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IDHC Integrated Diagnostics Holdings Plc

0.395
-0.0115 (-2.83%)
28 Mar 2024 - Closed
Delayed by 15 minutes
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
  -0.0115 -2.83% 0.395 0.39 0.40 0.40 0.40 0.40 94 16:35:01
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
0 0 N/A 0

Integrated Diagnostics Holdings PLC Half-year Report (0844Z)

12/09/2022 8:23am

UK Regulatory


Integrated Diagnostics (LSE:IDHC)
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From Mar 2022 to Mar 2024

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TIDMIDHC

RNS Number : 0844Z

Integrated Diagnostics Holdings PLC

12 September 2022

Integrated Diagnostics Holdings Plc

1H 2022 Results

Monday, 12 September 2022

Integrated Diagnostics Holdings Plc delivers robust growth in traditional offering demonstrating underlying strength

(Cairo and London) - Integrated Diagnostics Holdings ("IDH," "the Group," or "the Company"), a leading consumer healthcare company with operations in Egypt, Jordan, Sudan and Nigeria, released today its reviewed financial statements and operational performance for the six-month period ended 30 June 2022, recording revenue (compliant with IFRS) of EGP 1,954 million and net profit of EGP 439 million. During the period, IDH's conventional business continued to demonstrate its underlying strength and growth potential, recording robust year-on-year growth and helping to offset the decline in Covid-19-related (1) revenues for the period. More specifically, IDH's conventional business (comprising 69% of total revenues) recorded a solid 13% year-on-year increase in revenue during 1H 2022, on the back of a 6% rise in test volumes. Similarly, in Q2-2022, IDH's conventional offering recorded a remarkable 18% year-on-year and 9% quarter-on-quarter rise in revenues, with the robust growth versus Q1-2022 coming despite the seasonal slowdown related to the holy month of Ramadan and the Eid holidays. Consolidated revenues for the quarter recorded EGP 774 million, while net profit stood at EGP 125 million in Q2 2022. As noted above, consolidated results for the three- and six-month periods ended 30 June 2022 were weighed down by a significant slowdown in Covid-19-related business owing to a widespread decline in infection rates, the lifting of mandatory testing for international travellers, and a substantial decline in the average price per Covid-19-related test.

Financial Results (IFRS)

 
  EGP mn                                 1H 2021                  1H 2022     Change 
==============================  ================  =======================  ========= 
 Revenues                                  2,293                    1,954       -15% 
------------------------------  ----------------  -----------------------  --------- 
    Conventional Revenues                  1,188                    1,339        13% 
------------------------------  ----------------  -----------------------  --------- 
    Covid-19-related Revenues              1,105                      615       -44% 
------------------------------  ----------------  -----------------------  --------- 
 Cost of Sales                             (988)                  (1,122)        14% 
------------------------------  ----------------  -----------------------  --------- 
 Gross Profit                              1,305                      832       -36% 
------------------------------  ----------------  -----------------------  --------- 
 Gross Profit Margin                         57%                      43%   -14 pts. 
------------------------------  ----------------  -----------------------  --------- 
 Operating Profit                          1,094                      562       -49% 
------------------------------  ----------------  -----------------------  --------- 
 EBITDA (2)                                1,203                      709       -41% 
------------------------------  ----------------  -----------------------  --------- 
 EBITDA Margin                               52%                      36%   -16 pts. 
------------------------------  ----------------  -----------------------  --------- 
 Net Profit                                  668                      439       -34% 
------------------------------  ----------------  -----------------------  --------- 
 Net Profit Margin                           29%                      22%    -7 pts. 
------------------------------  ----------------  -----------------------  --------- 
 Cash Balance                              1,587                    2,182        37% 
------------------------------  ----------------  -----------------------  --------- 
 

Note (1): Throughout the 1H 2022 Earnings Release, percentage changes between reporting periods are calculated using the exact value (as reported in the Company's Consolidated Financials) and not the corresponding rounded figure.

Key Operational Indicators(3)

 
                                            1H 2021         1H 2022          Change 
==================================  ===============  ==============  ============== 
 Branches                                       495             538              43 
---------------------------------------  ----------  --------------  -------------- 
 Patients ('000)                              4,673           4,541             -3% 
---------------------------------------  ----------  --------------  -------------- 
 Revenue per Patient (EGP)                      491             416            -15% 
---------------------------------------  ----------  --------------  -------------- 
 Tests ('000)                                16,318          16,004             -2% 
---------------------------------------  ----------  --------------  -------------- 
  Conventional Tests ('000)                  13,717          14,547              6% 
---------------------------------------  ----------  --------------  -------------- 
  Covid-19-related Tests ('000)               2,601           1,458            -44% 
---------------------------------------  ----------  --------------  -------------- 
 Revenue per Test (EGP)                         141             118            -16% 
---------------------------------------  ----------  --------------  -------------- 
  Revenue per Conventional Test 
   (EGP)                                         87              92              6% 
---------------------------------------  ----------  --------------  -------------- 
  Revenue per Core Covid-19 
   Test (EGP)                                   425             389             -8% 
---------------------------------------  ----------  --------------  -------------- 
  Revenue per Other Covid-19-related 
   Test (EGP)                                   152             134            -12% 
---------------------------------------  ----------  --------------  -------------- 
 Test per Patient                               3.5             3.5             N/A 
----------------------------------  ---------------  --------------  -------------- 
 
 

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

(2) EBITDA is calculated as operating profit plus depreciation and amortization.

(3) Key operational indicators are calculated based on net sales for the six month period of EGP 1,891 million. More details on the difference between net sales and total revenues is available below.

Important Notice: Treatment of Revenue Sharing Agreements and Use of Alternative Performance Measures

As part of IDH's efforts to support local authorities in Egypt and Jordan in the fight against the pandemic, Biolab (IDH's Jordanian subsidiary) secured several revenue-sharing agreements to operate testing stations, primarily dedicated to PCR testing for Covid-19, in multiple locations across the country including Queen Alia International Airport (QAIA) and Aqaba Port. These agreements kicked off in May 2021 at Aqaba Port and in August 2021 at QAIA. However, f ollowing the decision by Jordanian authorities on 1 March 2022 to end mandatory testing, testing booths across both locations recorded sharp declines in patient traffic.

Under these agreements, Biolab received the full revenue (gross sales) for each test performed and paid a proportion to QAIA (38% of gross sales excluding sales tax) and Aqaba Port (36% of gross sales) as concession fees to operate in the facilities, thus effectively earning the net of these amounts (net sales) for each test supplied. Starting in Q4 2021, the treatment of these agreements was altered in accordance with IFRS 15 paragraph B34, which considers Biolab as a Principal (and not an Agent). Subsequently, revenues generated from these agreements are reported in the Consolidated Financial Statements as gross (inclusive of concession fees) and the fees paid to QAIA and Aqaba Port are reported as a separate line item in the direct cost. It is important to note that sales generated from these agreements were reflected on the Company's results in Q1 2022 only as the agreements were terminated starting in the second quarter of the year.

In an effort to present an accurate picture of IDH's performance for the six-month period ended 30 June 2022, throughout the report management utilizes net sales of EGP 1,891 million for 1H 2022 (IFRS revenues stand at EGP 1,954 million for the six-month period). Net sales for the first half of the year are calculated as total gross revenues excluding concession fees and sales taxes paid as part of Biolab's revenue sharing agreements with QAIA and Aqaba Port.

It is important to note that aside from revenue and cost of sales, all other figures related to gross profit, operating profit, EBITDA, and net profit are identical in the APM and IFRS calculations. However, the margins related to the aforementioned items differ between the two sets of performance indicators due to the use of Net Sales in the APM calculations and the use of Revenues for the IFRS calculations.

Adjustments Breakdown

 
  EGP mn                                          1H 2022 
===============================================  ======== 
 Net Sales                                          1,891 
-----------------------------------------------  -------- 
 QAIA and Aqaba Port Concession Fees                   63 
-----------------------------------------------  -------- 
 Revenues (IFRS)                                    1,954 
-----------------------------------------------  -------- 
 Cost of Net Sales                                (1,059) 
-----------------------------------------------  -------- 
 Adjustment for QAIA and Aqaba Port Agreements       (63) 
-----------------------------------------------  -------- 
 Cost of Sales (IFRS)                             (1,122) 
 

Adjustments by Country

 
   EGP mn    1H 2022    1H 2022 
              (IFRS)      (APM) 
==========  ========  ========= 
 Egypt         1,524      1,524 
----------  --------  --------- 
 Jordan          386        323 
----------  --------  --------- 
 Sudan            10         10 
----------  --------  --------- 
 Nigeria          33         33 
----------  --------  --------- 
 Total         1,954      1,891 
 

Note: differences between IFRS and APM figures are highlighted in grey.

Financial Results (APM)

 
                                        IFRS                           APM 
=========================  =============================  ============================= 
  EGP mn                    1H 2021    1H 2022    Change   1H 2021    1H 2022    Change 
=========================  ========  =========  ========  ========  =========  ======== 
 Net Sales                    2,293      1,954      -15%     2,293      1,891      -18% 
-------------------------  --------  ---------  --------  --------  ---------  -------- 
  Conventional Net Sales      1,188      1,339       13%     1,188      1,339       13% 
-------------------------  --------  ---------  --------  --------  ---------  -------- 
  Covid-19-related Net 
   Sales                      1,105        615      -44%     1,105        552      -50% 
-------------------------  --------  ---------  --------  --------  ---------  -------- 
 Cost of Net Sales            (988)    (1,122)       14%     (988)    (1,059)        7% 
-------------------------  --------  ---------  --------  --------  ---------  -------- 
 Gross Profit                 1,305        832      -36%     1,305        832      -36% 
-------------------------  --------  ---------  --------  --------  ---------  -------- 
 Gross Profit Margin 
  on Net Sales                  57%        43%   -14 pts       57%        44%   -13 pts 
-------------------------  --------  ---------  --------  --------  ---------  -------- 
 Operating Profit             1,094        562      -49%     1,094        562      -49% 
-------------------------  --------  ---------  --------  --------  ---------  -------- 
 EBITDA (4)                   1,203        709      -41%     1,203        709      -41% 
-------------------------  --------  ---------  --------  --------  ---------  -------- 
 EBITDA Margin on Net 
  Sales                         52%        36%   -16 pts       52%        38%   -15 pts 
-------------------------  --------  ---------  --------  --------  ---------  -------- 
 Net Profit                     668        439      -34%       668        439      -34% 
-------------------------  --------  ---------  --------  --------  ---------  -------- 
 Net Profit Margin on 
  Net Sales                     29%        22%    -7 pts       29%        23%    -6 pts 
-------------------------  --------  ---------  --------  --------  ---------  -------- 
 Cash Balance                 1,587      2,182       37%     1,587      2,182       37% 
-------------------------  --------  ---------  --------  --------  ---------  -------- 
 

Note: differences between IFRS and APM figures are highlighted in grey.

(4) EBITDA is calculated as operating profit plus depreciation and amortization.

Introduction

   i.    Financial Highlights 

-- Net Sales recorded EGP 1,891 million in 1H 2022, 18% below last year's figure which had been boosted by strong contributions from Covid-19-related offering. During the period, IDH continued to record robust year-on-year growth in conventional net sales, once more displaying the business' underlying strength and growth potential. This helped offset the significant decline in Covid-19-related(5) net sales for the period, owing to lower infection rates, the lifting of mandatory testing for international passengers, and declining average test prices. On a quarterly basis, consolidated net sales fell 34% year-on-year in Q2 2022 on the back of a large contraction in Covid-19-related net sales. Meanwhile, conventional net sales continued their steady expansion during the second quarter, a particularly noteworthy result in light of the expected seasonal slowdown related to the holy month of Ramadan and Eid impacting results for April and May.

-- More specifically, IDH's conventional offering recorded EGP 1,339 million in 1H 2022 up 13% year-on-year and continuing to support consolidated net sales for the six-month period. The segment's continued growth now sees it contribute to 71% of consolidated net sales up from 52% this time last year. The solid year-on-year growth was supported by a robust 6% increase in both test volumes and average revenue per test. On a quarterly basis, conventional net sales expanded an impressive 18% year-on-year and 9% quarter-on-quarter continuing to display the business' underlying strength. Growth was supported by growing test volumes which expanded 7% year-on-year and 4% quarter-on-quarter.

-- During the six-month period, IDH's Covid-19-related net sales recorded EGP 552 million versus the EGP 1,105 million recorded in 1H 2021. As such, the segment made up just 29% of total net sales in 1H 2022 versus 48% in 1H 2021. The segment's performance in the first six months of the year was significantly impacted by results for the second quarter, with Covid-19-related net sales declining 87% year-on-year and 84% quarter-on-quarter to record EGP 75 million in Q2 2022.

-- Gross Profit recorded EGP 832 million in 1H 2022, down 36% year-on-year. Gross profit margin on net sales stood at 44% compared to 57% in 1H 2021. Lower gross profitability comes on the back of a significant fall in the average price of Covid-19-related tests (including a 52% fall in the average price of PCR tests) which reflected in a rise in raw materials as percentage of net sales for the period. The contraction in gross profitability is also in part attributable to an increase in direct salaries and wages versus last year related to additional staff employed at the testing booths at Aqaba Port and QAIA and across IDH's newly rolled out branches, as well as an annual salary increase for IDH's staff. In Q2 2022, IDH recorded a gross profit of EGP 300 million, down 55% year-on-year and with an associated margin of 39%. Lower gross profitability for the quarter in part reflects the expected seasonal slowdown related to the holy month of Ramadan and Eid vacation.

-- EBITDA(6) recorded EGP 709 million in the six-month period, representing a 41% year-on-year decrease. EBITDA margin on net sales stood at 38% compared to 52% in 1H 2021. The year-on-year contraction comes on the back of lower gross profitability coupled with higher SG&A outlays for the period mainly related to marketing activities. On a quarterly basis, EBITDA recorded EGP 241 million in Q2 2022, down 60% year-on-year and with an associated margin of 31%.

