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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Integrated Diagnostics Holdings Plc | LSE:IDHC | London | Ordinary Share | JE00BLKGSR75 | ORD USD0.25 |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| -0.001 | -0.28% | 0.355 | 0.35 | 0.355 | 0.355 | 0.355 | 0.355 | 9,840 | 16:00:13 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2021 to Apr 2024
TIDMIDHC
RNS Number : 4515S
Integrated Diagnostics Holdings PLC
16 November 2021
Integrated Diagnostics Holdings Plc
3(rd) Quarter Results
Tuesday, 16 November 2021
Integrated Diagnostics Holdings Plc reports another set of record-breaking results on the back of strong demand across its entire portfolio
(Cairo and London) Integrated Diagnostics Holdings ("IDH," "the Group," or "the Company"), a leading consumer healthcare company with operations in Egypt, Jordan, Sudan and Nigeria, released today its reviewed financial statements and operational performance for the nine-month period ended 30 September 2021, reporting revenue of EGP 3,767 million, up 126% from the comparable period of 2020. Profitability remained at an all-time high, with normalised EBITDA(1) growing 180% year-on-year to reach EGP 1,992 million, and net profit recording a three-fold year-on-year increase recording EGP 1,148 million in 9M 2021. IDH's nine-month results were bolstered by a record-breaking third quarter which saw the Company outperform its already remarkable results from the first and second quarters of this year to deliver revenue and net profit quarter-on-quarter growth of 27% and 47%, respectively.
Financial Results
EGP mn 9M 2020 9M 2021 Change ====================== ======== ======== ========= Revenues 1,670 3,767 126% ---------------------- -------- -------- --------- Cost of Sales 840 1,600 90% ---------------------- -------- -------- --------- Gross Profit 830 2,167 161% ---------------------- -------- -------- --------- Gross Profit Margin 50% 58% 7.8 pts ---------------------- -------- -------- --------- Operating Profit (2) 575 1,823 217% ---------------------- -------- -------- --------- Normalised EBITDA(1) 710 1,992 180% ---------------------- -------- -------- --------- EBITDA Margin 43% 53% 10.4 pts ---------------------- -------- -------- --------- Net Profit 375 1,148 206% ---------------------- -------- -------- --------- Net Profit Margin 22% 30% 8.0 pts ---------------------- -------- -------- --------- Cash Balance 465 1,807 288% ---------------------- -------- -------- ---------
Key Operational Indicators
Hot Features
Premium
9M 2020 9M 2021 change
=========================== ======== ======== =======
Branches 471 507 36
--------------------------- -------- -------- -------
Patients ('000) 4,792 7,480 56%
--------------------------- -------- -------- -------
Revenue per Patient (EGP) 348 504 44%
--------------------------- -------- -------- -------
Tests ('000) 18,765 24,960 33%
--------------------------- -------- -------- -------
Revenue per Test (EGP) 89 151 70%
--------------------------- -------- -------- -------
Test per Patient 3.9 3.3 -15%
--------------------------- -------- -------- -------
1 Normalised EBITDA is calculated as operating profit plus depreciation and amortization and excluding one-off fees incurred in 9M 2021 (EGP 29.0 million) related to the Company's dual listing on the EGX completed in May 2021.
2 Operating Profit excludes one-off fees incurred in 9M 2021 (EGP 29.0 million) related to the Company's dual listing on the EGX completed in May 2021.
Introduction
i. Financial Highlights
-- Revenue increased by an impressive 126% year-on-year in 9M 2021 to EGP 3,767 million on the back of strong results across both the Company's Covid-19-related(3) and conventional tests portfolios. Top-line growth for the period was supported by a 33% year-on-year increase in tests performed coupled with a 70% year-on-year rise in average price per test. Controlling for Covid-19-related tests, IDH's top-line expanded a solid 30% year-on-year in 9M 2021 as the Company's conventional test offering continues to pick up steam following widespread shutdowns and lockdowns at the early onset of covid. In Q3 2021, IDH outperformed its already impressive results from the first and second quarters of this year to deliver quarter-on-quarter revenue growth of 27% and year-on-year revenue growth of 105%.
-- Covid-19-related tests include both core Covid-19 tests (Polymerase Chain Reaction (PCR), Antigen, and Antibody) as well as other routine inflammatory and clotting markers including, but not limited to, Complete Blood Picture, Erythrocyte Sedimentation Rate (ESR), D-Dimer, Ferritin and C-reactive Protein (CRP), which the Company opted to include in the classification as "other Covid-19-related tests" due to the strong rise in demand for these tests witnessed following the outbreak of Covid-19. More specifically, during 9M 2021 core Covid-19 tests made up 42% of consolidated revenue, while other Covid-19-related tests made a 9% contribution to consolidated revenue for the nine-month period.
-- Consolidated revenues continued to be supported by IDH's house call service in Egypt and Jordan. Revenue generated by the service expanded 146% year-on-year in 9M 2021, with its contribution to total revenue reaching 20% versus 19% in 9M 2020. Through its house call service, IDH successfully served over 944 thousand patients in 9M 2021 (up 69% versus 9M 2020), performing 4.9 million tests (up 34% year-on-year). In response to the service's increasingly popularity, the Company has been expanding its house call capabilities and in 9M 2021 was able to carry out an average of 3,500 house call visits per day, up remarkably from the 2,000 visits per day performed in 9M 2020.
-- Gross Profit recorded EGP 2,167 million in 9M 2021, up 161% year-on-year, with gross profit margin at 58% or an eight percentage points expansion versus last year. Improved gross profitability for the period came on the back strong top-line growth and the subsequent dilution of fixed costs for the period such as direct salaries and wages and other expenses. On a quarterly basis, gross profit recorded EGP 861 million, up 29% from Q2 2021 and with an associated margin of 58% versus 57% last quarter.
-- Operating Profit(4) posted a strong 217% year-on-year rise in 9M 2021 to EGP 1,823 million. Operating profit margin expanded an impressive 14 percentage points to reach 48% in 9M 2021 versus 34% this time last year. The remarkable growth in operating profit was supported by strong gross profitability for the period. Operating profitability was further buoyed by the normalisation of provisions booked in 9M 2021, which stood at EGP 18 million down from the EGP 36 million in 9M 2020 that had been booked to account for expected credit losses in accordance with IFRS 9.
-- Normalised EBITDA(5) increased 180% year-on-year to EGP 1,992 million in 9M 2021, while EBITDA margin expanded 10 percentage points to record 53% for the period. Strong EBITDA profitability was supported by the Company's remarkable top-line growth and the subsequent dilution of its fixed costs. In Q3 2021, normalised EBITDA reached EGP 790 million, up a solid 31% from last quarter's figure. Normalised EBITDA margin stood at 54% for the quarter compared to 52% in Q2 2021.
-- Net Profit recorded EGP 1,148 million in 9M 2021, a three-fold increase from the same period of last year. Net profit margin stood at 30% versus 22% in 9M 2020. Net profit growth comes on the back of strong EBITDA level profitability and despite the Company booking EGP 29 million in one-off fees related to its dual-listing in May 2021. On a quarterly basis, net profit stood at EGP 480 million, up 47% quarter-on-quarter and with an associated margin of 33% in Q3 2021 versus 28% the previous quarter.
-- Full-year guidance: IDH is on track to deliver record high revenues of around EGP 4.9 billion in FY 2021 (representing year-on-year growth above the 80% mark) with a normalised EBITDA margin(5) in the 50% range. The record-breaking performance is set to be supported by the strong and sustained recovery witnessed by IDH's conventional business coupled with robust contributions coming from its Covid-19-related test offering in both Egypt and Jordan.
(3) Covid-19-related tests include both core Covid-19 tests (Polymerase Chain Reaction (PCR), Antigen, and Antibody) as well as other routine inflammatory and clotting markers including, but not limited to, Complete Blood Picture, Erythrocyte Sedimentation Rate (ESR), D-Dimer, Ferritin and C-reactive Protein (CRP), which the Company opted to include in the classification as "other Covid-19-related tests" due to the strong rise in demand for these tests witnessed following the outbreak of Covid-19.
(4) Operating Profit excludes one-off fees incurred in 9M 2021 (EGP 29.0 million) related to the Company's dual listing on the EGX completed in May 2021.
(5) Normalised EBITDA is calculated as operating profit plus depreciation and amortization and minus one-off fees incurred in 9M 2021 (EGP 29 million) related to the Company's EGX listing completed in May 2021.
ii. Operational Highlights
-- IDH's branch network stood at 507 branches as of 30 September 2021, up from 481 branches and 495 branches as of 31 December 2020 and 30 June 2021, respectively.
-- Total tests performed increased 33% year-on-year to reach 25.0 million in 9M 2021. Test volume growth came on the back of both strong demand for IDH's Covid-19-related(6) test offering coupled with a 20% year-on-year increase in conventional tests performed by the Group during the nine-month period. During the third quarter of the year, IDH performed 8.6 million tests, up 5% from the previous quarter supported by both higher Covid-19-related and conventional tests performed during the quarter.
-- Average revenue per test increased 70% year-on-year to EGP 151 in 9M 2021. Controlling for the generally higher value Covid-19-related(6) tests, average revenue per test records an 8% increase versus last year.
-- Total patients served reached 7.5 million in 9M 2021, an increase of 56% from the comparable period of last year. Meanwhile, average test per patient declined to 3.3 in 9M 2021 from 3.9 last year as an increasing number of patients visit the Group's labs for single Covid-19 tests (PCR, Antigen and Antibody).
-- IDH's Egyptian operations generated revenue of EGP 3,122 million, up 122% from 9M 2020 as both patient and test volumes posted solid year-on-year expansions for the period. The country's top-line growth continued to be supported by both Covid-19-related(6) and conventional tests, and was further bolstered by the Group's house call service which in 9M 2021 contributed 23% of Egypt's top-line versus 20% in 9M 2020. Controlling for Covid-19-related contributions in 9M 2021, revenue increased 30% year-on-year driven by a 21% increase in conventional tests performed versus last year.
-- Al-Borg Scan reported revenue of EGP 31 million, up 92% increase compared to 9M 2020. Top-line growth at the venture was supported by a 75% year-on-year rise in tests performed. To capitalise on the rising patient demand for IDH's radiology service, the Group inaugurated a third Al-Borg Scan branch in of the end of September 2021, with an additional two branches set to come online over the coming six months.
-- Wayak reported standalone revenues of EGP 6.6 million in 9M 2021, up from EGP 2.1 million this time last year. The venture's standalone EBITDA losses continued to narrow reaching EGP 1.1 million in 9M 2021 from EGP 6.4 million in 9M 2020, supported by management's cost optimisation strategy.
-- In Jordan, revenue expanded 172% year-on-year during 9M 2021 supported by solid growth in both tests performed and average price per test. Covid-19-related tests made up 62% of the country's top-line with the contribution further bolstered by Biolab's multiple revenue-sharing partnerships with Amman's Queen Alia International Airport (QAIA), Aqaba's King Hussein International Airport (KHIA) and Aqaba Port. The agreements, which see Biolab operate multiple testing stations primarily offering Covid-19-related tests, generated a total of EGP 141 million in 9M 2021, contributing 24% to Jordan's top-line. In parallel, demand for Biolab's conventional test offering continues to increase steadily, with the number of conventional tests performed and revenue generated during 9M 2021 increasing 32% and 35% year-on-year, respectively.
-- In Nigeria, revenues expanded 62% year-on-year (65% in NGN terms) in 9M 2021 supported by a 24% and 43% year-on-year increase in patients served and tests performed, respectively. Echo-Lab's revenues have been posting consistent quarter-on-quarter growth since the start of the year, and when combined with the successful cost optimisation strategy implemented by the venture's new management team, see Echo-Lab on track to turn EBITDA positive early next year.
