REG - Integrated Diag Hdgs - 1ST QUARTER RESULTS
30/05/2024 07:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20240530:nRSd3620Qa&default-theme=true
RNS Number : 3620Q Integrated Diagnostics Holdings PLC 30 May 2024
Integrated Diagnostics Holdings Plc
Q1 2024 Results
Thursday, 30 May 2024
Integrated Diagnostics Holdings plc kicks off 2024 with robust results, posting 28% revenue growth
(Cairo and London) - Integrated Diagnostics Holdings ("IDH," "the Group," or
"the Company"), a leading provider of diagnostic services with operations in
Egypt, Jordan, Nigeria, Sudan and Saudi Arabia, announced today its reviewed
financial statements for the quarter ended 31 March 2024, booking revenues of
EGP 1,171 million, up 28% year-on-year. Revenue growth continued to be
supported by increased test volumes and higher average revenues per test.
Further down the income statement, IDH's cost optimization initiatives
resulted in improved profitability at all levels. During the quarter, the
Group posted EBITDA of EGP 330 million, up 45% year-on-year and yielding an
EBITDA margin of 28%. Meanwhile, the Company recorded net profit growth of
139% year-on-year to reach EGP 402 million, and yielding a net profit margin
(NPM) of 34%.
Financial Results (IFRS)
EGP mn Q1 2023 Q1 2024 Change
Revenues 915 1,171 28%
Cost of Sales (591) (742) 26%
Gross Profit 325 428 32%
Gross Profit Margin 35.5% 36.6% 1.1 pts
Operating Profit 129 220 71%
EBITDA(1) 227 330 45%
EBITDA Margin 24.8% 28.2% 3.4 pts
Net Profit 168 402 139%
Net Profit Margin 18.4% 34.3% 15.9 pts
Adjusted Net Profit(2) 59 100 70%
Adjusted Net Profit Margin 6.5% 8.6% 2.1 pts
Cash Balance(3) 813 944 16%
Note: Throughout the document, percentage changes are calculated using the
exact value (as per the Consolidated Financials) and not the corresponding
rounded figure.
Key Operational Indicators(4)
EGP mn Q1 2023 Q1 2024 Change
Branches 576 587(5) 11
Patients ('000) 1,939 2,038 5%
Revenue per Patient (EGP) 472 574 22%
Tests ('000) 8,036 8,683 8%
Revenue per Test 114 135 18%
Test per Patient 4.1 4.3 3%
1 EBITDA is calculated as operating profit plus depreciation and
amortization.
(2) Adjusted net profit excludes foreign exchange gains from both periods.
Foreign exchange gains amounted to EGP 301 million in Q1 2024 and EGP 109
million in Q1 2023
3 Cash balance includes time deposits, treasury bills, current accounts, and
cash on hand.
4 Key operational indicators are calculated based on revenues for the periods
of EGP 1,171 million and EGP 915 million for Q1 2024 and Q1 2023,
respectively.
(5) IDH rolled out 26 new branches in Egypt, 1 in Jordan, and 2 in KSA over
the past 12-month period. It is important to note that due to the ongoing
conflict in Sudan, IDH's 18 branches in the country have been shut down,
leading to a net growth in its branch network of only 12 branches.
Introduction
i. Financial Highlights
· IDH recorded consolidated revenues of EGP 1,171 million in Q1
2024, up a robust 28% year-on-year from EGP 915 million. Sustained top-line
growth continued to be driven by higher test volumes and average revenue per
test, which increased 8% and 18% year-on-year, respectively.
· Gross profit of EGP 428 million was recorded during the first
quarter of the year, increasing 32% year-on-year from EGP 325 million in Q1
2023. In parallel, the Company's gross profit margin (GPM) stood at 37% in Q1
2024, up from 35% in the comparable period of the previous year. Increased
gross profitability reflects the effectiveness of IDH's cost optimization
efforts as well as the normalization of margins as the effects of the
devaluation of the Egyptian Pound in 2022 and early 2023 begin to fade.
· EBITDA(6) amounted to EGP 330 million in Q1 2024, up from EGP 227
million one year prior and reflecting an increase of 45% year-on-year. IDH's
EBITDA margin during the quarter came in at 28%, 3 points higher than the
margin recorded in Q1 2023. Higher EBITDA profitability came on the back of
increased gross profitability combined with lower SG&A outlays as a
percentage of revenues as IDH continues to optimize its cost base and reduce
expenses where possible. In addition to the Group's optimization efforts, it
is important to highlight that outlays in the comparable period had been
boosted by higher-than-usual salary increases and higher depreciation expenses
to support the rollout of several new branches in IDH's network.
· Net profit during Q1 2024 booked EGP 402 million, increasing a
strong 139% year-on-year from the figure reported in Q1 2023. Meanwhile, the
Net Profit Margin (NPM) stood at 34%, tangibly increasing from 18% in the same
period of the previous year.
6 EBITDA is calculated as operating profit plus depreciation and amortization.
ii. Operational Highlights
· IDH's branch network reached 587 branches at the end of Q1 2024,
increasing by 11 branches compared to Q1 2023. Since Q1 2023, IDH has rolled
out 26 new branches in its largest market Egypt, one in Jordan, and two
inaugural branches in its newest geography, Saudi Arabia. It is important to
mention that due to the ongoing conflict in Sudan, IDH reported the closure of
its 18 branches in the country.
· During the first quarter of the year, IDH performed 8.7 million
tests across its geographies, increasing 8% year-on-year from 8.0 million
tests in Q1 2023.
· Meanwhile, average revenue per test stood at EGP 135 during Q1
2024, a 18% year-on-year increase. The growth in average revenue per test was
driven by strategic price increases implemented by IDH to counteract
inflationary pressures in its home and largest market, Egypt, as well as in
Nigeria.
· IDH served a total of 2.0 million patients during the first
quarter of 2024, reflecting a 5% year-on-year increase. In parallel, IDH
continued to record record-high average tests per patient, reaching 4.3 tests
in Q1 2024. Continually increasing average tests per patient reflect the
effectiveness of IDH's efforts to attract and retain patients while
encouraging increased testing. Notably, IDH's loyalty programme, which was
introduced in FY 2021 as part of the Company's post-pandemic growth strategy
has continued boosting patient testing.
iii. Updates by Geography
· In Egypt (84.5% of total revenues in Q1 2024), IDH recorded
impressive growth during the first quarter of 2024, booking revenues of EGP
989 million and posting a 35% year-on-year increase. Top-line growth in IDH's
largest market was primarily driven by increased average revenue per test,
which grew 23% year-on-year to reach EGP 123. Secondarily, higher test volumes
also supported revenue growth, with IDH conducting 8.0 million tests during
the three-month period, a 10% year-on-year expansion.
· IDH's Jordanian subsidiary (14.1% of total revenues in Q1 2024),
Biolab, posted a 4% year-on-year decline in revenues, posting a top-line of
JOD 3.2 million on the back of a 3% contraction in test volumes during Q1 2024
due to the effects of the unfolding geopolitical situation in the region
temporarily weighing down results. Meanwhile, average revenue per test in
Jordan remained relatively stable due to heavy pricing regulations in the
country, recording only a marginal 1% year-on-year decline in Q1 2024. In EGP
terms, Jordanian operations reported revenues of EGP 165 million, up 14%
year-on-year due to the translation effect from a weakened EGP.
· In Nigeria (1.3% of total revenues in Q1 2024), Echo-Lab recorded
a 29% year-on-year growth in revenues in local currency terms, reaching NGN
602 million Naira in Q1 2024 on the back of a 65% year-on-year increase in
average revenue per test. Test volumes in Nigeria stood at 56 thousand during
the quarter, down 22% year-on-year due to ongoing inflationary pressures
affecting patients' purchasing power. In EGP terms, revenues in Nigeria booked
EGP 16 million, a 49% year-on-year decline, due to lower test volumes and
average revenues per test as a result of the devaluation of the Nigerian
Naira.
· Biolab KSA, IDH's newest venture in Saudi Arabia (0.1% of total
revenues in Q1 2024) commenced operations during Q1 2024, with one branch
rolled out in January and another in March. The Company booked revenues of SAR
58 thousand in Q1 2024, on the back of 2 thousand tests performed and an
average revenue per test of SAR 24. IDH continues to ramp up operations in the
geography, running several targeted campaigns to attract patients. The
Kingdom's branch network is expected to reach 6 branches by the end of the
year, with the inauguration of an additional 4 branches. In EGP terms, Saudi
operations posted a top line of EGP 677 thousand, with average revenues per
test coming in at EGP 285 during the three-month period.
· Finally, due to the ongoing conflict and unrest in the country,
IDH has decided to cease all Sudanese operations, with the closure of all of
IDH's 18 branches in Sudan.
iv. Management Commentary
Commenting on the Group's performance, IDH Chief Executive Officer Dr. Hend
El-Sherbini said: "Reflecting back on the first quarter of 2024, I am pleased
to report yet another robust set of results which have seen us deliver solid
consolidated top-line expansion and improved profitability at all levels. This
sustained growth trend continues to showcase the adaptability of IDH's
business model in the face of economic and political challenges across our
geographies and the potential of our business going forward.
During the three-month period, IDH successfully booked a 28% year-on-year
expansion in revenue, driven by both higher test volumes and increased average
revenue per test on the back of strategic price hikes implemented across
several of our geographies. In addition to the impressive top-line growth, we
recorded significant margin improvements throughout the entire income
statement, reflecting an improving economic situation in our home market of
Egypt as well as the effectiveness of our efforts to hedge against inflation
and optimize costs where possible. As a result, IDH posted a remarkable 55%
year-on-year growth in EBITDA, with an associated margin of 30%, when
excluding contributions from our newest venture in Saudi Arabia which is
currently in its early ramp up phase having officially launched in January of
this year.
Looking at the performance of our individual markets, Egypt continued to
contribute the lion share of our consolidated results throughout the quarter,
with revenue posting a robust 35% increase versus the first three months of
the previous year. This is a particularly noteworthy result which comes
despite the anticipated slowdown in patient traffic associated with the holy
month of Ramadan which this year began in the second week of March. During the
quarter, we also rolled out 2 new branches across the country taking our total
number of branches to 546. The steady expansion of our network not only
continues to function as a primary barrier to entry for newer players looking
to penetrate the diagnostics market but also ensures we are able to bring our
world-class services to as many people as possible in line with our wider
community impact goals. As part of our growth and diversification strategy,
during the quarter we continued to drive rapid growth at our radiology
venture, Al-Borg Scan, which is now contributing 5.1% of our Egyptian revenue
up from 3.8% this time last year.
In Jordan, revenue in local currency terms slightly decreased compared to the
first quarter of 2023, with the geopolitical instability in the region
affecting international medical tourism to the country and weighing on test
volumes for the three-month period. Meanwhile, in Nigeria we recorded revenue
growth in local currency terms of 29% driven by higher average revenue per
test. This comes as a direct result of our revenue mix optimisation strategy,
which over the last two years has seen us pivot our test mix increasingly
towards higher-priced tests, and by the annual price increases that we
continue to introduce to counteract the effects of record-high inflation in
the country. It is worth noting that the multiple devaluations of the Nigerian
naira over the past two years and the removal of diesel subsidies have placed
considerable pressure on our patients' purchasing power, leading to both
decreased test volumes and lower revenues in EGP terms.