-- Net Profit recorded EGP 439 million in 1H 2022, down 34% year-on-year. Net profit margin on net sales stood at 23% for the period, in line with the Group's pre-Covid-19 averages.

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

(6) EBITDA is calculated as operating profit plus depreciation and amortization.

ii. Operational Highlights

-- IDH's branch network reached 538 branches as at 30 June 2022, up from 495 branches as at 30 June 2021 and 502 branches at year-end 2021.

-- Conventional tests performed, which made up the majority of total tests in 1H 2022, recorded 14.5 million, up a solid 6% versus last year. This largely compensated for a 44% year-on-year decline in Covid-19-related tests performed. As such total test volumes contracted 2% year-on-year to record 16.0 million in 1H 2022.

-- Average revenue per test(7) recorded EGP 118 in 1H 2022, a year-on-year decline of 16% driven by lower average revenue per Covid-19-related(8) tests (down 11% year-on-year). On the other hand, average revenue per conventional test increased 6% year-on-year in 1H 2022.

-- Total patients served decreased 3% in 1H 2022 to record 4.5 million. Meanwhile, average test per patient stood unchanged at 3.5 in 1H 2022.

-- In Egypt (80.6% share of consolidated net sales), IDH recorded revenue of EGP 1,524 million in 1H 2022, down 21% year-on-year. IDH's Egyptian operations recorded a solid 12% year-on-year increase in conventional revenues (75% of Egypt's total revenues) on the back of rising test volumes. Meanwhile, Covid-19-related revenues declined 58% year-on-year due to lower test volumes as infections rates decreased, mandatory testing for travellers was lifted, the average price for all Covid-19-related tests decline substantially. Finally, Egypt's revenues were supported by a 19% contribution from the Group's house call services.

-- Al-Borg Scan recorded revenues of EGP 35 million, representing a 78% year-on-year increase. Revenue growth was supported by an 85% and 77% year-on-year increase in test and patient volumes, respectively. Growing volumes at the venture have come on the back of new branch rollouts (+3 over the last twelve months). In the coming months, the Group is planning to expand its radiology branch network further through the roll out of two additional branches .

-- Wayak recorded a 364% year-on-year increase in consolidated revenue, which stood at EGP 8.7 million in 1H 2022 versus EGP 1.9 million in 1H 2021. Higher revenues in part reflect a 47% year-on-year rise in delivery orders which reached 64.3 thousand in 1H 2022. Combined with management's continued cost optimisation efforts, this is driving a steady narrowing of the venture's consolidated EBITDA losses. More specifically, EBITDA losses contracted to EGP 1.7 million from EGP 3.41 million.

-- In Jordan (17.1% share of consolidated net sales), net sales reached EGP 323 million (IFRS revenues(9) recorded EGP 386 million in 1H 2022), unchanged from last year's figure. During the period, Biolab recorded a 14% year-on-year increase in conventional net sales, while Covid-19-related net sales contracted 10% reflecting lower test prices.

-- IDH's Nigerian operations (1.8% share of consolidated net sales) recorded revenues of EGP 33 million in 1H 2022, up 32% from the comparable period of 2021, and reflecting the rising demand for the generally higher-priced MRI and CT testing. Excluding the two branches which were closed down earlier this year, test and patients volumes would be up 25% and 19% year-on-year, respectively.

-- In Sudan (0.6% share of consolidated net sales) , IDH recorded a remarkable 13% year-on-year increase in revenues during the first six months of 2022. This marked the first revenue increase in EGP terms in over a year and came on the back of a 40% increase in average revenue per test. In local currency terms growth was even more pronounced with IDH's Sudanese operations reporting a 125% year-on-year increase in revenue.

(7) Calculated on net sales for the period.

(8) Covid-19-related tests include both Core Covid-19 tests (PCR, Antigen, and Antibody) as well as Other Covid-19-related tests.

(9) Biolab's revenues for the quarter are calculated as net sales and including concession fees paid to QAIA and Aqaba Port as part of their revenue sharing agreements.

iii. Management Commentary

Commenting on the Group's performance, IDH Chief Executive Officer Dr. Hend El-Sherbini said: "I am pleased to present another set of solid financial and operational results, which saw us build on a strong start to the year to deliver further growth in our conventional business despite a difficult operating environment. I was particularly happy to note the robust year-on-year and quarter-on-quarter growth delivered by our conventional service offering during the second quarter of the year, a noteworthy achievement in light of the seasonal slowdown associated with the holy month of Ramadan and Eid holiday. The segment's steady expansion comes as a direct result of our multi-pronged growth and investment strategy which has enabled us to continue delivering exceptional value to our patients despite the unprecedented challenges faced over the last several years. Looking at the numbers in more detail, conventional net sales recorded a robust 13% year-on-year expansion in 1H 2022. Meanwhile in Q2 2022, conventional net sales expanded 18% year-on-year and an impressive 9% quarter-on-quarter. In both periods, growth was supported by higher test and patient volumes, once more showcasing the attractiveness of our value proposition and the business' strong future growth potential. Moreover, our ability to consistently grow our business irrespective of ongoing challenges, has enabled our conventional revenues to currently stand an impressive 32% above pre-pandemic revenues recorded in the first half of 2019 once controlling for contributions from the 100 Million Healthy Lives campaign. Robust growth at the conventional segment is helping to offset the significant decline in our Covid-19-related(10) net sales both on a quarterly and year-to-date basis. More specifically, starting in March we recorded sharp declines across both Egypt and Jordan on the back of lower infection rates, a lifting of mandatory testing for international travellers, and a widespread decline in Covid-19 test prices.

On a geographic basis, across both Egypt and Jordan, we are continuing to leverage our market leading position, expanded product offering and patient base, increased service delivery capabilities, and growing visibility to deliver robust growth in our conventional business. We were very pleased to note the 12% year-on-year growth in conventional revenues delivered by our home of Egypt, which continued to expand in line with recent trends despite rising inflation and an above-average number of public holidays during the months of April and May. Egypt's performance continued to be bolstered by rising contributions from our fast-growing radiology venture, Al-Borg Scan, which in early August obtained the prestigious ACR accreditation for its nuclear medicine unit. Across both Egypt and Jordan, we are continuing to focus on retaining the thousands of new patients acquired through our Covid-19-related services over the past two years. Initiatives on this front have included the launch of a dedicated loyalty programme, the roll out of multiple marketing campaigns, and the enhancement of our cross-selling capabilities through a more effective use of patient data. In parallel, we are continuing to invest in growing our direct-to-patient reach, further developing our branch network, house call service, and digital offering. Here it is worth highlighting that thanks to our efforts to ramp up our house call capabilities over the last two years, the service is continuing to make contributions to consolidated net sales well above its pre-pandemic averages. Looking at our other geographies, in Nigeria we recorded a solid year-on-year revenue growth supported by a record-breaking second quarter performance, and reflecting the growing popularity of the venture's radiology offering. It is also worth stressing that when controlling for branch closures in the first quarter of the year, both test and patient volumes posted strong year-on-year growth proving that the venture's revamp strategy is continuing to deliver the desired results despite the fast-rising inflation experienced in recent months. On an equally positive note, we witnessed the return to year-on-year growth in EGP terms of our operations in Sudan demonstrating the underlying potential of the Sudanese market.

While we expect the current operational challenges to persist throughout the rest of 2022, I firmly believe that the robust mitigation measures we have put in place provide ample protection against possible future disruptions to the business. Coupled with our flexible business model and the inherently counter-cyclical nature of the healthcare industry, this sees us well placed to take full advantage of the vast growth opportunities offered by our markets. Looking at our mitigation strategy in more detail, as with similar situations in the past, we expect protracted high inflation, in particular in Egypt, to have the most significant impact on patients who pay for their own healthcare. With this in mind, we have been developing our marketing programs to target them with a strong health awareness message in combination with a compelling value component. This includes offering bundled diagnostic test packages for lifestyle-related diseases and chronic health conditions as well as an in-house point redemption system. We are also exploring various solutions to offer more affordable payment plans to help our patients during the ongoing difficulties. At the same time, I am confident that the brand equity we have built over many years has translated into strong loyalty, and I am certain that patients will continue to choose us as their trusted diagnostic services provider irrespective of the ongoing inflationary pressures. Meanwhile, thanks to our proactive inventory build-up and sourcing strategy we continue to face no problems acquiring raw materials and we hold sufficient inventories to cover four months of operations. Going forward, we are confident that our long-lasting relationships with test kit suppliers we enable us to continue procuring stock at competitive prices.

In light of the aforementioned and our robust performance in the first half of the year, we are maintaining our full-year guidance, with the Company on track to record conventional revenue year-on-year growth of around 20%. It is worth noting that these estimates assume no additional contributions from our Covid-19-related offering.

On a similar note, I am happy to report that despite the challenging conditions faced on the foreign exchange markets over the past several months, we have successfully completed the payment of the entire full-year 2021 dividend to all shareholders. The distribution of a record-breaking USD 69.6 million dividend reaffirms our trust in the business' fundamental strength and sustainability, and its potential going forward."

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

- End -

Analyst and Investor Call Details

An analyst and investor call will be hosted at 2pm (UK) | 3pm (Egypt) on Tuesday, 13 September 2022. You can register for the call by clicking on this link , and you may dial in using the conference call details below:

   --      Webinar ID: 928 3447 8622 
   --      Webinar Passcode: 651028 

For more information about the event, please contact: amr.amin@cicapital.com

About Integrated Diagnostics Holdings (IDH)

IDH is a leading consumer healthcare company in the Middle East and Africa with operations in Egypt, Jordan, Sudan and Nigeria. The Group's core brands include Al Borg, Al Borg Scan and Al Mokhtabar in Egypt, as well as Biolab (Jordan), Ultralab and Al Mokhtabar Sudan (both in Sudan) and Echo-Lab (Nigeria). A long track record for quality and safety has earned the Company a trusted reputation, as well as internationally recognised accreditations for its portfolio of over 2,000 diagnostics tests. From its base of 538 branches as of 30 June 2022, IDH will continue to add laboratories through a Hub, Spoke and Spike business model that provides a scalable platform for efficient expansion. Beyond organic growth, the Group's expansion plans include acquisitions in new Middle Eastern, African, and East Asian markets where its model is well-suited to capitalise on similar healthcare and consumer trends and capture a significant share of fragmented markets. IDH has been a Jersey-registered entity with a Standard Listing on the Main Market of the London Stock Exchange (ticker: IDHC) since May 2015 with a secondary listing on the EGX since May 2021 (ticker: IDHC.CA).

Shareholder Information

LSE: IDHC.L

EGX: IDHC.CA

Bloomberg: IDHC:LN

Listed on LSE: May 2015

Listed on EGX: May 2021

Shares Outstanding: 600 million

Contact

Nancy Fahmy

Investor Relations Director

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

Forward-Looking Statements

These results for the six-month period ended 30 June 2022 have been prepared solely to provide additional information to shareholders to assess the group's performance in relation to its operations and growth potential. These results should not be relied upon by any other party or for any other reason. This communication contains certain forward-looking statements. A forward-looking statement is any statement that does not relate to historical facts and events, and can be identified by the use of such words and phrases as "according to estimates", "aims", "anticipates", "assumes", "believes", "could", "estimates", "expects", "forecasts", "intends", "is of the opinion", "may", "plans", "potential", "predicts", "projects", "should", "to the knowledge of", "will", "would" or, in each case their negatives or other similar expressions, which are intended to identify a statement as forward-looking. This applies, in particular, to statements containing information on future financial results, plans, or expectations regarding business and management, future growth or profitability and general economic and regulatory conditions and other matters affecting the Group .

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

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

Group Operational & Financial Review

   i.    Revenue/Net Sales and Cost Analysis 
 
 Revenue/Net Sales 
  Consolidated Analysis 
  During both Q2 2022 and 1H 2022, IDH continued to record robust growth 
  in conventional revenues supported by both higher volumes and average 
  revenue per test. It is especially important to note that conventional 
  revenues in Q2 2022 expanded an impressive 18% year-on-year and 9% quarter-on-quarter 
  despite results for the months of April and May being weighed down by 
  the expected slowdown related to the holy month of Ramadan and Eid holidays. 
  The steady growth in IDH's conventional revenues further demonstrates 
  the business' underlying strength and future growth potential. 
 
  Meanwhile, IDH recorded a significant contract in Covid-19-related(11) 
  offering on the back of lower infection rates across both Egypt and 
  Jordan, the lifting of mandatory testing for international travellers, 
  and a substantial decline in the average price per Covid-19-related 
  test. In fact, during the first half of the year, the average price 
  of PCR tests fell 45% in Egypt and 44% in Jordan compared to 1H 2021. 
  It is worth noting that the segment's decline largely came in the second 
  quarter of the year, outweighing a strong start to the year which had 
  seen the Group's Covid-19-related offering record strong demand in the 
  months of January and February. 
 
  As such, IDH recorded total consolidated revenue of EGP 1,954 million 
  in the first half of the year, representing a 15% year-on-year decline. 
  Consolidated net sales(12) recorded EGP 1,891 million, down 18% from 
  the comparable period of last year which had included strong contributions 
  from the Group's Covid-19-related offering. On a quarterly basis, consolidated 
  net sales recorded EGP 774 million, down 34% versus Q2 2021 and 31% 
  versus the first quarter of 2022. 
 
  House Call Service 
  The Group's consolidated net sales were also supported by its house 
  call services in Egypt and Jordan, which recorded revenues of EGP 307 
  million in the first half of the year and contributed to 16% of consolidated 
  net sales for the six-month period. The service continued to make a 
  robust contribution, well above the service's pre-pandemic averages. 
  The robust set of results continue to reflect the significant investments 
  undertaken by the Group over the last two years to boost its house call 
  capacity and cater to the growing demand for the service. 
 