(6) Covid-19-related tests include both core Covid-19 tests (Polymerase Chain Reaction (PCR), Antigen, and Antibody) as well as other routine inflammatory and clotting markers including, but not limited to, Complete Blood Picture, Erythrocyte Sedimentation Rate (ESR), D-Dimer, Ferritin and C-reactive Protein (CRP), which the Company opted to include in the classification as "other Covid-19-related tests" due to the strong rise in demand for these tests witnessed following the outbreak of Covid-19.
iii. Management Commentary
Commenting on the Group's performance, IDH Chief Executive Officer Dr. Hend El-Sherbini said: "As we near the end of what is shaping out to be another record-breaking year for IDH, I am delighted to present to you a new set of impressive financial and operational results. During the third quarter of 2021, we successfully built on an already remarkable first half of the year to report our highest ever revenue and net profit figures for a single quarter. More specifically, during Q3 2021 we recorded top- and bottom-line quarter-on-quarter growth of 27% and 47%, respectively, an outstanding performance which was supported by growing demand across our entire offering. While our Covid-19-related(7) offering continued to make a significant contribution to consolidated revenue, we also witnessed a robust contribution coming from our traditional offering with conventional revenues for Q3 2021 and 9M 2021 up 19% and 30% year-on-year, respectively. It is also worth highlighting that our conventional test volumes are back to pre-Covid-19 levels on both a quarterly and year-to-date basis, and in 9M 2021 recorded a 3% increase versus the same nine months of 2019 once adjusting for the impact of the 100 Million Healthy Lives campaign.(8)
Since the start of the year, we have displayed a remarkable ability to adapt to changing market and demand dynamics and consistently cater to the evolving needs of our growing patient base. In the third quarter, we continued to effectively care for both our conventional and Covid-19 patients leveraging an expanded branch network, a ramped up house call service, and a growing digital presence to make our services increasingly accessible and our payment methods increasingly convenient. On the one hand, we are continuing to serve our Covid-19 patients by ensuring we are well-equipped to handle peaks in demand when infection rates increase, while promptly adapting our offering to the requirements of patients. Over the course of the year, IDH secured multiple partnerships with international air carriers and regional healthcare providers like National Air Services (NAS) and Pure Health UAE to conduct PCR testing for passengers traveling from Egypt to other regional destinations. We also offer PCR testing for passengers on a walk-in basis, with the Company being the first lab in Egypt to provide QR codes on travel certificates. This enabled us to not only to play an important role in supporting the recovery of international travel, but also ensured that we successfully captured a leading market share for the service. On the other hand, despite the challenges posed by the pandemic, we have never lost sight of the needs of our conventional patients, continuing to care for them even at the height of the Covid-19 crisis. Our efforts have focused on expanding our service offering and delivery capabilities, as well as organising special campaigns to raise healthcare awareness specifically targeting patients suffering from chronic diseases, a particularly vulnerable category in light of the ongoing pandemic.
Looking at our geographies in more detail, I am pleased to note that Egypt, Jordan and Nigeria continued to report strong growth during the third quarter of the year. Highlights for Q3 2021 include the outstanding growth of Al-Borg Scan, the continued ramp up of our house call services and of our AI-focused subsidairy Wayak, and the important contributions coming from our revenue-sharing partnerships in Jordan. During the quarter, Al-Borg Scan reported year-on-year revenue growth of 52% and successfully rolled out its third branch located in the strategic East Cairo neighbourhood of Heliopolis. The launch comes as part of a wider ramp up strategy which in the coming six months will see us roll out an additional two branches. Meanwhile, our house call services in both Egypt and Jordan are continuing to record steady growth, and in Q3 2021 we served 39% more house call patients than in the comparable quarter of last year. Through our house call service, we are able to carry out more tests per patient than at our traditional branches, enabling us to deliver on an important pillar of our long-term growth strategy and further emphasising the significant potential offered by the service well beyond the end of the Covid-19 pandemic. Meanwhile, operations at Wayak continued to be ramped up effectively, with the venture's losses declining further, supported by strong top-line growth and management's cost optimisation strategy. In Jordan, our multiple revenue-sharing agreements with QAIA, KHIA and Aqaba Port, made a noteworthy 46% contribution to the country's topline for the quarter, with their positive impact on Biolab's top-line set to continue in the coming months as international travel recovers further. In Nigeria, EBITDA losses excluding a one-time adjustment continued their steady narrowing. Revenue at Echo-Lab has been consistently growing quarter-on-quarter throughout 2021, and when combined with the stellar work being done by the company's new management team to streamline operations, sees the venture on track to turn EBITDA positive early next year. Finally, in Sudan our results continued to be heavily impacted by the Sudanese Pound devaluation from earlier in the year. Moreover, we are continuing to monitor the mounting political and social unrest across the country, and our management team on the ground is well-prepared to take the necessary measures to protect our patients, staff, and operations.
Looking ahead, our strategic priorities remain unchanged as we continue assisting local authorities in their battle against Covid-19 while simultaneously pressing forward with our post-pandemic strategy and set the foundations for a new chapter of sustainable growth. On this front, during the quarter we launched our new loyalty programme specifically aimed at retaining the new patients we were able to acquire since the start of the pandemic. At the same time, we rolled out an additional 12 branches in Q3 2021, and remain on track to reach our target of 30 to 35 new branch rollouts in 2021. Our ability to consistently rollout new branches currently sees us operate the largest network of branches amongst private players in the country and enables us to maintain our leadership position in the market. We are also continuing to assess potential value-accretive acquisition opportunities in new markets across Africa, the Middle East, and Asia where we feel our business model is best-suited to capitalise on healthcare and consumer trends similar to those prevailing in our current markets of operation. Finally, while the ongoing global supply chain disruptions have had no impacts on our operations so far, we are keeping a close eye on the evolving situation and have taken proactive steps to build up our inventory to shield ourselves from any potential future disruptions. It is also worth highlighting that our test kits are purchased on fixed-price contracts with tenors ranging from five to seven years, providing effective protection from short-term price fluctuations.
In light of our most recent results, we are on track to post record revenues of around EGP 4.9 billion in FY 2021, representing a year-on-year growth above the 80% mark, with a normalised EBITDA margin(9) in the 50% range. The record-breaking performance is expected to come on the back of strong and sustained recovery witnessed at our conventional business coupled with robust contributions from our Covid-19-related test offering in both Egypt and Jordan."
- End -
(7) Covid-19-related tests include both core Covid-19 tests (Polymerase Chain Reaction (PCR), Antigen, and Antibody) as well as other routine inflammatory and clotting markers including, but not limited to, Complete Blood Picture, Erythrocyte Sedimentation Rate (ESR), D-Dimer, Ferritin and C-reactive Protein (CRP), which the Company opted to include in the classification as "other Covid-19-related tests" due to the strong rise in demand for these tests witnessed following the outbreak of Covid-19.
(8) The 100 Million Healthy Lives Campaign which ran from November 2018 through June 2019. As part of the Campaign, the Group performed 2.4 million tests in 1H 2019.
(9) Normalised EBITDA is calculated as operating profit plus depreciation and amortization and minus one-off fees incurred in 9M 2021 (EGP 29 million) related to the Company's EGX listing completed in May 2021.
(10) Covid-19-related tests include both core Covid-19 tests (Polymerase Chain Reaction (PCR), Antigen, and Antibody) as well as other routine inflammatory and clotting markers including, but not limited to, Complete Blood Picture, Erythrocyte Sedimentation Rate (ESR), D-Dimer, Ferritin and C-reactive Protein (CRP), which the Company opted to include in the classification as "other Covid-19-related tests" due to the strong rise in demand for these tests witnessed following the outbreak of Covid-19.
Analyst and Investor Call Details
An analyst and investor call will be hosted at 1pm (UK) | 3pm (Egypt) on Thursday, 18 November 2021. You can access the call by clicking on this link , and you may dial in using the conference call details below:
-- Event number: 2374 489 7777
-- Event password: C5wWfFNBa46
For more information about the event, please contact: halaa@EFG-HERMES.com
About Integrated Diagnostics Holdings (IDH)
IDH is a leading consumer healthcare company in the Middle East and Africa with operations in Egypt, Jordan, Sudan and Nigeria. The Group's core brands include Al Borg, Al Borg Scan and Al Mokhtabar in Egypt, as well as Biolab (Jordan), Ultralab and Al Mokhtabar Sudan (both in Sudan) and Echo-Lab (Nigeria). A long track record for quality and safety has earned the Company a trusted reputation, as well as internationally recognised accreditations for its portfolio of over 2,000 diagnostics tests. From its base of 507 branches as of 30 September 2021, IDH will continue to add laboratories through a Hub, Spoke and Spike business model that provides a scalable platform for efficient expansion. Beyond organic growth, the Group's expansion plans include acquisitions in new Middle Eastern, African, and East Asian markets where its model is well-suited to capitalise on similar healthcare and consumer trends and capture a significant share of fragmented markets. IDH has been a Jersey-registered entity with a Standard Listing on the Main Market of the London Stock Exchange (ticker: IDHC) since May 2015 with a secondary listing on the EGX since May 2021 (ticker: IDHC.CA).
Shareholder Information
LSE: IDHC.L
EGX: IDHC.CA
Bloomberg: IDHC:LN
Listed on LSE: May 2015
Listed on EGX: May 2021
Shares Outstanding: 600 million
Contact
Nancy Fahmy
Investor Relations Director
T: +20 (0)2 3345 5530 | M: +20 (0)12 2255 7445 | nancy.fahmy@idhcorp.com
Forward-Looking Statements
These results for the nine-month period ended 30 September 2021 have been prepared solely to provide additional information to shareholders to assess the group's performance in relation to its operations and growth potential. These results should not be relied upon by any other party or for any other reason. This communication contains certain forward-looking statements. A forward-looking statement is any statement that does not relate to historical facts and events, and can be identified by the use of such words and phrases as "according to estimates", "aims", "anticipates", "assumes", "believes", "could", "estimates", "expects", "forecasts", "intends", "is of the opinion", "may", "plans", "potential", "predicts", "projects", "should", "to the knowledge of", "will", "would" or, in each case their negatives or other similar expressions, which are intended to identify a statement as forward-looking. This applies, in particular, to statements containing information on future financial results, plans, or expectations regarding business and management, future growth or profitability and general economic and regulatory conditions and other matters affecting the Group .
Forward-looking statements reflect the current views of the Group's management ("Management") on future events, which are based on the assumptions of the Management and involve known and unknown risks, uncertainties and other factors that may cause the Group's actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. The occurrence or non-occurrence of an assumption could cause the Group's actual financial condition and results of operations to differ materially from, or fail to meet expectations expressed or implied by, such forward-looking statements.
The Group's business is subject to a number of risks and uncertainties that could also cause a forward-looking statement, estimate or prediction to differ materially from those expressed or implied by the forward-looking statements contained in this communication. The information, opinions and forward-looking statements contained in this communication speak only as at its date and are subject to change without notice. The Group does not undertake any obligation to review, update, confirm or to release publicly any revisions to any forward-looking statements to reflect events that occur or circumstances that arise in relation to the content of this communication.
Group Operational & Financial Review
i. Revenue and Cost Analysis
Revenue
Consolidated revenue recorded EGP 3,767 million in
9M 2021, a 126% year-on-year increase driven by both
a 33% year-on-year increase in tests performed and
a 70% year-on-year rise in average price per test.
The Group's top-line growth was supported by its Covid-19-related(12)
and conventional test portfolios, both of which recorded
growing demand during the period. IDH's Covid-19-related
offering contributed to exactly half of consolidated
revenue versus the 14% contribution made this time
last year. Meanwhile, revenues generated by IDH's conventional
test offering recorded a robust 30% year-on-year rise
as tests performed increased 20% versus last year and
average price per conventional test increased 8% from
9M 2020.