Turning to our newest geography, I am delighted to announce that operations in
Saudi Arabia officially commenced during Q1 2024, with the rollout of two new
branches in the Kingdom's capital, Riyadh. The geography, characterized by a
young and growing population and by a fragmented diagnostics market, provides
the perfect ingredients for our proven business model to succeed, and we are
confident that KSA will quickly become an integral market of operation for
IDH. During the quarter, as part of our multi-pronged go-to-market strategy we
focused on building our brand presence through targeted marketing campaigns
across a variety of mediums. These included outdoor advertising, social media
campaigns, sponsorship of community events, as well as partnering with several
local healthcare providers to increase brand awareness for Biolab KSA. By the
end of 2024, we plan to inaugurate an additional four branches in the Kingdom
and aim to capture a market share of 1% as we steadily expand our reach and
widen our patient base.
Finally, it is with a heavy heart that I announce the complete halting of our
operations in Sudan. We initially launched our Sudanese operations back in
2011 as part of our first international expansion phase, and the country along
with our two Sudanese brands will always represent an important part of our
corporate history. With this in mind, the ongoing civil war and escalating
violence have unfortunately prevented us from continuing to operate in a
manner that safeguards our patients and staff. As a result of this decision,
Sudan, which in 2023 contributed to just 0.3% of our top line, has not
contributed to our financial and operational results starting in January 2024.
Looking ahead, our strategy and priorities at home and across our footprint
remain unchanged. In Egypt, we are beginning to see the early signs of a
sustained economic recovery supported by the float of the EGP in March 2024
and the policy changes enacted by the government and central bank in recent
months. As such, we expect volumes to continue growing steadily as inflation
declines and patients' purchasing power improves. Elsewhere across our
footprint, we are particularly excited to continue ramping up operations in
Saudi Arabia and begin to realize our new market's full potential. In light of
the strong results posted during the first quarter of the year, the economic
recovery we are witnessing in our home market, and the positive policies set
forth by the Egyptian government and central bank, we reaffirm our guidance of
approximately 30% revenue growth in FY 2024. In terms of profitability, we
expect to record an EBITDA margin around 30% during the year, excluding
results from our newly inaugurated venture in Saudi Arabia and non-recurring
expenses.
A few weeks ago, we also announced our proposal to delist from the Egyptian
Exchange (EGX). While we had originally listed on the EGX in May 2021 in an
effort to improve the liquidity of the Company's shares and give an
opportunity to local investors to capitalise on IDH's strong growth prospects,
we have since seen lower than expected liquidity and trading volumes on our
EGX-listed shares. It is important to specify that this decision has no
effects on our operations in Egypt and the remainder of our markets.
Additionally, the decision in no way impacts our standard listing on the
London Stock Exchange (LSE) where we remain fully committed to meeting all our
disclosure requirements. As always, our first responsibility remains towards
our patients and communities, and we look forward to continuing to deliver
world-class quality to our growing patient base across Egypt, Jordan, Nigeria,
and Saudi Arabia.
- End -
Analyst and Investor Call Details
An analyst and investor call will be hosted at 1pm (UK) | 3pm (Egypt) on
Monday, 3 June 2024. You can learn more details and register for the call by
clicking on this link
(https://s3.amazonaws.com/resources.inktankir.com/idh/IDH-Q1-2024-results-conference-call.pdf)
.
For more information about the event, please contact: amoataz@EFG-HERMES.com
(mailto:amoataz@EFG-HERMES.com)
About Integrated Diagnostics Holdings (IDH)
IDH is a leading diagnostics services provider in the Middle East and Africa
offering a broad range of clinical pathology and radiology tests to patients
in Egypt, Jordan, Nigeria, Sudan, and Saudi Arabia. The Group's core brands
include Al Borg, Al Borg Scan and Al Mokhtabar in Egypt, as well as Biolab
(Jordan), Echo-Lab (Nigeria), Ultralab and Al Mokhtabar Sudan (both in Sudan),
and Biolab KSA (Saudi Arabia). With over 40 years of experience, a long track
record for quality and safety has earned the Company a trusted reputation, as
well as internationally recognised accreditations for its portfolio of over
3,000 diagnostics tests. From its base of 601 branches as of 31 December 2023,
IDH served over 8.5 million patients and performed more than 36.1 million
tests in 2023. IDH will continue to add laboratories through a Hub, Spoke and
Spike business model that provides a scalable platform for efficient
expansion. Beyond organic growth, the Group targets expansion in appealing
markets, including acquisitions in the Middle Eastern, African, and East Asian
markets where its model is well-suited to capitalise on similar healthcare and
consumer trends and capture a significant share of fragmented markets. IDH has
been a Jersey-registered entity 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
Tarek Yehia
Investor Relations Director
T: +20 (0)2 3332 1126 | M: +20 10 6882 6678 | tarek.yehia@idhcorp.com
(mailto:tarek.yehia@idhcorp.com)
Forward-Looking Statements
These results for the quarter ended 31 March 2024 have been prepared solely to
provide additional information to shareholders to assess the group's
performance in relation to its operations and growth potential. These results
should not be relied upon by any other party or for any other reason. This
communication contains certain forward-looking statements. A forward-looking
statement is any statement that does not relate to historical facts and
events, and can be identified by the use of such words and phrases as
"according to estimates", "aims", "anticipates", "assumes", "believes",
"could", "estimates", "expects", "forecasts", "intends", "is of the opinion",
"may", "plans", "potential", "predicts", "projects", "should", "to the
knowledge of", "will", "would" or, in each case their negatives or other
similar expressions, which are intended to identify a statement as
forward-looking. This applies, in particular, to statements containing
information on future financial results, plans, or expectations regarding
business and management, future growth or profitability and general economic
and regulatory conditions and other matters affecting the Group.
Forward-looking statements reflect the current views of the Group's management
("Management") on future events, which are based on the assumptions of the
Management and involve known and unknown risks, uncertainties and other
factors that may cause the Group's actual results, performance or achievements
to be materially different from any future results, performance or
achievements expressed or implied by these forward-looking statements. The
occurrence or non-occurrence of an assumption could cause the Group's actual
financial condition and results of operations to differ materially from, or
fail to meet expectations expressed or implied by, such forward-looking
statements.
The Group's business is subject to a number of risks and uncertainties that
could also cause a forward-looking statement, estimate or prediction to differ
materially from those expressed or implied by the forward-looking statements
contained in this communication. The information, opinions and forward-looking
statements contained in this communication speak only as at its date and are
subject to change without notice. The Group does not undertake any obligation
to review, update, confirm or to release publicly any revisions to any
forward-looking statements to reflect events that occur or circumstances that
arise in relation to the content of this communication.
Group Operational & Financial Review
i. Revenue and Cost Analysis
Consolidated Revenue
IDH recorded a strong start to 2024, posting revenues of EGP 1,171 million, a
28% year-on-year increase. Top-line expansion was supported by higher test
volumes, which grew 8% year-on-year to reach 8.7 million tests, as well as
increased average revenues per test, which recorded EGP 135, an 18%
year-on-year rise. Higher average revenues per test continued to reflect the
strategic price increases implemented across Egyptian and Nigerian operations
to counteract mounting inflationary pressures in the geographies.
Revenue Analysis
Q1 2023 Q1 2024 %
Total revenue (EGP mn) 915 1,171 28%
Test Volume Analysis
Revenue per Test Analysis
Total tests (mn) 8.0 8.7 8%
Total revenue per test (EGP) 114 135 18%
Revenue Analysis: Contribution by Patient Segment
Contract Segment (66% of Group revenue in Q1 2024)
At IDH's contract segment, revenues recorded EGP 775 million, a year-on-year
increase of 34%. Average revenues per test at the segment grew 20%
year-on-year, reaching EGP 106 in Q1 2024. In parallel, test volumes recorded
7.3 million tests, reflecting a 12% increase compared to the same three-month
period of the previous year.
Average tests per patient at the segment maintained its record-high results,
recording 4.4 tests in Q1 2024 compared to 4.3 tests in the comparable period
of last year. Average tests per patient was supported by the IDH's loyalty
programme, which was rolled out in FY 2021 and continues to yield positive
results for the Group.
Walk-in Segment (34% of Group revenue in Q1 2024)
Meanwhile, at IDH's walk-in segment, IDH booked revenues of EGP 396 million
during the first three months of the year, an 18% year-on-year. Revenues were
boosted by a 28% year-on-year increase in average revenue per test, which
booked EGP 283 in Q1 2024. The Company performed 1.4 million walk-in tests
during the quarter, down 8% year-on-year as more walk-in patients switch to
IDH's contract segment. Average tests per patient at the segment recorded a
marginal 2% year-on-year decline, coming in at 3.5 tests during the period.
Test Volume Analysis
Revenue per Test Analysis
Total tests (mn) 8.0 8.7 8%
Total revenue per test (EGP) 114 135 18%
Revenue Analysis: Contribution by Patient Segment
Contract Segment (66% of Group revenue in Q1 2024)
At IDH's contract segment, revenues recorded EGP 775 million, a year-on-year
increase of 34%. Average revenues per test at the segment grew 20%
year-on-year, reaching EGP 106 in Q1 2024. In parallel, test volumes recorded
7.3 million tests, reflecting a 12% increase compared to the same three-month
period of the previous year.
Average tests per patient at the segment maintained its record-high results,
recording 4.4 tests in Q1 2024 compared to 4.3 tests in the comparable period
of last year. Average tests per patient was supported by the IDH's loyalty
programme, which was rolled out in FY 2021 and continues to yield positive
results for the Group.
Walk-in Segment (34% of Group revenue in Q1 2024)
Meanwhile, at IDH's walk-in segment, IDH booked revenues of EGP 396 million
during the first three months of the year, an 18% year-on-year. Revenues were
boosted by a 28% year-on-year increase in average revenue per test, which
booked EGP 283 in Q1 2024. The Company performed 1.4 million walk-in tests
during the quarter, down 8% year-on-year as more walk-in patients switch to
IDH's contract segment. Average tests per patient at the segment recorded a
marginal 2% year-on-year decline, coming in at 3.5 tests during the period.
Detailed Segment Performance Breakdown
Walk-in Segment Contract Segment Total
1Q23 1Q24 Change 1Q23 1Q24 Change 1Q23 1Q24 Change
Revenue (EGP mn) 337 396 18% 579 775 34% 915 1,171 28%
Patients ('000) 422 395 -6% 1,517 1,643 8% 1,939 2,038 5%
% of Patients 22% 19% 78% 81%
Revenue per Patient (EGP) 798 1,003 26% 381 471 24% 472 574 22%
Tests ('000) 1,519 1,399 -8% 6,517 7,284 12% 8,036 8,683 8%
% of Tests 19% 16% 81% 84%
Revenue per Test (EGP) 222 283 28% 89 106 20% 114 135 18%
Test per Patient 3.6 3.5 -2% 4.3 4.4 3% 4.1 4.3 3%
Revenue Analysis: Contribution by Geography
Egypt (84.5% of Group revenue)
IDH's home and largest market, Egypt, sustained the growth trend recorded
started during the second half of 2023, posting robust year-on-year revenue
growth of 35% to reach EGP 989 million in Q1 2024. Growth at the segment was
driven by a 10% increase in test volumes as well as a 23% year-on-year growth
in average revenue per test, as IDH continued to implement strategic price
increases in the country.
Al-Borg Scan
IDH's fast-growing radiology venture, Al-Borg Scan, maintained its rapid
expansion in the first three months of the year, booking solid revenue
expansion of 81% year-on-year, to reach EGP 50 million in Q1 2024. To support
this growth, Al-Borg Scan performed 60 thousand scans during the quarter, a
43% year-on-year rise. Meanwhile, average revenues per test stood at EGP 839,
expanding 26% year-on-year. Al-Borg Scan continues to expand its operations
through its network of 7 branches spread across the Greater Cairo area,
positioning itself as a leader in the fragmented Egyptian radiology market.