  (11) Covid-19-related tests include both core Covid-19 tests (Polymerase 
  Chain Reaction (PCR), Antigen, and Antibody) as well as other routine 
  inflammatory and clotting markers including, but not limited to, Complete 
  Blood Picture, Erythrocyte Sedimentation Rate (ESR), D-Dimer, Ferritin 
  and C-reactive Protein (CRP), which the Company opted to include in 
  the classification as "other Covid-19-related tests" due to the strong 
  rise in demand for these tests witnessed following the outbreak of Covid-19. 
  (12) A reconciliation between revenue and net sales is available earlier 
  in this announcement. 
 

Detailed Consolidated Performance Breakdown

The table presents Alternative Performance Measures (APM) for each period (further information available above)

 
                                  Q1      Q1               Q2      Q2               1H      1H 
                                2021    2022   Change    2021    2022   Change    2021    2022   Change 
----------------------------  ------  ------  -------  ------  ------  -------  ------  ------  ------- 
 Total net sales 
  (EGP mn)                     1,130   1,117      -1%   1,164     774     -34%   2,293   1,891     -18% 
 Total tests (mn)                8.1     8.4       4%     8.3     7.6      -8%    16.3    16.0      -2% 
============================  ======  ======  =======  ======  ======  =======  ======  ======  ======= 
 Conventional test 
  net sales (EGP mn)             594     640       8%     594     699      18%   1,188   1,339      13% 
 Conventional tests 
  performed (mn)                 6.8     7.1       5%     6.9     7.4       7%    13.7    14.5       6% 
============================  ======  ======  =======  ======  ======  =======  ======  ======  ======= 
 Total Covid-19-related 
  test net sales (EGP 
  mn)                            536     477     -11%     569      75     -87%   1,105     552     -50% 
============================  ======  ======  =======  ======  ======  =======  ======  ======  ======= 
  Core Covid-19 tests 
   (PCR, Antigen, Antibody) 
   (EGP mn)                      399     421       6%     431      62     -86%     830     483     -42% 
  Core Covid-19 tests 
   performed (k)                 407     837     106%     387     109     -72%     793     946      19% 
============================  ======  ======  =======  ======  ======  =======  ======  ======  ======= 
  Other Covid-19-related 
   tests (EGP mn)                137      56     -59%     138      13     -91%     275      68     -75% 
  Other Covid-19-related 
   tests performed 
   (k)                           874     417     -52%     933      95     -90%   1,807     512     -72% 
----------------------------  ------  ------  -------  ------  ------  -------  ------  ------  ------- 
                                  Contribution to Consolidated Results 
 Conventional test 
  net sales                      53%     57%              51%     90%              52%     71% 
 Conventional tests 
  performed                      84%     85%              84%     97%              84%     91% 
============================  ======  ======  =======  ======  ======  =======  ======  ======  ======= 
 Total Covid-19-related 
  tests                          47%     43%              49%     10%              48%     29% 
============================  ======  ======  =======  ======  ======  =======  ======  ======  ======= 
  Core Covid-19 tests 
   (PCR, Antigen, Antibody)      35%     38%              37%      8%              36%     26% 
  Core Covid-19 tests 
   performed                      5%     10%               5%      1%               5%      6% 
============================  ======  ======  =======  ======  ======  =======  ======  ======  ======= 
  Other Covid-19-related 
   tests                         12%      5%              12%      2%              12%      4% 
  Other Covid-19-related 
   tests performed               11%      5%              11%      1%              11%      3% 
 
   Net Sales Analysis: Contribution by Patient Segment 
 
   Contract Segment (58% of total net sales) 
   Conventional revenues at IDH's contract segment expanded an impressive 
   24% year-on-year in 1H 2022 supported by an 11% increase in tests performed 
   and a 12% expansion in average net sales per test. However, a significant 
   decline in revenues from the segment's Covid-19-related(13) offering 
   saw total revenue at the contract segment (identical in value to net 
   sales for the period) contract 13% from 1H 2022. 
 
   Walk-in Segment (42% of total net sales) 
   The Group's walk-in segment recorded conventional revenues largely in 
   line with the figure recorded in the same six months of 2021 as lower 
   test volumes were offset by an increase in average revenue per test. 
   Meanwhile, Covid-19-related walk-in net sales declined 44% year-on-year 
   (revenue(14) declined 32% year-on-year) on the back of both lower test 
   volumes and average revenue per test. This saw total revenue at the 
   walk-in segment decline 17% year-on-year, and total walk-in net sales 
   for the period fall 23% year-on-year. 
 
   The walk-in segment's results were supported by Biolab's partnership 
   with Queen Alia International Airport (QAIA) which generated net sales 
   of EGP 140 million in the six months to 30 June 2022 . However, f ollowing 
   the decision by Jordanian authorities on 1 March 2022 to end mandatory 
   testing, Biolab's booths recorded sharp declines in patient traffic. 
 

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

(14) A reconciliation between revenue and net sales is available earlier in this announcement.

Key Performance Indicators

The table presents Alternative Performance Measures (APM) for each period (further information available on above)

 
                               Walk-in Segment           Contract Segment                Total 
=========================  =======================  =========================  ========================= 
                             1H21    1H22   Change     1H21     1H22   Change     1H21     1H22   Change 
=========================  ======  ======  =======  =======  =======  =======  =======  =======  ======= 
 Net sales^ (EGP mn)        1,029     794     -23%    1,264    1,097     -13%    2,293    1,891     -18% 
  Conventional net 
   sales (EGP mn)             522     512      -2%      666      827      24%    1,188    1,339      13% 
  Total Covid-19-related 
   net sales (EGP mn)         507     282     -44%      598      270     -55%     1105      552     -50% 
 Patients ('000)            1,523   1,513      -1%    3,150    3,027      -4%    4,673    4,541      -3% 
 % of Patients                33%     33%               67%      67% 
 Net sales per Patient 
  (EGP)                       676     524     -22%      401      362     -10%      491      416     -15% 
-------------------------  ------  ------  -------  -------  -------  -------  -------  -------  ------- 
 Tests ('000)               4,164   3,849      -8%   12,153   12,155       0%   16,318   16,004      -2% 
 % of Tests                   26%     24%               74%      76% 
  Conventional tests 
   ('000)                   3,406   3,135      -8%   10,311   11,412      11%   13,717   14,547       6% 
  Total Covid-19-related 
   tests ('000)               758     714      -6%    1,843      744     -60%    2,601    1,458     -44% 
 Net Sales per Test 
  (EGP)                       247     206     -17%      104       90     -13%      141      118     -16% 
 Test per Patient             2.7     3.0      -7%      3.9      4.0       4%      3.5      3.5       1% 
-------------------------  ------  ------  -------  -------  -------  -------  -------  -------  ------- 
 
   Revenue Analysis: Contribution by Geography 
 
   Egypt (80.6% of net sales) 
   During the first six months of the year, IDH's Egyptian operations recorded 
   a robust 12% year-on-year expansion in conventional revenues, supported 
   by an increase in conventional tests performed and in the average revenue 
   per conventional test. This partially offset a significant decline in 
   Covid-19-related revenues for the period following both a fall in both 
   the demand for, and average price of, Covid-19-related test during the 
   period. For example, during 1H 2022 IDH performed 16% less PCR tests 
   than a year prior, and recorded a 45% decline in the average price per 
   PCR test versus 1H 2021. As such, consolidated revenue(15) in IDH's largest 
   market declined 21% year-on-year in the first six months of the year. 
 
   Similar trends held on a quarterly basis, with revenues down 36% year-on-year 
   on the back of an 89% year-on-year decline in Covid-19-related net sales. 
   Meanwhile, IDH's conventional offering in Egypt continued its steady 
   expansion in Q2 2022 increasing 16% year-on-year and 8% quarter-on-quarter. 
   The latter is an especially noteworthy result in light of the expected 
   seasonal slowdown related to the holy month of Ramadan and Eid holidays 
   which impacted results in the months of April and May this year. 
 
   House Call Service 
   IDH's house call service in Egypt recorded revenue of EGP 292 million 
   in 1H 2022, contributing to 19% of Egypt's revenues for the period, well 
   above the service's pre-pandemic contributions. The remarkable contribution 
   was recorded despite the fall in Covid-19-related revenue generated through 
   the house call service as infection rates in the country declined significantly 
   starting March. 
 
   Al-Borg Scan 
   IDH's fast-growing radiology venture continued to record remarkable results 
   with revenues expanding 78% year-on-year to record EGP 35 million in 
   1H 2022. Top-line growth came on the back of an 85% year-on-year rise 
   in radiology tests performed (patients served was up 77% for the six-month 
   period). Steady growth at the venture in directly attributable to the 
   significant investments undertaken by IDH since the venture's launch 
   back in 2018, with total investment costs as at 30 June 2022 having reached 
   EGP 382 million. More specifically, over the last twelve months IDH has 
   added three new branches, taking the total number of radiology branches 
   in Egypt to five. While all three new branches remain in their ramp up 
   phases, the Group is recording growing contributions from each one, with 
   all three helping to drive steady growth in test and patient volumes 
   as well as revenues. To build on this momentum, in the coming months 
   IDH is planning to inaugurate two additional branches to expand its reach 
   across Greater Cairo and capitalise on the service's increasing popularity. 
   Moreover, it is worth highlighting that in early August 2022, Al-Borg 
   Scan obtained ACR (American College of Radiology) accreditation for its 
   nuclear medicine unit. Al-Borg Scan is the first radiology company to 
   receive this certification in Africa and is testament to the high service 
   quality consistently delivered by the venture and the Group as a whole. 
 
   (15) It is important to note that revenues and net sales in Egypt, Nigeria 
   and Sudan are identical in absolute terms. A reconciliation between revenue 
   and net sales is available earlier in this announcement. 
 

Detailed Egypt Revenue Breakdown

The table presents Alternative Performance Measures (APM) for each period (further information available on page 2)

 
                                  Q1      Q1               Q2      Q2               1H      1H 
 EGP mn                         2021    2022   Change    2022    2022   Change    2021    2022   Change 
----------------------------  ------  ------  -------  ------  ------  -------  ------  ------  ------- 
 Total Revenue                   920     879      -4%   1,015     645     -36%   1,935   1,524     -21% 
 Conventional Revenue            507     549       8%     510     591      16%   1,017   1,140      12% 
 Total Covid-19-related 
  Revenue                        414     330     -20%     504      53     -89%     918     384     -58% 
  Core Covid-19 tests 
   (PCR, Antigen, Antibody)      277     274      -1%     366      41     -89%     643     315     -51% 
  Other Covid-19-related 
   tests                         137      56     -59%     138      13     -91%     275      68     -75% 
----------------------------  ------  ------  -------  ------  ------  -------  ------  ------  ------- 
                                  Contribution to Consolidated Results 
 Conventional tests              55%     62%              50%     92%              53%     75% 
 Total Covid-19-related 
  tests                          45%     38%              50%      8%              47%     25% 
  Core Covid-19 tests 
   (PCR, Antigen, Antibody)      30%     31%              36%      6%              33%     21% 
  Other Covid-19-related 
   tests                         15%      6%              14%      2%              14%      4% 
 
 
 Jordan (17.1% of net sales) 
  In Jordan, IDH recorded revenue of EGP 386 million in 1H 2022, up 19% 
  versus the same period of 2021. Meanwhile, net sales(16) recorded EGP 
  323 million, unchanged from 1H 2021. During the period, solid growth 
  in conventional net sales fully offset a decline in Covid-19-related 
  net sales. The latter's decline came following a decrease in infection 
  rates, the removal of mandatory testing, and a fall in the average price 
  for the offering. It is worth noting that despite the decline in Covid-19-related 
  net sales for the period, the segment continued to make up the largest 
  proportion of Biolab's net sales (52% in 1H 2022 versus 58% last year). 
  It is also worth highlighting that strong demand for Covid-19-related 
  tests in the first part of the year supported a 47% year-on-year increase 
  in the number of Covid-19-related tests performed for the six-month 
  period. Finally, the country's net sales continued to be supported by 
  Biolab's house call service which generated EGP 15 million in net sales 
  in 1H 2022, making up 5% of total net sales in Jordan. 
 
  Covid-19-related net sales in Jordan were supported by contributions 
  of EGP 140 million from Biolab's partnership with QAIA. As part of the 
  agreement, Biolab carried out 293 thousand PCR tests, representing 59% 
  of total PCR tests performed in Jordan for the first half of the year. 
  At the same time, Biolab's agreements with KHIA and Aqaba Port contributed 
  an additional EGP 18 million to the segment. The stations recorded strong 
  demand in January and February before witnessing a sharp decline in 
  traffic following the end of mandatory testing in the country. 
 
  During the second quarter, Biolab recorded revenue (net sales were identical 
  for the quarter) of EGP 106 million, down 21% year-on-year. The decline 
  was fully driven by a contraction in Covid-19-related revenue for the 
  quarter, as Biolab shut down its testing booths in Aqaba Port and QAIA 
  and recorded a widespread decline in infections. Meanwhile, Biolab's 
  conventional net sales expanded an 23% year-on-year. It is worth highlighting 
  that strong year-on-year growth in second quarter largely reflects a 
  devaluation of the Egyptian pound during the period. 
 
  (16) Biolab's net sales for the period are calculated as revenues excluding 
  concession fees paid to QAIA and Aqaba Port as part of their revenue 
  sharing agreement. 
 

