Agreement is terminated/cancelled within 6 months
period from the date of such termination/cancellation, CHG shall
have a call option, which allows the CHG to purchase Biolab's Stake
in JSC Megalab having value of USD 400,000.00 plus 20% annual
Interred Rate of Return (IRR). If JCI accreditation is not
obtained, immediately after the expiration of the 12 months period,
CHG shall have a call option (the Accreditation Call option),
exercisable within 6 months period, allowing CHG has the right to
purchase BioLab's Shares in JSC Mega Lab at a price of the equity
value of USD 400,00.00 plus the 20% annual IRR.
After 12 months from the date of the put option period
expiration, CHG to has the right purchase Biolab's Stake in JSC
Megalab having value of USD 400,000 plus higher of 20% annual IRR
or 6x EV/EBITDA (of the financial year immediately preceding the
call option exercise date).
8. Trade and other receivables
30 June 2022 31 December 2021
------------- -----------------
Trade receivables - net 384,617 371,051
Prepayments 28,716 22,647
Due from related parties note (16) 7,323 5,237
Accrued revenue 1,648 2,818
Other receivables 69,273 67,974
-------------
491,577 469,727
============= =================
9. Financial assets at amortised cost
30 June 2022 31 December 2021
------------- -----------------
Term deposits (more than 90 days) 3,726 148,136
Treasury bills (more than 90 days) 510,771 1,310,588
514,497 1,458,724
============= =================
The maturity date of the treasury bills and Fixed-term deposits
is between 3-12 months and have average interest rates of 13.18%
and 8.50% respectively.
10. Cash and cash equivalents
30 June 2022 31 December 2021
------------- -----------------
Cash at banks and on hand 1,589,519 261,430
Treasury bills (less than 90 days) 13,744 150,431
Term deposits (less than 90 days) 64,361 479,590
1,667,624 891,451
============= =================
11. Trade and other payables
30 June 2022 31 December 2021
------------- -----------------
Trade payable 230,299 311,321
Accrued expenses 225,387 325,677
Due to related parties note (16) 11,230 13,234
Other payables 86,800 99,040
Deferred revenue 52,984 24,603
Accrued finance cost 4,207 3,479
610,907 777,354
============= =================
12. Current put option liability
30 June 31 December 2021
2022
-------- -----------------
Put option - Biolab Jordan 897,163 921,360
897,163 921,360
======== =================
The accounting policy for put options after initial recognition
is to recognise all changes in the carrying value of the put option
liability within equity.
Through the historic acquisitions of Makhbariyoun Al Arab, the
Group entered into separate put option arrangements to purchase the
remaining equity interests from the vendors at of a subsequent
date. At acquisition, a put option liability has been recognised at
the net present value of the exercise price of the option.
The option is calculated at seven times (7x) EBITDA of the last
12 months minus Net Debt, and its exercisable in whole starting the
fifth anniversary of completion of the original purchase agreement,
which fell due in June 2016. The vendor has not exercised this
right at 30 June 2022. It is important to note that the put option
liability is treated as current as it could be exercised at any
time by the NCI. However based on discussions and ongoing business
relationship, there is no expectation that this will happen in the
next 18 months. The put option has no expiry date.
13. Loans and borrowings
Currency Nominal interest rate Maturity 30 June 2022 31 December 2021
---------- ----------------------- --------------- ------------- -----------------
CIB - Bank EGP Secured rate 9.5% 5 April 2022 - 13,238
AUB - Bank EGP CBE corridor rate+1% 26 April 2026 84,828 84,828
84,828 98,066
Amount held as:
Current liability 8,483 21,721
Non- current liability 76,345 76,345
84,828 98,066
============= =================
A)
In July 2018, AL-Borg lab, one of IDH subsidiaries, was granted
a medium-term loan amounting to EGP 130.5m from the Ahli United
Bank "AUB Egypt" to finance the investment cost related to the
expansion into the radiology segment. As at 30 June 2022 only EGP
84.8m had been drawn down from the total facility available. The
loan contains the following financial covenants which if breached
will mean the loan is repayable on demand:
1. The financial leverage shall not exceed 0.7 throughout the period of the loan
" Financial leverage ": total bank debt divided by net
equity
2. The debt service ratios (DSR) shall not be less than 1.35 starting 2020
Loans and borrowings (continued)
"Debt service ratio": cash operating profit after tax plus
depreciation for the financial year less annual maintenance on
machinery and equipment adding cash balance (cash and cash
equivalent ) divided by total financial payments.