House Calls
During Q1 2024, IDH's house call services continued its significant
contribution to the country's results, constituting 17% of total revenues.
This contribution sits comfortably above pre-pandemic average, highlighting
the segment's growth potential and the effectiveness of the Group's
post-pandemic growth strategy.
Wayak
Finally, IDH's Egypt-based subsidiary, Wayak, which seeks to utilize the
Company's growing patient database to create electronic patient medical
records and offer tailor-made services for its patients, completed 51 thousand
orders in Q1 2024, an 28% year-on-year increase. Meanwhile, the venture
continued posting improved profitability, with EBITDA turning positive and
recording EGP 0.2 million during the quarter, compared to a loss of EGP 0.4
million in Q1 2023.
Detailed Egypt Performance Breakdown
Revenue Analysis
EGP mn Q1 2023 Q1 2024 %
Total Revenue 731 989 35%
Pathology Revenue 703 939 33%
Radiology Revenue 28 50 81%
Contribution to Consolidated Results
Pathology Revenue 96% 95%
Radiology Revenue 4% 5%
Test Volume Analysis
Total Tests 7.3 8.1 10%
Revenue per Test Analysis
Total Revenue per Test 99 123 23%
Test Volume Analysis
Total Tests 7.3 8.1 10%
Revenue per Test Analysis
Total Revenue per Test 99 123 23%
Jordan (14.1% of Group revenue in Q1 2024)
In IDH's second largest market, Jordan, IDH booked revenues of JOD 3.2 million
in Q1 2024, down 4% year-on-year. Declined revenues in the region were
primarily driven by lower test volumes, which stood at 566 thousand tests
during the period, a 3% year-on-year decline. Lower test volumes reflected the
ongoing geopolitical situation in the region, with the most recent escalation
in Gaza weighing down on operations in Jordan.
In EGP terms, Jordanian operations booked a 14% year-on-year increase, booking
EGP 165 million in Q1 2024. Higher revenues in EGP terms reflected an 18%
year-on-year increase in average revenue per test, due to the translation
effect from the devaluation of the Egyptian Pound over the past 12-month
period.
Detailed Jordan Performance Breakdown
Revenue Analysis
EGP mn Q1 2023 Q1 2024 %
Total Revenue 144 165 14%
Test Volume Analysis
Total Tests ('000) 582 566 -3%
Revenue per Test Analysis
Total Revenue per Test 248 292 18%
Test Volume Analysis
Total Tests ('000) 582 566 -3%
Revenue per Test Analysis
Total Revenue per Test 248 292 18%
Nigeria (1.3% of Group revenue in Q1 2024)
Echo-Lab, IDH's Nigerian subsidiary, posted a 29% year-on-year increase in
revenues in NGN terms during the first quarter of 2024, reaching NGN 602
million. Higher revenues in local currency terms were entirely driven by a 65%
year-on-year increase in average revenues per test, which stood at NGN 11
thousand during Q1 2024. Meanwhile, test volumes were down 22% year-on-year
compared to the same three-month period of 2023, recording 56 thousand tests
due to the ongoing economic volatility in the country affecting patient
purchasing power.
In EGP terms, Echo-Lab booked EGP 16 million in revenues during Q1 2024, down
49% year-on-year. In addition to declining test volumes at the geography,
average revenue per test declined to EGP 282 during the first three months of
the year, reflecting the translation effect from multiple devaluations of the
Naira over the past year.
Saudi Arabia (0.1% of Group revenue in Q1 2024)
IDH's newest geography, Saudi Arabia, officially commenced operations in Q1
2024 with the rollout of 2 Biolab KSA branches in the Kingdom's capital,
Riyadh. One branch was inaugurated in January while the other opened in March
2024. The Kingdom is characterized by supportive demographics, a fast-growing
economy, and a fragmented diagnostics market posing significant potential for
IDH. This new venture aims to establish itself as a fully-fledged clinical
pathology diagnostic services provider, with an extensive branch network
covering the entire Kingdom.
In its inaugural quarter, Biolab KSA posted revenues of SAR 58 thousand,
performing 2 thousand tests and booking an average revenue per test of SAR 24.
In EGP terms, Saudi operations yielded revenues of EGP 677 thousand with
average revenues per test amounting to EGP 285 during Q1 2024.
Sudan
Due to the ongoing situation in Sudan, which started with the eruption of
violent conflict in April 2023, IDH has decided to halt all operations in the
country starting in Q1 2024. All 18 of IDH's branches in the country have now
been indefinitely shut down.
Revenue Contribution by Country
Q1 2023 Q1 2024 Change
Egypt Revenue (EGP mn) 731 989 35%
Pathology Revenue (EGP mn) 703 939 33%
Radiology Revenue (EGP mn) 28 50 81%
Egypt Contribution to IDH Revenue 79.9% 84.5%
Jordan Revenue (EGP mn) 144 165 14%
Jordan Revenues (JOD mn) 3.4 3.2 -4%
Jordan Revenue Contribution to IDH Revenue 15.8% 14.1%
Nigeria Revenue (EGP mn) 31 16 -49%
Nigeria Revenue (NGN mn) 468 602 29%
Nigeria Contribution to IDH Revenue 3.4% 1.3%
Saudi Arabia Revenue (EGP k) 677 -
Saudi Arabia Revenue (SAR k) - 58 -
Saudi Arabia Contribution to IDH Revenue - 0.1%
Average Exchange Rate
Q1 2023 Q1 2024 Change
USD/EGP 30.5 36.3 18.9%
JOD/EGP 42.9 51.1 19.2%
NGN/EGP 0.07 0.03 -60.7%
SAR/EGP - 9.7 -
Patients Served and Tests Performed by Country
Q1 2023 Q1 2024 Change
Egypt Patients Served (mn) 1.8 1.9 7%
Egypt Tests Performed (mn) 7.3 8.1 10%
Jordan Patients Served (k) 92 85 -8%
Jordan Tests Performed (k) 582 566 -3%
Nigeria Patients Served (k) 35 30 -14%
Nigeria Tests Performed (k) 72 56 -22%
Saudi Arabia Patients Served (k) - 0.2 -
Saudi Arabia Tests Performed (k) - 2 -
Total Patients Served (mn) 1.9 2.0 5%
Total Tests Performed (mn) 8.0 8.7 8%
Branches by Country
31 March 2023 31 March 2024 Change
Egypt 520 546 26
Jordan 26 27 1
Nigeria 12 12 -
Saudi Arabia - 2 2
Sudan(7) 18 - -18
Total Branches 576 587 11
(7) Due to the ongoing conflict in Sudan, IDH has terminated operations in the
country, with the closure of all 18 branches.
Cost of Goods Sold
IDH booked cost of goods sold of EGP 742 million during the first quarter of
the year, a 25.7% year-on-year increase. As a share of revenue, cost of goods
sold constituted 63.4% in Q1 2024, down from 64.5% one year prior. Lower cost
of goods sold as a share of revenue was primarily driven by decreased direct
wages and salaries and depreciation expenses as a share of revenue.
Cost of Goods sold Breakdown as a Percentage of Revenue
Q1 2023 Q1 2024
Raw Materials 20.2% 21.1%
Wages & Salaries 20.7% 19.6%
Depreciation & Amortisation 9.7% 8.6%
Other Expenses 13.9% 14.1%
Total 64.5% 63.4%
Raw material costs (33% of consolidated cost of goods sold in Q1 2024) the
largest contributor to cost of goods sold in Q1 2024, amounted to EGP 247
million, reflecting a 34% year-on-year increase. As a share of revenue, raw
materials stood at 21% of revenue, up marginally from 20% in Q1 2023.
Wages and salaries including employee share of profits (31% share of
consolidated cost of goods sold) remained the second largest contributor to
cost of goods sold during the quarter, recording EGP 230 million, a 21%
year-on-year increase. As a share of revenue, however, direct wages and
salaries stood at 19.6%, down from 20.7% in the same period of the previous
year. Declining wages as a share of revenue are a direct reflection of the
optimization of IDH's headcount compared to the previous year.
Direct Wages and Salaries by Region
Q1 2023 Q1 2024 Change
Egypt (EGP mn) 141 174 23%
Jordan (EGP mn) 39 46 19%
Jordan (JOD k) 912 911 -0.1%
Nigeria (EGP mn) 7.5 4.6 -38%
Nigeria (NGN mn) 114 176 55%
Saudi Arabia (EGP mn) - 5.1 -
Saudi Arabia (SAR k) - 517 -
Direct depreciation and amortization costs (13% of consolidated cost of goods
sold) reached EGP 100 million in Q1 2024, up 13% year-on-year. As a share of
revenues, depreciation and amortization costs decreased by 1.1 points
year-on-year to 8.6% during the three-month period. Higher depreciation costs
reflect the expansion of IDH's branch network, including the rollout of 26
branches in Egypt as well as an additional Al-Borg Scan branch during the past
12 months.
Other expenses (22% of consolidated cost of goods sold) amounted to EGP 165
million in Q1 2024, reflecting a 30% year-on-year increase. Other expenses
remained relatively stable as a share of revenues, constituting 14% during
both Q1 2024 and the comparable period of last year. Repair & maintenance
fees, hospital contracts, and cleaning expenses remained the largest
contributors to other expenses during the period.
Gross Profit
The Company booked a gross profit of EGP 428 million during the first three
months of the year, recording a 32% year-on-year increase. Meanwhile, IDH's
Gross Profit Margin (GPM) stood at 37%, up from 35% in Q1 2023. Increased
gross profitability reflected the previously outlined decline in cost of goods
sold as a share of revenues during the period, utilizing its fixed assets to
decrease depreciation and optimizing its headcount to decrease direct salary
expenses as a share of revenues.
Selling, General and Administrative (SG&A) Expenses
SG&A outlays during Q1 2024 came in at EGP 208 million, up 6%
year-on-year. As a share of revenues, SG&A constituted 18% in the first
quarter of the year, down from 21% one year prior. Increased SG&A expenses
in absolute terms were mainly driven by the following:
· Higher indirect wages and salaries, which recorded EGP 79
million, a 15% year-on-year increase. Higher wages and salaries were
represented annual wage increases as well as the translation effect from
Jordanian salaries as a result of a weakened EGP. It is important to note,
however, that indirect salaries and wages as a share of revenues declined to
6.8% during the quarter, compared to 7.5% in Q1 2023, due to the optimization
of IDH's headcount across its operations.
· Increased impairment loss on trade and other receivables, which
booked a 63% year-on-year increase to reach EGP 17 million in Q1 2024,
reflecting a conservative approach by management due to economic headwinds and
increased inflation in its largest market, Egypt.
Selling, General and Administrative Expenses
Q1 2023 Q1 2024 Change
Wages & Salaries 69 79 15%
Accounting Fees 17 20 21%
Market - Advertisement expenses 32 25 -24%
Other Expenses 55 65 18%
Depreciation & Amortisation 10 10 -5%
Impairment loss on trade and other receivable 11 17 63%
Travelling and transportation expenses 6 9 43%
Other (income)/expense (5) 3 -
Total 196 208 6%
EBITDA
During Q1 2024, IDH booked an EBITDA(8) of EGP 330 million, a 45% year-on-year
increase reflecting the continued normalisation of costs throughout the past
12 months. In parallel, the EBITDA margin stood at 28% up from 25% in Q1 2023.
It is important to note that EBITDA has been partially weighed down due to the
recent ramp-up of operations in IDH's newest geography, Saudi Arabia.
Accounting for Saudi operations, IDH would have recorded an EBITDA of EGP 352
million and yielded a margin of 30% during the quarter.