Detailed Jordan Net Sales Breakdown

The table presents Alternative Performance Measures (APM) for each period (further information available on page 2)

 
                              Q1      Q1               Q2      Q2               1H      1H 
 EGP mn                     2021    2022   Change    2021    2022   Change    2021    2022   Change 
------------------------  ------  ------  -------  ------  ------  -------  ------  ------  ------- 
 Total Net Sales             190     217      14%     134     106     -21%     324     323        - 
 Conventional Net 
  Sales                       68      70       4%      68      84      23%     136     155      14% 
 Total Covid-19-related 
  Net Sales (PCR and 
  Antibody)                  122     147      20%      65      21     -67%     187     168     -10% 
                                Contribution to Consolidated Results 
 Conventional Net 
  Sales                      36%     32%              51%     80%              42%     48% 
 Total Covid-19-related 
  Net Sales (PCR and 
  Antibody)                  64%     68%              49%     20%              58%     52% 
 
 
 Nigeria (1.8% of net sales) 
  Echo-Lab, the Group's Nigerian subsidiary, recorded revenues of EGP 
  33 million in 1H 2022, up 32% versus the same six months of last year. 
  In local currency terms, revenue was up 25% year-on-year on the back 
  of a 33% increase in average revenue per test during the period. The 
  increase reflects the increased number of CT and MRI exams performed 
  during the six-month period, both of which are relatively higher-priced 
  services. It is important to note that during Q4 2021 management decided 
  to shut down its operational activities in the PPP branches due to their 
  under-performance on the profitability level. This subsequently weighed 
  on tests volumes for the first half of 2022, with tests performed and 
  patients served down 1% and 6, respectively. Controlling for the branch 
  closures, Echo-Lab would record a 25% year-on-year increase in tests 
  performed and a 19% year-on-year rise in patients served in 1H 2021. 
  In line with the venture's growth strategy, Echo-Lab rolled out two 
  new branches during the second quarter of the year, bringing the total 
  number of operational branches to 12. 
 
  During Q2 2022, IDH's Nigeria operations recorded revenue growth of 
  45% on the back of a 2% year-on-year rise in tests performed and a 41% 
  increase in average revenue per test during the period. 
 
  Sudan (0.6% of net sales) 
  In Sudan, IDH recorded revenues of EGP 10 million, up 13% from the first 
  half of last year supported by a 40% year-on-year rise in average revenue 
  per test. This marks the first year-on-year increase in EGP terms recorded 
  by the Group's Sudanese operations in over a year, demonstrating the 
  underlying potential of the Sudanese market which has been impacted 
  by multiple political and economic crises over the last couple of years. 
  On a similar note, in local currency terms, revenue expanded a solid 
  125% in the first six months of the year. 
 
  In the second quarter of the year, IDH recorded revenue growth in EGP 
  terms of 91% in Sudan supported by a more than twofold year-on-year 
  increase in the average revenue per test for the quarter. 
 

Net Sales Contribution by Country

The table presents Alternative Performance Measures (APM) for each period (further information available on page 2)

 
                          1Q21    1Q22   Change    2Q21    2Q22   Change    1H21    1H22   Change 
======================  ======  ======  =======  ======  ======  =======  ======  ======  ======= 
 Egypt Net Sales 
  (EGP mn)                 920     879      -4%   1,015     645     -36%   1,935   1,524     -21% 
   Conventional (EGP 
    mn)                    507     549       8%     510     591      16%   1,017   1,140      12% 
   Covid-19-related 
    (EGP mn)               414     330     -20%     504      53     -89%     918     384     -58% 
 Egypt Contribution      81.5%   78.7%            87.2%   83.3%            84.4%   80.6% 
======================  ======  ======  =======  ======  ======  =======  ======  ======  ======= 
 Jordan Net Sales 
  (EGP mn)                 190     217      14%     134     106     -21%     324     323      N/A 
   Conventional (EGP 
    mn)                     68      70       4%      68      84      23%     136     155      14% 
   Covid-19-related 
    (EGP mn)               122     147      20%      65      21     -67%     187     168     -10% 
 Jordan Revenues 
  (EGP mn) (IFRS)          190     281      48%     134     106     -21%     324     386      19% 
 Jordan Net Sales 
  (JOD mn)                 8.6     9.6      12%     6.0     4.0     -33%    14.6    13.7      -7% 
 Jordan Revenues 
  (JOD mn) (IFRS)          8.6    12.5      45%     6.1     4.0     -34%    14.7    16.5      12% 
 Jordan Contribution     16.8%   19.4%            11.5%   13.7%            14.1%   17.1% 
======================  ======  ======  =======  ======  ======  =======  ======  ======  ======= 
 Nigeria Net Sales 
  (EGP mn)                12.5    14.8      19%    12.9    18.6      45%      25      33      32% 
 Nigeria Net Sales 
  (NGN mn)                 302     371      23%     330     416      27%     631     787      25% 
 Nigeria Contribution     1.1%    1.3%             1.1%    2.4%             1.1%    1.8% 
 Sudan Net Sales 
  (EGP mn)                 6.8     5.7     -16%     2.5     4.8      91%       9      10      13% 
 Sudan Net Sales 
  (SDG mn)                  61     152     149%      67     137     103%     129     289     125% 
 Sudan Contribution       0.6%    0.5%             0.2%    0.6%             0.4%    0.6% 
======================  ======  ======  =======  ======  ======  =======  ======  ======  ======= 
 

Patients Served and Tests Performed by Country

 
                                    1H 2021   1H 2022   Change 
=================================  ========  ========  ======= 
 Egypt Patients Served (mn)             4.1       3.8      -8% 
 Egypt Tests Performed (mn)            14.6      14.2      -3% 
     Conventional tests (mn)           12.4      13.2       7% 
     Covid-19-related tests (mn)        2.3       1.0     -58% 
=================================  ========  ========  ======= 
 Jordan Patients Served (k)             502       670      33% 
 Jordan Tests Performed (k)           1,447     1,594      10% 
     Conventional tests (k)           1,105     1,092      -1% 
     Covid-19-related tests (k)         342       502      47% 
 Nigeria Patients Served (k)             75        70      -6% 
 Nigeria Tests Performed (k)            136       135      -1% 
 Sudan Patients Served (k)               33        46      39% 
 Sudan Tests Performed (k)              104        84     -19% 
=================================  ========  ========  ======= 
 Total Patients Served (mn)             4.7       4.5      -3% 
 Total Tests Performed (mn)            16.3      16.0      -2% 
 

Branches by Country

 
                   30 June   30 June           Change 
                      2021      2022 
================  ========  ========  =============== 
 Egypt                 443       488               45 
================  ========  ========  =============== 
 Jordan                 21        21              N/A 
================  ========  ========  =============== 
 Nigeria                12        12              N/A 
================  ========  ========  =============== 
 Sudan                  19        17               -2 
================  ========  ========  =============== 
 Total Branches        495       538               43 
================  ========  ========  =============== 
 
 
            Cost of Net Sales(17) 
             IDH's cost of net sales rose 7% year-on-year to record EGP 1,059 million 
             in 1H 2022. Combined with the year-on-year decrease in consolidated 
             net sales for the period, this weighed down on the Group's gross profit 
             which recorded EGP 832 million in 1H 2022, down 36% from last year. 
             It is important to note that gross profit for the first six months of 
             the year is identical in absolute terms between IFRS and APM measures. 
             IDH's gross profit margin(18) on revenue recorded 43% in 1H 2022 versus 
             57% last year. Meanwhile, IDH's gross profit margin on net sales(19) 
             recorded 44% in 1H 2022 versus 57% in the same six months of 2021. 
 
             In the second quarter of the year, IDH recorded cost of sales (identical 
             in value to cost of net sales) of EGP 473 million, down 5% year-on-year. 
             Gross profit for the quarter recorded EGP 300 million, with a margin 
             of 39% for the quarter versus 57% in Q2 2021 when a large contribution 
             from Covid-19-related tests had significantly boosted gross profitability. 
             Lower gross profitability for the quarter also partially reflects the 
             expected slowdown related to the holy month of Ramadan and Eid vacation. 
 
             Cost of Net Sales Breakdown as a Percentage of Net Sales                                1H 2021   1H 2022 
             =============================  ========  ======== 
              Raw Materials                    18.1%     20.9% 
             =============================  ========  ======== 
              Wages & Salaries                 12.9%     17.4% 
             =============================  ========  ======== 
              Depreciation & Amortisation       4.2%      7.0% 
             =============================  ========  ======== 
              Other Expenses                    7.8%     10.7% 
             =============================  ========  ======== 
              Total                            43.1%     56.0% 
             =============================  ========  ======== 
 
 
             Raw material costs, which include cost of specialized analysis at other 
             laboratories, recorded EGP 396 million for the first half of the year, 
             continuing to make up the largest share of total COGS at 37%. As a share 
             of net sales , raw material costs increased to 20.9% in 1H 2022 compared 
             to 18.1% in the same six months of the previous year. This increase 
             is primarily reflective of the substantial reduction in the average 
             selling price of Covid-19-related tests during the period in both Egypt 
             and Jordan (PCR tests were priced 52% lower in 1H 2022 than in 1H 2021). 
 
             Direct salaries and wages rose 11% year-on-year to EGP 329 million in 
             1H 2022, making the second largest share of total COGS at 31%. The increase 
             versus last year is primarily attributable to the additional staff employed 
             at Aqaba Port and QAIA airport, an annual salary increase of around 
             15%, and the additional staff employed across the newly added branches 
             (+43 new branches vs 1H21). Additional salary expenses related to Biolab's 
             testing booths amounted to JOD 549 thousand (EGP 13.6 million) during 
             1H 2022, noting that starting April Biolab ceased its operational activities 
             across all booths. 
 
             Direct depreciation and amortisation increased 35% year-on-year in the 
             first half of the year to record EGP 132 million, largely due to the 
             incremental amortisation of new branches (IFRS 16 right-of-use assets). 
 
             Other expenses for the first six months of 2022 increased 13% to record 
             EGP 202 million. The increase principally reflected higher maintenance 
             costs in Egypt, as well as higher utility expenses related to the 43 
             additional branches rolled out in the twelve months to 30 June 2022. 
 
             (17) Cost of net sales is calculated as cost of sales (IFRS) for the 
             period excluding commission fees paid to QAIA and Aqaba Port by Biolab 
             as part of its revenue sharing agreements with the two terminals. According 
             to IFRS 15, cost of sales recorded EGP 1,122 million in 1H 2022 , up 
             14% year-on-year. 
             (18) It is important to note that while in absolute terms the Gross 
             Profit figure is identical when using IFRS or APM, its margin differs 
             between the two sets of performance indicators. 
             (19) A reconciliation between revenue and net sales is available earlier 
             in this announcement. 
 
             Selling, General and Administrative Expenses 
             Total SG&A outlays stood at EGP 269 million in 1H 2022, representing 
             a 27% year-on-year increase for the six-month period. The increase in 
             SG&A costs was mainly a result of rising salaries and marketing expenses, 
             as well as higher fees for external auditing services. 
 
             Marketing and advertising expenses came in at EGP 54 million in 1H 2022, 
             representing a 48% year-on-year increase. The increase reflects an overall 
             expansion in IDH's marketing and advertisement efforts which for the 
             last year has seen the Company roll out targeted campaigns across multiple 
             channels predominantly to support Al-Borg Scan's ramp up. 
 
             EBITDA 
             IDH's EBITDA(20) came in at EGP 709 million in the first half of 2022, 
             down 41% from the figure recorded this time last year. It is important 
             to note that EBITDA for the period is identical in absolute terms between 
             IFRS and APM measures. EBITDA margin on consolidated revenue recorded 
             36% in 1H 2022 versus 52% in the same six-month period of a year ago. 
             Meanwhile, EBITDA margin on net sales declined to 38% in 1H 2022 from 
             52% in 1H 2021.(21) The decline in EBITDA level profitability comes 
             on the back of lower gross profitability for the period coupled with 
             higher sales and marketing outlays versus the first six months of 2021. 
 
             In IDH's home market of Egypt, EBITDA recorded EGP 622 million in 1H 
             2022. EBITDA margin on net sales stood at 41% for the period versus 
             56% this time last year. 
 
             In Jordan, IDH recorded an EBITDA of EGP 91 million, down 31% from the 
             same six months of last year. In JOD terms, Biolab's EBITDA recorded 
             JOD 4.0 million, a 33% year-on-year decrease. EBITDA margin on revenue 
             recorded 24% in 1H 2022 down from 40% this time last year. Meanwhile, 
             EBITDA margin on net sales for the six-month period recorded 29% versus 
             41% in 1H 2021. The decrease in Biolab's EBITDA margin is mainly attributable 
             to lower gross profitability for the period as well as higher expenses 
             related to Biolab's testing booths in QAIA and Aqaba Port. 
 
             Operations in Nigeria posted an EBITDA loss of EGP 3.3 million in 1H 
             2022 compared to a loss of EGP 4.3 million this time last year. It is 
             important to highlight that EBITDA profitability during the period was 
             impacted by a 462% year-on-year increase in the country's diesel prices 
             (responsible for 11% of Echo-Lab's cost base). Controlling for this, 
             the venture would have been on track to turn positive in early 2022. 
 
             Finally, in Sudan the Company recorded an EBITDA of EGP 0.1 million 
             in 1H 2022, down from the EGP 0.7 million in EBITDA recorded this time 
             last year. In SDG terms EBITDA stood at SDG 4.1 million in 1H 2022 compared 
             to an EBITDA loss of SDG 14 million in the same six months of 2021. 
 
             Regional EBITDA in Local Currency Mn                                            1H 2021   1H 2022    Change 
             --------------------------------------------  --------  --------  -------- 
              Egypt                                EGP        1,075       622      -42% 
               Margin on net sales                              56%       41% 
              Jordan                               JOD          5.9       4.0      -33% 
               Margin on net sales                              41%       29% 
               Margin on revenues (IFRS)                        40%       24% 
              Nigeria                              NGN         -111       -80      -28% 
               Margin on net sales                             -18%      -10% 
              Sudan                                SDG          -14       4.1       N/A 
               Margin on net sales                             -11%        1% 
 
 
 
             (20) EBITDA is calculated as operating profit plus depreciation and 
             amortization and minus one-off fees incurred in 1H 2021 related to the 
             Company's EGX listing completed in May 2021. 
             (21) It is important to note that while in absolute terms the Normalised 
             EBITDA figure is identical when using IFRS or APM, its margin differs 
             between the two sets of performance indicators. 
 
             Interest Income / Expense 
             The Group reported interest income of EGP 75 million in 1H 2022, up 
             67% year-on-year reflecting higher cash balances during the period, 
             an optimised cash allocation between T-bills and time deposits, and 
             a 300 basis point cumulative interest rate hike enacted by the CBE during 
             the six-month period. 
 