"Cash operating profit": Operating profit after tax, interest
expense, depreciation and amortisation, is calculated as follows:
Net income after tax and unusual items adding Interest expense,
Depreciation, Amortisation and provisions excluding tax related
provisions less interest income and Investment income and gains
from extraordinary items.
"Financial payments": current portion of long-term debt
including finance lease payments, interest expense and fees and
dividends distributions.
3. The current ratios shall not be less than 1.
"Current ratios": Current assets divided current
liabilities.
The terms and conditions of outstanding loans are as
follows:
* As at 30 June 2022 corridor rate is 12.25% (2021: 9.25%)
AL- Borg company didn't breach any covenants related to the MTL
agreement.
B) Last year the Group signed two debt facilities agreements.
The debt package includes US$ 45.0 million secured facility with
the tenor of 8-year starting May 2021 from the International
Finance Corporation (IFC), and an additional US$ 15.0 million IFC
syndicated facility from Mashreq Bank. As at 30 June 2022, the debt
facility has not been drawn by IDH.
14. Non-current put option liability
30 June 31 December 2021
2022
-------- -----------------
Put option liability* 39,733 35,037
39,733 35,037
======== =================
* According to the definitive agreements signed on 15 January
2018 between Dynasty Group Holdings Limited and the International
Finance Corporation (IFC) related to the Eagle Eye-Echo scan
transaction, IFC has the option to put its shares to Dynasty in the
year 2024. The put option price will be calculated on the basis of
fair market value determined by an independent valuator.
15. Other Financial obligations
30 June 2022 31 December 2021
------------- -----------------
Lease liabilities - buildings 601,703 531,804
Financial obligations- laboratory equipment 259,519 228,870
861,222 760,674
============= =================
The financial obligations for the laboratory equipment and
building are payable as follows:
30 June 2022
Minimum payments Interest Principal
----------------- --------- ----------
Less than one year 249,937 112,915 137,022
Between one and five years 809,055 239,675 569,380
More than five years 174,300 19,480 154,820
1,233,292 372,070 861,222
================= ========= ==========
31 December 2021
Minimum payments Interest Principal
----------------- --------- ----------
Less than one year 211,242 95,764 115,478
Between one and five years 701,084 227,314 473,770
More than Five years 191,229 19,803 171,426
1,103,555 342,881 760,674
================= ========= ==========
Amounts recognised in profit or loss:
For the three For the six months
months ended ended 30 June
30 June
2022 2021 2022 2021
------- ------- ---------- ---------
Interest on lease liabilities 18,065 14,597 34,926 28,872
Expenses related to short-term
lease 9,387 3,420 15,144 8,639
16. Related party transactions
The significant transactions with related parties, their nature
volumes and balance during the period 30 June 2022 are as
follows:
30 June 2022
Transaction amount of
Related Party Nature of transaction Nature of relationship the period Balance
----------------------- ------------------------ ----------------------- ---------------------- ----------
ALborg Scan (S.A.E)* Expenses paid on behalf Affiliate - 351
International
Fertility (IVF)** Expenses paid on behalf Affiliate - 1,767
Entity owned by
H.C Security Provided service Company's board member 56 (263)
Entity owned by
Life Health Care Provide service Company's CEO 1,956 4,050
Bio. Lab C.E.O and
Dr. Amid Abd Elnour Put option liability shareholder 24,197 (897,163)
International Finance Eagle Eye - Echo Scan
corporation (IFC) Put option liability limited shareholder (4,696) (39,733)
International Finance Eagle Eye - Echo Scan
corporation (IFC) Current account limited shareholder 1,948 (10,967)
Integrated Treatment
for Kidney Diseases Entity owned by
(S.A.E.) Medical services Company's CEO - 1,155
130
Total (940,803)
==========
Related party transactions (continued)
31 December 2021
Transaction
amount of
Related Party Nature of transaction Nature of relationship the year Balance
----------------------------------------------- -------------------------------- --- ------------------------------- --- ------------ ----------
ALborg Scan (S.A.E)* Expenses paid on behalf Affiliate 1 351
International Fertility (IVF)** Expenses paid on behalf Affiliate - 1,767
Entity owned by Company's board
H.C Security Provide service member (243) (319)
Life Health Care Provide service Entity owned by Company's CEO (11,232) 2,094
Dr. Amid Abd Elnour Put option liability Bio. Lab C.E.O and shareholder (639,093) (921,360)
Eagle Eye - Echo Scan limited
International Finance corporation (IFC) Put option liability shareholder (3,247) (35,037)
Eagle Eye - Echo Scan limited
International Finance corporation (IFC) Current account shareholder (12,915) (12,915)
Rental income Medical services Entity owned by Company's CEO 1,025
Integrated Treatment for Kidney Diseases (S.A.E) (298)
530
Total (964,394)
==========
* ALborg Scan is a company whose shareholders include Dr.