EBITDA by Country
In Egypt, IDH recorded an EBITDA of EGP 320 million in Q1 2024, up 61%
year-on-year. The EBITDA margin booked 32%, up from 27% at the same time last
year. Higher EBITDA profitability in the region reflected lower SG&A
expenses, which declined 8% year-on-year due to lower advertisement and
depreciation expenses.
In Jordan, IDH's subsidiary, Biolab, posted an EBITDA of JOD 753 thousand in
Q1 2024, down 10% year-on-year and yielding a margin of 23%, compared to 25%
in Q1 2023. In EGP terms, EBITDA recorded 39 million, up 9% year-on-year and
yielding a margin of 23%. The increase in EBITDA in EGP terms reflects the
translation effect from the devaluation of the EGP during the past twelve
months.
In Nigeria, continued economic downturns in the country, leading to
increasing inflation, has affected IDH's cost base and led to a widening of
EBITDA losses during the first quarter of the year. In Q1 2024, EBITDA losses
recorded NGN 244 million, widening from NGN 121 million during the first
quarter of 2023. In EGP terms, EBITDA losses stood at EGP 7 million in Q1
2024, narrowing from EGP 8 million one year prior. Narrowing EBITDA losses in
EGP terms were due to the translation effect following the devaluation of the
Nigerian Naira.
In Saudi Arabia, EBITDA losses recorded SAR 2 million as the venture begins to
ramp up its operations. Meanwhile, in EGP terms, EBITDA losses booked EGP 22
million.
Regional EBITDA in Local Currency
Q1 2023 Q1 2024 Change
Egypt EBITDA EGP mn 198 320 61%
Margin 27% 32%
Jordan EBITDA JOD k 837 753 -10%
Margin 25% 23%
Nigeria EBITDA NGN mn (121) (244) -101%
Margin -26% -41%
Saudi Arabia EBITDA SAR k - (2,291) -
Margin - -3,951%
8 EBITDA is calculated as operating profit plus depreciation and amortization.
Interest Income / Expense
IDH's interest income recorded EGP 25 million, increasing considerably from
EGP 15 million in Q1 2023. Higher interest income during the quarter reflects
the increase in interest rates imposed by the CBE during the past 12 months,
in addition to increased cash balances due to significant increases in
revenues compared to the same period of last year.
Interest expense(9) stood at EGP 44 million, up 2% year-on-year in Q1 2024.
The marginal increase in interest expenses were mainly driven by:
· Higher interest on lease liabilities related to IFRS 16 due to
the addition of new branches to IDH's network.
· Higher interest expenses following the CBE decision to increase
rates in December 2023 and February 2024. It is important to note that IDH's
interest bearing debt balance decreased to EGP 104 million as at 31 March
2024, from EGP 111 million at year-end 2023. In 2023, as part of IDH's
strategy to reduce foreign currency risk, the Company agreed with General
Electric (GE) for the early repayment of its contractual obligation of USD 5.7
million. To finance the settlement, IDH utilized a bridge loan facility, with
half the amount being funded internally, while the other half (amounting to
EGP 55 million) was provided through a bridge loan by Ahly United Bank- Egypt
(AUBE). Interest expenses related to the AUBE facility recorded EGP 5 million
in Q1 2024. The bridge loan was fully settled in Q2 2023.
· Fast track payments worth EGP 1.6 million, which encompass
discounts provided for the rapid payment of receivables in Q1 2024.
Interest Expense Breakdown
EGP mn Q1 2023 Q1 2024 Change
Interest on Lease Liabilities (IFRS 16) 22.3 26.3 18%
Interest Expenses on Leases 8.4 7.0 -17%
Interest Expenses on Borrowings(10) 5.1 5.5 9%
Bank Charges 2.4 3.3 38%
Loan-related Expenses on IFC facility(11) 4.6 - -100%
Fast Track Payment - 1.6 -
Total Interest Expense 42.8 43.7 2%
9 Interest expenses on medium-term loans include EGP 5 million related to the
Group's facility with Ahli United Bank Egypt (AUBE).
(10) Interest expenses on medium-term loans include EGP 5 million related to
the Group's facility with Ahli United Bank Egypt (AUBE).
(11) Loan-related expenses on IFC facility represents commitment fees on the
facility granted by IFC and Mashreq with a total value of USD 60 million. The
facility was cancelled in May 2023.
Foreign Exchange
IDH booked a foreign exchange gain of EGP 301 million in Q1 2024, up from EGP
109 million during the same period of the previous year. The foreign exchange
gain was due to intercompany balances revaluation.
Taxation
Tax expenses, including income and deferred tax, rose to EGP 101 million
during Q1 2024, up from EGP 42 million one year prior. IDH's effective tax
rate remained stable at 20% in Q1 2024. The decline in effective tax rate for
both quarters compared to IDH's historical averages is primarily due to the
increase in foreign exchange gain recorded during the periods as a result of
intercompany transactions. It is important to highlight that there is no tax
payable for IDH's two holding-level companies.
Taxation Breakdown by Region
EGP Mn Q1 2023 Q1 2024 Change
Egypt 36.0 91.1 153%
Jordan 5.4 10.1 87%
Nigeria 0.3 0.1 -78%
Sudan 0.4 - -
Total Tax Expenses 42.1 101.3 140%
Net Profit
IDH booked a net profit of EGP 402 million in Q1 2024, a 139% year-on-year
increase due to the substantial increase in foreign exchange gain from
intercompany transactions. Meanwhile, the Company's Net Profit Margin (NPM)
came in at 34% compared to 18% in Q1 2023.
When accounting for contributions from foreign exchange gains during both
periods, IDH booked an adjusted net profit of EGP 100 million in Q1 2024,
growing 70% year-on-year from EGP 59 million during the same quarter of last
year. The Company's adjusted net profit margin stood at 9% during the quarter,
up from 6% in Q1 2023.
Raw material costs (33% of consolidated cost of goods sold in Q1 2024) the
largest contributor to cost of goods sold in Q1 2024, amounted to EGP 247
million, reflecting a 34% year-on-year increase. As a share of revenue, raw
materials stood at 21% of revenue, up marginally from 20% in Q1 2023.
Wages and salaries including employee share of profits (31% share of
consolidated cost of goods sold) remained the second largest contributor to
cost of goods sold during the quarter, recording EGP 230 million, a 21%
year-on-year increase. As a share of revenue, however, direct wages and
salaries stood at 19.6%, down from 20.7% in the same period of the previous
year. Declining wages as a share of revenue are a direct reflection of the
optimization of IDH's headcount compared to the previous year.
Direct Wages and Salaries by Region
Q1 2023 Q1 2024 Change
Egypt (EGP mn) 141 174 23%
Jordan (EGP mn) 39 46 19%
Jordan (JOD k) 912 911 -0.1%
Nigeria (EGP mn) 7.5 4.6 -38%
Nigeria (NGN mn) 114 176 55%
Saudi Arabia (EGP mn) - 5.1 -
Saudi Arabia (SAR k) - 517 -
Direct depreciation and amortization costs (13% of consolidated cost of goods
sold) reached EGP 100 million in Q1 2024, up 13% year-on-year. As a share of
revenues, depreciation and amortization costs decreased by 1.1 points
year-on-year to 8.6% during the three-month period. Higher depreciation costs
reflect the expansion of IDH's branch network, including the rollout of 26
branches in Egypt as well as an additional Al-Borg Scan branch during the past
12 months.
Other expenses (22% of consolidated cost of goods sold) amounted to EGP 165
million in Q1 2024, reflecting a 30% year-on-year increase. Other expenses
remained relatively stable as a share of revenues, constituting 14% during
both Q1 2024 and the comparable period of last year. Repair & maintenance
fees, hospital contracts, and cleaning expenses remained the largest
contributors to other expenses during the period.
Gross Profit
The Company booked a gross profit of EGP 428 million during the first three
months of the year, recording a 32% year-on-year increase. Meanwhile, IDH's
Gross Profit Margin (GPM) stood at 37%, up from 35% in Q1 2023. Increased
gross profitability reflected the previously outlined decline in cost of goods
sold as a share of revenues during the period, utilizing its fixed assets to
decrease depreciation and optimizing its headcount to decrease direct salary
expenses as a share of revenues.
Selling, General and Administrative (SG&A) Expenses
SG&A outlays during Q1 2024 came in at EGP 208 million, up 6%
year-on-year. As a share of revenues, SG&A constituted 18% in the first
quarter of the year, down from 21% one year prior. Increased SG&A expenses
in absolute terms were mainly driven by the following:
· Higher indirect wages and salaries, which recorded EGP 79
million, a 15% year-on-year increase. Higher wages and salaries were
represented annual wage increases as well as the translation effect from
Jordanian salaries as a result of a weakened EGP. It is important to note,
however, that indirect salaries and wages as a share of revenues declined to
6.8% during the quarter, compared to 7.5% in Q1 2023, due to the optimization
of IDH's headcount across its operations.
· Increased impairment loss on trade and other receivables, which
booked a 63% year-on-year increase to reach EGP 17 million in Q1 2024,
reflecting a conservative approach by management due to economic headwinds and
increased inflation in its largest market, Egypt.
Selling, General and Administrative Expenses
Q1 2023 Q1 2024 Change
Wages & Salaries 69 79 15%
Accounting Fees 17 20 21%
Market - Advertisement expenses 32 25 -24%
Other Expenses 55 65 18%
Depreciation & Amortisation 10 10 -5%
Impairment loss on trade and other receivable 11 17 63%
Travelling and transportation expenses 6 9 43%
Other (income)/expense (5) 3 -
Total 196 208 6%
EBITDA
During Q1 2024, IDH booked an EBITDA(8) of EGP 330 million, a 45% year-on-year
increase reflecting the continued normalisation of costs throughout the past
12 months. In parallel, the EBITDA margin stood at 28% up from 25% in Q1 2023.
It is important to note that EBITDA has been partially weighed down due to the
recent ramp-up of operations in IDH's newest geography, Saudi Arabia.
Accounting for Saudi operations, IDH would have recorded an EBITDA of EGP 352
million and yielded a margin of 30% during the quarter.
EBITDA by Country
In Egypt, IDH recorded an EBITDA of EGP 320 million in Q1 2024, up 61%
year-on-year. The EBITDA margin booked 32%, up from 27% at the same time last
year. Higher EBITDA profitability in the region reflected lower SG&A
expenses, which declined 8% year-on-year due to lower advertisement and
depreciation expenses.
In Jordan, IDH's subsidiary, Biolab, posted an EBITDA of JOD 753 thousand in
Q1 2024, down 10% year-on-year and yielding a margin of 23%, compared to 25%
in Q1 2023. In EGP terms, EBITDA recorded 39 million, up 9% year-on-year and
yielding a margin of 23%. The increase in EBITDA in EGP terms reflects the
translation effect from the devaluation of the EGP during the past twelve
months.
In Nigeria, continued economic downturns in the country, leading to
increasing inflation, has affected IDH's cost base and led to a widening of
EBITDA losses during the first quarter of the year. In Q1 2024, EBITDA losses
recorded NGN 244 million, widening from NGN 121 million during the first
quarter of 2023. In EGP terms, EBITDA losses stood at EGP 7 million in Q1
2024, narrowing from EGP 8 million one year prior. Narrowing EBITDA losses in
EGP terms were due to the translation effect following the devaluation of the
Nigerian Naira.
In Saudi Arabia, EBITDA losses recorded SAR 2 million as the venture begins to
ramp up its operations. Meanwhile, in EGP terms, EBITDA losses booked EGP 22
million.