             Interest expense recorded EGP 64 million in the first six months of 
             the year, up 18% versus 1H 2021. The increase in attributable to: 
              *    Higher interest on lease liabilities related to IFRS 
                   16 following the addition of new branches in Egypt 
                   and Jordan and the renewal of medical equipment 
                   agreements with the Group's main equipment suppliers. 
 
 
              *    Higher bank charges reflecting an increased 
                   penetration of, and reliance on, POS machines and 
                   electronic payments in both Egypt and Jordan during 
                   the six-month period. 
 
 
              *    Higher interest expenses following the CBE decision 
                   to increase rates by 300 bps year-to-date. 
 
 
              *    Fees amounting to EGP 5.9 million related to the US$ 
                   45 million facility with the International Finance 
                   Corporation (IFC) granted in May 2021 and the US$ 15 
                   million IFC syndicated facility from Mashreq Bank in 
                   December 2021. Fees include commitment and 
                   supervisory fees. 
 
 
 
             Interest Expense Breakdown EGP mn                           1H 2021   1H 2022   Change 
             ===============================  ========  ========  ======= 
              Interest on Lease Liabilities 
               (IFRS 16)                          28.9      34.9      21% 
             ===============================  ========  ========  ======= 
              Interest Expenses on 
               Borrowings(22)                      4.8       5.2       8% 
             ===============================  ========  ========  ======= 
              Loan-related Expenses 
               on IFC facility                    12.5       5.9     -53% 
             ===============================  ========  ========  ======= 
              Interest Expenses on 
               Leases                              2.8       9.3     231% 
             ===============================  ========  ========  ======= 
              Bank Charges                         5.4       8.8      64% 
             ===============================  ========  ========  ======= 
              Total Interest Expense              54.4      64.1      18% 
             ===============================  ========  ========  ======= 
 
 
             (22) Interest expenses on medium-term loans include EGP 4.2 million 
             related to the Group's facility with Ahli United Bank Egypt (AUBE). 
             Meanwhile, the Group's facility with the Commercial International Bank 
             (CIB) was fully repaid as of 5 April 2022. 
 
             Foreign Exchange 
             IDH recorded a net foreign exchange gain of EGP 69 million in the first 
             half of 2022 compared to an EGP 19 million FX loss in the comparable 
             period of last year partially reflecting intercompany balances revaluation. 
 
             Taxation 
             Tax expenses recorded EGP 211 million in the first half of the year 
             versus EGP 367 million in 1H 2021. The effective tax rate stood at 32% 
             for the six months to 30 June 2022 versus 35% in the same period of 
             last year. The lower effective tax rate principally reflects the large 
             balance of Treasury bills held by IDH's Egyptian subsidiaries. 
 
             Taxation Breakdown by Region EGP Mn                1H 2021   1H 2022   Change 
             ====================  ========  ========  ======= 
              Egypt                   342.5     196.0     -43% 
             ====================  ========  ========  ======= 
              Jordan                   24.4      14.6     -40% 
             ====================  ========  ========  ======= 
              Nigeria                 (0.1)     (0.2)      N/A 
             ====================  ========  ========  ======= 
              Sudan                     0.0       0.1      N/A 
             ====================  ========  ========  ======= 
              Total Tax Expenses      366.8     210.5     -43% 
             ====================  ========  ========  ======= 
 
 
             Net Profit 
             IDH's consolidated net profit for the first half of the year stood at 
             EGP 439 million, down 34% from the same six months of last year. It 
             is important to note that net profit for the period was identical in 
             absolute terms between IFRS and APM measures. Net profit margin on consolidated 
             revenue recorded 22% in 1H 2022, versus 29% in 1H 2021. Meanwhile, net 
             profit margin on net sales(23) stood at 23% in 1H 2022, in line with 
             the Group's pre-pandemic averages, but down six percentage points compared 
             to 29% this time last year. The decline in net profitability for the 
             six-month period comes on the back of lower EBITDA profitability. In 
             Q2 2022, net profit recorded EGP 125 million, down 62% from Q2 2021 
             and with a net profit margin of 16%. Lower net profitability for the 
             quarter also in part reflected the seasonal slowdown related to the 
             holy month of Ramadan and Eid vacation which impacted the months of 
             April and May. 
 
             (23) It is important to note that while in absolute terms the net profit 
             figure is identical when using IFRS or APM, its margin differs between 
             the two sets of performance indicators. 
 

ii. Balance Sheet Analysis

 
 Assets 
  Property, Plant and Equipment 
  IDH held gross property, plant and equipment (PPE) of EGP 1,888 million 
  as at 30 June 2022, up from the EGP 1,653 million as at year-end 2021. 
  The increase in CAPEX outlays as a share of total net sales for the 
  six-month period is in part attributable to EGP 67 million spent on 
  new radiology branches (Capital Business Park Branch in West Cairo) 
  during the period and EGP 69 million translation effect (mainly related 
  to Jordan) resulting from the depreciation of the Egyptian Pound since 
  the start of the year. 
 
  Total CAPEX Breakdown EGP Mn                                 1H 2022   % of Net 
                                                       Sales 
  =====================================  ========  ========= 
   Al-Borg Scan Expansion                    66.7       3.5% 
  =====================================  ========  ========= 
   Translation Effect                        68.6       3.6% 
  =====================================  ========  ========= 
   Leasehold Improvements/new branches      100.3       5.3% 
  =====================================  ========  ========= 
   Total CAPEX Additions                    235.6      12.5% 
  =====================================  ========  ========= 
 
 
  Accounts Receivable and Provisions 
  As at 30 June 2022, accounts receivables' Days on Hand (DOH) recorded 
  at 118 days compared to 107 days at year-end 2021. The increase reflects 
  the large balance related to the airlines deals in QAIA airport, characterized 
  by a relatively higher credit period. Accounts receivables' DOH is calculated 
  based on credit revenues(24) amounting to EGP 592 million during 1H 
  2022. 
 
  The receivables balance in Egypt and Jordan stood at EGP 374 million 
  as at 30 June 2022. More specifically, in Egypt account receivables' 
  DOH increased to 104 days as at the end of the current reporting period 
  compared to 96 days as at year-end 2021. Accounts receivables' DOH for 
  Egypt is calculated based on credit revenues amounting to EGP 500 million 
  during the six-month period. Meanwhile, in Jordan accounts receivables' 
  DOH increased to 203 days as at 30 June 2022 from 154 days as at year-end 
  2021 largely due to agreements with various airline companies as part 
  of QAIA and KHIA agreements. Accounts receivables' DOH for Jordan is 
  calculated based on credit revenues amounting to EGP 79 million during 
  the first half of 2022. 
 
  Provision for doubtful accounts established during the first half of 
  2022 amounted to EGP 16 million, up from EGP 10 million in the same 
  six months of last year. The increase in provisions reflects the slowdown 
  in collections during the holy month of Ramadan and Eid vacation. 
 
  (24) Credit revenues relates to patients who paid for IDH's services 
  on credit. 
 
  Inventory 
  As at 30 June 2022, the Group's inventory balance reached EGP 243 million, 
  up from EGP 223 million as at year-end 2021. Meanwhile, days Inventory 
  Outstanding (DIO) increased to 109 days as at 30 June 2022 from 61 days 
  as at year-end 2021. The increase largely reflects management's decision 
  to accumulate inventory as part of its proactive strategy to shield 
  the business from any disruption that might result from the global supply 
  chain challenges and protect the Company's margins from a potential 
  devaluation of the Egyptian pound. It should be noted that as at 31 
  July 2022, IDH held sufficient inventory to cover the Group's needs 
  for a four-month period. 
 
  Cash and Net Debt/Cash 
  IDH's cash balances increased to EGP 2,182 million as at 30 June 2022 
  up from EGP 2,350 million as at 31 December 2021. EGP million         31 Dec   30 Jun 
                         2021     2022 
  ==================  =======  ======= 
   Time Deposits          628       68 
  ==================  =======  ======= 
   T-Bills              1,461      525 
  ==================  =======  ======= 
   Current Accounts       239    1,572 
  ==================  =======  ======= 
   Cash on Hand            22       18 
  ==================  =======  ======= 
   Total                2,350    2,182 
  ==================  =======  ======= 
 
 
  Net cash balance(25) amounted to EGP 1,321 million as at 30 June 2022 
  compared to EGP 1,488 million as of 31 December 2021. 
   EGP million                               31 Dec   30 Jun 
                                               2021     2022 
  ========================================  =======  ======= 
   Cash and Financial Assets at Amortised 
    Cost(26)                                  2,350    2,182 
  ========================================  =======  ======= 
   Interest Bearing Debt ("Medium 
    Term Loans")(27)                            102       89 
  ========================================  =======  ======= 
   Lease Liabilities Property                   532      602 
  ========================================  =======  ======= 
   Long-term Equipment Liabilities              229      260 
  ========================================  =======  ======= 
   Net Cash Balance                           1,488    1,321 
  ========================================  =======  ======= 
 
  Note: Interest Bearing Debt includes accrued interest for each period. 
 
  Lease liabilities on property recorded EGP 602 million as at 30 June 
  2022, up from the EGP 532 million booked as at year-end 2021. The increase 
  is driven by the addition of new branches throughout the first half 
  of the year. Meanwhile, financial obligations related to equipment recorded 
  EGP 260 million as at the end of the current reporting period, up from 
  EGP 229 million as of year-end 2021, for the most part reflecting the 
  renewal of the Company's contracts and the addition of new equipment. 
  Total financial obligations related to equipment for the period includes 
  EGP 121 million for equipment at Al-Borg Scan. Meanwhile, interest-bearing 
  debt declined to EGP 89 million as at 30 June 2022 from EGP 102 million 
  as at 31 December 2021. More specifically, IDH's interest-bearing debt 
  as at 30 June 2022 comprised EGP 84.4 million related to its facility 
  with AUBE. It is worth highlighting that interest-bearing debt in both 
  periods excludes accrued interest. It is also important to note that 
  the Company's facility with the Commercial International Bank (CIB) 
  was fully repaid as of April 2022. 
 
  (25) The net cash balance is calculated as cash and cash equivalent 
  balances including includes financial assets at amortised cost, less 
  interest-bearing debt (medium term loans), finance lease and Right-of-use 
  liabilities. 
  (26) As outlined in Note 9 of IDH's Consolidated Financial Statements, 
  some term deposits and treasury bills cannot be accessed for over 90 
  days and are therefore not treated as cash. Term deposits which cannot 
  be accessed for over 90 days stood at EGP 4 million in 1H 2022, versus 
  EGP 148 million as at year-end 2021. Meanwhile, treasury bills not accessible 
  for over 90 days stood at EGP 511 million in 1H 2022, down from EGP 
  1,310 million in FY 2021. 
  (27) IDH's interest bearing debt as at 30 June 2022 included EGP 84.4 
  million to its facility with Ahli United Bank Egypt (AUBE) (outstanding 
  loan balances are excluding accrued interest for the period). 
 
  Liabilities 
  Accounts Payable(28) 
  As at the end of 30 June 2022, accounts payable balance recorded EGP 
  230 million down from EGP 311 million as of 31 December 2021. Despite 
  this, the Group's days payable outstanding (DPO) increased to 126 days 
  from 93 days as at 31 December 2021. The increase largely reflects both 
  lower Covid-19-related kits consumption and the renegotiation of extended 
  payment terms with the Company's test kit suppliers. 
 
  (28) Accounts payable is calculated based on average payables at the 
  end of each year. 
 
  Put Option 
  The put option current liability is related to the option granted in 
  2011 to Dr. Amid, Biolab's CEO, to sell his stake (40%) to IDH. The 
  put option is in the money and exercisable since 2016 and is calculated 
  as 7 times LTM EBITDA minus net debt. Biolab's put option liability 
  increased following the depreciation of the Egyptian pound by around 
  20% as at 30 June 2022 compared to year-end 2021. 
 
  The put option non-current liability is related to the option granted 
  in 2018 to the International Finance Corporation from Dynasty - shareholders 
  in Echo Lab - and it is exercisable in 2024. The put option is calculated 
  based on fair market value (FMV). 
 
  Dividend Payment 
  During the Company's annual general meeting (AGM) held in London on 
  7 June 2022, IDH's shareholders approved a record-breaking dividend 
  distribution for the financial year ended 31 December 2022 of EGP 2.17 
  per share, or EGP 1.3 billion (US$ 69.5 million(29) ) in aggregate. 
  The dividend's payment date was scheduled for 27 July 2022. In light 
  of the ongoing difficulties in obtaining US dollars in the foreign exchange 
  markets, IDH's management agreed to distribute the Dividend over two 
  tranches. The first tranche was paid out to all minority shareholders 
  on 27 July, as originally schedule. Meanwhile, the Company signed a 
  deferral agreement with its two largest shareholders, HENA Holdings 
  Ltd and Actis IDH Limited, to postpone their payment date. IDH distributed 
  the second tranche to the dividend to its two largest shareholders over 
  two instalments on the 11 August and 18 August 2022. 
 
  (29) Calculated on a USD/EGP exchange rate of 18.70/1 as of 7 June 
  2022. 
 

iii. Cash Flow Analysis

 
 Net cash flow from operating activities recorded EGP 34 million in 
  1H 2022 continuing to demonstrate IDH's strong cash generation ability. 
  Net cash flow from operating activities declined from EGP 866 million 
  the same six months of last year. 
 