Breaking down the Group's Covid-19-related offering
further, revenues generated from core Covid-19 tests
(PCR, Antigen and Antibody) reached to EGP 1,580 million
in 9M 2021, contributing to 42% of total revenue for
the period. In parallel, revenue generated by IDH's
other Covid-19-related tests reached EGP 321 million
in 9M 2021.
IDH's consolidated top-line was further bolstered by
its house call services in Egypt and Jordan, with revenue
generated by the service expanding 146% year-on-year
in 9M 2021 to reach EGP 770 million. The service's
contribution to total revenue reached 20% in 9M 2021
versus the 19% contribution in 9M 2020. Through its
house call service, IDH served more than 944 thousand
patients in the nine-month period, an increase of 69%
from last year, and performed more than 4.9 million
tests, up 34% year-on-year. In response to the service's
increasingly popularity, the Company has been expanding
its house call capabilities, and in 9M 2021 was able
to carry out an average of 3,500 house call visits
per day, up remarkably from the 2,000 visits per day
performed in 9M 2020. It is worth noting that in 9M
2021, average revenue per house call test stood at
EGP 157 (versus the Group's average of EGP 151), while
the number of tests per house call patient stood at
5.2 (versus the Group's average of 3.3 tests).
The Group's year-to-date performance was supported
by a record-breaking third quarter, which saw the Company
outperform its results from the first and second quarters
of 2021 to record revenues of EGP 1,473 million, up
27% versus Q2 2021 and 30% versus Q1 2021. Moreover,
revenues in the third quarter more than doubled year-on-year.
Top-line growth for the quarter was supported by strong
results across the entirety of IDH's service portfolio
with the number of conventional tests performed increasing
8% quarter-on-quarter. It is worth noting that revenues
during the month of September reached record highs,
recording 44% above the average monthly revenue in
the preceding eight months. Total Covid-19-related
tests contributed to 59% of September's top-line as
the recovery in international travel saw IDH record
growing demand for PCR tests from travellers.
Detailed Consolidated Revenue Breakdown Q1 Q1 Q2 Q2 Q3 Q3 9M 9M
EGP mn 2020 2021 2020 2021 2020 2021 2020 2021
------------------- ----- ------ ----- ------ ------ ------ ------ -------------
Total revenues 500 1,130 450 1,164 720 1,473 1,670 3,767
Conventional
tests 495 594 367 595 568 676 1,430 1,865
Total
Covid-19-related
tests 5 536 83 569 152 797 240 1,901
Core Covid-19
tests (PCR,
Antigen,
Antibody) 5 399 26 431 92 750 123 1,580
Other
Covid-19-related
tests 0 137 57 138 60 47 117 321
------------------- ----- ------ ----- ------ ------ ------ ------ -------------
Contribution to consolidated revenue
--------------------------------------------------------------------------------------
Conventional
tests 99% 53% 82% 51% 79% 46% 86% 50%
Total
Covid-19-related
tests 1% 47% 18% 49% 21% 54% 14% 50%
Core Covid-19
tests (PCR,
Antigen,
Antibody) 1% 35% 6% 37% 13% 51% 7% 42%
Other
Covid-19-related
tests 0% 12% 13% 12% 8% 3% 7% 9%
(12) Covid-19-related tests include both core Covid-19
tests (Polymerase Chain Reaction (PCR), Antigen, and
Antibody) as well as other routine inflammatory and
clotting markers including, but not limited to, Complete
Blood Picture, Erythrocyte Sedimentation Rate (ESR),
D-Dimer, Ferritin and C-reactive Protein (CRP), which
the Company opted to include in the classification
as "other Covid-19-related tests" due to the strong
rise in demand for these tests witnessed following
the outbreak of Covid-19.
Revenue Analysis: Contribution by Patient Segment
Contract Segment
At the Group's contract segment, revenue increased
133% year-on-year in 9M 2021 on the back of 34% year-on-year
increase in test performed and a 74% year-on-year rise
in average revenue per contract test. This pushed the
segment's contribution to total revenues up to 57%
for the period versus 55% in the comparable nine-month
period of last year. Covid-19-related(13) testing contributed
52% of contract revenues in 9M 2021 as the Company
continued to witness strong demand for its offering
in both Egypt and Jordan. Controlling for contributions
made by Covid-19-related tests during the period, the
contract segment would record a 32% year-on-year increase
in revenue supported by a 23% rise in tests performed
and a 7% increase in average revenue per test.
The contract segment's results continued to include
contributions from IDH's multiple partnerships to conduct
PCR testing for passengers. More specifically, IDH's
agreement with Pure Health UAE, generated EGP 81 million
in the nine-month period. Meanwhile, the Group's agreement
with National Air Services (NAS) contributed EGP 79
million to the segment's top-line. In Jordan, the Group's
partnership with Queen Alia International Airport (QAIA)
generated EGP 84 million, while Biolab's agreements
with Aqaba's King Hussein International Airport (KHIA)
and Aqaba Port contributed an additional EGP 57 million
to the segment. It is worth highlighting that Biolab's
partnership with KHIA started in August 2020, followed
by the company's agreement with Aqaba Port which kicked
off in May 2021, and its partnership with QAIA which
commenced in August 2021.
Walk-in Segment
Revenue from IDH's walk-in segment recorded a 116%
year-on-year expansion in 9M 2021, contributing 43%
of consolidated revenues for the nine-month period
versus the 45% contribution in 9M 2020. During 9M 2021,
average revenue per test at the walk-in segment increased
66% year-on-year, while tests performed increased by
30% versus the same period a year ago. The contribution
of Covid-19-related tests to the walk-in segment stood
at 48% in 9M 2021. Controlling for this, walk-in revenues
recorded a 29% increase versus last year, as conventional
walk-in tests grew 13% year-on-year and revenue per
conventional walk-in test increased 13% versus 9M 2020.
Key Performance Indicators Walk-in Segment Contract Segment Total
=================== ======================= ========================= =========================
9M20 9M21 Change 9M20 9M21 Change 9M20 9M21 Change
=================== ====== ====== ======= ======= ======= ======= ======= ======= =======
Revenue^
(EGP mn) 749 1,619 116% 921 2,148 133% 1,670 3,767 126%
Total
Covid-19-related
revenue
(EGP mn) 101 785 679% 139 1,117 701% 240 1,901 692%
Patients
('000) 1,531 2,488 62% 3,261 4,992 53% 4,792 7,480 56%
% of Patients 32% 33% 68% 67%
Revenue
per Patient
(EGP) 489 651 33% 282 430 52% 348 503 44%
------------------- ------ ------ ------- ------- ------- ------- ------- ------- -------
Tests ('000) 4,984 6,491 30% 13,780 18,469 34% 18,765 24,960 33%
% of Tests 27% 26% 73% 74%
Total
Covid-19-related
tests ('000) 322 1,202 273% 825 2,557 210% 1,147 3,760 228%
Revenue
per Test
(EGP) 150 249 66% 67 116 74% 89 151 70%
Test per
Patient 3.3 2.6 -20% 4.2 3.7 -12% 3.9 3.3 -15%
------------------- ------ ------ ------- ------- ------- ------- ------- ------- -------
(13) Covid-19-related tests include both core Covid-19
tests (Polymerase Chain Reaction (PCR), Antigen, and
Antibody) as well as other routine inflammatory and
clotting markers including, but not limited to, Complete
Blood Picture, Erythrocyte Sedimentation Rate (ESR),
D-Dimer, Ferritin and C-reactive Protein (CRP), which
the Company opted to include in the classification
as "other Covid-19-related tests" due to the strong
rise in demand for these tests witnessed following
the outbreak of Covid-19.
Revenue Analysis: Contribution by Geography
Egypt
In Egypt, revenues recorded EGP 3,122 million in 9M
2021, up 122% year-on-year on the back of a 30% year-on-year
rise in tests performed and a 70% year-on-year increase
in average revenue per test. Revenue growth for the
nine-month period was supported by both the Group's
Covid-19-related(14) test offering which in 9M 2021
made up 49% of the Egypt's top-line, as well as the
country's conventional test offering. When controlling
for contributions made by Covid-19-related tests during
the period, revenue generated by conventional tests
increased 30% versus 9M 2020 supported by a 21% rise
in conventional tests performed.
On a quarterly basis, revenues generated by IDH's Egyptian
operations reached EGP 1,187 million in Q3 2021, up
97% versus the same three months of last year and 17%
above Q2 2021. During the third quarter, IDH saw Covid-19-related
revenues in Egypt reach EGP 614 million versus EGP
504 million in Q2 2021, mainly driven by growing demand
for PCR tests coming from international travellers
as restrictions imposed by governments around the world
continued to ease.
IDH's house call service, which has been successfully
ramped up to capitalise on the service's growing popularity,
recorded revenue of EGP 725 million in 9M 2021, up
152% year-on-year. The service's contribution to Egypt's
top-line stood at 23% in 9M 2021, versus the 20% contribution
made in the comparable period of last year.
Al-Borg Scan reported revenue of EGP 31 million in
9M 2021, a 92% year-on-year increase. Top-line growth
at the venture was supported by a 75% rise in tests
performed versus the same nine months a year ago. To
capitalise on the rising patient demand for IDH's radiology
service, the Group inaugurated a third Al-Borg Scan
branch at the end of September of this year, with an
additional two branches set to come online over the
coming twelve months.
Overall, IDH served 6.3 million patients in Egypt and
performed 22.1 million tests in 9M 2021, up by 45%
and 30% year-on-year, respectively.
Detailed Egypt Revenue Breakdown Q1 Q1 Q2 Q2 Q3 Q3 9M 9M
EGP mn 2020 2021 2020 2021 2020 2021 2020 2021
------------------------- ----- ----- ----- ------ ----- ------ ------ ------
Total revenues 424 920 381 1,015 602 1,187 1,407 3,122
Conventional
tests 424 507 314 510 482 573 1,220 1,590
Total Covid-19-related
tests 0 414 67 504 120 614 187 1,531
Core Covid-19
tests (PCR,
Antigen, Antibody) 0 277 10 366 60 567 70 1,210
Other Covid-19-related
tests 0 137 57 138 60 47 117 321
------------------------- ----- ----- ----- ------ ----- ------ ------ ------ -------
Contribution to Egypt revenue
--------------------------------------------------------------------------------------------
Conventional
tests 100% 55% 82% 50% 80% 48% 87% 51%
Total Covid-19-related
tests 0% 45% 18% 50% 20% 52% 13% 49%
Core Covid-19
tests (PCR,
Antigen, Antibody) 0% 30% 3% 36% 10% 48% 5% 39%
Other Covid-19-related
tests 0% 15% 15% 14% 10% 4% 8% 10%
Jordan
IDH's Jordanian operations reported year-on-year revenue
grow of 172% in 9M 2021 recording EGP 592 million.
Top-line growth was driven by an 81% increase in test
performed coupled with a 50% rise in Biolab's average
revenue per test. In the nine-month period, Covid-19-related
tests (PCR, Antigen, and Antibody) contributed to 62%
of Biolab's revenue and to 31% of its tests performed.
Controlling for this, revenue increased 35% year-on-year
on the back of a 32% increase in conventional tests
performed. Meanwhile, the country's top-line continued
to be bolstered by Biolab's house call service which
in 9M 2021 generated EGP 45 million in revenue, up
81% year-on-year.
On a quarterly basis, Jordan's revenue reached EGP
269 million, a 101% increase from last quarter's figure
and up 167% versus Q3 2020. The impressive quarter-on-quarter
expansion was supported by an EGP 84 million net revenue
contribution coming from Biolab's new partnership with
QAIA coupled with the EGP 40 million in net revenue
coming from its partnerships with KHIA and Aqaba Port.
PCR test volumes generated by Biolab's testing stations
in QAIA, KHIA, and Aqaba Port more than offset a general
decrease in demand for Covid-19-related testing as
infection rates declined following the continued ramp
up of the country's vaccination campaign.