Regional EBITDA in Local Currency
Q1 2023 Q1 2024 Change
Egypt EBITDA EGP mn 198 320 61%
Margin 27% 32%
Jordan EBITDA JOD k 837 753 -10%
Margin 25% 23%
Nigeria EBITDA NGN mn (121) (244) -101%
Margin -26% -41%
Saudi Arabia EBITDA SAR k - (2,291) -
Margin - -3,951%
8 EBITDA is calculated as operating profit plus depreciation and amortization.
Interest Income / Expense
IDH's interest income recorded EGP 25 million, increasing considerably from
EGP 15 million in Q1 2023. Higher interest income during the quarter reflects
the increase in interest rates imposed by the CBE during the past 12 months,
in addition to increased cash balances due to significant increases in
revenues compared to the same period of last year.
Interest expense(9) stood at EGP 44 million, up 2% year-on-year in Q1 2024.
The marginal increase in interest expenses were mainly driven by:
· Higher interest on lease liabilities related to IFRS 16 due to
the addition of new branches to IDH's network.
· Higher interest expenses following the CBE decision to increase
rates in December 2023 and February 2024. It is important to note that IDH's
interest bearing debt balance decreased to EGP 104 million as at 31 March
2024, from EGP 111 million at year-end 2023. In 2023, as part of IDH's
strategy to reduce foreign currency risk, the Company agreed with General
Electric (GE) for the early repayment of its contractual obligation of USD 5.7
million. To finance the settlement, IDH utilized a bridge loan facility, with
half the amount being funded internally, while the other half (amounting to
EGP 55 million) was provided through a bridge loan by Ahly United Bank- Egypt
(AUBE). Interest expenses related to the AUBE facility recorded EGP 5 million
in Q1 2024. The bridge loan was fully settled in Q2 2023.
· Fast track payments worth EGP 1.6 million, which encompass
discounts provided for the rapid payment of receivables in Q1 2024.
Interest Expense Breakdown
EGP mn Q1 2023 Q1 2024 Change
Interest on Lease Liabilities (IFRS 16) 22.3 26.3 18%
Interest Expenses on Leases 8.4 7.0 -17%
Interest Expenses on Borrowings(10) 5.1 5.5 9%
Bank Charges 2.4 3.3 38%
Loan-related Expenses on IFC facility(11) 4.6 - -100%
Fast Track Payment - 1.6 -
Total Interest Expense 42.8 43.7 2%
9 Interest expenses on medium-term loans include EGP 5 million related to the
Group's facility with Ahli United Bank Egypt (AUBE).
(10) Interest expenses on medium-term loans include EGP 5 million related to
the Group's facility with Ahli United Bank Egypt (AUBE).
(11) Loan-related expenses on IFC facility represents commitment fees on the
facility granted by IFC and Mashreq with a total value of USD 60 million. The
facility was cancelled in May 2023.
Foreign Exchange
IDH booked a foreign exchange gain of EGP 301 million in Q1 2024, up from EGP
109 million during the same period of the previous year. The foreign exchange
gain was due to intercompany balances revaluation.
Taxation
Tax expenses, including income and deferred tax, rose to EGP 101 million
during Q1 2024, up from EGP 42 million one year prior. IDH's effective tax
rate remained stable at 20% in Q1 2024. The decline in effective tax rate for
both quarters compared to IDH's historical averages is primarily due to the
increase in foreign exchange gain recorded during the periods as a result of
intercompany transactions. It is important to highlight that there is no tax
payable for IDH's two holding-level companies.
Taxation Breakdown by Region
EGP Mn Q1 2023 Q1 2024 Change
Egypt 36.0 91.1 153%
Jordan 5.4 10.1 87%
Nigeria 0.3 0.1 -78%
Sudan 0.4 - -
Total Tax Expenses 42.1 101.3 140%
Net Profit
IDH booked a net profit of EGP 402 million in Q1 2024, a 139% year-on-year
increase due to the substantial increase in foreign exchange gain from
intercompany transactions. Meanwhile, the Company's Net Profit Margin (NPM)
came in at 34% compared to 18% in Q1 2023.
When accounting for contributions from foreign exchange gains during both
periods, IDH booked an adjusted net profit of EGP 100 million in Q1 2024,
growing 70% year-on-year from EGP 59 million during the same quarter of last
year. The Company's adjusted net profit margin stood at 9% during the quarter,
up from 6% in Q1 2023.
ii. Balance Sheet Analysis
Assets
Property, Plant and Equipment
IDH recorded property, plant and equipment (PPE) cost of EGP 2,903 million as
of 31 March 2024, up from EGP 2,554 million at the end of 2023. The increase
in CAPEX as a share of revenue during the past three-month period is mainly
attributable to the addition of new branches, renovation of existing branches,
improvements of IDH's headquarters (constituting 4.3% of revenues), in
addition to the translation effect related to Jordan, Nigeria, and Saudi
Arabia (comprising 25.5% of revenues).
Total CAPEX Addition Breakdown - Q1 2024
EGP mn % of Revenue
Leasehold Improvements/new branches 48.2 4.1%
Al-Borg Scan Expansion 2.0 0.2%
Total CAPEX Additions Excluding Translation 50.2 4.3%
Translation Effect 298.7 25.5%
Total CAPEX Additions 348.9 29.8%
Accounts Receivable and Provisions
Accounts receivable at 31 March 2023 amounted to EGP 703 million, up 23%
year-to-date. Meanwhile, IDH's receivables' Days on Hand (DoH) booked 141
days, up from 134 days at the end of 2023.
Provision for doubtful accounts during Q1 2024 recorded EGP 17 million, up
from EGP 11 million one year prior. Higher provision for doubtful accounts
continues to reflect slower collection rates due to inflationary pressures in
IDH's markets, particularly Egypt and Nigeria.
Inventory
At 31 March 2024, IDH booked an inventory balance of EGP 480 million, up 28%
compared to the end of 2023. Meanwhile, Days Inventory Outstanding (DIO)
increased to 164 days, from 133 days at 31 December 2023. Increased DIO
showcases management's proactive strategy of accumulating inventory to hedge
against inflationary pressures.
Cash and Net Debt
Cash balances and financial assets at amortised cost at 31 March 2024 reached
EGP 944 million, up from EGP 835 million at year-end 2023.
EGP million 31 Dec 2023 31 Mar 2024
Treasury Bills 133 290
Time Deposits 289 117
Current Accounts 391 514
Cash on Hand 21 23
Total 835 944
IDH's net debt(12) balance came in at EGP 359 million as of the end of Q1
2024, remaining relatively stable compared to EGP 361 million as at year-end
2023.
EGP million 31 Dec 2023 31 Mar 2024 31 Dec 2021
Cash and Financial Assets at Amortised Cost(13) 835 944 2,350
Lease Liabilities Property* (828) (937) 106
Total Financial Liabilities (Short-term and Long-term) (240) (250)
Interest Bearing Debt ("Medium Term Loans") (128) (116)
Net Debt Balance (361) (359) 1,483
Note: Interest Bearing Debt includes accrued interest for each period.
*If excluding Lease Liabilities Property (IFRS 16), IDH would have recorded
net cash of EGP 578 million
Lease liabilities and financial obligations on property came in at EGP 937
million at the end of Q1 2024, with the increase driven by the translation
effect due to a rise in JOD-denominated liabilities in Jordan following the
devaluation of the EGP in early 2024.
Meanwhile, financial obligations related to equipment stood at EGP 250 million
as at 31 Mar 2024, with the increase attributable to increases in USD-linked
contracts with equipment suppliers following the devaluation of the Egyptian
Pound.
Finally, interest bearing debt(14) (excluding accrued interest) reached EGP
104 million at the end of Q1 2024, down from EGP 111 million at year-end 2023.
12 The net debt balance is calculated as cash and cash equivalent balances
including financial assets at amortised cost, less interest-bearing debt
(medium term loans), finance lease and Right-of-use liabilities.
1(3) As outlined in Note 18 of IDH's Consolidated Financial Statements, some
term deposits and treasury bills cannot be accessed for over 3 months and are
therefore not treated as cash. Term deposits which cannot be accessed for over
3 months stood at EGP 67 million at March 2023 (2022: EGP 60 million).
Meanwhile, treasury bills not accessible for over 3 months stood at EGP 139
million (2022: EGP 107 million).
1(4) IDH's interest bearing debt as at 31 March 2024 included EGP 107 million
to its facility with Ahli United Bank Egypt (AUBE) (outstanding loan balances
are excluding accrued interest for the period). It is worth noting that in
order to finance the early repayment settlement with General Electric, the
Company utilized a bridge loan facility of EGP 55 million. The facility was
withdrawn in Q1 2023 and settled in Q2 2023.
Liabilities
Accounts Payable(15)
Accounts payable as of 31 March 2024 stood at EGP 300 million, up from EGP 272
million at the end of 2023. Meanwhile, Days Payable Outstanding (DPO) came in
at 110 days, down from 113 days at 31 December 2023.
Put Option
The put option current liability stood at EGP 441 million as at 31 March 2024,
up from EGP 314 million at 31 December 2023, and is related to both:
· The option granted in 2011 to Dr. Amid, Biolab's CEO, to sell his
stake (40%) to IDH. The put option is in the money and exercisable since 2016
and is calculated as 7 times Biolab's LTM EBITDA minus net debt. Biolab's put
option liability decreased following the significant decline in the venture's
EBITDA for the period.
· The option granted in 2018 to the International Finance
Corporation from Dynasty - shareholders in Echo Lab - and it is exercisable in
2024. The put option is calculated based on fair market value (FMV).
The put option non-current liability amounted to EGP 48 million at the end of
Q1 2024, up from EGP 43 million at 31 December 2023, and is related to the
option granted in 2022 to Izhoor, IDH, and Biolab as part of their JV
agreement in Saudi Arabia. The option allows the non-defaulting party, at its
sole and absolute discretion, to serve one or more written notices to the
defaulting party. The notices enable the non-defaulting party to buy the
defaulting party's shares at the fair price, sell its shares to the defaulting
party at the fair price, or request the dissolution and liquidation of the JV
company. It is important to note that the put option, which grants these
rights to the non-defaulting party, does not have a specified expiration date.
1(5) Accounts payable is calculated based on average payables at the end of
each period.
Accounts Receivable and Provisions
Accounts receivable at 31 March 2023 amounted to EGP 703 million, up 23%
year-to-date. Meanwhile, IDH's receivables' Days on Hand (DoH) booked 141
days, up from 134 days at the end of 2023.
Provision for doubtful accounts during Q1 2024 recorded EGP 17 million, up
from EGP 11 million one year prior. Higher provision for doubtful accounts
continues to reflect slower collection rates due to inflationary pressures in
IDH's markets, particularly Egypt and Nigeria.
Inventory
At 31 March 2024, IDH booked an inventory balance of EGP 480 million, up 28%
compared to the end of 2023. Meanwhile, Days Inventory Outstanding (DIO)
increased to 164 days, from 133 days at 31 December 2023. Increased DIO
showcases management's proactive strategy of accumulating inventory to hedge
against inflationary pressures.
Cash and Net Debt
Cash balances and financial assets at amortised cost at 31 March 2024 reached
EGP 944 million, up from EGP 835 million at year-end 2023.
EGP million 31 Dec 2023 31 Mar 2024
Treasury Bills 133 290
Time Deposits 289 117
Current Accounts 391 514
Cash on Hand 21 23
Total 835 944
IDH's net debt(12) balance came in at EGP 359 million as of the end of Q1
2024, remaining relatively stable compared to EGP 361 million as at year-end
2023.