Principal Risks and Uncertainties

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

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

Statement of Directors' Responsibilities

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

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

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

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

For and on behalf of the Board of Directors

Dr. Hend El Sherbini

Executive Director

11 September 2022

-End-

 
 INTEGRATED DIAGNOSTICS HOLDINGS plc - "IDH" 
  AND ITS SUBSIDIARIES 
 
 
 
 
 
 
  Consolidated Financial Statements 
  for the six month period ended 30 June 2022 
 

Consolidated statement of financial position as at 30 June 2022

 
                                                                  30 June          31 December 
                                              Notes                  2022                 2021 
                                                                  EGP'000              EGP'000 
-------------------------------------------  ------  --------------------  ------------------- 
 
 ASSETS 
 Non-current assets 
 Property, plant and equipment                  4               1,173,807            1,061,808 
 Intangible assets and goodwill                 5               1,672,444            1,658,867 
 Right of use assets                            6                 519,711              462,432 
 Financial assets at fair value through 
  profit and loss                               7                  13,018               10,470 
 Total non-current assets                                       3,378,980            3,193,577 
                                                     --------------------  ------------------- 
 
 Current assets 
 Inventories                                                      242,840              222,612 
 Trade and other receivables                    8                 491,577              469,727 
 Financial assets at amortized cost             9                 514,497            1,458,724 
 Cash and cash equivalents                     10               1,667,624              891,451 
 Total current assets                                           2,916,538            3,042,514 
                                                     --------------------  ------------------- 
 Total assets                                                   6,295,518            6,236,091 
                                                     ====================  =================== 
 
 EQUITY AND LIABILITIES 
 Equity 
 Share Capital                                                  1,072,500            1,072,500 
 Share premium reserve                                          1,027,706            1,027,706 
 Capital reserve                                                (314,310)            (314,310) 
 Legal reserve                                                     51,641               51,641 
 Put option reserve                                             (936,896)            (956,397) 
 Translation reserve                                              177,195              150,730 
 Retained earnings                                                663,686            1,550,976 
 Equity attributable to the equity holders 
  of the parent                                                 1,741,522            2,582,846 
 Non-controlling interests                                        199,244              211,513 
 Total equity                                                   1,940,766            2,794,359 
                                                     --------------------  ------------------- 
 
 Non-current liabilities 
 Provisions                                                         3,708                4,088 
 Borrowings                                    13                  76,345               76,345 
 Other financial obligations                   15                 724,200              645,196 
 Non-current put option liability              14                  39,733               35,037 
 Deferred tax liabilities                     19-C                264,114              332,149 
 Total non-current liabilities                                  1,108,100            1,092,815 
                                                     --------------------  ------------------- 
 
 Current liabilities 
 Trade and other payables                      11                 610,907              777,354 
 Shareholders dividend                         24               1,304,805                    - 
 Other financial obligations                   15                 137,022              115,478 
 Current put option liability                  12                 897,163              921,360 
 Borrowings                                    13                   8,483               21,721 
 Current tax liabilities                                          288,272              513,004 
 Total current liabilities                                      3,246,652            2,348,917 
                                                     --------------------  ------------------- 
 Total liabilities                                              4,354,752            3,441,732 
                                                     --------------------  ------------------- 
 Total equity and liabilities                                   6,295,518            6,236,091 
                                                     ====================  =================== 
 
 
 
 These condensed consolidated interim financial information were approved 
  and authorized for issue by the Board of Directors and signed on their 
  behalf on 11 September 2022 by: 
 
   __________________                                ___________________ 
 
 Dr. Hend El Sherbini      Hussein Choucri 
 Chief Executive Officer   Independent Non-Executive Director 
 

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

Consolidated income statement for the quarter and six-month periods ended 30 June 2022

 
                                              For the three months                  For the six months 
                                                     period                                period 
                                                  ended 30 June                        ended 30 June 
                              Notes                2022               2021              2022              2021 
                                                EGP'000            EGP'000           EGP'000           EGP'000 
---------------------------  ------  ------------------  -----------------  ----------------  ---------------- 
 
 Revenue                       23               773,586          1,163,632         1,954,065         2,293,170 
 Cost of sales                                (473,402)          (496,742)       (1,122,195)         (987,873) 
 Gross profit                                   300,184            666,890           831,870         1,305,297 
 
 Marketing and advertising 
  expenses                                     (51,804)           (37,848)          (92,568)          (66,655) 
 Administrative expenses       17              (77,892)          (105,212)         (164,192)         (176,132) 
 Impairment loss on 
  trade and other 
  receivable                                    (8,980)            (5,181)          (16,158)          (10,265) 
 Other income                                     4,553              8,346             3,471            12,431 
 Operating profit                               166,061            526,995           562,423         1,064,676 
                                     ------------------  -----------------  ----------------  ---------------- 
 
 Finance costs                 18              (31,087)           (39,212)          (64,147)          (74,900) 
 Finance income                18                43,247             24,975           151,292            45,248 
 Net finance cost                                12,160           (14,237)            87,145          (29,652) 
                                     ------------------  -----------------  ----------------  ---------------- 
 Profit before tax                              178,221            512,758           649,568         1,035,024 
                                     ==================  =================  ================  ================ 
 
 Income tax expense           19-B             (53,302)          (186,142)         (210,516)         (366,814) 
 Profit for the period                          124,919            326,616           439,052           668,210 
                                     ==================  =================  ================  ================ 
 
 Profit attributed 
  to: 
 Equity holders of the 
  parent                                        125,611            320,410           422,220           646,440 
 Non-controlling interests                        (692)              6,206            16,832            21,770 
                                                124,919            326,616           439,052           668,210 
                                     ==================  =================  ================  ================ 
 Earnings per share 
  (expressed in EGP): 
 Basic and diluted earnings 
  per share                    22                  0.21               0.53              0.70              1.08 
                                     ------------------  -----------------  ----------------  ---------------- 
 

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

Consolidated statement of comprehensive income/(expenses) for the quarter and six-month periods ended 30 June 2022

 
                                              For the three           For the six months 
                                            months period ended         period ended 30 
                                                  30 June                     June 
                                               2022          2021         2022         2021 
                                            EGP'000       EGP'000      EGP'000      EGP'000 
-------------------------------------   -----------  ------------  -----------  ----------- 
 
 
 Net profit                                 124,919       326,616      439,052      668,210 
 Items that may be reclassified 
  to profit or loss: 
 Exchange difference on translation 
  of foreign operations                      25,983       (2,062)      103,291       12,375 
 Other comprehensive income / (Loss) 
  for the period net of tax                  25,983       (2,062)      103,291       12,375 
                                        -----------  ------------  -----------  ----------- 
 Total comprehensive income for 
  the period                                150,902       324,554      542,343      680,585 
                                        ===========  ============  ===========  =========== 
 
 Attributed to: 
 Equity holders of the parent               138,135       320,692      448,685      656,583 
 Non-controlling interests                   12,767         3,862       93,658       24,002 
                                            150,902       324,554      542,343      680,585 
                                        ===========  ============  ===========  =========== 
 

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

Consolidated statement of cash flows for the six month period ended 30 June 2022

 
                                                                         30 June                 30 June 
                                                  Notes                     2022                    2021 
                                                                         EGP'000                 EGP'000 
-----------------------------------------------  ------  -----------------------  ---------------------- 
 
 Cash flows from operating activities 
 Profit for the period before tax                                        649,568               1,035,024 
 Adjustments 
 Depreciation of property, plant and equipment                            95,184                  59,068 
 Depreciation of right of use assets                                      48,215                  46,677 
 Amortisation of intangible assets                                         3,439                   3,049 
 loss/(Gain )on disposal of Property, plant 
  and equipment                                                              523                    (45) 
 Impairment in trade and other receivables                                16,158                  10,265 
 Interest income                                   18                   (75,443)                (45,248) 
 Interest expense                                  18                     55,342                  49,011 
 Bank Charges                                                              8,805                       - 
 Equity settled financial assets at fair 
  value                                                                  (2,548)                   (678) 
 ROU Asset/Lease Termination                                               (408)                   (464) 
 Hyperinflation                                    18                    (6,471)                   1,204 
 Unrealised foreign currency exchange loss         18                   (69,378)                  19,321 
 Change in Provisions                                                      (380)                      72 
 Change in Inventories                                                  (15,888)                (41,444) 
 Change in trade and other receivables                                  (81,073)               (103,537) 
 Change in trade and other payables                                     (85,084)                  74,710 
 Cash generated from operating activities 
  before income tax payment                                              540,562               1,106,985 
                                                         -----------------------  ---------------------- 
 
 Tax paid during period                                                (506,375)               (240,624) 
 Net cash generated from operating activities                             34,187                 866,361 
                                                         -----------------------  ---------------------- 
 
 Cash flows from investing activities 
 Proceeds from sale of Property, plant 
  and equipment                                                            5,999                   3,036 
 Interest received on financial asset at 
  amortised cost                                                          25,224                  44,866 
 Payments for acquisition of property, 
  plant and equipment                               4                  (143,424)                (86,530) 
 Payments for acquisition of intangible 
  assets                                            5                    (1,505)                 (1,104) 
 Payments for the purchase of financial 
  assets at amortized cost                                             (309,952)               (309,835) 
 Proceeds for the sale of financial assets 
  at amortized cost                                                    1,266,048                 257,404 
 Net cash flows generated from/ (used 
  in)investing activities                                                842,390                (92,163) 
                                                         -----------------------  ---------------------- 
 
 Cash flows from financing activities 
 Proceeds from borrowings                                                      -                   2,617 
 Repayments of borrowings                                               (13,238)                (12,708) 
 Payment of finance lease liabilities                                   (17,239)                (32,401) 
 Dividends paid                                                         (88,766)                (21,998) 
 Interest paid                                                          (58,276)                (48,640) 
 Bank charge paid                                                        (8,805)                       - 
 Net cash flows used in financing activities                           (186,324)               (113,130) 
                                                         -----------------------  ---------------------- 
 
 Net increase in cash and cash equivalent                                690,253                 661,068 
 Cash and cash equivalents at the beginning 
  of the year                                                            891,451                 600,130 
 Effect of exchange rate                                                  85,920                 (3,215) 
 Cash and cash equivalent at the end of 
  the period                                       10                  1,667,624               1,257,983 
                                                         =======================  ====================== 
 

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

Consolidated statement of changes in equity for the six month period ended 30 June 2022

 
                                                                                                   Attributable to owners of the Parent 
                   ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- 
 EGP '000                Share              Share            Capital             Legal             Put option          Translation          Retained               Total          Non-controlling          Total 
                         capital            premium           reserve           reserve*             reserve             reserve             earnings           attributable          interests            equity 
                                            reserve                                                                                                                to the 
                                                                                                                                                                   owners 
                                                                                                                                                                   of the 
                                                                                                                                                                   Parent 
----------------   -----------------  -----------------  ---------------                                                                                                         -----------------  ------------------- 
 
 At 1 January 
  2022                     1,072,500          1,027,706        (314,310)              51,641            (956,397)             150,730           1,550,976             2,582,846            211,513            2,794,359 
                   -----------------  -----------------  ---------------  ------------------  -------------------  ------------------  ------------------  --------------------  -----------------  ------------------- 
 Profit for the 
  period                           -                  -                -                   -                    -                   -             422,220               422,220             16,832              439,052 
 Other 
  comprehensive 
  income for the 
  period                           -                  -                -                   -                    -              26,465                   -                26,465             76,826              103,291 
 Total 
  comprehensive 
  income at 30 
  June 2022                        -                  -                -                   -                    -              26,465             422,220               448,685             93,658              542,343 
                   -----------------  -----------------  ---------------  ------------------  -------------------  ------------------  ------------------  --------------------  -----------------  ------------------- 
 Transactions 
 with owners 
 of the Company 
 Contributions 
 and 
 distributions 
 Dividends                         -                  -                -                   -                    -                   -         (1,304,805)           (1,304,805)          (106,947)          (1,411,752) 
 Movement in put 
  option 
  liabilities                      -                  -                -                   -               19,501                   -                   -                19,501                  -               19,501 
 Impact of 
  hyperinflation                   -                  -                -                   -                    -                   -             (4,705)               (4,705)              1,020              (3,685) 
 Total 
  contributions 
  and 
  distributions                    -                  -                -                   -               19,501                   -         (1,309,510)           (1,290,009)          (105,927)          (1,395,936) 
                   -----------------  -----------------  ---------------  ------------------  -------------------  ------------------  ------------------  --------------------  -----------------  ------------------- 
 Balance at 30 
  June 
  2022                     1,072,500          1,027,706        (314,310)              51,641            (936,896)             177,195             663,686             1,741,522            199,244            1,940,766 
                   =================  =================  ===============  ==================  ===================  ==================  ==================  ====================  =================  =================== 
 
 At 1 January 
  2021                     1,072,500          1,027,706        (314,310)              49,218            (314,057)             145,617             603,317             2,269,991            156,383            2,426,374 
                   -----------------  -----------------  ---------------  ------------------  -------------------  ------------------  ------------------  --------------------  -----------------  ------------------- 
 Profit for the 
  period                           -                  -                -                   -                    -                   -             646,440               646,440             21,770              668,210 
 Other 
  comprehensive 
  income for the 
  period                           -                  -                -                   -                    -              10,143                   -                10,143              2,232               12,375 
 Total 
  comprehensive 
  income at 30 
  June 2021                        -                  -                -                   -                    -              10,143             646,440               656,583             24,002              680,585 
                   -----------------  -----------------  ---------------  ------------------  -------------------  ------------------  ------------------  --------------------  -----------------  ------------------- 
 Transactions 
 with owners 
 of the Company 
 Contributions 
 and 
 distributions 
 Dividends                         -                  -                -                   -                    -                   -           (454,472)             (454,472)           (21,998)            (476,470) 
 Legal reserve 
  formed 
  during the 
  period                           -                  -                -               2,423                    -                   -             (2,423)                     -                  -                    - 
 Movement in put 
  option 
  liabilities                      -                  -                -                   -            (303,990)                   -                   -             (303,990)                  -            (303,990) 
 Impact of 
  hyperinflation                   -                  -                -                   -                    -                   -            (15,794)              (15,794)            (6,277)             (22,071) 
 Total 
  contributions 
  and 
  distributions                    -                  -                -               2,423            (303,990)                   -           (472,689)             (774,256)           (28,275)            (802,531) 
                   -----------------  -----------------  ---------------  ------------------  -------------------  ------------------  ------------------  --------------------  -----------------  ------------------- 
 Balance at 30 
  June 
  2021                     1,072,500          1,027,706        (314,310)              51,641            (618,047)             155,760             777,068             2,152,318            152,110            2,304,428 
                   =================  =================  ===============  ==================  ===================  ==================  ==================  ====================  =================  =================== 
 

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

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

   1.    Reporting entity 

Integrated Diagnostics Holdings plc "IDH" or "the Company" is a Company which was incorporated in Jersey on 4 December 2014 and established according to the provisions of the Companies (Jersey) Law 1991 under Registered No. 117257. These condensed consolidated interim financial information as at and for the six months ended 30 June 2022 comprise the Company and its subsidiaries (together referred as the 'Group'). The Company is a dually listed entity, in both London Stock Exchange (since 2015) and in the Egyptian Exchange (during May 2021).