Moamena Kamel (founder of IDH subsidiary Al-Mokhtabar Labs).
** International Fertility (IVF) is a company whose shareholders
include Dr. Moamena Kamel (founder of IDH subsidiary Al-Mokhtabar
Labs).
Related party transactions (continued)
Compensation of key management personnel of the Group
The amounts disclosed in the table are the amounts recognised as
an expense during the reporting period related to key management
personnel.
30 June 2022 30 June 2021
------------- -------------
Short-term employee benefits 33,746 35,617
------------- -------------
33,746 35,617
============= =============
17. General and administrative expenses
For the three months ended 30 June For the six months ended 30 June
2022 2021 2022 2021
----------------- ------------------ ----------------- ----------------
Wages and salaries 32,979 34,623 66,910 61,636
Depreciation 7,440 5,659 14,843 11,187
Other expenses 37,473 64,930 82,439 103,309
Total 77,892 105,212 164,192 176,132
================= ================== ================= ================
18. Net finance cost
For the three months ended 30 June For the six months
ended 30 June
2022 2021 2022 2021
------------------ ----------------- ---------- ---------
Interest income 30,196 24,975 75,443 45,248
Net foreign exchange gain 8,244 - 69,378 -
Gain on hyperinflationary net monetary position
(Sudan companies) 4,807 - 6,471 -
Total finance income 43,247 24,975 151,292 45,248
================== ================= ========== =========
Loss on hyperinflationary net monetary position - (1,204) - (1,204)
Bank Charges (1,661) (2,848) (8,805) (5,364)
Interest expense (29,426) (30,574) (55,342) (49,011)
Net foreign exchange loss - (4,586) - (19,321)
Total finance costs (31,087) (39,212) (64,147) (74,900)
================== ================= ========== =========
Net finance income /(cost) 12,160 (14,237) 87,145 (29,652)
On March 21, 2022, the Central Bank of Egypt raised the corridor
rate by 100 basis points and on May 19, 2022, an additional
increase of 200 basis point took place.
19. Tax
A) Tax expense
Tax expense is recognised based on management's best estimate of
the weighted-average annual income tax rate expected for the full
financial year multiplied by the pre-tax income of the interim
reporting period.
B) Income tax
Amounts recognised in profit or loss as follow:
For the three months ended 30 June For the six months
ended 30 June
2022 2021 2022 2021
----------------- ------------------ ---------- ----------
Current tax:
Current year tax (58,479) (143,535) (159,839) (282,345)
Deferred tax:
DT on undistributed reserves 6,672 (43,068) (48,553) (83,780)
DT on reversal of temporary differences (1,495) 461 (2,124) (689)
Total Deferred tax 5,177 (42,607) (50,677) (84,469)
Tax expense recognized in profit or loss (53,302) (186,142) (210,516) (366,814)
================= ================== ========== ==========
C) Deferred tax liabilities
Deferred tax relates to the following:
30 June 31 December
2022 2021
---------- ------------
Property, plant and equipment (30,052) (28,925)
Intangible assets (106,518) (105,358)
Undistributed reserves from Group subsidiaries (157,961) (223,425)
Provisions and financial obligations 30,417 25,559
----------
Net deferred tax liabilities (264,114) (332,149)
========== ============
20. Financial instruments
The Group has reviewed the financial assets and liabilities held
at 30 June 2022. 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.