EGP million 31 Dec 2023 31 Mar 2024 31 Dec 2021
Cash and Financial Assets at Amortised Cost(13) 835 944 2,350
Lease Liabilities Property* (828) (937) 106
Total Financial Liabilities (Short-term and Long-term) (240) (250)
Interest Bearing Debt ("Medium Term Loans") (128) (116)
Net Debt Balance (361) (359) 1,483
Note: Interest Bearing Debt includes accrued interest for each period.
*If excluding Lease Liabilities Property (IFRS 16), IDH would have recorded
net cash of EGP 578 million
Lease liabilities and financial obligations on property came in at EGP 937
million at the end of Q1 2024, with the increase driven by the translation
effect due to a rise in JOD-denominated liabilities in Jordan following the
devaluation of the EGP in early 2024.
Meanwhile, financial obligations related to equipment stood at EGP 250 million
as at 31 Mar 2024, with the increase attributable to increases in USD-linked
contracts with equipment suppliers following the devaluation of the Egyptian
Pound.
Finally, interest bearing debt(14) (excluding accrued interest) reached EGP
104 million at the end of Q1 2024, down from EGP 111 million at year-end 2023.
12 The net debt balance is calculated as cash and cash equivalent balances
including financial assets at amortised cost, less interest-bearing debt
(medium term loans), finance lease and Right-of-use liabilities.
1(3) As outlined in Note 18 of IDH's Consolidated Financial Statements, some
term deposits and treasury bills cannot be accessed for over 3 months and are
therefore not treated as cash. Term deposits which cannot be accessed for over
3 months stood at EGP 67 million at March 2023 (2022: EGP 60 million).
Meanwhile, treasury bills not accessible for over 3 months stood at EGP 139
million (2022: EGP 107 million).
1(4) IDH's interest bearing debt as at 31 March 2024 included EGP 107 million
to its facility with Ahli United Bank Egypt (AUBE) (outstanding loan balances
are excluding accrued interest for the period). It is worth noting that in
order to finance the early repayment settlement with General Electric, the
Company utilized a bridge loan facility of EGP 55 million. The facility was
withdrawn in Q1 2023 and settled in Q2 2023.
Liabilities
Accounts Payable(15)
Accounts payable as of 31 March 2024 stood at EGP 300 million, up from EGP 272
million at the end of 2023. Meanwhile, Days Payable Outstanding (DPO) came in
at 110 days, down from 113 days at 31 December 2023.
Put Option
The put option current liability stood at EGP 441 million as at 31 March 2024,
up from EGP 314 million at 31 December 2023, and is related to both:
· The option granted in 2011 to Dr. Amid, Biolab's CEO, to sell his
stake (40%) to IDH. The put option is in the money and exercisable since 2016
and is calculated as 7 times Biolab's LTM EBITDA minus net debt. Biolab's put
option liability decreased following the significant decline in the venture's
EBITDA for the period.
· The option granted in 2018 to the International Finance
Corporation from Dynasty - shareholders in Echo Lab - and it is exercisable in
2024. The put option is calculated based on fair market value (FMV).
The put option non-current liability amounted to EGP 48 million at the end of
Q1 2024, up from EGP 43 million at 31 December 2023, and is related to the
option granted in 2022 to Izhoor, IDH, and Biolab as part of their JV
agreement in Saudi Arabia. The option allows the non-defaulting party, at its
sole and absolute discretion, to serve one or more written notices to the
defaulting party. The notices enable the non-defaulting party to buy the
defaulting party's shares at the fair price, sell its shares to the defaulting
party at the fair price, or request the dissolution and liquidation of the JV
company. It is important to note that the put option, which grants these
rights to the non-defaulting party, does not have a specified expiration date.
1(5) Accounts payable is calculated based on average payables at the end of
each period.
INTEGRATED DIAGNOSTICS HOLDINGS plc - "IDH"
AND ITS SUBSIDIARIES
Consolidated Financial Statements
for the quarter ended 31 March 2024
Consolidated statement of financial position as at 31 March 2024
Notes 31 March 2024 31 December
2023
EGP'000 EGP'000
Assets
Non-current assets
Property, plant and equipment 4 1,546,113 1,414,725
Intangible assets and goodwill 5 1,781,950 1,710,183
Right of use assets 6 788,975 683,025
Total non-current assets 4,117,038 3,807,933
Current assets
Inventories 480,344 374,650
Trade and other receivables 8 907,057 727,235
Financial assets at fair value through profit and loss 7 39,453 25,157
Financial assets at amortized cost 9 206,613 161,098
Cash and cash equivalents 10 737,481 674,253
Total current assets 2,370,948 1,962,393
Total assets 6,487,986 5,770,326
Equity
Share capital 1,072,500 1,072,500
Share premium reserve 1,027,706 1,027,706
Capital reserves (314,310) (314,310)
Legal reserve 51,641 51,641
Put option reserve (501,900) (356,583)
Translation reserve (354,845) (82,341)
Retained earnings 1,697,875 1,280,287
Equity attributable to the owners of the Company 2,678,667 2,678,900
Non-controlling interests 734,531 421,888
Total equity 3,413,198 3,100,788
Non-current liabilities
Provisions 21,471 17,758
Borrowings 13 53,972 67,465
Other financial obligations 14 966,298 891,350
Non-current put option liability 12 47,772 42,786
Deferred tax liabilities 18-C 411,121 374,729
Total non-current liabilities 1,500,634 1,394,088
Current liabilities
Trade and other payables 11 699,965 637,761
Other financial obligations 14 221,050 176,704
Current put option liability 12 454,128 313,796
Borrowings 13 49,797 43,680
Current tax liabilities 149,214 103,509
Total current liabilities 1,574,154 1,275,450
Total liabilities 3,074,788 2,669,538
Total equity and liabilities 6,487,986 5,770,326
The accompanying notes form an integral part of these consolidated financial
statements.
These condensed consolidated interim financial information were approved and
authorised for issue by the Board of Directors and signed on their behalf on
29 May 2024 by:
Dr. Hend El Sherbini Hussein Choucri
Chief Executive Officer Independent Non-Executive Director
Consolidated income statement for the quarter ended 31 March 2024
Notes 31 March 31 March
2024 2023
EGP'000 EGP'000
Revenue 21 1,170,573 915,291
Cost of sales (742,315) (590,717)
Gross profit 428,258 324,574
Marketing and advertising expenses (55,199) (63,295)
Administrative expenses 16 (132,316) (126,483)
Impairment loss on trade and other receivable (17,384) (10,683)
Other (expenses)/income (3,139) 4,697
Operating profit 220,220 128,810
Finance costs 17 (43,696) (42,795)
Finance income 17 326,371 124,488
Net finance (costs)/income 282,675 81,693
Profit before income tax 502,895 210,503
Income tax expense 18-B (101,286) (42,117)
Profit for the period 401,609 168,386
Profit attributed to:
Owners of the Company 417,588 172,909
Non-controlling interests (15,979) (4,523)
401,609 168,386
Earnings per share 20
Basic and diluted 0.70 0.29
The accompanying notes form an integral part of these consolidated financial
statements.
Consolidated statement of comprehensive income for the quarter ended 31 March
2024
31 March 31 March
2024 2023
EGP'000 EGP'000
Net profit for the period 401,609 168,386
Other comprehensive income:
Items that may be reclassified to profit or loss:
Exchange difference on translation of foreign operations 56,118 32,453
Other comprehensive income for the period, net of tax 56,118 32,453
Total comprehensive income for the period 457,727 200,839
Attributable to:
Owners of the Company 145,084 87,010
Non-controlling interests 312,643 113,829
457,727 200,839
The accompanying notes form an integral part of these consolidated financial
statements.
Consolidated statement of cash flows for the quarter ended 31 March 2024
Note 31 March 31 March
2024 2023
EGP'000 EGP'000
Cash flows from operating activities
Profit before tax 502,895 210,503
Adjustments for:
Depreciation of property, plant and equipment 4 69,826 63,717
Depreciation of right of use assets 6 38,318 32,938
Amortisation of intangible assets 5 1,733 1,913
Interest income 17 (25,132) (15,168)
Interest expense 17 38,769 40,387
Bank Charges 4,927 2,408
Gain on disposal of Property, plant and equipment 757 (7)
Impairment in trade and other receivables 17,384 10,683
impairment in goodwill - (98)
Equity settled financial assets at fair value (14,296) (4,897)
ROU Asset/Lease Termination 1,154 (237)
Hyperinflation losses 17 - -
Unrealised foreign currency exchange (gains) losses 17 (301,239) (109,320)
Change in Provisions 3,713 19
Change in Inventories (86,430) (24,065)
Change in trade and other receivables (118,401) (15,677)
Change in trade and other payables (19,340) (93,454)
Net cash generated from operating activities 114,638 99,645
Cash flows from investing activities
Interest received on financial asset at amortised cost 25,052 15,113
Payments for the purchase of financial assets at amortized cost (77,271) (252,163)
Proceeds for the sale of financial assets at amortized cost 49,050 177,816
Payments for acquisition of property, plant and equipment 4 (54,606) (85,501)
Payments for acquisition of intangible assets 5 (34) (944)
Proceeds from sale of Property, plant and equipment 2,769 584
Net cash flows generated (used in) from investing activities (55,040) (145,095)
Cash flows from financing activities
Proceeds from borrowings 6,117 54,936
Repayments of borrowings (13,493) (8,483)
Interest paid (43,938) (37,011)
Bank charges paid (4,927) (2,408)
Payment of finance lease liabilities (49,599) (111,994)
Net cash flows used in financing activities (105,840) (104,960)
Net (decrease) increase in cash and cash equivalents (46,242) (150,410)
Cash and cash equivalents at the beginning of the year 674,253 648,512
Effect of exchange rate 109,470 57,271
Cash and cash equivalents at the end of the period 10 737,481 555,373
Non-cash investing and financing activities disclosed in other notes are:
· acquisition of right-of-use assets - note 6
· Property, plant and equipment - note 4
· Put option liability - note 12
The accompanying notes form an integral part of these consolidated financial
statements.
Consolidated statement of changes in equity for the quarter ended 31 March
2024
EGP'000 Share Capital Share premium reserve Capital reserves Legal reserve* Put option reserve Translation reserve Retained earnings Total attributed to Non-Controlling interests Total Equity
the owners of the
Company
At 1 January 2023 1,072,500 1,027,706 (314,310) 51,641 (356,583) (82,341) 1,280,287 2,678,900 421,888 3,100,788
Profit for the period - - - - - - 417,588 417,588 (15,979) 401,609
Other comprehensive income for the period - - - - - (272,504) - (272,504) 328,622 56,118
Total comprehensive income at 31 March 2024 - - - - - (272,504) 417,588 145,084 312,643 457,727
Transactions with owners of the Company
Contributions and distributions
Dividends - - - - - - - - - -
Legal reserve formed during the period - - - - - - - - - -
Movement in put option liabilities - - - - (145,317) - - (145,317) - (145,317)
Impact of hyperinflation - - - - - - - - - -
paid share from non-controlling interest
Non-controlling interests cash injection in subsidiaries during the period - - - - - - - - - -
Total contributions and distributions - - - - (145,317) - - (145,317) - (145,317)
Balance at 31 March 2024 1,072,500 1,027,706 (314,310) 51,641 (501,900) (354,845) 1,697,875 2,678,667 734,531 3,413,198
As at 1 January 2023 1,072,500 1,027,706 (314,310) 51,641 (490,695) 24,173 783,081 2,154,096 292,885 2,446,981
Profit for the period - - - - - - 172,909 172,909 (4,523) 168,386
Other comprehensive loss for the period - - - - - (85,899) - (85,899) 118,352 32,453
Total comprehensive income at 31 March 2022 - - - - - (85,899) 172,909) 87,010 113,829 200,839
Transactions with owners of the Company
Contributions and Distributions
Dividends - - - - - - - - - -
Legal reserve formed during the period - - - - - - - - - -
Movement in put option liabilities - - - - 192,289 - - 192,289 - 192,289
Impact of hyperinflation - - - - - - - - - -
Non-controlling interest cash injection in subsidiaries during the period - - - - - - - - - -
Total contributions and distributions - - - - 192,289 - - 192,289 - 192,289
Balance at 31 March 2023 1,072,500 1,027,706 (314,310) 51,641 (298,406) (61,726) 955,990 2,433,395 406,714 2,840,109
* Under Egyptian Law each subsidiary 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 consolidated financial
statements.