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

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

These condensed consolidated interim financial information were approved for issue by the Directors of the Company on 11 September 2022.

   2.    Basis of preparation 
   A)   Statement of compliance 

These condensed consolidated interim financial information have been prepared as per IAS 34 'Interim Financial Reporting' (As adopted by the IASB). as the accounting policies adopted are consistent with those of the previous financial year ended 31 December 2021 and corresponding interim reporting period.

These condensed consolidated interim financial information do not include all the information and disclosures in the annual consolidated financial Statement, and should be read in conjunction with the financial Statement published as at and for the year ended 31 December 2021 which is available at www.idhcorp.com . In addition, results of the six month period ended 30 June 2022 are not necessary indicative for the results that may be expected for the financial year ending 31 December 2022.

   B)    Basis of measurement 

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

   C)    Functional and presentation currency 

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

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

   3.    Significant accounting policies 

In preparing these condensed consolidated interim financial information, the significant judgments made by the management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that were applied to the consolidated financial information for the year ended 31 December 2021."The preparation of these condensed consolidated interim financial information requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expense. Actual results may differ from these estimates. Information about significant areas of estimation uncertainty and critical judgement in applying accounting policies that have the most significant effect on the amount recognised in the condensed consolidated interim financial statement is described in note 3.2 of the annual consolidated financial information published for the year ended 31 December 2021. In preparing these condensed consolidated interim financial information, the significant judgments made by the management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that were applied to the consolidated financial information for the year ended 31 December 2021".

   4.    Property, plant, and equipment 
 
                    Land &         Medical,       Leasehold      Fixtures,      Building &     Payment on      Total 
                   buildings       electric      improvements    fittings &     Leasehold       account 
                                      &                           vehicles      assets in 
                                 information                                    the course 
                                    system                                          of 
                                  equipment                                    construction 
                --------------  -------------  --------------  -------------  -------------  -------------  ---------- 
 Cost 
 At 1 January 
  2022              380,883        824,628         335,203         95,966         15,937         6,761       1,659,378 
 Additions          38,275          71,111         44,936          6,177          13,504         1,063        175,066 
 Hyper 
  inflation            -            1,784             -              -              -              -           1,784 
 Disposals             -            (674)           (453)         (7,675)           -              -          (8,802) 
 Transfers             -              -             2,669            -           (2,669)           -             - 
 Exchange 
  differences        2,810          37,155         18,894          8,078          1,677            -          68,614 
                --------------  -------------  --------------  -------------  -------------  -------------  ---------- 
 At 30 June 
  2022              421,968        934,004         401,249        102,546         28,449         7,824       1,896,040 
                --------------  -------------  --------------  -------------  -------------  -------------  ---------- 
 Depreciation 
 At 1 January 
  2022              53,490         333,806         177,230         33,044           -                         597,570 
 Depreciation 
  for the 
  period             3,224          62,253         24,861          4,846            -              -          95,184 
 Disposals             -            (613)           (414)         (1,253)           -              -          (2,280) 
 Exchange 
  differences         454           17,496          8,860          4,949            -              -          31,759 
                --------------  -------------  --------------  -------------  -------------  -------------  ---------- 
 At 30 June 
  2022              57,168         412,942         210,537         41,586           -                         722,233 
                --------------  -------------  --------------  -------------  -------------  -------------  ---------- 
 Net book 
  value at 30 
  June 2022         364,800        521,062         190,712         60,960         28,449         7,824       1,173,807 
                ==============  =============  ==============  =============  =============  =============  ========== 
 At 31 
  December 
  2021              327,393        490,822         157,973         62,922         15,937         6,761       1,061,808 
                ==============  =============  ==============  =============  =============  =============  ========== 
 
   5.    Intangible assets and goodwill 

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

 
                                          Goodwill    Brand name    Software          Total 
                                         ---------  -------------  ---------      ------------ 
 Cost 
 Balance at 1 January 2022                 1,260,965      383,909      77,394           1,722,268 
 Additions                                      -            -          1,505             1,505 
 Effect of movements in exchange rates       11,031        3,652        1,444            16,127 
                                         -------------  ----------  ------------      ------------ 
 Balance at 30 June 2022                   1,271,996      387,561      80,343           1,739,900 
                                         -------------  ----------  ------------      ------------ 
 
 Amortisation and impairment 
 Balance at 1 January 2022                   4,552          372        58,477            63,401 
 Amortisation                                  -             -          3,439             3,439 
 Effect of movements in exchange rates         -             -           616               616 
                                         -------------  ----------  ------------      ------------ 
 Balance at 30 June 2022                      4,552         372         62,532           67,456 
                                         -------------  ----------  ------------      ------------ 
 
 Carrying amount 
 Balance at 30 June 2022                   1,267,444      387,189      17,811           1,672,444 
                                         =============  ==========  ============      ============ 
 Balance at 31 December 2021               1,256,413      383,537      18,917           1,658,867 
                                         =============  ==========  ============      ============ 
 
 

Goodwill impairment reviews are undertaken annually or more frequently if events or changes in circumstances indicate a potential impairment. No indicators of impairment have been identified during the six months ended 30 June 2022.

   6.    Right-of-use assets 
 
                                              30 June 2022   31 December 2021 
                                             -------------  ----------------- 
 Balance at 1 January                              462,432            354,688 
 Addition for the period / year                     94,959            198,402 
 Depreciation charge for the period / year        (48,215)           (79,617) 
 Terminated contracts                              (8,406)            (7,643) 
 Exchange differences                               18,941            (3,398) 
                                                   519,711            462,432 
                                             =============  ================= 
 
   7.    Financial asset at fair value through profit and loss 
 
                         30 June 2022   31 December 2021 
                        -------------  ----------------- 
 Equity i nvestments*       13,018                10,470 
                        ------------- 
                            13,018                10,470 
                        =============  ================= 
 

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

- ownership percentage in JSC Mega Lab at the transaction date on April 8, 2019, and as of June 30, 2022, was 8.25%.

- On April 8, 2019, Al Mokhabariyoun Al Arab (Biolab) has signed a Shareholder Agreement with JSC Mega Lab and JSC Georgia Healthcare Group (CHG), whereas, BioLab Shall have a put option, exercisable within 12 months immediately after the expiration of five(5) year period from the signing date, which allows BioLab stake to be bought out by CHG at a price of the equity value being USD 400,000 plus 15% annual Interred Rate of Return (IRR). In case the Management Agreement or the Purchase Agreement and/or the Service level Agreement is terminated/cancelled within 6 months period from the date of such termination/cancellation, CHG shall have a call option, which allows the CHG to purchase Biolab's Stake in JSC Megalab having value of USD 400,000.00 plus 20% annual Interred Rate of Return (IRR). If JCI accreditation is not obtained, immediately after the expiration of the 12 months period, CHG shall have a call option (the Accreditation Call option), exercisable within 6 months period, allowing CHG has the right to purchase BioLab's Shares in JSC Mega Lab at a price of the equity value of USD 400,00.00 plus the 20% annual IRR.

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

   8.    Trade and other receivables 
 
                                       30 June 2022   31 December 2021 
                                      -------------  ----------------- 
 Trade receivables - net                    384,617            371,051 
 Prepayments                                 28,716             22,647 
 Due from related parties note (16)           7,323              5,237 
 Accrued revenue                              1,648              2,818 
 Other receivables                           69,273             67,974 
                                      ------------- 
                                            491,577            469,727 
                                      =============  ================= 
 
   9.    Financial assets at amortised cost 
 
                                       30 June 2022   31 December 2021 
                                      -------------  ----------------- 
 Term deposits (more than 90 days)        3,726           148,136 
 Treasury bills (more than 90 days)      510,771         1,310,588 
                                         514,497         1,458,724 
                                      =============  ================= 
 

The maturity date of the treasury bills and Fixed-term deposits is between 3-12 months and have average interest rates of 13.18% and 8.50% respectively.

10. Cash and cash equivalents

 
                                       30 June 2022   31 December 2021 
                                      -------------  ----------------- 
 Cash at banks and on hand                1,589,519            261,430 
 Treasury bills (less than 90 days)          13,744            150,431 
 Term deposits (less than 90 days)           64,361            479,590 
                                          1,667,624            891,451 
                                      =============  ================= 
 

11. Trade and other payables

 
                                     30 June 2022   31 December 2021 
                                    -------------  ----------------- 
 Trade payable                            230,299            311,321 
 Accrued expenses                         225,387            325,677 
 Due to related parties note (16)          11,230             13,234 
 Other payables                            86,800             99,040 
 Deferred revenue                          52,984             24,603 
 Accrued finance cost                       4,207              3,479 
                                          610,907            777,354 
                                    =============  ================= 
 

12. Current put option liability

 
                               30 June   31 December 2021 
                                 2022 
                              --------  ----------------- 
 Put option - Biolab Jordan    897,163            921,360 
                               897,163            921,360 
                              ========  ================= 
 

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

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

The option is calculated at seven times (7x) EBITDA of the last 12 months minus Net Debt, and its exercisable in whole starting the fifth anniversary of completion of the original purchase agreement, which fell due in June 2016. The vendor has not exercised this right at 30 June 2022. It is important to note that the put option liability is treated as current as it could be exercised at any time by the NCI. However based on discussions and ongoing business relationship, there is no expectation that this will happen in the next 18 months. The put option has no expiry date.

13. Loans and borrowings

 
                           Currency    Nominal interest rate       Maturity      30 June 2022   31 December 2021 
                          ----------  -----------------------  ---------------  -------------  ----------------- 
 CIB - Bank                   EGP        Secured rate 9.5%       5 April 2022          -                  13,238 
 AUB - Bank                   EGP       CBE corridor rate+1%    26 April 2026       84,828                84,828 
                                                                                    84,828                98,066 
 Amount held as: 
 Current liability                                                                   8,483                21,721 
 Non- current liability                                                             76,345                76,345 
                                                                                    84,828                98,066 
                                                                                =============  ================= 
 

A)

In July 2018, AL-Borg lab, one of IDH subsidiaries, was granted a medium-term loan amounting to EGP 130.5m from the Ahli United Bank "AUB Egypt" to finance the investment cost related to the expansion into the radiology segment. As at 30 June 2022 only EGP 84.8m had been drawn down from the total facility available. The loan contains the following financial covenants which if breached will mean the loan is repayable on demand:

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

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

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

Loans and borrowings (continued)

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

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

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

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

"Current ratios": Current assets divided current liabilities.

The terms and conditions of outstanding loans are as follows:

   *     As at 30 June 2022 corridor rate is 12.25% (2021: 9.25%) 

AL- Borg company didn't breach any covenants related to the MTL agreement.

B) Last year the Group signed two debt facilities agreements. The debt package includes US$ 45.0 million secured facility with the tenor of 8-year starting May 2021 from the International Finance Corporation (IFC), and an additional US$ 15.0 million IFC syndicated facility from Mashreq Bank. As at 30 June 2022, the debt facility has not been drawn by IDH.

14. Non-current put option liability

 
                          30 June   31 December 2021 
                            2022 
                         --------  ----------------- 
 Put option liability*    39,733         35,037 
                          39,733         35,037 
                         ========  ================= 
 

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

15. Other Financial obligations

 
                                                30 June 2022   31 December 2021 
                                               -------------  ----------------- 
 Lease liabilities - buildings                       601,703            531,804 
 Financial obligations- laboratory equipment         259,519            228,870 
                                                     861,222            760,674 
                                               =============  ================= 
 

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

 
                                            30 June 2022 
                               Minimum payments   Interest   Principal 
                              -----------------  ---------  ---------- 
 Less than one year                     249,937    112,915     137,022 
 Between one and five years             809,055    239,675     569,380 
 More than five years                   174,300     19,480     154,820 
                                      1,233,292    372,070     861,222 
                              =================  =========  ========== 
 
 
                                          31 December 2021 
                               Minimum payments   Interest   Principal 
                              -----------------  ---------  ---------- 
 Less than one year                     211,242     95,764     115,478 
 Between one and five years             701,084    227,314     473,770 
 More than Five years                   191,229     19,803     171,426 
                                      1,103,555    342,881     760,674 
                              =================  =========  ========== 
 

Amounts recognised in profit or loss:

 
                                     For the three     For the six months 
                                      months ended        ended 30 June 
                                        30 June 
                                     2022     2021      2022        2021 
                                   -------  -------  ----------  --------- 
 Interest on lease liabilities      18,065   14,597    34,926      28,872 
 Expenses related to short-term 
 lease                              9,387    3,420     15,144      8,639 
 

16. Related party transactions

The significant transactions with related parties, their nature volumes and balance during the period 30 June 2022 are as follows:

 
                                                                                         30 June 2022 
                                                                               Transaction amount of 
 Related Party             Nature of transaction     Nature of relationship         the period           Balance 
-----------------------  ------------------------   -----------------------   ----------------------  ---------- 
 
 ALborg Scan (S.A.E)*     Expenses paid on behalf            Affiliate                    -                351 
 
 International 
  Fertility (IVF)**       Expenses paid on behalf            Affiliate                    -               1,767 
 
                                                          Entity owned by 
 H.C Security                 Provided service         Company's board member            56               (263) 
 
                                                          Entity owned by 
 Life Health Care             Provide service              Company's CEO                1,956             4,050 
 
 
 