21. 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
26.8m to EGP 60m could become payable, however this is not
considered probable due to the specialized and differential
training programs that the group provides to its medical and
administrative professionals on an annual basis, which is one of
the requirements imposed by the international accreditation
bodies.
22. Earnings per share
For the three months ended 30 June For the six months ended 30 June
2022 2021 2022 2021
------------------ ----------------- ----------------- ----------------
Profit attributed to owners of the
parent 125,611 320,410 422,220 646,440
Weighted average number of ordinary
shares in issue 600,000 600,000 600,000 600,000
------------------ ----------------- ----------------- ----------------
Basic and diluted earnings per share 0.21 0.53 0.70 1.08
================== ================= ================= ================
The Company has no potential diluted shares as at 30 June 2022
and 30 June 2021, therefore; the earnings per diluted share are
equivalent to basic earnings per share.
23. Segment reporting
Operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision-maker.
The chief operating decision-maker who is responsible for
allocating resources and assessing performance of the operating
segments, has been identified as the steering committee that makes
strategic decisions.
The Group has four operating segments based on geographical
location rather than two operating segments based on service
provided, as the Group's Chief Operating Decision Maker (CODM)
reviews the internal management reports and KPIs of each
geography.
The Group operates in four geographic areas, Egypt, Sudan,
Jordan, and Nigeria. As a provider of medical diagnostic services,
IDH's operations in Sudan are not subject to sanctions. The revenue
split, EBITDA split (being the key profit measure reviewed by CODM)
net profit and loss between the four regions is set out below.
Revenue by geographic location
-------------------------------------------------------------------------
For the three months ended Egypt region Sudan region Jordan region Nigeria region Total
------------- ------------- -------------- --------------- ----------
30-June-22 644,550 4,797 105,621 18,618 773,586
30-June-21 1,014,597 2,514 133,648 12,873 1,163,632
Revenue by geographic location
-------------------------------------------------------------------------
For the six months period ended Egypt region Sudan region Jordan region Nigeria region Total
------------- ------------- -------------- --------------- ----------
30-June-22 1,524,040 10,469 386,135 33,421 1,954,065
30-June-21 1,935,059 9,267 323,518 25,326 2,293,170
EBITDA by geographic location
-----------------------------------------------------------------------
For the three months ended Egypt region Sudan region Jordan region Nigeria region Total
------------- ------------- -------------- --------------- --------
30-June-22 226,684 (23) 16,478 (2,163) 240,976
30-June-21 534,796 (377) 53,296 (3,873) 583,842
EBITDA by geographic location
-------------------------------------------------------------------------
For the six months period ended Egypt region Sudan region Jordan region Nigeria region Total
------------- ------------- -------------- --------------- ----------
30-June-22 621,740 63 90,790 (3,332) 709,261
30-June-21 1,046,064 711 131,023 (4,328) 1,173,470
Segment reporting (continued)
Net profit / (loss) by geographic location
-----------------------------------------------------------------------
For the three months ended Egypt region Sudan region Jordan region Nigeria region Total
------------- ------------- -------------- --------------- --------
30-June-22 124,044 1,522 2,441 (3,088) 124,919
30-June-21 310,160 (4,486) 31,731 (10,789) 326,616
Net profit / (loss) by geographic location
-----------------------------------------------------------------------
For the six months period ended Egypt region Sudan region Jordan region Nigeria region Total
------------- ------------- -------------- --------------- --------
30-June-22 393,560 4,278 47,471 (6,257) 439,052
30-June-21 616,213 (14,801) 83,247 (16,449) 668,210
Revenue by type Net profit by type
For the three months ended 30 June For the three months ended 30 June
2022 2021 2022 2021
----------------------------- ---------- -------------------------------- --------
Pathology 736,467 1,140,057 147,694 331,357
Radiology 37,119 23,575 (22,775) (4,741)
773,586 1,163,632 124,919 326,616
============================= ========== ================================ ========
Revenue by type Net profit by type
For the six months period ended 30 June For the six months period ended 30 June
2022 2021 2022 2021
-------------------- -------------------- ---------------------- ------------------
Pathology 1,885,271 2,247,984 477,718 675,057
Radiology 68,794 45,186 (38,666) (6,847)
1,954,065 2,293,170 439,052 668,210
==================== ==================== ====================== ==================
Revenue by categories Revenue by categories
For the three months ended 30 June For the six months period ended 30 June
2022 2021 2022 2021
---------------- ------------------- -------------------- --------------------
Walk-in 319,548 499,678 854,653 1,029,039
Corporate 454,038 663,954 1,099,412 1,264,131
773,586 1,163,632 1,954,065 2,293,170
================ =================== ==================== ====================
* 30 June 2022 figure includes Covid-19 related Pathology tests
amounted to EGP 615 m (30 June 2021: EGP 1,104 m).