Detailed Jordan Revenue Breakdown Q1 Q1 Q2 Q2 Q3 Q3 9M 9M
EGP mn 2020 2021 2020 2021 2020 2021 2020 2021
------------------------ ----- ----- ----- ----- ----- ----- ------ ------
Total revenues 58 190 59 134 100 269 218 592
Conventional
revenue 53 68 44 69 68 86 165 222
Total Covid-19-related
revenue (PCR,
Antigen, Antibody) 5 122 16 65 32 183 53 370
-----------------
Contribution to Jordan revenue
---------------------------------------------------------------------------------------------------
Conventional
revenue 91% 36% 74% 52% 68% 32% 76% 38%
Total Covid-19-related
revenue (PCR,
Antigen, Antibody) 9% 64% 26% 48% 32% 68% 24% 62%
(14) Covid-19-related tests include both core Covid-19
tests (Polymerase Chain Reaction (PCR), Antigen, and
Antibody) as well as other routine inflammatory and
clotting markers including, but not limited to, Complete
Blood Picture, Erythrocyte Sedimentation Rate (ESR),
D-Dimer, Ferritin and C-reactive Protein (CRP), which
the Company opted to include in the classification
as "other Covid-19-related tests" due to the strong
rise in demand for these tests witnessed following
the outbreak of Covid-19.
Nigeria
At the Group's Nigerian subsidiary, revenue recorded
EGP 40 million in 9M 2021, up 62% year-on-year. In
local currency terms, growth was even more pronounced
with revenues up 65% year-on-year on the back of a
43% year-on-year expansion in tests performed (patients
served were up 24%) and a 13% rise in average revenue
per test. The continued growth in patient and test
volumes over the last two years has come as a direct
result of management's revamp strategy which has involved
the complete renovation of Echo-Lab's branches combined
with the rollout of targeted marketing campaigns aimed
at stimulating demand for the venture's services. In
parallel, volumes are also benefitting from a gradual
normalisation of traffic following the easing of restrictive
measures enforced to curb the spread of Covid-19 throughout
2020. On a quarterly basis, IDH's Nigeria operations
reported revenues of EGP 14.9 million in Q3 2021, up
54% year-on-year and 16% versus Q2 2021. It is worth
noting that Dr. Alok Bhatia joined Echo-Lab as CEO
in March 2021.
Sudan
In Sudan, IDH reported a 41% year-on-year decline in
revenues to EGP 12 million for 9M 2021. The country's
results continue to be significantly impacted by the
devaluation of the Sudanese pound in early 2021 with
the average SDG/EGP rate in 9M 2021 standing at 0.07
versus 0.30 this time last year. Nonetheless, management's
continued success in raising prices in step with inflation,
saw revenue in local currency terms expand a remarkable
169% year-on-year in 9M 2021.
Revenue Contribution by Country 9M 2020 9M 2021 Change
========================= ======== ======== =======
Egypt Revenue (EGP
mn) 1,407 3,122 122%
Covid-19-related (EGP
mn) 187 1,531 719%
Egypt Contribution 84% 83%
========================= ======== ======== =======
Jordan Revenue (EGP
mn) 218 592 172%
Covid-19-related (EGP
mn) 53 370 598%
Jordan Revenue (JOD
mn) 10 27 174%
Jordan Contribution 13% 16%
========================= ======== ======== =======
Nigeria Revenue (EGP
mn) 25 40 62%
Nigeria Revenue (NGN
mn) 620 1,020 65%
Nigeria Contribution 1% 1%
Sudan Revenue (EGP
mn) 21 12 -41%
Sudan Revenue (SDG
mn) 69 187 169%
Sudan Contribution 1% 0.3%
========================= ======== ======== =======
---
Patients Served and Tests Performed by Country 9M 2020 9M 2021 Change
================================= ======== ======== =======
Egypt Patients Served (mn) 4.3 6.3 45%
Egypt Tests Performed (mn) 17.0 22.1 31%
Covid-19-related tests (mn) 1.1 3.0 179%
================================= ======== ======== =======
Jordan Patients Served (k) 284 1,031 263%
Jordan Tests Performed (k) 1,372 2,482 81%
Covid-19-related tests (k) 77 778 916%
Nigeria Patients Served (k) 95 117 24%
Nigeria Tests Performed (k) 150 215 43%
Sudan Patients Served (k) 91 47 -48%
Sudan Tests Performed (k) 289 140 -51%
================================= ======== ======== =======
Total Patients Served (mn) 4.8 7.5 56%
Total Tests Performed (mn) 18.8 25.0 33%
Branches by Country 31 December 30 September Change
2020 2021
================ ============ ============= =============
Egypt 429 455 26
================ ============ ============= =============
Jordan 20 21 1
================ ============ ============= =============
Nigeria 12 12 -
================ ============ ============= =============
Sudan 20 19 -1
================ ============ ============= =============
Total Branches 481 507 26
================ ============ ============= =============
Cost of Goods Sold
IDH's cost of goods sold increased 90% year-on-year
to EGP 1,600 million in 9M 2021, rising at a significantly
slower pace than the Group's top-line during the period.
As such, gross profit for 9M 2021 increased 161% year-on-year
to EGP 2,167 million, with an associated margin of
58% versus 50% last year.
COGS Breakdown as a Percentage of Revenue 9M 2020 9M 2021
============================= ======== ========
Raw Materials 16.4% 18.3%
============================= ======== ========
Wages & Salaries 16.0% 12.5%
============================= ======== ========
Depreciation & Amortisation 7.1% 4.0%
============================= ======== ========
Other Expenses 10.8% 7.6%
============================= ======== ========
Total 50.3% 42.5%
============================= ======== ========
Raw material costs, which include cost of specialized
analysis at other laboratories, recorded EGP 690 million
in 9M 2021, and continued to make up the lion share
of total COGS at 43%. As a share of revenue, raw material
costs increased to 18.3% in 9M 2021 compared to 16.4%
last year. This increase is primarily attributable
to higher raw material costs as a share of revenue
recorded in Jordan, with Biolab's raw material to revenues
ratio reaching 33% in 9M 2021 from 25% in 9M 2020 mainly
due to additional fees incurred by the company during
the months of August and September as part of its revenue
sharing agreement with QAIA.
Direct salaries and wages increased 77% year-on-year
to EGP 473 million in 9M 2021 and made up the second
largest share of total COGS for the nine-month period
at 30%. The year-on-year increase is largely attributable
to a rise in the share of profits allocated to direct
salaries and wages to EGP 141 million in 9M 2021 from
EGP 50 million in the comparable period of 2020 following
higher net profit recorded at its Egyptian operations,(15)
in addition to higher bonuses and incentives paid during
9M 2021 in light of the impressive performance recorded
during the period.
Direct depreciation and amortisation increased 28%
year-on-year in 9M 2021 to EGP 152 million, principally
due to the incremental amortisation of additional branches
(IFRS 16 right-of-use assets).
EBITDA
IDH's normalised EBITDA(16) recorded EGP 1,992 million
in 9M 2021, up 180% year-on-year. Normalised EBITDA
margin expanded to 53% in 9M 2021 versus 43% last year.
Improved EBITDA level profitability was supported by
strong top-line growth and the subsequent dilution
of fixed costs. EBITDA growth was further bolstered
by the normalization of provisions booked during 9M
2021, which recorded EGP 18 million versus the EGP
36 million booked in 9M 2020 to account for expected
credit losses in accordance with IFRS 9. It is worth
noting that normalised EBITDA excludes one-off listing
fees of EGP 29 million incurred in 9M 2021 related
to the Company's dual listing on the EGX completed
in May 2021.
On a quarterly basis, normalised EBITDA expanded 130%
year-on-year to record EGP 790 million in Q3 2021.
This represents a 31% quarter-on-quarter increase largely
driven by the strong top-line growth recorded by the
Group during the third quarter. Normalised EBITDA margin
stood at 54% for the quarter, up from the 48% margin
recorded in Q3 2020 and the 52% margin recorded in
Q2 2021.
In Egypt, EBITDA recorded EGP 1,761 million in 9M 2021,
up 177% year-on-year on the back of strong top-line
growth. EBITDA margin increased to 56% for the nine-month
period from 45% in 9M 2020.
IDH's Jordanian operations recorded a 206% year-on-year
increase in EBITDA to EGP 236 million for 9M 2021 supported
by strong revenue growth for the period. In local currency
terms, EBITDA grew 208% compared to 9M 2020. EBITDA
margin recorded 40% in 9M 2021 compared to 35% in 9M
2020.
In Nigeria, EBITDA losses increased to EGP 5.2 million
in 9M 2021 compared to EGP 3.8 million in the same
nine months of 2020. Increased losses are partially
attributable to an increase in management salaries
incurred during the course of 2021 following the hiring
of a new CEO at Echo-Lab in Q1 2021. Moreover, it is
also worth noting that the figure includes a one-off
adjustment related to the previous year of EGP 4.4
million. Excluding the one-off adjustment, EBITDA losses
would have reached EGP 0.8 million, representing a
significant improvement compared to the same period
of last year.
Finally, Sudan's EBITDA recorded EGP 0.2 million in
9M 2021, down 86% year-on-year with an EBITDA margin
of 1% compared to 6% in 9M 2020. EBITDA for the period
was weighed down by the sharp SDG devaluation in February
of this year. In SDG terms EBITDA declined 38% year-on-year.
Regional EBITDA in Local Currency Mn 9M 2020 9M 2021 Change
----------------- -------- -------- -------
Egypt EGP 636 1,761 177%
margin 45% 56%
Jordan JOD 3.5 10.7 208%
margin 35% 40%
Nigeria NGN -94 -131 40%
margin -15% -13%
Sudan SDG 4 3 -38%
margin 6% 1%
(15) According to IAS 1, 10% of Egypt's net profit
is allocated to direct wages and salaries.
(16) Normalised EBITDA is calculated as operating
profit plus depreciation and amortization and minus
one-off fees incurred in 9M 2021 related to the Company's
EGX listing completed in May 2021.
Interest Income / Expense
IDH recorded interest income of EGP 69 million in 9M
2021, up 56% year-on-year on the back of higher cash
balances during the period coupled with proper cash
allocation between T-bills and time deposits.
Interest expense recorded EGP 83 million in the 9M
2021, up 56% year-on-year. The increase in attributable
to:
* Higher interest on lease liabilities related to IFRS
16 following the addition of new branches and the
renewal of medical equipment agreements with our main
equipment suppliers.
* Higher bank charges resulting from increased
penetration of, and reliance on, POS machines and
electronic payments in both Egypt and Jordan during
the period. It is important to note that bank charges
recorded by IDH's Jordanian operations represented
51% of total bank charges during 9M 2021, which is
mainly related to the newly launched partnership with
QAIA.
* Loan-related expenses incurred by IDH during the
period as the Company secured a new eight-year US$ 45
million facility with the International Finance
Corporation (IFC) in May 2021. During 9M 2021, IDH
booked loan-related expenses of EGP 14.6 million
including a front-end fee, syndication fee, and legal
advisory fees.
Interest Expense Breakdown EGP Mn 9M 2020 9M 2021 Change
=============================== ======== ======== =======
Interest on Lease Liabilities
(IFRS 16) 38.3 44.0 15%
=============================== ======== ======== =======
Interest Expenses on
Borrowings(17) 9.9 7.0 -29%
=============================== ======== ======== =======
Loan-related Expenses - 14.6 N/A
on IFC facility
=============================== ======== ======== =======
Interest Expenses on
Leases 3.0 4.8 62%
=============================== ======== ======== =======
Bank Charges 1.9 12.5 549%
=============================== ======== ======== =======
Total Interest Expense 53.1 82.9 56%
=============================== ======== ======== =======
(17) Interest expenses on medium-term loans divided
as EGP 2.3 million related to IDH's facility with the
Commercial International Bank (CIB) and EGP 4.6 million
related to IDH's facility with Ahli United Bank Egypt
(AUBE).