                                                        Bio. Lab C.E.O and 
 Dr. Amid Abd Elnour        Put option liability            shareholder                24,197           (897,163) 
 International Finance                                 Eagle Eye - Echo Scan 
  corporation (IFC)         Put option liability        limited shareholder            (4,696)          (39,733) 
 International Finance                                 Eagle Eye - Echo Scan 
  corporation (IFC)           Current account           limited shareholder             1,948           (10,967) 
 
 
 Integrated Treatment 
  for Kidney Diseases                                     Entity owned by 
  (S.A.E.)                    Medical services             Company's CEO                  -               1,155 
                                                                                        130 
 Total                                                                                                 (940,803) 
                                                                                                      ========== 
 

Related party transactions (continued)

 
                                                                                                                                    31 December 2021 
                                                                                                                               Transaction 
                                                                                                                                amount of 
 Related Party                                         Nature of transaction                 Nature of relationship             the year          Balance 
-----------------------------------------------  --------------------------------  ---  -------------------------------  ---  ------------      ---------- 
 
 ALborg Scan (S.A.E)*                                   Expenses paid on behalf                        Affiliate                     1               351 
 
 International Fertility (IVF)**                        Expenses paid on behalf                        Affiliate                     -              1,767 
 
 
 
 
 
 
                                                                                            Entity owned by Company's board 
 H.C Security                                               Provide service                              member                    (243)            (319) 
 
 Life Health Care                                           Provide service                  Entity owned by Company's CEO       (11,232)           2,094 
 
 Dr. Amid Abd Elnour                                      Put option liability              Bio. Lab C.E.O and shareholder       (639,093)        (921,360) 
 
                                                                                             Eagle Eye - Echo Scan limited 
 International Finance corporation (IFC)                  Put option liability                        shareholder                 (3,247)         (35,037) 
                                                                                             Eagle Eye - Echo Scan limited 
 International Finance corporation (IFC)                    Current account                           shareholder                (12,915)         (12,915) 
  Rental income Medical services         Entity owned by Company's CEO                                                                             1,025 
  Integrated Treatment for Kidney Diseases (S.A.E)                                                                                (298) 
                                                                                                                                    530 
 
 Total                                                                                                                                           (964,394) 
                                                                                                                                                ========== 
 

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

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

Related party transactions (continued)

Compensation of key management personnel of the Group

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

 
                                 30 June 2022   30 June 2021 
                                -------------  ------------- 
 Short-term employee benefits          33,746         35,617 
                                -------------  ------------- 
                                       33,746         35,617 
                                =============  ============= 
 

17. General and administrative expenses

 
                         For the three months ended 30 June     For the six months ended 30 June 
                              2022               2021                2022              2021 
                       -----------------  ------------------  -----------------  ---------------- 
 Wages and salaries          32,979             34,623              66,910            61,636 
 Depreciation                7,440               5,659              14,843            11,187 
 Other expenses              37,473             64,930              82,439            103,309 
 Total                       77,892             105,212            164,192            176,132 
                       =================  ==================  =================  ================ 
 

18. Net finance cost

 
                                                        For the three months ended 30 June     For the six months 
                                                                                                  ended 30 June 
                                                             2022                2021           2022        2021 
                                                      ------------------  -----------------  ----------  --------- 
 Interest income                                                  30,196             24,975      75,443     45,248 
 Net foreign exchange gain                                         8,244                  -      69,378          - 
 Gain on hyperinflationary net monetary position 
  (Sudan companies)                                                4,807                  -       6,471          - 
 Total finance income                                             43,247             24,975     151,292     45,248 
                                                      ==================  =================  ==========  ========= 
 
 Loss on hyperinflationary net monetary position                       -            (1,204)           -    (1,204) 
 Bank Charges                                                    (1,661)            (2,848)     (8,805)    (5,364) 
 Interest expense                                               (29,426)           (30,574)    (55,342)   (49,011) 
 Net foreign exchange loss                                             -            (4,586)           -   (19,321) 
 Total finance costs                                            (31,087)           (39,212)    (64,147)   (74,900) 
                                                      ==================  =================  ==========  ========= 
 
 Net finance income /(cost)                                       12,160           (14,237)      87,145   (29,652) 
 

On March 21, 2022, the Central Bank of Egypt raised the corridor rate by 100 basis points and on May 19, 2022, an additional increase of 200 basis point took place.

19. Tax

   A)   Tax expense 

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

   B)    Income tax 

Amounts recognised in profit or loss as follow:

 
                                              For the three months ended 30 June     For the six months 
                                                                                        ended 30 June 
                                                   2022               2021            2022        2021 
                                            -----------------  ------------------  ----------  ---------- 
 Current tax: 
 Current year tax                                (58,479)           (143,535)       (159,839)   (282,345) 
 Deferred tax: 
 DT on undistributed reserves                     6,672             (43,068)        (48,553)    (83,780) 
 DT on reversal of temporary differences         (1,495)               461           (2,124)      (689) 
 Total Deferred tax                               5,177             (42,607)        (50,677)    (84,469) 
 
 Tax expense recognized in profit or loss        (53,302)           (186,142)       (210,516)   (366,814) 
                                            =================  ==================  ==========  ========== 
 
   C)    Deferred tax liabilities 

Deferred tax relates to the following:

 
                                                    30 June    31 December 
                                                      2022         2021 
                                                  ----------  ------------ 
 
 Property, plant and equipment                     (30,052)     (28,925) 
 Intangible assets                                 (106,518)    (105,358) 
 Undistributed reserves from Group subsidiaries    (157,961)    (223,425) 
 Provisions and financial obligations               30,417       25,559 
                                                  ---------- 
 Net deferred tax liabilities                      (264,114)    (332,149) 
                                                  ==========  ============ 
 

20. Financial instruments

The Group has reviewed the financial assets and liabilities held at 30 June 2022. It has been deemed that the carrying amounts for all financial instruments are a reasonable approximation of fair value. All financial instruments are deemed Level 3.

21. Contingent liabilities

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

Should a claim be brought against Al Borg Laboratory Company and Al Mokhtabar Company for Medical Labs, an amount of between EGP 26.8m to EGP 60m could become payable, however this is not considered probable due to the specialized and differential training programs that the group provides to its medical and administrative professionals on an annual basis, which is one of the requirements imposed by the international accreditation bodies.

22. Earnings per share

 
                                          For the three months ended 30 June     For the six months ended 30 June 
                                               2022                2021               2022              2021 
                                        ------------------  -----------------  -----------------  ---------------- 
 Profit attributed to owners of the 
  parent                                           125,611            320,410            422,220           646,440 
 Weighted average number of ordinary 
  shares in issue                                  600,000            600,000            600,000           600,000 
                                        ------------------  -----------------  -----------------  ---------------- 
 Basic and diluted earnings per share                 0.21               0.53               0.70              1.08 
                                        ==================  =================  =================  ================ 
 

The Company has no potential diluted shares as at 30 June 2022 and 30 June 2021, therefore; the earnings per diluted share are equivalent to basic earnings per share.

23. Segment reporting

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

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

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

 
                                                    Revenue by geographic location 
                              ------------------------------------------------------------------------- 
 For the three months ended    Egypt region   Sudan region   Jordan region   Nigeria region     Total 
                              -------------  -------------  --------------  ---------------  ---------- 
 30-June-22                      644,550      4,797          105,621         18,618             773,586 
 30-June-21                     1,014,597     2,514          133,648         12,873           1,163,632 
 
 
                                                         Revenue by geographic location 
                                   ------------------------------------------------------------------------- 
 For the six months period ended    Egypt region   Sudan region   Jordan region   Nigeria region     Total 
                                   -------------  -------------  --------------  ---------------  ---------- 
 30-June-22                         1,524,040      10,469         386,135         33,421           1,954,065 
 30-June-21                         1,935,059      9,267          323,518         25,326           2,293,170 
 
 
                                                   EBITDA by geographic location 
                              ----------------------------------------------------------------------- 
 For the three months ended    Egypt region   Sudan region   Jordan region   Nigeria region    Total 
                              -------------  -------------  --------------  ---------------  -------- 
 30-June-22                      226,684          (23)          16,478          (2,163)       240,976 
 30-June-21                      534,796         (377)          53,296          (3,873)       583,842 
 
 
                                                         EBITDA by geographic location 
                                   ------------------------------------------------------------------------- 
 For the six months period ended    Egypt region   Sudan region   Jordan region   Nigeria region     Total 
                                   -------------  -------------  --------------  ---------------  ---------- 
 30-June-22                              621,740             63          90,790          (3,332)     709,261 
 30-June-21                            1,046,064            711         131,023          (4,328)   1,173,470 
 

Segment reporting (continued)

 
                                             Net profit / (loss) by geographic location 
                              ----------------------------------------------------------------------- 
 For the three months ended    Egypt region   Sudan region   Jordan region   Nigeria region    Total 
                              -------------  -------------  --------------  ---------------  -------- 
 30-June-22                      124,044         1,522           2,441          (3,088)       124,919 
 30-June-21                      310,160        (4,486)         31,731          (10,789)      326,616 
 
 
                                                  Net profit / (loss) by geographic location 
                                   ----------------------------------------------------------------------- 
 For the six months period ended    Egypt region   Sudan region   Jordan region   Nigeria region    Total 
                                   -------------  -------------  --------------  ---------------  -------- 
 30-June-22                              393,560          4,278          47,471          (6,257)   439,052 
 30-June-21                              616,213       (14,801)          83,247         (16,449)   668,210 
 
 
                           Revenue by type                            Net profit by type 
                 For the three months ended 30 June         For the three months ended 30 June 
                          2022                 2021                   2022                  2021 
             -----------------------------  ----------  --------------------------------  -------- 
 
 Pathology              736,467              1,140,057               147,694               331,357 
 Radiology               37,119               23,575                (22,775)               (4,741) 
                        773,586              1,163,632               124,919               326,616 
             =============================  ==========  ================================  ======== 
 
 
                           Revenue by type                           Net profit by type 
               For the six months period ended 30 June     For the six months period ended 30 June 
                     2022                  2021                   2022                  2021 
             --------------------  --------------------  ----------------------  ------------------ 
 
 Pathology         1,885,271             2,247,984               477,718               675,057 
 Radiology          68,794                45,186                (38,666)               (6,847) 
                   1,954,065             2,293,170               439,052               668,210 
             ====================  ====================  ======================  ================== 
 
 
                     Revenue by categories                     Revenue by categories 
               For the three months ended 30 June     For the six months period ended 30 June 
                   2022                2021                 2022                  2021 
             ----------------  -------------------  --------------------  -------------------- 
 Walk-in              319,548              499,678               854,653             1,029,039 
 Corporate            454,038              663,954             1,099,412             1,264,131 
                      773,586            1,163,632             1,954,065             2,293,170 
             ================  ===================  ====================  ==================== 
 

* 30 June 2022 figure includes Covid-19 related Pathology tests amounted to EGP 615 m (30 June 2021: EGP 1,104 m).

Segment reporting (continued)

 
                                      Non-current assets by geographic location 
                      ------------------------------------------------------------------------- 
 For the year ended    Egypt region   Sudan region   Jordan region   Nigeria region     Total 
                      -------------  -------------  --------------  ---------------  ---------- 
 30-June-22               2,937,484          9,104         329,326          103,066   3,378,980 
 31-Dec-21                2,803,954          7,234         291,880           90,509   3,193,577 
 

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

 
                                  For the three months ended 30 June        For six months period ended 30 June 
                                        2022                 2021                2022                 2021 
                               ----------------------  ---------------   --------------------  ------------------ 
 
 Profit from operations                166,061                 526,995          562,423             1,064,676 
 
 
   Property, plant and 
   equipment depreciation              49,136                   26,608          95,184               59,068 
 Right of use depreciation             24,289                   28,711          48,215               46,677 
 Amortization of Intangible 
  assets                                1,490                    1,528           3,439                3,049 
 EBITDA                                240,976                 583,842          709,261             1,173,470 
                               ----------------------  ---------------   --------------------  ------------------ 
 Non-recurring expenses                       -             18,797                          -         29,034 
 Normalised EBITDA                      240,976             602,639                   709,261       1,202,504 
                               ================        ================        ==============   ================= 
 
 

24. Distributions made and proposed

 
                                                                30 June      31 December 2021 
                                                                  2022 
                                                              -----------   ----------------- 
                                                                EGP'000          EGP'000 
 
 Cash dividends on ordinary shares declared and not paid: 
 US$ 0.116 per share (2021 nil)                                 1,304,805                   - 
                                                              -----------   ----------------- 
                                                                1,304,805                   - 
                                                              ===========   ================= 
 Cash dividends on ordinary shares declared and paid :                   -            455,182 
 Nil per qualifying ordinary share (2021: 0.0485) per share              -            455,182 
                                                              ============  ================= 
 

25. Subsequent events

A) Due to the current economic situation in Egypt, IDH board of Directors has decided to pay dividends over two rounds as follows:

   -      Round 1 -> Minority Shareholders the deadline on the 27th of July 2022 
   -      Round 2 -> Hena Holdings & Actis 

IDH signed a deferral agreement with principal shareholders (Hena Holdings and Actis) who have agreed to receive their dividends in two tranches (on the 11th of August 2022 and the 18th of August 2022) with an interest rate of 10% per annum.

In relation to this agreement, IDH has incurred an Interest Expense of USD 174.5 K.

B) In relation to the share purchase agreement (the "SPA") signed on 20 December 2021 by IDH (or "the Company") for the acquisition of a 50% stake in Islamabad Diagnostic Center ("IDC"), IDH has notified Evercare IGA Holdings Limited (the "Seller") of its decision to terminate the SPA on 29 August 2022. Termination has become inevitable as the Long-stop Date (which had already been extended for a period of three months) has occurred without the satisfaction of all condition's precedent ("CPs"). However, negotiations with the Seller are ongoing, with Pakistan's evolving economic challenges and geopolitical situation to be important considerations in the completion of the negotiations. In case the Company reaches an agreement with the Seller, an amended SPA will be signed and a new Long-stop Date set.

C) IDH (or "the Company") will implement an Employee Stock Ownership Plan ("ESOP") for the senior management starting Q3 2022.

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