(In the notes all amounts are shown in Egyptian Pounds "EGP'000" unless
otherwise stated)
1. Reporting entity
Integrated Diagnostics Holdings plc "IDH" or "the Company" is a Company which
was incorporated in Jersey on 4 December 2014 and established according to the
provisions of the Companies (Jersey) Law 1991 under Registered No. 117257.
These condensed consolidated interim financial information as of and for the
three months ended 31 March 2024 comprise the Company and its subsidiaries
(together referred as the 'Group'). The Company is a dually listed entity, in
both London Stock Exchange (since 2015) and in the Egyptian Exchange (during
May 2021).
The principal activities of the Company and its subsidiaries (together "The
Group") include investments in all types of the healthcare field of medical
diagnostics (the key activities are pathology and Radiology related tests),
either through acquisitions of related business in different jurisdictions or
through expanding the acquired investments they have. The key jurisdictions
that the Group operates are in Egypt, Jordan, Nigeria, Sudan and Saudi Arabia.
The Group's financial year starts on 1 January and ends on 31 December of each
year.
This condensed consolidated interim financial information were approved for
issue by the Directors of the Company on 29 May 2024.
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 2023 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 2023 which is available at
www.idhcorp.com (http://www.idhcorp.com) ,. In addition, results of the three
months period ended 31 March 2024 are not necessary indicative for the results
that may be expected for the financial year ending 31 December 2024.
B) Basis of measurement
The condensed consolidated interim financial information has been prepared on
the historical cost basis except where adopted IFRS mandates that fair value
accounting is required which is related to the financial assets and
liabilities measured at fair value.
C) Functional and presentation currency
These condensed consolidated interim financial information is presented in
Egyptian Pounds (EGP'000). The functional currency of the majority of the
Group's entities is the Egyptian Pound (EGP) and is the currency of the
primary economic environment in which the Group operates.
The Group also operates in Jordan, Sudan, Nigeria and Saudi Arabia and the
functional currencies of those foreign operations are the local currencies of
those respective territories, however due to the size of these operations,
there is no significant impact on the functional currency of the Group, which
is the Egyptian Pound (EGP).
3. Significant accounting policies
In preparing these condensed consolidated interim financial information, the
significant judgments made by the management in applying the Group's
accounting policies and the key sources of estimation uncertainty were the
same as those that were applied to the consolidated financial statements for
the year ended 31 December 2023."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 statements
published for the year ended 31 December 2023. 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 statements for the year ended 31 December 2023".
4. Property, plant and equipment
Land & buildings Medical, electric Leasehold Fixtures, fittings & vehicles Project under construction Payment on account Total
& information
improvements
system equipment
Cost
At 1 January 2024 460,869 1,254,894 644,956 155,168 38,227 10,882 2,564,996
Additions - 35,133 6,965 6,554 5,954 - 54,606
Hyperinflation effect - - - - - - -
Disposals - (769) (2,926) (1,247) - (4,942)
Exchange differences 23,772 123,543 106,657 39,949 5,343 - 299,264
Transfers 29,516 (29,516) -
At 31 March 2024 484,641 1,412,801 785,168 200,424 20,008 10,882 2,913,924
Depreciation
At 1 January 2024 69,311 655,649 353,808 71,503 - - 1,150,271
Depreciation for the period 2,050 38,528 24,818 4,430 - - 69,826
Disposals - (158) (408) (850) - - (1,416)
Exchange differences 2,409 74,705 49,724 22,292 - - 149,130
At 31 March 2024 73,770 768,724 427,942 97,375 - - 1,367,811
Net book amount
At 31 March 2024 410,871 644,077 357,226 103,049 20,008 10,882 1,546,113
At 31 December 2023 391,558 599,245 291,148 83,665 38,227 10,882 1,414,725
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 2024 1,304,967 403,461 99,358 1,807,786
Additions - - 34 34
Disposals - - (67) (67)
Exchange differences 48,645 21,044 11,457 81,146
Balance at 31 March 2024 1,353,612 424,505 110,782 1,888,899
Amortisation and impairment
Balance at 1 January 2024 17,718 392 79,493 97,603
Amortisation - - 1,734 1,734
Disposals - - (67) (67)
Exchange differences 541 36 7,102 7,679
Balance at 31 March 2024 18,259 428 88,262 106,949
Net book amount
At 31 March 2024 1,335,353 424,077 22,520 1,781,950
At 31 December 2023 1,287,249 403,069 19,865 1,710,183
Goodwill impairment reviews are undertaken annually or more frequently if
events or changes in circumstances indicate a potential impairment. No
indicators of impairment have been identified during the three months ended 31
March 2024.
6. Right-of-use assets
31 March 2024 31 December 2023
Balance at 1 January 683,025 622,975
Addition for the period / year 15,559 157,482
Depreciation charge for the period / year (38,319) (134,033)
Terminated contracts (1,154) (5,170)
Exchange differences 129,864 41,771
Balance 788,975 683,025
7. Financial asset at fair value through profit or loss
31 March 2024 31 December 2023
Current equity investments 39,453 25,157
39,453 25,157
* On August 17, 2017, Almakhbariyoun AL Arab (seller) has signed IT
purchase Agreement with JSC Mega Lab (Buyer) to transfer and install the
Laboratory Information Management System (LIMS) for a purchase price amounted
to USD 400 000, which will be in the form of 10% equity stake in JSC Mega Lab.
In case the valuation of the project is less or more than USD 4,000,000, the
seller stake will be adjusted accordingly, in a way that the seller equity
stake shall not fall below 5% of JSC Mega Lab.
- Ownership percentage in JSC Mega Lab at the transaction date on
April 8, 2019, and as of March 31, 2024, 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).
- If JCI accreditation is not obtained, immediately after the
expiration of the 12 months period, CHG shall have a call option (the
Accreditation Call option), exercisable within 6 months period, allowing CHG
to purchase BioLab's Shares in JSC Mega Lab at a price of the equity value
of USD 400,00.00 plus the 20% annual IRR.
- After 12 months from the date of the put option period
expiration, CHG to purchase Biolab's Stake in JSC Megalab having value of USD
400,000 plus higher of 20% annual IRR or 6X EV/EBITDA (of the financial year
immediately preceding the call option exercise date).
- In case the Management Agreement or the Purchase Agreement
and/or the Service level Agreement is terminated/cancelled within 6 months
period from the date of such termination/cancellation, CHG shall have a call
option, which allows the CHG to purchase Biolab's Strake in JSC Megalab having
value of USD 400,000.00 plus 20% annual Interred Rate of Return (IRR).
8. Trade and other receivables
31 March 2024 31 December 2023
Trade receivables - net* 703,143 569,738
Prepayments 62,425 42,185
Due from related parties note (15) 5,704 5,037
Other receivables - net* 133,951 108,521
Accrued revenue 1,834 1,754
907,057 727,235
* The expected credit loss related to trade and other receivables was EGP
216,938K (2023: EGP 191,580K). Below show the movements in the provision for
impairment of trade and other receivables:
31 March 2024 31 December 2023
At 1 January 191,580 145,586
Charge for the period 17,384 51,255
Exchange differences 7,974 (5,261)
216,938 191,580
9. Financial assets at amortised cost
31 March 2024 31 December 2023
Term deposits (more than 3 months) 67,457 49,244
Treasury bills (more than 3 months) 139,156 111,854
206,613 161,098
The maturity date of the treasury bills and Fixed-term deposits are between
more than 3 months and 12 months and have average interest rates treasury
bills of EGP 26.53% and Fixed-term deposits of EGP and JOD 5.59% and 5.38%
respectively.
10. Cash and cash equivalents
31 March 2024 31 December 2023
Cash at banks and on hand 537,254 412,561
Treasury bills (less than 3 months) 151,119 21,461
Term deposits (less than 3 months) 49,108 240,231
737,481 674,253
Cash at banks earns interest at floating rates based on daily bank deposit
rates. Short-term deposits and treasury bills are made for varying periods of
between one day and three months, depending on the immediate cash requirements
of the Group, and earn interest at the respective weighted average rate. Of
the above Short-term deposits relates to amounts held in Egypt with a weighted
average rate of 16.61% (2023: 16.40%), Short-term deposits relates to amounts
held in Jordan with a weighted average rate of 5% (2023: 5%) and Short-term
deposits relates to amounts held in Nigeria with a weighted average rate of
5.6% (2023:5.6%). Treasury bills are denominated in EGP and earn interest at a
weighted average rate of 24.19% (2023: 24.95%) per annum.
11. Trade and other payables
31 March 2024 31 December 2023
Trade payable 300,016 271,741
Accrued expenses 174,668 178,499
Due to related parties note (15) 9,076 5,962
Other payables 144,271 112,750
Deferred revenue 68,212 59,918
Accrued finance cost 3,722 8,891
699,965 637,761
12. Put option liability
31 March 2024 31 December 2023
Current put option - Biolab Jordan 441,293 301,383
Current put option - Eagle Eye-Echo scan 12,835 12,413
454,128 313,796
31 March 2024 31 December 2023
Non-current put option - Medical Health Development 47,772 42,786
47,772 42,786
12. Put option liability (continued)
Put option - Biolab Jordan
The accounting policy for put options after initial recognition is to
recognise all changes in the carrying value of the put option liability within
equity.
Through the historic acquisitions of Makhbariyoun Al Arab the Group entered
into separate put option arrangements to purchase the remaining equity
interests from the vendors at of a subsequent date. At acquisition, a put
option liability has been recognised at the net present value of the exercise
price of the option.
The option is calculated at seven times EBITDA of the last 12 months minus Net
Debt and its exercisable in whole starting the fifth anniversary of completion
of the original purchase agreement, which fell due in June 2016. The vendor
has not exercised this right at 31 March 2024. It is important to note that
the put option liability is treated as current as it could be exercised at any
time by the NCI. However, based on discussions and ongoing business
relationships, there is no expectation that this will happen in next 21
months. The option has no expiry date.
Put option - Eagle Eye-Echo scan
According to the definitive agreements signed on 15 January 2018 between
Dynasty Group Holdings Limited and the International Finance Corporation (IFC)
related to the Eagle Eye-Echo scan transaction, IFC has the option to put it
is shares to Dynasty in year 2024. The put option price will be calculated on
the basis of the fair market value determined by an independent valuator.
Put option - Medical Health Development
Based on the agreement made on October 27th, 2022, between Business Flower
Holding LLC, Integrated Diagnostics Holdings plc and Al Makhbariyoun Al Arab
there is a clause that in cases of bankruptcy and defaulting, a non-defaulting
party is entitled to implement any of the following options for a defaulting
party's share without reference to it:
(A) sell to the Non-Defaulting Party its Shares at the Fair Price of such
Shares.
(B) buy the Non-Defaulting Party's Shares at the Fair Price of such Shares.
(C) requesting the dissolution and liquidation of the Company.
It's important to note that the put option, which grants these rights to the
non-defaulting party, does not have a specified expiration date.