Foreign Exchange
IDH recorded a net foreign exchange loss of EGP 18
million in 9M 2021 compared to EGP 10 million in the
same nine months of 2020. The figure largely reflects
FX losses on the back of the SDG devaluation versus
the EGP in February 2021.
Taxation
Tax expenses recorded in the first nine months of 2021
were EGP 610 million compared to EGP 182 million in
the same period of last year. The effective tax rate
stood at 35% in the period versus 33% in 9M 2020, reflecting
the change in withholding tax on undistributed profits
from 5% to 10% which came into effect in Egypt in September
of last year. It is important to note that there is
no tax payable for IDH's two companies at the holding
level, while tax was paid on profits generated by operating
subsidiaries.
Net Profit
IDH's consolidated net profit recorded EGP 1,148 million
in 9M 2021, an impressive three-fold year-on-year increase.
Improving net profitability was supported by strong
revenue growth coupled with the dilution of fixed costs,
higher interest income and normalising provisions for
the nine-month period. As such, net profit margin expanded
eight percentage points year-on-year to record 30%
in 9M 2021.
ii. Balance Sheet Analysis
Assets
Property, Plant and Equipment
IDH held gross property, plant and equipment (PPE) of EGP 1,569 million as at 30 September 2021, up from the EGP 1,256 million as of 31 December 2020. Meanwhile, CAPEX outlays represented around 8% of consolidated revenues in 9M 2021. The increase in CAPEX outlays as a share of total revenue is partially due to the EGP 149 million in equipment related to the SPA (Reagent deals) and the EGP 48.7 million spent on a new radiology branch (CBP) during the period.
Total CAPEX Breakdown
EGP Mn 9M 2021 % of Revenue =============================== ======== ============= Mega Lab 130.2 3.5% =============================== ======== ============= Al-Borg Scan Expansion 100.3 2.7% =============================== ======== ============= Leasehold Improvements/others 83.0 2.2% =============================== ======== ============= Total CAPEX Additions 313.5 8.3% =============================== ======== =============
Accounts Receivable and Provisions
As at 30 September 2021, accounts receivables' Days on Hand (DOH) stood at 107 days compared to 144 days at year-end 2020, continuing to highlight a sustained improvement in collections versus 2020. Accounts receivables' DOH is calculated based on credit revenues amounting to EGP 967 million during 9M 2021.
The receivables balance in Egypt and Jordan stood at EGP 376 million as of 30 September 2021. More specifically, in Egypt account receivables' DOH declined to 96 days as at 30 September 2021 compared to 145 days as at 31 December 2020. Accounts receivables' DOH for Egypt is calculated based on credit revenues amounting to EGP 812 million during 9M 2021. Meanwhile, in Jordan accounts receivables' DOH increased from 150 days to 172 days largely due to recent agreements with various airline companies as part of QAIA and KHIA agreements. Accounts receivables' DOH for Jordan is calculated based on credit revenues amounting to EGP 144 million during 9M 2021.
Provision for doubtful accounts established during the nine months to 30 September 2021 amounted to EGP 18 million, down from the EGP 36 million booked in the comparable nine-month period of last year.
Inventory
As at 30 September 2021, the Group's inventory balance reached EGP 190 million, up from EGP 100 million as at year-end 2020. Days Inventory Outstanding (DIO) decreased to 59 days as at 30 September 2021 from 72 days as at year-end 2020. The decline is mainly due to the high turnover of PCR testing for Covid-19.
Cash and Net Debt/Cash
IDH's cash balances increased to EGP 1,807 million as at 30 September 2021 compared to EGP 877 million as at 31 December 2020.
EGP million 31 Dec 2020 30 Sep 2021 ================== ============ ============ Time Deposits 162.4 366.5 ================== ============ ============ T-Bills 461.2 943.1 ================== ============ ============ Current Accounts 234.3 474.3 ================== ============ ============ Cash on Hand 19.0 22.7 ================== ============ ============ Total 876.8 1,806.7 ================== ============ ============
Net cash balance(18) amounted to EGP 1,013 million as at 30 September 2021, an increase of 215% compared to EGP 321 million as at 31 December 2020.
EGP million 31 Dec 2020 30 Sep 2021
=================================== ============ ============
Cash and Investments at Amortised
Cost 876.8 1,806.7
=================================== ============ ============
Interest Bearing Debt ("Medium
Term Loans")(19) 96.5 103.4
=================================== ============ ============
Lease Liabilities Property 389.9 475.4
=================================== ============ ============
Lease Liabilities Equipment 69.1 215.2
=================================== ============ ============
Net Cash Balance 321.3 1,012.8
=================================== ============ ============
Lease liabilities on property stood at EGP 475 million as at 30 September 2021 versus the EGP 390 million booked as at year-end 2020. The increase is attributable to the addition of new branches during 9M 2021 including Al-Borg Scan's third branch which came online at the start of October 2021. Meanwhile, financial obligations related to equipment recorded EGP 215 million as at 30 September 2021, up from EGP 69 million as at year-end 2020. This increase reflects the renewal of the Company's contracts and the addition of new equipment. Finally, the increase partially reflects a rise in the interest bearing debt related to IDH's two medium term facilities with Commercial International Bank (CIB) and Ahli United Bank of Egypt (AUBE). More specifically, IDH's interest bearing debt as at 30 September 2021 is split as EGP 27.2 million related to its medium term facility with CIB and EGP 76.1 million to its facility with AUBE. It is worth noting that interest bearing debt in both periods includes accrued interest.
(18) The net cash balance is calculated as cash and cash equivalent balances less interest-bearing debt (medium term loans), finance lease and Right-of-use liabilities.
(19) IDH's interest bearing debt as at 30 September 2021 is split as EGP 27.2 million related to its medium term facility with the Commercial International Bank (CIB) and EGP 76.1 million to its facility with Ahli United Bank Egypt (AUBE).
Liabilities
Accounts Payable
As at 30 September 2021, accounts payable balance stood at EGP 292 million up from EGP 178 million as at year-end 2020. However, the Group's days payable outstanding (DPO) stood at 95 days as at 30 September 2021 down from 127 days as year-end 2020. The decline primarily reflects the fact that PCR testing kit suppliers are paid within a period of 15 days.
iii. Cash Flow Analysis
Net cash flow from operating activities recorded EGP 1,641 million in 9M 2021 compared to EGP 370 million in 9M 2020, continuing to display the Company's strong cash generation ability.
-End-
INTEGRATED DIAGNOSTICS HOLDINGS plc - "IDH" AND ITS SUBSIDIARIES CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION FOR THE NINE MONTHSED 30 SEPTEMBER 2021 Index to the condensed consolidated interim financial information Pages ------------------------------------------------------------------- -------- Condensed consolidated interim statement of financial position 21 Condensed consolidated interim statement of profit or loss 22 Condensed consolidated interim statement of comprehensive income 23 Condensed consolidated interim statement of changes in equity 24 Condensed consolidated interim statement of cash flows 25 Notes to the condensed consolidated interim financial information 26 - 44
Condensed consolidated interim statement of financial position - As of 30 September 2021
(All amounts in Egyptian Pounds "EGP'000") 30 September 31 December
Notes 2021 2020
-------------------------------------------- ------ ------------------ ------------------
EGP'000 EGP'000
(Reviewed) (Audited)
ASSETS
Non-current assets
Property, plant and equipment 4 1,006,695 787,590
Intangible assets and goodwill 5 1,659,481 1,659,755
Right of use assets 6 417,708 354,688
Investment at fair value through profit
and loss 7 10,372 9,604
Total non-current assets 3,094,256 2,811,637
------------------ ------------------
Current assets
Inventories 190,178 100,115
Trade and other receivables 8 489,813 388,903
Investments at amortized cost 9 856,016 276,625
Cash and cash equivalents 10 950,703 600,130
Total current assets 2,486,710 1,365,773
------------------ ------------------
Total assets 5,580,966 4,177,410
================== ==================
EQUITY AND LIABILITIES
Equity
Share Capital 1,072,500 1,072,500
Share premium reserve 1,027,706 1,027,706
Capital reserve (314,310) (314,310)
Legal reserve 51,641 49,218
Put option reserve (809,677) (314,057)
Translation reserve 150,988 145,617
Retained earnings 1,234,832 603,317
Equity attributable to the equity holders
of the parent 2,413,680 2,269,991
Non-controlling interest 176,992 156,383
Total equity 2,590,672 2,426,374
------------------ ------------------
Non-current liabilities
Deferred tax liabilities 19-C 316,693 240,333
Provisions 3,799 3,408
Long term Loans and borrowings 13 67,591 67,617
Other long-term financial obligations 15 581,471 398,525
Long-term financial liability at fair
value 14 33,682 31,790
Total non-current liabilities 1,003,236 741,673
------------------ ------------------
Current liabilities
Trade and other payables 11 649,117 383,623
Other short-term financial obligations 15 109,123 60,517
Short-term financial liability at fair
value 12 775,995 282,267
Short term loans and borrowings 13 33,457 25,416
Current tax liabilities 419,366 257,540
Total current liabilities 1,987,058 1,009,363
------------------ ------------------
Total liabilities 2,990,294 1,751,036
------------------ ------------------
Total equity and liabilities 5,580,966 4,177,410
================== ==================
These condensed consolidated interim financial information were
approved and authorized for issue by the Board of Directors and
signed on their behalf on 15 November 2021 by:
Dr. Hend El Sherbini Hussein Choucri
Board member of the audit
Chief Executive Officer committee
The accompanying notes on pages 26 - 44 form an integral part of
these condensed consolidated interim financial information.
Condensed consolidated interim statement of profit or loss For the three and nine months period ended 30 September 2021
(All amounts in Egyptian Pounds "EGP'000")
For the three months For the nine months period
period ended 30 September ended 30 September
Notes 2021 2020 2021 2020
------
EGP'000 EGP'000 EGP'000 EGP'000
------------------ ------ ---------------- ------------------ ------------------- -----------------------
(Unaudited) (Unaudited)
(Reviewed) / (Unreviewed) (Reviewed) / (Unreviewed)
Revenue 23 1,473,411 720,290 3,766,581 1,669,977
Cost of sales (612,146) (336,615) (1,600,019) (840,105)
Gross profit 861,265 383,675 2,166,562 829,872
Marketing and
advertising
expenses (41,273) (26,781) (107,928) (72,456)
General and
administrative
expenses 17 (82,969) (51,546) (259,101) (154,809)
Impairment loss
on
trade and other
receivable (7,816) (7,300) (18,081) (35,581)
Other income (135) 487 12,296 8,377
Operating profit 729,072 298,535 1,793,748 575,403
---------------- ------------------ ------------------- -----------------------
Finance income 18 23,838 10,434 69,086 44,199
Finance cost 18 (30,261) (21,583) (105,161) (62,555)
Net finance cost (6,423) (11,149) (36,075) (18,356)
---------------- ------------------ ------------------- -----------------------
Profit before tax 722,649 287,386 1,757,673 557,047
================ ================== =================== =======================
Income tax
expense 19-B (242,961) (86,591) (609,775) (181,627)
Profit for the
period 479,688 200,795 1,147,898 375,420
================ ================== =================== =======================
Profit attributed
to:
Equity holders of
the
parent 454,236 194,371 1,100,676 373,139
Non-controlling
interests 25,452 6,424 47,222 2,281
479,688 200,795 1,147,898 375,420
================ ================== =================== =======================
Earnings per share (expressed in EGP):
Basic and diluted
earnings
per share 22
0.76 0.32 1.83 0.62
================ ================== =================== =======================
The accompanying notes on pages 26 - 44 form an integral part of these condensed consolidated interim financial information.
