RNS Number : 8931B
Integrated Diagnostics Holdings PLC
28 August 2024
 

Integrated Diagnostics Holdings Plc

1H 2024 Results

Wednesday, 28 August 2024

Integrated Diagnostics Holdings plc delivers strong 33% year-on-year revenue growth in 1H 2024

(Cairo and London) Integrated Diagnostics Holdings ("IDH," "the Group," or "the Company"), a leading provider of diagnostic services with operations in Egypt, Jordan, Nigeria, Sudan and Saudi Arabia, announced today its unaudited financial statements for the six-month period ended 30 June 2024. IDH recorded revenues of EGP 2,498 million, a 33% increase year-on-year driven by higher test volumes and increased average revenues per test. Strong revenue performance, combined with IDH's ongoing cost optimization efforts, has improved profitability across the board. The Group posted an EBITDA of EGP 668 million, up 45% year-on-year, with an increased EBITDA margin of 27% compared to 25% in 1H 2023. Additionally, the company saw significant net profit growth of 127% year-on-year, reaching EGP 480 million and achieving an expanded net profit margin (NPM) of 19%.

 

On a quarterly basis, revenues reached EGP 1,327 million in Q2 2024, representing a 39% increase year-on-year. Net profit saw substantial growth, rising 84% year-on-year to total EGP 78 million.

 

Financial Results (IFRS)

EGP mn

Q2 2023

Q2 2024

Change

1H 2023

1H 2024

Change

Revenues

957

1,327

39%

          1,872

          2,498

33%

Cost of Sales

(623)

(831)

33%

        (1,214)

        (1,573)

30%

Gross Profit

333

497

49%

            658

            925

41%

Gross Profit Margin

34.8%

37.4%

2.6 pts

35.1%

37.0%

1.9 pts

Operating Profit

136

215

57%

            265

            435

64%

EBITDA[1]

234

338

44%

            462

            668

45%

EBITDA Margin

24.5%

25.4%

0.9 pts

24.7%

26.7%

2.0 pts

Net Profit

43

78

84%

            211

            480

127%

Net Profit Margin

4.5%

5.9%

1.4 pts

11.3%

19.2%

7.9 pts

Cash Balance[2]

666

1,254

88%

666

1,254

88%

Note: Throughout the document, percentage changes are calculated using the exact value (as per the Consolidated Financials) and not the corresponding rounded figure.

 

Key Operational Indicators[3]

EGP mn

1H 2023

1H 2024

Change

Branches

588

591[4]

3

Patients ('000)

3,917

4,119

5%

Revenue per Patient (EGP)

478

606

27%

Tests ('000)

16,465

17,822

8%

Revenue per Test

114

140

23%

Test per Patient

4.2

4.3

3%

 

 

 

 



 

Introduction

 

i.    Financial Highlights

·      IDH recorded consolidated revenues of EGP 2,498 million in the first half of 2024, increasing 33% year-on-year from EGP 1,872 million in 1H 2023. Growth was supported by an 8% year-on-year rise in test volumes and a 23% year-on-year increase in average revenue per test. On a three-month basis, IDH's consolidated revenues grew 39% year-on-year to EGP 1,327 million.

Revenue Progression

 (EGP mn)

Test Volumes Progression

 (mn)

Revenue Progression

 (EGP mn)

Test Volumes Progression

 (mn)



·      Gross profit for the six-month period recorded EGP 925 million, reflecting a 41% increase from EGP 658 million in 1H 2023. The gross profit margin stood at 37% in 1H 2024, up from 35% in the same period last year, underscoring the effectiveness of IDH's cost optimization efforts. On a quarterly basis, gross profit recorded EGP 497 million, up 49% year-on-year, with a higher margin of 37% versus 35% in Q2 2023.

·      EBITDA[5] recorded EGP 668 million in the first half of 2024, up 45% from EGP 462 million in the same period last year. The EBITDA margin improved to 27% from 25% in 1H 2023. Higher EBITDA profitability was driven by revenue growth that outpaced the rise in costs and SG&A expenses. Moreover, IDH continues to implement cost optimization efforts amid inflationary pressures, which reflect positively on margins. In Q2 2024, EBITDA came in at EGP 338 million, up 44% year-on-year with a stable margin of 25%.

·      Net profit for 1H 2024 reached EGP 480 million, representing a notable 127% year-on-year increase from 1H 2023. The Net Profit Margin (NPM) expanded to 19%, up 8 percentage points from the 11% recorded in 1H 2023. On a quarterly basis, net profit grew 84% year-on-year to EGP 78 million, with an associated net profit margin of 6%, up from 4% in the same period of the previous year.