13. Loans and borrowings
Currency Nominal interest rate Maturity 31 March 2024 31 December 2023
AUB ـــ BANK EGP CBE corridor rate*+1% 26 January 2027 80,958 94,451
AUB - BANK EGP Secured 5% 3 May 2024 13,121 13,121
Bank: Sterling BANK NGN Secured 22% 26 May 2024 9,690 3,573
103,769 111,145
Amount held as:
Current liability 49,797 43,680
Non- current liability 53,972 67,465
103,769 111,145
A) In July 2018, AL-Borg lab, one of IDH subsidiaries,
was granted a medium term loan amounting to EGP 130.5m from Ahli United Bank
"AUB Egypt" to finance the investment cost related to the expansion into the
radiology segment. As at 31 March 2024 only EGP 124.9 M had been drawn down
from the total facility available with 43.9 M had been repaid. The loan will
be fully repaid by January 2027.
The loan contains the following financial covenants which if breached will
mean the loan is repayable on demand:
1. The financial leverage shall not exceed 0.7 throughout the period
of the loan
"Financial leverage": total bank debt divided by net equity.
2. The debt service ratios (DSR) shall not be less than 1.35 starting
2020
"Debt service ratio": cash operating profit after tax plus depreciation for
the financial year less annual maintenance on machinery and equipment adding
cash balance (cash and cash equivalent) divided by total financial payments.
"Cash operating profit": Operating profit after tax, interest expense,
depreciation and amortisation, is calculated as follows: Net income after tax
and unusual items adding Interest expense, Depreciation, Amortisation and
provisions excluding tax related provisions less interest income and
Investment income and gains from extraordinary items.
"Financial payments": current portion of long-term debt including finance
lease payments, interest expense and fees and dividends distributions.
3. The current ratios shall not be less than 1.
"Current ratios": Current assets divided current liabilities.
The terms and conditions of outstanding loans are as follows:
* As at 31 March 2024 corridor rate 28.25% (2023: 20.25%)
AL- Borg company didn't breach any covenants for MTL agreements.
14. Other financial obligations
31 March 2024 31 December 2023
Financial liability- laboratory equipment 249,983 240,015
Lease liabilities building 937,365 828,039
1,187,348 1,068,054
The un-discounted financial obligations for the laboratory equipment and
building are as follows:
31 March 2024
Minimum payments Interest Principal
Less than one year 344,195 123,145 221,050
Between one and five years 1,147,627 314,169 833,458
More than five years 179,130 46,290 132,840
1,670,952 483,604 1,187,348
31 December 2023
Minimum payments Interest Principal
Less than one year 291,342 114,638 176,704
Between one and five years 1,054,902 295,586 759,316
More than Five years 166,965 34,931 132,034
1,513,209 445,155 1,068,054
Amounts recognised in profit or loss:
31 March
2024 2023
Interest on lease liabilities 26,257 22,323
Expenses related to short-term lease 1,443 2,676
15. Related party transactions
The significant transactions with related parties, their nature volumes and
balance during the period
31 March 2024 are as follows:
31 March 2024
Related Party Nature of transaction Nature of relationship Transaction amount of the year Amount due from / (to)
EGP'000 EGP'000
International Fertility (IVF)** Expenses paid on behalf Affiliate 6 6
H.C Security Provide service Entity owned by Company's board member (142) (235)
Life Health Care Provided service Entity owned by Company's CEO 277 3,650
Dr. Amid Abd Elnour Put option liability Bio. Lab C.E.O and shareholder (159,882) (461,265)
Current account Bio. Lab C.E.O and shareholder (112) (578)
International Finance corporation (IFC) Put option liability Echo-Scan shareholder (423) (12,835)
Integrated Treatment for Kidney Diseases (S.A.E) Collection Entity owned by Company's CEO (207) 2,048
Medical Test analysis 591
Hena Holdings Ltd shareholders' dividends deferral agreement shareholder (1,568) (4,531)
Actis IDH Limited shareholders' dividends deferral agreement shareholder (1,292) (3,732)
Business Flowers Holding Put option liability shareholder (4,986) (47,772)
(525,244)
15. Related party transactions (continued)
31 December 2023
Related Party Nature of transaction Nature of relationship Transaction amount of the year Amount due from / (to)
EGP'000 EGP'000
AL borg Scan (S.A.E)* Expenses paid on behalf Affiliate (351) -
International Fertility (IVF)** Expenses paid on behalf Affiliate (1,771) -
H.C Security Provide service Entity owned by Company's board member 6 (93)
Life Health Care Provided service Entity owned by Company's CEO 855 3,373
Dr. Amid Abd Elnour Put option liability Bio. Lab C.E.O and shareholder 138,312 (301,383)
Current account Bio. Lab C.E.O and shareholder 19,542 (466)
International Finance corporation (IFC) Put option liability Echo-Scan shareholder 38,587 (12,413)
International Finance corporation (IFC) Current account Echo-Scan shareholder 623 -
Integrated Treatment for Kidney Diseases (S.A.E) Rental income Entity owned by Company's CEO 217 1664
Medical Test analysis 591 -
HENA HOLDINGS LTD shareholders' dividends deferral agreement shareholder (590) (2,963)
ACTIS IDH LIMITED shareholders' dividends deferral agreement shareholder (485) (2,440)
Business Flowers Holding Put option liability shareholder (42,786)
(357,507)
* ALborg Scan is a company whose shareholders include Dr. Moamena Kamel
(founder of IDH subsidiary Al-Mokhtabar Labs).
** International Fertility (IVF) is a company whose shareholders include Dr.
Moamena Kamel (founder of IDH subsidiary Al-Mokhtabar Labs).
15. Related party transactions (continued)
Compensation of key management personnel of the Group
The amounts disclosed in the table are the amounts recognised as an expense
during the reporting period related to key management personnel.
31 March 2024 31 March 2023
Short-term employee benefits 22,669 20,192
22,669 20,192
16. General and administrative expenses
31 March
2024 2023
Wages and salaries 61,059 51,762
Depreciation 7,735 8,459
Amortisation 1,807 1,554
Consulting fees 24,545 37,061
Other expenses 37,170 27,647
Total 132,316 126,483
17. Net finance cost
For the three months ended
31 March
2024 2023
Finance income
Interest income 25,132 15,168
Net foreign exchange gain 301,239 109,320
Total finance income 326,371 124,488
Finance cost
Bank charges (4,927) (2,408)
Interest expense (38,769) (40,387)
Total finance cost (43,696) (42,795)
Net finance income 282,675 81,693
The increase is mainly driven from the change of exchange rate between EGP and
other currencies that took place in March 2023 which resulted into foreign
exchange gain during the period ended 31 March 2024.
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 31 March
2024 2023
Current tax:
Current period (66,320) (41,136)
Current tax (66,320) (41,136)
Deferred tax:
Deferred tax arising on undistributed reserves in subsidiaries (31,055) 190
Relating to origination and reversal of temporary differences (3,911) (1,171)
Total Deferred tax expense (34,966) (981)
Tax expense recognised in profit or loss (101,286) (42,117)
C) Deferred tax liabilities
Deferred tax relates to the following:
31 March 31 December
2024 2023
Property, plant and equipment (36,957) (39,552)
Intangible assets (118,965) (111,033)
Undistributed reserves from Group subsidiaries (257,930) (226,875)
Provisions 2,731 2,731
Net deferred tax liabilities (411,121) (374,729)
19. Financial instruments
The Group has reviewed the financial assets and liabilities held at 31 March
2024. It has been deemed that the carrying amounts for all financial
instruments are a reasonable approximation of fair value. All financial
instruments are deemed Level 3.
20. Earnings per share
For the three months ended
31 March
2024 2023
Profit attributed to owners of the parent 417,588 172,909
Weighted average number of ordinary shares in issue 600,000 600,000
Basic and diluted earnings per share 0.70 0.29
The Company has no potential diluted shares as at 31 March 2024 and 31 March
2023, therefore; the earnings per diluted share are equivalent to basic
earnings per share.
21. Segment reporting
Operating segments are reported in a manner consistent with the internal
reporting provided to the chief operating decision-maker. The chief operating
decision-maker who is responsible for allocating resources and assessing
performance of the operating segments, has been identified as the steering
committee that makes strategic decisions.
The Group has five operating segments based on geographical location rather
than two operating segments based on service provided, as the Group's Chief
Operating Decision Maker (CODM) reviews the internal management reports and
KPIs of each geography.
The Group operates in five geographic areas, Egypt, Sudan, Jordan, Nigeria and
Saudi Arabia. As a provider of medical diagnostic services, IDH's operations
in Sudan are not subject to sanctions. The revenue split, EBITDA split (being
the key profit measure reviewed by CODM) net profit and loss between the five
regions is set out below.
Revenue by geographic location
For the three months ended Egypt region Sudan region Jordan region Nigeria region Saudi Arabia Total
31 March 24 988,936 - 165,191 15,769 677.00 1,170,573
31 March 2023 731,040 8,780 144,473 30,998 - 915,291
EBITDA by geographic location
For the three months ended Egypt region Sudan region Jordan region Nigeria region Saudi Arabia Total
31 March 2024 319,594 (18) 39,131 (6,956) (21,654) 330,097
31 March 2023 197,947 1,622 35,832 (8,023) - 227,378
21. Segment reporting (continued)
Net profit / (loss) by geographic location
For the three months ended Egypt region Sudan region Jordan region Nigeria region Saudi Arabia Total
31 March 2024 423,245 10,703 (1,193) (3,562) (27,584) 401,609
31 March 2023 171,237 4,072 6,392 (13,315) - 168,386
Revenue by type Net profit by type
31 March 31 March
2024 2023 2024 2023
Pathology 1,104,449 856,436 423,389 208,340
Radiology 66,124 58,855 (21,780) (39,954)
1,170,573 915,291 401,609 168,386
Non-current assets by geographic location
Egypt region Sudan region Jordan region Nigeria region Saudi Arabia Total
31 March 2024 3,067,334 5,896 898,069 46,905 98,834 4,117,038
31 December 2023 3,091,485 3,848 609,699 47,639 55,262 3,807,933
The operating segment profit measure reported to the CODM is EBITDA, as
follows:
For the three months ended
31 March
2024 2023
Profit from operations 220,220 128,810
Property, plant and equipment depreciation 69,826 63,717
Right of use depreciation 38,318 32,938
Amortization of Intangible assets 1,733 1,913
EBITDA 330,097 227,378
22. Significant events during the period
The Monetary Policy Committee of the Central Bank of Egypt decided to raise
the deposit and lending interest rates by 200 basis points on 1 February 2024,
then by 600 basis points on 6 March 2024. The credit and discount rates were
also raised by 600 basis points on 6 March 2024.
The Central Bank of Egypt announced that it would allow the foreign exchange
rate to be determined against the Egyptian pound as per market mechanisms,
starting from 6 March 2024.
23. Subsequent events
In the Board of Directors meeting of Integrated Diagnostics Holdings plc "IDH"
on May 15, 2024, the company approved the exit from the Egyptian Stock
Exchange of its ordinary shares from the Egyptian Stock Exchange. The decision
shall be presented to the company's general assembly during its annual
meeting.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END QRFEAFSNAADLEAARecent news on Integrated Diagnostics Holdings
See all newsREG - Integrated Diag Hdgs - Results of Extraordinary General Meeting
AnnouncementREG - Integrated Diag Hdgs - Publication of Circular and Notice of EGM
AnnouncementREG - Integrated Diag Hdgs - IDH's proposed revised Delisting Buyback Price
AnnouncementREG - Integrated Diag Hdgs - Results of Extraordinary General Meeting
AnnouncementREG - Integrated Diag Hdgs - 1ST QUARTER RESULTS
Announcement