Condensed consolidated interim statement of comprehensive income For the three and nine months period ended 30 September 2021
(All amounts in Egyptian Pounds "EGP'000")
For the three months For the nine months
period ended 30 September period ended 30 September
2021 2020 2021 2020
EGP'000 EGP'000 EGP'000 EGP'000
---------------------------------- ----------------- ----------------- -------------- -----------------
(Unaudited) (Unaudited)
(Reviewed) / (Unreviewed) (Reviewed) / (Unreviewed)
Net profit 479,688 200,795 1,147,898 375,420
Items that may be reclassified
to profit or loss:
Currency translation differences (4,285) (5,607) 8,090 (19,747)
Other comprehensive (loss)
/ income for the period net
of tax (4,285) (5,607) 8,090 (19,747)
----------------- ----------------- -------------- -------------------
Total comprehensive income
for the period 475,403 195,188 1,155,988 355,673
================= ================= ============== ===================
Attributed to:
Equity holders of the parent 449,464 196,889 1,106,047 362,621
Non-controlling interests 25,939 (1,701) 49,941 (6,948)
475,403 195,188 1,155,988 355,673
================= ================= ============== ===================
The accompanying notes on pages 26 - 44 form an integral part of these condensed consolidated interim financial information.
Total
attributable
to the
Share Put owners
Share premium Capital Legal option Translation Retained of the Non-controlling Total
capital reserve reserve reserve* reserve reserve earnings Parent interests equity
-------------------------- ----------------- ----------------- --------------- ----------------- --------------- ----------------- ----------------- ------------------- ----------------- -----------------
At 1 January 2021 1,072,500 1,027,706 (314310) 49,218 (314,057) 145,617 603,317 2,269,991 156,383 2,426,374
----------------- ----------------- --------------- ----------------- --------------- ----------------- ----------------- ------------------- ----------------- -----------------
Profit for the period - - - - - - 1,100,676 1,100,676 47,222 1,147,898
Other comprehensive income
for the period - - - - - 5,371 - 5,371 2,719 8,090
Total comprehensive income - - - - - 5,371 1,100,676 1,106,047 49,941 1,155,988
----------------- ----------------- --------------- ----------------- --------------- ----------------- ----------------- ------------------- ----------------- -----------------
Transactions with owners
of the Company
Contributions and
distributions
Dividends - - - - - - (455,182) (455,182) (23,566) (478,748)
Legal reserve formed
during
the period - - - 2,423 - - (2,423) - - -
Movement in put option
liability - - - - (495,620) - - (495,620) - (495,620)
Impact of hyperinflation - - - - - - (11,556) (11,556) (5,766) (17,322)
Total contributions and
distributions - - - 2,423 (495,620) - (469,161) (962,358) (29,332) (991,690)
----------------- ----------------- --------------- ----------------- --------------- ----------------- ----------------- ------------------- ----------------- -----------------
Balance at 30 September
2021 (Reviewed) 1,072,500 1,027,706 (314310) 51,641 (809,677) 150,988 1,234,832 2,413,680 176,992 2,590,672
================= ================= =============== ================= =============== ================= ================= =================== ================= =================
At 1 January 2020 1,072,500 1,027,706 (314310) 46,330 (229,163) 155,823 456,661 2,215,547 144,710 2,360,257
----------------- ----------------- --------------- ----------------- --------------- ----------------- ----------------- ------------------- ----------------- -----------------
Profit for the period - - - - - - 373,139 373,139 2,281 375,420
Other comprehensive loss
for the period - - - - - (10,518) - (10,518) (9,229) (19,747)
Total comprehensive income - - - - - (10,518) 373,139 362,621 (6,948) 355,673
----------------- ----------------- --------------- ----------------- --------------- ----------------- ----------------- ------------------- ----------------- -----------------
Transactions with owners
of the Company
Contributions and
distributions
Dividends - - - - - - (441,855) (441,855) (8,883) (450,737)
Legal reserve formed
during
the period - - - 1,331 - - (1,331) - - -
Movement in put option
liability - - - - 20,481 - - 20,481 - 20,481
Impact of hyperinflation - - - - - - (3,296) (3,296) 790 (2,506)
Non-controlling interest
cash injection in
subsidiaries
during the period - - - - - - - 17,372 17,372
Total contributions and
distributions - - - 1,331 20,481 - (446,482) (424,670) 9,279 (415,391)
----------------- ----------------- --------------- ----------------- --------------- ----------------- ----------------- ------------------- ----------------- -----------------
Balance at 30 September
2020
(Unaudited)/(Unreviewed) 1,072,500 1,027,706 (314310) 47,661 (208,682) 145,305 383,318 2,153,499 147,041 2,300,540
================= ================= =============== ================= =============== ================= ================= =================== ================= =================
Condensed consolidated interim statement of changes in equity For the nine months period ended 30 September 2021
(All amounts in Egyptian Pounds "EGP'000")
*Under Egyptian Law, each subsidiary in Egypt must set aside at least 5% of its annual net profit into a legal reserve until such time that this represents 50% of each subsidiary's issued capital. This reserve is not distributable to the owners of the Company.
The accompanying notes on pages 26 - 44 form an integral part of these condensed consolidated interim financial information.
(All amounts in Egyptian Pounds "EGP'000") 30 September 30 September
Note 2021 2020
---------------------------------------------- ----- ----------------------- ----------------------
EGP'000 EGP'000
(Unaudited)
(Reviewed) / (Unreviewed)
Cash flows from operating activities
Profit for the period before tax 1,757,673 557,047
Adjustments - -
Depreciation of property, plant and
equipment and right of use 164,534 130,982
Amortization 5,002 4,045
Gain on disposal of Property, plant
and equipment (208) (274)
Impairment in trade receivables 18,081 35,582
Interest expense 18 55,822 53,118
Interest income 18 (69,086) (44,199)
Equity settled shares financial investments (768) (3,464)
ROU Asset/Lease Termination 1,038 -
Loss / (gain) in hyperinflationary net
monetary position 18 4,628 (192)
Unrealised foreign currency exchange
loss 18 17,588 9,629
Net cash from operating activities before
changes in working capital 1,954,304 742,274
Change in Provisions 392 (1,982)
Change in inventory (95,002) (15,424)
Change in trade and other receivables (127,907) (65,856)
Change in trade and other payables 183,011 (125,204)
Cash generated from operating activities
before income tax payment 1,914,798 533,808
----------------------- ----------------------
Income tax paid during period (273,881) (163,571)
Net cash from operating activities 1,640,917 370,237
----------------------- ----------------------
Cash flows from investing activities
Interest received 68,048 43,505
Decrease in restricted cash - 247
Payments for the purchase of short term
investments (904,779) (460,476)
Proceeds for the sale of short term
investments 325,388 527,869
Acquisition of Property, plant and equipment 4 (177,580) (77,892)
Acquisition of intangible assets 5 (8,285) (3,665)
Proceeds from sale of Property, plant
and equipment 6,255 1,278
Net cash flows(used in)/from investing
activities (690,953) 30,866
----------------------- ----------------------
Cash flows from financing activities
Proceeds from borrowings 20,724 10,311
Repayments of borrowings (12,708) (12,708)
Interest paid (56,696) (49,532)
Dividends paid (478,748) (450,737)
Payment of finance lease liabilities (68,372) (26,921)
Injection of cash by non-controlling
interest - 17,372
Net cash flows used in financing activities (595,800) (512,216)
----------------------- ----------------------
Net increase (decrease) in cash and
cash equivalent 354,164 (111,114)
Cash and cash equivalent at the beginning
of the period 600,130 409,139
Effect of exchange rate fluctuations
on cash held (3,591) 13,092
Cash and cash equivalent at the end
of the period 10 950,703 311,118
======================= ======================
Condensed consolidated interim statement of cash flows For the nine months period ended 30 September 2021
The accompanying notes on pages 26 - 44 form an integral part of these condensed consolidated interim financial information.
(In the notes all amounts are shown in Egyptian Pounds "EGP' 000" unless otherwise stated)
1. Reporting entity
Integrated Diagnostics Holdings plc "IDH" or "the Company" is a Company which was incorporated in Jersey on 4 December 2014 and established according to the provisions of the Companies (Jersey) Law 1991 under Registered No. 117257. These condensed consolidated interim financial information as at and for the nine months ended 30 September 2021 comprise the Company and its subsidiaries (together referred as the 'Group'). The Company is a dually listed entity, in both London stock exchange (since 2015) and in the Egyptian Exchange (during May 2021).
The principal activities of the Company and its subsidiaries (together "The Group") include investments in all types of the healthcare field of medical diagnostics (the key activities are pathology and Radiology related tests), either through acquisitions of related business in different jurisdictions or through expanding the acquired investments they have. The key jurisdictions that the Group operates are in Egypt, Jordan, Nigeria and Sudan.
The Group's financial year starts on 1 January and ends on 31 December of each year.
These condensed consolidated interim financial information were approved for issue by the Directors of the Company on 15 November 2021.
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). The group's assessment for the differences with IAS 34 'Interim Financial Reporting' (As adopted by the EU) concluded that there are no material differences on the consolidated financial position and consolidated financial performance of the Group for the period then ended, as the accounting policies adopted are consistent with those of the previous financial year ended 31 December 2020 and corresponding interim reporting period.
These condensed consolidated interim financial 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 2020 which is available at www.idhcorp.com, In addition, results of the nine-month period ended 30 September 2021 are not necessary indicative for the results that may be expected for the financial year ending 31 December 2021.
B) Basis of measurement
The condensed consolidated interim financial information has been prepared on the historical cost basis except where adopted IFRS mandates that fair value accounting is required which is related to the financial assets and liabilities measured at fair value.
C) Functional and presentation currency
These condensed consolidated interim financial information is presented in Egyptian Pounds (EGP'000). The functional currency of the majority of the Group's entities is the Egyptian Pound (EGP) and is the currency of the primary economic environment in which the Group operates.
The Group also operates in Jordan, Sudan and Nigeria and the functional currencies of those foreign operations are the local currencies of those respective territories, however due to the size of these operations there is no significant impact on the functional currency of the Group, which is the Egyptian Pound (EGP).
3. Significant accounting policies
In preparing these condensed consolidated interim financial information, the significant judgments made by the management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that were applied to the consolidated financial information for the year ended 31 December 2020 "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 2.2 of the annual consolidated financial information published for the year ended 31 December 2020. In preparing these condensed consolidated interim financial information, the significant judgments made by the management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that were applied to the consolidated financial information for the year ended 31 December 2020".
4. Property, plant and equipment
Medical, Building &
electric Leasehold
& information Fixtures, assets in the
system Leasehold fittings & course of
Land & buildings equipment* improvements vehicles construction Total
---------------- ----------------- ---------------- --------------- -------------- -------------- -----------------
Cost
At 1 January
2021 332,345 565,697 254,474 73,261 21,207 1,246,984
Additions 48,886 222,230 49,915 20,822 3,891 345,744
Hyperinflation
effect - (12,377) - - - (12,377)
Disposals - (2,968) (893) (1,330) - (5,191)
Transfers - - 5,310 (5,310) -
Translation
differences (329) (9,742) (2,226) (1,298) (1,079) (14,674)
----------------- ---------------- --------------- -------------- -------------- -----------------
At 30 September
2021
(Reviewed) 380,902 762,840 306,580 91,455 18,709 1,560,486
----------------- ---------------- --------------- -------------- -------------- -----------------
Depreciation
At 1 January
2021 47,724 245,929 138,511 27,230 - 459,394
Depreciation
for the period 4,238 68,444 27,722 5,212 - 105,616
On disposals - (2,573) (751) (1,131) - (4,455)
Translation
differences (29) (4,855) (895) (985) - (6,764)
----------------- ---------------- --------------- -------------- -------------- -----------------
At 30 September
2021
(Reviewed) 51,933 306,945 164,587 30,326 - 553,791
----------------- ---------------- --------------- -------------- -------------- -----------------
Net book value
at 30
September
(Reviewed) 328,969 455,895 141,993 61,129 18,709 1,006,695
================= ================ =============== ============== ============== =================
At 31 December
2020 (Audited) 284,621 319,768 115,963 46,031 21,207 787,590
================= ================ =============== ============== ============== =================
* Medical equipment
The group entered into purchase agreement with an external party to supply medical equipment. These equipment's are supplied to service the Group's new state-of-the-art Mega Lab. The agreement provides for annual base payments, The Group entered into new agreements for the period ended 30 September 2021 to replace the current equipment in use.