 

ii.  Operational Highlights

·      At the end of 1H 2024, IDH's branch network stood at 591 branches, up by 3 branches compared to 1H 2023. In the first half of the year, IDH launched 20 new branches in Egypt and two inaugural branches in Saudi Arabia. During the same period, IDH closed one of its branches in Jordan located in Jordan's airport due to a decrease in testing following the COVID-19 pandemic, as well as all 18 branches in Sudan due to the ongoing conflict.

·      During the first half of the year, IDH conducted 17.8 million tests across its geographies, reflecting an 8% year-on-year increase from 16.5 million tests in 1H 2023.

·      The average revenue per test reached EGP 140 in 1H 2024, up 23% compared to EGP 114 in 1H 2023. This increase was largely attributed to strategic price increases introduced by IDH to address inflationary pressures in its primary markets, including Egypt and Nigeria.

·      During the first half of 2024, IDH served 4.1 million patients, up 5% year-on-year, with the average number of tests per patient reaching a record-high of 4.3, highlighting the success of IDH's strategies to attract and retain patients while promoting increased testing. The continued rise in average tests per patient underscores the effectiveness of IDH's initiatives, including its loyalty program introduced in FY 2021, which remains a key driver in enhancing patient testing.

 

iii. Updates by Geography

·      In Egypt (82.8% of total revenues in 1H 2024), IDH saw significant growth during the first half of 2024, generating EGP 2,069 million in revenues, up 37% year-on-year. Revenue growth was primarily fuelled by a 25% year-on-year rise in the average revenue per test, reaching EGP 125 in 1H 2024, and further strengthened by a 10% year-on-year expansion in test volumes, with IDH conducting 16.5 million tests in the first half of the year. On a quarterly basis, IDH's Egyptian operations recorded revenues of EGP 1,080 million in Q2 2024, an increase of 38% year-on-year.

·      IDH's Jordanian subsidiary (15.4% of total revenues in 1H 2024), Biolab, recorded revenues of JOD 6.5 million, down 4% year-on-year, largely attributed to a 2% reduction in test volumes during 1H 2024 as a result of the ongoing geopolitical situation in the region. The average revenue per test in Jordan declined a marginal 2% year-on-year during the period due to stringent pricing regulations imposed on Jordan's health sector. In EGP terms, operations in Jordan reported revenues of EGP 386 million, representing a 33% year-on-year increase due to the translation effect from a weakened EGP.

·      In Nigeria (1.5% of total revenues in 1H 2024), Echo-Lab achieved a 37% year-on-year growth in revenues in local currency, reaching NGN 1,284 million during the first half of 2024, driven by a 65% year-on-year increase in the average revenue per test. However, test volumes in Nigeria recorded 113 thousand in 1H 2024, down 17% year-on-year due to the continued impact of inflationary pressures affecting patients' purchasing power. In EGP terms, revenues in Nigeria recorded EGP 39 million, down 33% year-on-year, impacted by both lower test volumes and average revenues per test due to the devaluation of the Nigerian Naira.

·      Biolab KSA, IDH's newest venture in Saudi Arabia (0.2% of total revenues in 1H 2024) began operations in Q1 2024 with one branch opening in January and another in March. The company generated revenues of SAR 339 thousand in 1H 2024, performing 7 thousand tests in 1H 2024 with an average revenue per test of SAR 46. The company continues to run targeted campaigns to attract patients, which is evident through its impressive quarterly results. In Q2 2024, the company's revenue reached SAR 281 thousand, compared to SAR 58 thousand in the first quarter of the year, driven by more than a threefold increase in the number of patients as well as a higher average revenue per test. IDH sees significant potential in the Saudi market and continues to actively expand in this region. In EGP terms, Saudi operations reported revenues of EGP 4 million, with an average revenue per test of EGP 579 during the six-month period.



 

·      In Q1 2024, IDH decided to suspend all operations indefinitely in Sudan due to the ongoing conflict, leading to the closure of its 18 branches in the country.

iv. Management Commentary

 

Commenting on the Group's performance, IDH Chief Executive Officer Dr. Hend El-Sherbini said: "I am pleased to report that IDH has successfully built on a strong start to the year, delivering an impressive performance characterized by substantial consolidated revenue growth and improved profitability. This continued upward trajectory highlights the resilience of IDH's business model amid various economic and regional challenges, underscoring our ability to achieve consistent results and capitalize on opportunities for future growth.