Segment reporting (continued)
Non-current assets by geographic location
-------------------------------------------------------------------------
For the year ended Egypt region Sudan region Jordan region Nigeria region Total
------------- ------------- -------------- --------------- ----------
30-June-22 2,937,484 9,104 329,326 103,066 3,378,980
31-Dec-21 2,803,954 7,234 291,880 90,509 3,193,577
The operating segment profit measure reported to the CODM is
EBITDA, as follows:
For the three months ended 30 June For six months period ended 30 June
2022 2021 2022 2021
---------------------- --------------- -------------------- ------------------
Profit from operations 166,061 526,995 562,423 1,064,676
Property, plant and
equipment depreciation 49,136 26,608 95,184 59,068
Right of use depreciation 24,289 28,711 48,215 46,677
Amortization of Intangible
assets 1,490 1,528 3,439 3,049
EBITDA 240,976 583,842 709,261 1,173,470
---------------------- --------------- -------------------- ------------------
Non-recurring expenses - 18,797 - 29,034
Normalised EBITDA 240,976 602,639 709,261 1,202,504
================ ================ ============== =================
24. Distributions made and proposed
30 June 31 December 2021
2022
----------- -----------------
EGP'000 EGP'000
Cash dividends on ordinary shares declared and not paid:
US$ 0.116 per share (2021 nil) 1,304,805 -
----------- -----------------
1,304,805 -
=========== =================
Cash dividends on ordinary shares declared and paid : - 455,182
Nil per qualifying ordinary share (2021: 0.0485) per share - 455,182
============ =================
25. Subsequent events
A) Due to the current economic situation in Egypt, IDH board of
Directors has decided to pay dividends over two rounds as
follows:
- Round 1 -> Minority Shareholders the deadline on the 27th of July 2022
- Round 2 -> Hena Holdings & Actis
IDH signed a deferral agreement with principal shareholders
(Hena Holdings and Actis) who have agreed to receive their
dividends in two tranches (on the 11th of August 2022 and the 18th
of August 2022) with an interest rate of 10% per annum.
In relation to this agreement, IDH has incurred an Interest
Expense of USD 174.5 K.
B) In relation to the share purchase agreement (the "SPA")
signed on 20 December 2021 by IDH (or "the Company") for the
acquisition of a 50% stake in Islamabad Diagnostic Center ("IDC"),
IDH has notified Evercare IGA Holdings Limited (the "Seller") of
its decision to terminate the SPA on 29 August 2022. Termination
has become inevitable as the Long-stop Date (which had already been
extended for a period of three months) has occurred without the
satisfaction of all condition's precedent ("CPs"). However,
negotiations with the Seller are ongoing, with Pakistan's evolving
economic challenges and geopolitical situation to be important
considerations in the completion of the negotiations. In case the
Company reaches an agreement with the Seller, an amended SPA will
be signed and a new Long-stop Date set.
C) IDH (or "the Company") will implement an Employee Stock
Ownership Plan ("ESOP") for the senior management starting Q3
2022.
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