5. Intangible assets and goodwill
Intangible assets represent goodwill acquired through business combinations and brand names.
Goodwill Brand name Software Total
----------------------------------------- ---------- ----------- ---------------- ----------
Cost
Balance at 1 January 2021 1,261,808 383,922 67,157 1,712,887
Additions - - 8,285 8,285
Translation (3,169) (347) (47) (3,563)
---------- ----------- ---------------- ------------
Balance at 30 September 2021 (Reviewed) 1,258,639 383,575 75,395 1,717,609
---------- ----------- ---------------- ------------
Amortisation and impairment
Balance at 1 January 2021 1,849 - 51,283 53,132
Amortisation - - 5,002 5,002
Translation - - (6) (6)
---------- ----------- ---------------- ------------
Balance at 30 September 2021 (Reviewed) 1,849 - 56,279 58,128
---------- ----------- ---------------- ------------
Carrying amount
Balance at 31 December 2020 (Audited) 1,259,959 383,922 15,874 1,659,755
========== =========== ================ ============
Balance at 30 September 2021 (Reviewed) 1,256,790 383,575 19,116 1,659,481
========== =========== ================ ============
Goodwill impairment reviews are undertaken annually or more frequently if events or changes in circumstances indicate a potential impairment. No indicators of impairment have been identified during the nine months ended 30 September 2021.
6. Right of use assets
30 September 31 December 2020
2021
------------------------------------------- ---------------------------- -----------------
(Reviewed) (Audited)
Balance at 1 January 354,688 264,763
Addition for the period / year 128,864 152,030
Depreciation charge for the period / year (58,918) (60,803)
Terminated contracts (3,454) (1,302)
Translation (3,472) -
Balance 417,708 354,688
============================ =================
7. Investment at fair value through profit and loss
30 September 2021 31 December 2020
--------------------- ------------------ -----------------
(Reviewed) (Audited)
Equity investments* 10,372 9,604
------------------
10,372 9,604
================== =================
* On August 17, 2017, Almakhbariyoun AL Arab (seller) has signed IT purchase Agreement with JSC Mega Lab (Buyer) to transfer and install the Laboratory Information Management System (LIMS) for a purchase price amounted to USD 400 000, which will be in the form of 10% equity stake in JSC Mega Lab. In case the valuation of the project is less or more than USD 4,000,000, the seller stake will be adjusted accordingly, in a way that the seller equity stake shall not fall below 5% of JSC Mega Lab.
- ownership percentage in JSC Mega Lab at the transaction date on April 8, 2019, and as of September 30, 2021, 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 of BioLab Shares/total stake (being USD 400,000.00) plus 15% annual IRR (including preceding 5 Financial years). After the expiration of above 12 months from the date of the put option period expiration, which allows CHG to purchase Biolab's all shares at a price of equity value of Biolab's stake (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 SLA 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 all Shares at a price of the equity value of BioLab's stake in JSC Mega Lab (having value of USD 400,000.00) plus 205 annual IRR. If JCI accreditation is not obtained, immediately after the expiration of the additional 12 months period of the CHG shall have a call option (the Accreditation Call option), exercisable within 6 months period, which allows CHG to purchase BioLab's all Shares at a price of the equity value of BioLab's stake in JSC Mega Lab (having value of USD 400,00.00) plus 20% annual IRR.
8. Trade and other receivables
30 September 2021 31 December 2020
------------------------------------ ------------------ -----------------
(Reviewed) (Audited)
Trade receivables - net 380,490 325,770
Prepayments 27,859 19,363
Due from related parties note (16) 3,847 2,910
Accrued revenue 2,044 1,006
Other receivables* 75,573 39,854
------------------
489,813 388,903
================== =================
* Other receivables during the period ended 30 September 2021, including EGP 27m related to advance to suppliers for purchasing fixed assets and leasehold improvement the new and existing pathology branches.
9. Investments at amortised cost
30 September 2021 31 December 2020
---------------- ------------------------ -----------------
(Reviewed) (Audited)
Term deposits 96,294 -
Treasury bills 759,722 276,625
856,016 276,625
======================== =================
The maturity date of the treasury bills and Fixed-term deposits is between 3-12 months and have settled average interest rates of 12.53% and 7.85% respectively. Treasury bills are classified as held to collect.
10. Cash and cash equivalents
30 September 2021 31 December 2020
------------------------------------ ------------------ -----------------
(Reviewed) (Audited)
Term deposits (less than 90 days) 270,237 162,380
Treasury bills (less than 90 days) 183,419 184,525
Cash at banks and on hand 497,047 253,225
950,703 600,130
================== =================
11. Trade and other payables
30 September 2021 31 December 2020
---------------------------------- ------------------ -----------------
(Reviewed) (Audited)
Trade payable 291,591 177,602
Accrued expenses 254,525 151,201
Due to related parties note (16) 121 439
Other payables 100,555 50,959
Accrued finance cost 2,325 3,422
649,117 383,623
================== =================
12. Short-term financial liability at fair value
30 September 2021 31 December 2020
---------------------- ------------------ -----------------
(Reviewed) (Audited)
Put option liability 775,995 282,267
775,995 282,267
================== =================
The accounting policy for put options after initial recognition is to recognise all changes in the carrying value of the put liability within equity as all these transactions are with the non-controlling interests of the Group.
During the historic acquisitions of Makhbariyoun Al Arab (Biolabs) which took place at 31 December 2011, the Group entered into separate put option arrangements to purchase the remaining equity interests at a subsequent date. At acquisition, a put option liability has been recognised for the net present value for the exercise price of the option. The options are exercisable in whole from the fifth anniversary of the completion of the original purchase agreement, which fell due in September 2016. The vendor has not exercised this right at 30 September 2021.
13. Loans and borrowings
A) In April 2017 AL-Mokhtabar for medical lab, one of IDH subsidiaries, was granted a medium-term loan amounting to EGP 110m from the Commercial International Bank "CIB Egypt" to finance the purchase of the new administrative building for the group. As at 30 September 2021, loan amount EGP 110m had been drawn down in full. The loan contains the following financial covenants which if breached will mean the loan is repayable on demand:
1. The financial leverage shall not exceed the following percentages
Year 2017 2018 2019 2020 2021 2022
----------------- ---------------- ---------------- ---------------- ---------------- ---------------- ----------------
% 2.33 1.71 2.31 1.95 1.64 1.47
"Financial leverage": total liabilities divided by net equity
2. The debt service ratios (DSR) shall not be less than 1.
"Debt service ratios": cash operating profit after tax plus Depreciation for the financial year less annual maintenance on machinery and equipment divided by total distributions plus accrued interest and loan instalments.
3. The current ratios shall not be less than 1.
"Current ratios": Current assets divided current liabilities.
4. The capital expansions in AL Mokhtabar company shall not exceed EGP 50m per year, other than year 2017 which includes in addition the value of the building financed by EGP 110m loan facility. This condition is valid throughout the term of the loan.
The agreement includes other non-financial covenants which relate to the impact of material events on the Company and the consequential ability to repay the loan.
B) In July 2018, AL-Borg lab, one of IDH subsidiaries, was granted a medium term loan amounting to EGP 130.5m from the Ahli United Bank "AUB Egypt" to finance the investment cost related to the expansion into the radiology segment. As at 30 September 2021 only EGP 75m had been drawn down from the total facility available. The loan contains the following financial covenants which if breached will mean the loan is repayable on demand:
1. The financial leverage shall not exceed 0.7 throughout the period of the loan
"Financial leverage": total bank debt divided by net equity
2. The debt service ratios (DSR) shall not be less than 1.35 starting 2019
"Debt service ratio": cash operating profit after tax plus depreciation for the financial year less annual maintenance on machinery and equipment adding cash balance divided by total financial payments.
"Cash operating profit": Operating profit after tax, interest expense, depreciation and amortisation, is calculated as follows: Net income after tax and unusual items adding Interest expense, Depreciation, Amortisation and provisions excluding tax related provisions less interest income and Investment income and gains from extraordinary items.
"Financial payments": current portion of long-term debt including finance lease payments, interest expense and fees and dividends distributions.
3. The current ratios shall not be less than 1.
"Current ratios": Current assets divided current liabilities.
The terms and conditions of outstanding loans are as follows:
Currency Nominal interest rate Maturity 30 September 2021 31 December 2020
----------------------- ---------- ----------------------- --------------- ------------------ -----------------
(Reviewed) (Audited)
CIB - Bank EGP Secured rate 9.5% 5 April 2022 25,947 38,654
AUB - Bank EGP CBE corridor rate+1% 26 April 2026 75,101 54,379
101,048 93,033
Amount held as:
Current liability 33,457 25,416
Non- current liability 67,591 67,617
101,048 93,033
================== =================
* As at 30-September-21 corridor rate 9.25% (2020: 9.25%)
The companies (Mokhtabar and Borg) didn't breach any covenants for both MTL agreements.
C) On 25 May 2021, IDH has secured an 8 years USD 45 million debt financing package from the International Finance Corporation (IFC). The eight-year loan will be used to finance IDH's growth plans across new and existing markets and help expand access to high-quality diagnostic services in high growth emerging markets, in addition to its current presence in Egypt, Jordan, Nigeria and Sudan. The loan has an availability period of two years. As of September30, 2021, the USD 45 million debt has not been withdrawn by IDH.
14. Long-term financial liability at fair value
30 September 2021 31 December 2020
----------------------- ------------------ -----------------
(Reviewed) (Audited)
Put option liability* 33,682 31,790
33,682 31,790
================== =================
* According to definitive agreements signed on 15 January 2018 between Dynasty Group Holdings Limited and International Finance Corporation (IFC) related to the Eagle Eye-Echo scan transaction, IFC has the option to put it is shares to Dynasty in year 2024. The put option price will be calculated on the basis of the fair market value determined by an independent valuer.
15. Other Financial obligations
30 September 2021 31 December 2020
--------------------------------------------- --------------------- -----------------
(Reviewed) (Audited)
Lease liabilities - buildings 475,408 389,920
Financial obligations- laboratory equipment 215,186 69,122
690,594 459,042
===================== =================
The financial obligations for the laboratory equipment and building are payable as follows:
30 September 2021
Minimum
payments Interest Principal
---------------------------- -------------------- -------------- ----------------
(Reviewed) (Reviewed) (Reviewed)
Less than one year 195,078 85,955 109,123
Between one and five years 653,533 208,045 445,488
More than five years 161,382 25,399 135,983
1,009,993 319,399 690,594
==================== ============== ================
31 December 2020
Minimum payments Interest Principal
---------------------------- ----------------- ---------- ----------
(Audited) (Audited) (Audited)
Less than one year 126,998 66,481 60,517
Between one and five years 463,646 176,312 287,334
More than Five years 131,605 20,414 111,191
722,249 263,207 459,042
================= ========== ==========
Amounts recognised in profit or loss:
For the three months ended 30 September For the nine months ended 30 September
2021 2020 2021 2020
----------------------------- ------------------------ ---------------- ------------------- --------------------
(Reviewed) (Unaudited) (Reviewed) (Unaudited)
Interest on lease
liabilities 15,165 11,955 44,037 38,343
Expenses related to
short-term lease 5,504 1,961 14,143 6,255
16. Related party transactions
The significant transactions with related parties, their nature volumes and balance during the period 30 September 2021 are as follows:
30 September 2021
Nature of Nature of Transaction amount
Related Party transaction relationship of the period Balance
--------------- ----------------- ----------------- --------------------- --------------------
(Reviewed)
Life Scan Expenses paid on
(S.A.E.)* behalf Affiliate - 350
International
Fertility Expenses paid on
(IVF)** behalf Affiliate - 1,767
Entity owned by
Company's board
H.C Security Provided service member 242 (121)
Life Health Medical Test Entity owned by
Care analysis Company's CEO 3,321 -
Provided service
"Medical
insurance" (2,306) 652
Dr. Amid Abd Put option Bio. Lab C.E.O
Elnour liability and shareholder (493,728) (775,995)
Integrated Rental income Entity owned by
Treatment for Company's CEO
Kidney
Diseases
(S.A.E.) 125 -
Medical Test
analysis 410 1,078
Total (772,269)
====================
31 December 2020
Nature of Nature of Transaction amount
Related Party transaction relationship of the year Balance
-------------------- -------------------- -------------------- ------------------- ----------
(Audited)
Expenses paid on
Life Scan (S.A.E) * behalf Affiliate 6 350
International Expenses paid on
Fertility (IVF)** behalf Affiliate (3,449) 1,767
Entity owned by
Company's board
H.C Security Provided service member (412) (76)
Entity owned by
Life Health Care Provided service Company's CEO (11,058) (363)
Bio. Lab C.E.O and
Dr. Amid Abd Elnour Put option liability shareholder (83,126) (282,267)
Integrated Rental income Entity owned by
Treatment for Company's CEO
Kidney Diseases
(S.A.E) 344 -
Medical Test analysis 377 793
(279,796)
============
Related party transactions (continued)
* Life Scan is a company whose shareholders include Dr. Moamena Kamel (founder of IDH subsidiary Al-Mokhtabar Labs).