During the first half of 2024, IDH achieved a robust 33% year-on-year revenue increase, driven by a combination of higher test volumes and effective pricing strategies yielding higher average revenues per test. This strong top-line growth, coupled with disciplined cost management, has been pivotal in our solid financial performance across the income statement. Notably, our success in managing SG&A expenses, which decreased as a share of revenue, underscores our commitment to optimizing costs and enhancing operational efficiency. Consequently, our EBITDA grew by 45% year-on-year, with the margin expanding to 27%, up from 25% last year, highlighting the resilience of our business model in adapting to changing economic conditions.

Breaking down our results by regions, our core market in Egypt displayed remarkable resilience, achieving a 37% year-on-year revenue growth. Despite the challenges of rising inflation and its impact on patients' purchasing power, we saw a growing demand for our services, with test volumes expanding 10% year-on-year and average revenue per test rising 25% year-on-year. We have continued to solidify our market leadership by expanding our service offerings and extending our reach into underpenetrated areas, adding 20 new branches since the beginning of 2024. We are particularly delighted with the progress of our radiology venture, Al-Borg Scan, which remains a central focus of our growth strategy. The expansion of Al-Borg Scan reflects our commitment to enhancing our service offerings in this critical area and aligns with our diversification strategy. These initiatives are yielding tangible results, with the radiology sector now contributing 5.0% to Egyptian revenues, up from 4.2% last year.

In Jordan, geopolitical instability impacted our performance in the first half of the year, resulting in a slight decline in revenue in local currency terms, primarily due to its effect on medical tourism and reduced test volumes. On the other hand, Nigeria saw a robust 37% year-on-year increase in revenue in local currency terms, driven by higher revenue per test. This growth reflects our revenue mix optimization strategy, which has focused on higher-priced tests, along with annual price increases we have implemented to counteract the effects of record-high inflation in the country. However, it is important to note that multiple devaluations of the Nigerian naira over the past two years, coupled with the removal of diesel subsidies, have significantly strained our patients' purchasing power, resulting in decreased test volumes and lower revenues in EGP terms.

Turning to Saudi Arabia, where we officially commenced operations in Q1 2024 with the opening of two branches in Riyadh, our growth has been encouraging. We are excited about expanding in this market, given its favourable demographics, growing population, and rising demand for healthcare services. The diagnostics sector remains fragmented, with no dominant players, presenting IDH with an excellent environment to implement our proven business model. We are confident that Saudi Arabia will quickly become a key market for IDH. Since our launch, our comprehensive branding strategy, which included outdoor advertising, social media campaigns, community event sponsorships, and partnerships with local healthcare providers, has yielded strong results. In Q2 2024, our revenue in Saudi Arabia surged to SAR 281 thousand, up from SAR 58 thousand in Q1 2024, driven by a significant increase in patient numbers and higher revenue per test.

 

Looking ahead, our strategic focus remains steadfast. In Egypt, we expect continued growth driven by recent economic reforms and a gradual improvement in purchasing power. With over four decades of experience in the diagnostics sector, we are particularly excited about the significant potential in our radiology venture. As the economy stabilizes, we see a tremendous opportunity to further capitalize on this growth area, leveraging our enhanced capabilities to deliver even greater value across the region. In Saudi Arabia, we are intensifying our efforts to fully capitalize on the market's potential, with plans to expand our network of branches across the Kingdom. While we remain mindful of the challenges ahead, particularly in navigating currency fluctuations and inflationary pressures in some of our key markets, our proactive risk management strategies, including price adjustments and cost control measures, have so far mitigated these impacts, and we are confident in our ability to sustain our growth trajectory. As such, we are reaffirming our guidance of approximately 30% revenue growth in FY 2024, with an expected EBITDA margin of around 30% for the year, excluding non-recurring expenses and results from our newly inaugurated venture in Saudi Arabia.

Following up on our OTP from the EGX, IDH has received preliminary approval to proceed with the delisting of its shares. IDH and the EGX coordinated the process, with the Special Operations Market (OPR) operating from August 18th to August 22nd. During this period, 18,673,728 shares were subscribed. IDH then purchased these shares on August 26th, and the buyback settlement is to be completed by August 28th. Afterwards, IDH will transfer its shares from the EGX to the London Stock Exchange (LSE).

To conclude, our commitment remains unchanged in prioritizing the well-being of our patients and stakeholders, as we continue to deliver exceptional quality care to our growing patient base across Egypt, Jordan, Nigeria, and Saudi Arabia.

 

- End -



Analyst and Investor Call Details

An analyst and investor call will be hosted at 1pm (UK) | 3pm (Egypt) on Monday, 2 September 2024. You can learn more details and register for the call by clicking on this link.

For more information about the event, please contact: amoataz@EFG-HERMES.com  

About Integrated Diagnostics Holdings (IDH)

IDH is a leading diagnostics services provider in the Middle East and Africa offering a broad range of clinical pathology and radiology tests to patients in Egypt, Jordan, Nigeria, Sudan, and Saudi Arabia. The Group's core brands include Al Borg, Al Borg Scan and Al Mokhtabar in Egypt, as well as Biolab (Jordan), Echo-Lab (Nigeria), Ultralab and Al Mokhtabar Sudan (both in Sudan), and Biolab KSA (Saudi Arabia). With over 40 years of experience, a long track record for quality and safety has earned the Company a trusted reputation, as well as internationally recognised accreditations for its portfolio of over 3,000 diagnostics tests. From its base of 601 branches as of 31 December 2023, IDH served over 8.5 million patients and performed more than 36.1 million tests in 2023. IDH will continue to add laboratories through a Hub, Spoke and Spike business model that provides a scalable platform for efficient expansion. Beyond organic growth, the Group targets expansion in appealing markets, including acquisitions in the Middle Eastern, African, and East Asian markets where its model is well-suited to capitalise on similar healthcare and consumer trends and capture a significant share of fragmented markets. IDH has been a Jersey-registered entity (i) whose shares are admitted to the equity shares (transition) category (previously, the standard listing segment) of the Official List of the UK Financial Conduct Authority and admitted to trading on the main market for listed securities of the London Stock Exchange (ticker: IDHC) since May 2015, and (ii) with a secondary listing on the Egyptian Exchange since May 2021 (ticker: IDHC.CA).

 

Shareholder Information

LSE: IDHC.L

EGX: IDHC.CA

Bloomberg: IDHC:LN

Listed on LSE: May 2015

Listed on EGX: May 2021

Shares Outstanding: 600 million

Contact

Tarek Yehia

Investor Relations Director

T: +20 (0)2 3332 1126 | M: +20 10 6882 6678 | tarek.yehia@idhcorp.com

Forward-Looking Statements

These results for the quarter ended 30 June 2024 have been prepared solely to provide additional information to shareholders to assess the group's performance in relation to its operations and growth potential. These results should not be relied upon by any other party or for any other reason. This communication contains certain forward-looking statements. A forward-looking statement is any statement that does not relate to historical facts and events, and can be identified by the use of such words and phrases as "according to estimates", "aims", "anticipates", "assumes", "believes", "could", "estimates", "expects", "forecasts", "intends", "is of the opinion", "may", "plans", "potential", "predicts", "projects", "should", "to the knowledge of", "will", "would" or, in each case their negatives or other similar expressions, which are intended to identify a statement as forward-looking. This applies, in particular, to statements containing information on future financial results, plans, or expectations regarding business and management, future growth or profitability and general economic and regulatory conditions and other matters affecting the Group.

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

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



 

Group Operational & Financial Review

i.    Revenue and Cost Analysis

Consolidated Revenue

IDH maintained its strong performance throughout the first half of 2024, with revenues growing 33% year-on-year to reach EGP 2,498 million in 1H 2024. Revenue growth was driven by an 8% year-on-year rise in test volumes and a 23% increase in average revenue per test, which stood at EGP 140 during the period. Higher average revenues per test continued to reflect the strategic price increases implemented across Egyptian and Nigerian operations to counteract mounting inflationary pressures in these markets.

Revenue Analysis

 

1H 2023

1H 2024

%

Total revenue (EGP mn)

1,872

2,498

33%

Test Volume Analysis

Total tests (mn)

16.5

17.8

8%

Revenue per Test Analysis

Total revenue per test (EGP)

114

140

23%


 

Revenue Analysis: Contribution by Patient Segment

 

Contract Segment (65% of Group revenue in 1H 2024)

At IDH's contract segment, revenues reached EGP 1,632 million, marking a 37% year-on-year increase. Average revenue per test grew by 23% year-on-year, reaching EGP 109 in 1H 2024. In parallel, test volumes totaled 14.9 million, an 11% increase compared to the same period last year.

 

The segment also maintained its record-high average tests per patient, with 4.5 tests in 1H 2024, up from 4.4 tests in the comparable period last year. This was supported by IDH's loyalty program, introduced in FY 2021, which continues to deliver positive results for the Group.

 

Walk-in Segment (35% of Group revenue in 1H 2024)

Meanwhile, in IDH's walk-in segment, revenues reached EGP 866 million during the six-month period, up 28% year-on-year, driven by a 33% increase in revenue per test, which averaged EGP 301 in 1H 2024. The company conducted 2.9 million walk-in tests during the period, a 4% year-on-year decrease as more walk-in patients shifted to IDH's contract segment. The average tests per patient in this segment saw a slight 2% year-on-year decline, recording 3.5 tests during the period.