** International Fertility (IVF) is a company whose shareholders include Dr. Moamena Kamel (founder of IDH subsidiary Al-Mokhtabar Labs).
Compensation of key management personnel of the Group
The amounts disclosed in the table are the amounts recognised as an expense during the reporting period related to key management personnel.
30 September 30 September
2021 2020
------------- -------------
(Reviewed) (Unaudited)
(Unreviewed)
Short-term employee benefits 47,617 38,256
------------- -------------
47,617 38,256
============= =============
17. General and administrative expenses
For the three months ended 30 September For the nine months ended 30 September
2021 2020 2021 2020
-------------------- ------------------- --------------------- ---------------------- ----------------------
(Reviewed) (Unaudited) (Reviewed) (Unaudited)
(Unreviewed) (Unreviewed)
Wages and salaries 36,239 28,954 97,875 78,337
Depreciation 6,050 5,382 17,237 15,796
Other expenses* 40,680 17,210 143,989 60,676
------------------- --------------------- ---------------------- ----------------------
Total 82,969 51,546 259,101 154,809
=================== ===================== ====================== ======================
* Other expenses included EGP 29m related to dual listing expenses in Egyptian Exchange.
18. Net finance cost
For the nine months ended
For the three months ended 30 September 30 September
2021 2020 2021 2020
------------------------------------------ ------------------- --------------------- ------------ --------------
(Reviewed) (Unaudited) (Reviewed) (Unaudited)
(Unreviewed) (Unreviewed)
Finance income
Interest income 23,838 10,434 69,086 44,199
------------------- --------------------- ------------ --------------
Total finance income 23,838 10,434 69,086 44,199
Finance cost
(Loss) / gain on hyperinflationary net
monetary position (3,424) - (4,628) 192
Bank charges (7,137) (699) (12,501) (1,927)
Interest expense (21,433) (15,734) (70,444) (51,191)
Net foreign exchange (loss) / gain 1,733 (5,150) (17,588) (9,629)
------------------- --------------------- ------------ --------------
Total finance cost (30,261) (21,583) (105,161) (62,555)
Net finance cost (6,423) (11,149) (36,075) (18,356)
=================== ===================== ============ ==============
19. Tax
A) Tax expense
Tax expense is recognised based on management's best estimate of the weighted-average annual income tax rate expected for the full financial year multiplied by the pre-tax income of the interim reporting period.
B) Income tax
Amounts recognised in profit or loss as follow:
For the three months For the nine months
ended 30 September ended 30 September
2021 2020 2021 2020
---------------------------- ------------- -------------- ---------------- -------------
(Reviewed) (Unaudited) (Reviewed) (Unaudited)
(Unreviewed) (Unreviewed)
Current tax:
Current year (182,332) (76,973) (464,677) (163,182)
Deferred tax:
Deferred tax arising on
undistributed reserves
in subsidiaries (55,518) (13,742) (139,298) (24,132)
Relating to origination
and reversal of temporary
differences (5,111) 4,124 (5,800) 5,687
------------- -------------- ---------------- -------------
Total Deferred tax expense (60,629) (9,618) (145,098) (18,445)
Tax expense recognised
in profit or loss (242,961) (86,591) (609,775) (181,627)
============= ============== ================ =============
Tax (continued)
C) Deferred tax liabilities
Deferred tax relates to the following:
30 September 31 December
2021 2020
------------------------------------------------ --------------- ------------
(Reviewed) (Audited)
Property, plant and equipment (23,945) (18,334)
Intangible assets (105,603) (106,702)
Undistributed reserves from group subsidiaries (187,218) (116,657)
Provisions and finance lease liabilities 73 1,360
---------------
Net deferred tax liabilities (316,693) (240,333)
=============== ============
20. Financial instruments
The Group has reviewed the financial assets and liabilities held at 30 September 2021. It has been deemed that the carrying amounts for all financial instruments are a reasonable approximation of fair value. All financial instruments are deemed Level 3.
Contingent liabilities
As required by article 134 of the labour law on Vocational Guidance and Training issued by the Egyptian Government in 2003, Al Borg Laboratory Company and Al Mokhtabar Company for Medical Labs are required to conform to the requirements set out by that law to provide 1% of net profits each year into a training fund. During the year, Integrated Diagnostics Holdings plc have taken legal advice and considered market practice in Egypt relating to this and more specifically whether the vocational training courses undertaken by Al Borg Laboratory Company and Al Mokhtabar Company for Medical Labs suggest that obligations have been satisfied through training programmes undertaken in-house by those entities. Since the issue of the law on Vocational Guidance and Training, Al Borg Laboratory Company and Al Mokhtabar Company for Medical Labs have not been requested by the government to pay or have voluntarily paid any amounts into the external training fund. The board of Integrated Diagnostics Holdings plc have concluded that an outflow of funds is not probable.
Should a claim be brought against Al Borg Laboratory Company and Al Mokhtabar Company for Medical Labs, an amount of between EGP 19.5m to EGP 49 m could become payable, however this is not considered probable.
21. Dividends distributions
30 September 30 September 2020
2021
----------------------------------------------------------- -------------- ------------------
(Reviewed) (Unaudited)
Cash dividends on ordinary shares declared and paid: (Unreviewed)
US$ 0.0485 per share (2020), US$ 0.04675 per share (2019) (455,182) (441,855)
-------------- ------------------
(455,182) (441,855)
============== ==================
22. Earnings per share
For the three months ended 30 September For the nine months ended 30 September
2021 2020 2021 2020
---------------------------- -------------------- --------------------- --------------------- ------------------
(Reviewed) (Unaudited) (Reviewed) (Unaudited)
(Unreviewed) (Unreviewed)
Profit attributed to owners
of the parent 454,236 194,371 1,100,676 373,139
Weighted average number of
ordinary shares in issue 600,000 600,000 600,000 600,000
-------------------- --------------------- --------------------- ------------------
Basic and diluted earnings
per share 0.76 0.32 1.83 0.62
==================== ===================== ===================== ==================
There is no dilutive effect from equity.
* At the Extraordinary General Meeting on 4 December 2020, the Company decided to the following share split: The existing issued ordinary share capital of 150,000,000 ordinary shares of US$1.00 each (the "Existing Ordinary Shares") have been split into four new ordinary shares of US$0.25 each (the "New Ordinary Shares"). The comparative figures have been updated.
23. Segment reporting
The Group has four operating segments based on geographical location rather than two operating segments based on service provided, as the Group's Chief Operating Decision Maker (CODM) reviews the internal management reports and KPIs of each geography.
The Group operates in four geographic areas, Egypt, Sudan, Jordan and Nigeria. The revenue split between the four regions is set out below.
Revenue by geographic location
For the three
months ended Egypt region Sudan region Jordan region Nigeria region Total
30 September
2021
(Reviewed) 1,186,803 2,912 268,770 14,926 1,473,411
30 September
2020
(Unaudited)/
(Unreviewed) 601,775 8,316 100,477 9,722 720,290
Revenue by geographic location
For nine months period ended Egypt region Sudan region Jordan region Nigeria region Total
30 September 2021 (Reviewed) 3,121,862 12,179 592,288 40,252 3,766,581
30 September 2020 (Unaudited)/ (Unreviewed) 1,406,769 20,607 217,820 24,781 1,669,977
Net profit / (loss) by geographic location
For the three months ended Egypt region Sudan region Jordan region Nigeria region Total
30 September 2021 (Reviewed) 419,408 (3,922) 68,430 (4,228) 479,688
30 September 2020 (Unaudited)/ (Unreviewed) 184,124 (2,426) 23,453 (4,356) 200,795
Net profit / (loss) by geographic location
For nine month period ended Egypt region Sudan region Jordan region Nigeria region Total
30 September 2021 (Reviewed) 1,035,620 (18,723) 151,677 (20,676) 1,147,898
30 September 2020 (Unaudited)/ (Unreviewed) 363,328 (6,963) 38,515 (19,460) 375,420
Segment reporting (continued)
Revenue by type Net profit by type
For the three months ended 30 September For the three months ended 30 September
2021 2020 2021 2020
(Reviewed) (Unaudited) (Reviewed) (Unaudited)
(Unreviewed) (Unreviewed)
Pathology 1,447,526 703,380 494,667 206,918
Radiology 25,885 16,910 (14,979) (6,123)
1,473,411 720,290 479,688 200,795
Revenue by type Net profit by type
For the nine months ended 30 September For the nine months ended 30 September
2021 2020 2021 2020
(Reviewed) (Unaudited) (Reviewed) (Unaudited)
(Unreviewed) (Unreviewed)
Pathology* 3,695,510 1,629,137 1,184,241 401,782
Radiology 71,071 40,840 (36,343) (26,362)
3,766,581 1,669,977 1,147,898 375,420
Revenue by categories Revenue by categories
For the three months ended 30 September For the nine months ended 30 September
2021 2020 2021 2020
(Reviewed) (Unaudited) (Reviewed) (Unaudited)
(Unreviewed) (Unreviewed)
Walk-in 590,504 306,296 1,619,543 749,283
Corporate 882,907 413,994 2,147,038 920,694
1,473,411 720,290 3,766,581 1,669,977
* On 30 September 2021 includes Covid-19 related Pathology tests amounted to EGP 1,531m (30 September 2020: EGP 187m).
Non-current assets by geographic location
Egypt region Sudan region Jordan region Nigeria region Total
30 September 2021 (Reviewed) 2,693,564 3,889 299,257 97,546 3,094,256
31 December 2020 (Audited) 2,409,797 24,132 263,767 113,941 2,811,637
Segment reporting (continued)
The operating segment profit measure reported to the CODM is EBITDA, as follows:
For the three months period ended 30 For the nine months period ended 30
September September
2021 2020 2021 2020
(Reviewed) (Unaudited) (Reviewed) (Unaudited)
(Unreviewed) (Unreviewed)
Profit from
operations 729,072 298,535 1,793,748 575,403
Property, plant and
equipment
depreciation 46,548 28,316 105,616 86,675
Amortisation of right
of use 12,241 14,852 58,918 44,307 Amortisation of Intangible assets 1,953 1,373 5,002 4,045 EBITDA 789,814 343,076 1,963,284 710,430 Non-recurring expenses - - 29,034 - Normalised EBITDA 789,814 343,076 1,992,318 710,430
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