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

Detailed Segment Performance Breakdown


Walk-in Segment

Contract Segment

Total


1H23

1H24

Change

1H23

1H24

Change

1H23

1H24

Change

Revenue (EGP mn)

679

866

28%

1,193

1,632

37%

1,872

2,498

33%

Patients ('000)

833

814

-2%

3,084

3,305

7%

3,917

4,119

5%

% of Patients

21%

20%

 

79%

80%

 



 

Revenue per Patient (EGP)

815

1,064

31%

387

494

28%

478

606

27%

Tests ('000)

3,008

2,880

-4%

13,457

14,942

11%

16,465

17,822

8%

% of Tests

18%

16%

 

82%

84%

 



 

Revenue per Test (EGP)

226

301

33%

89

109

23%

114

140

23%

Test per Patient

3.6

3.5

-2%

4.4

4.5

4%

4.2

4.3

3%

 

 

 

Revenue Analysis: Contribution by Geography

 

Egypt (82.8% of Group revenue)

IDH's home and largest market, Egypt, maintained its strong growth momentum, recording revenues of EGP 2,069 million in 1H 2024, a 37% year-on-year increase. Growth at the segment was primarily dual driven by a 10% increase in test volumes as well as a 25% rise in average revenue per test, attributed to repricing strategies implemented to counter the inflationary environment.

 

On a quarterly basis, IDH's Egyptian operations recorded revenues of EGP 1,080 million in Q2 2024, an increase of 38% year-on-year.

 

Al-Borg Scan

IDH's rapidly growing radiology venture, Al-Borg Scan, continued its upward trajectory in the six-month period, with revenues reaching EGP 104 million, a substantial 65% year-on-year increase. Growth was supported by a 33% year-on-year increase in scans performed reaching 121 thousand during 1H2024. Furthermore, the average revenue per test grew 24% year-on-year to EGP 856 in 1H 2024. Al-Borg Scan continues to grow its operations through its network of seven branches across the Greater Cairo area, positioning itself as a leader in the fragmented Egyptian radiology market.

 

House Calls

During 1H 2024, IDH's house call services continued its significant contribution to the country's results, constituting 18% of total revenues. This contribution sits comfortably above pre-pandemic average, highlighting the segment's growth potential and the effectiveness of the Group's post-pandemic growth strategy.

 

Wayak

Finally, IDH's Egyptian subsidiary, Wayak, aims to leverage the Company's expanding patient database to develop electronic medical records and provide personalized services. In the first half of 2024, Wayak achieved revenues of EGP 7 million, marking a 60% year-on-year increase. This growth came after fulfilling 100 thousand orders during the first six months of the year, reflecting a 21% rise compared to 1H 2023.

 

 

 

 

 

 

 

 

Detailed Egypt Performance Breakdown

Revenue Analysis

EGP mn

1H 2023

1H 2024

%

Total Revenue

1,514

2,069

37%

Pathology Revenue

1,451

1,966

35%

Radiology Revenue

63

104

65%

Contribution to Consolidated Results

Pathology Revenue

96%

95%

 

Radiology Revenue

4.2%

5.0%

 

Test Volume Analysis

Total Tests

15.1

16.5

10%

Revenue per Test Analysis

Total Revenue per Test

100

125

25%


 

 

Jordan (15.4% of Group revenue in 1H 2024)

In IDH's second largest market, Jordan, Biolab, recorded revenues of JOD 6.5 million, down 4% year-on-year, largely attributed to a 2% reduction in test volumes during 1H 2024 weighed down by the ongoing geopolitical instability in the region. The average revenue per test in Jordan remained relatively stable, showing only a 2% year-on-year decline during the period due to stringent pricing regulations. In EGP terms, Jordanian operations booked a 33% year-on-year increase, posting EGP 386 million in 1H 2024. Higher revenues in EGP terms reflected an 36% year-on-year increase in average revenue per test, due to the translation effect following the devaluation of the Egyptian pound.

 

On a quarterly basis, Biolab recorded JOD 3.3 million in Q2 2024, down 4% year-on-year. In EGP terms, it recorded EGP 221 million, up 51% year-on-year, due to the translation effect of a weaker Egyptian pound.

 

 

Detailed Jordan Performance Breakdown

Revenue Analysis

EGP mn

1H 2023

1H 2024

%

Total Revenue

290

386

33%

Test Volume Analysis

Total Tests ('000)

            1,180

            1,154

-2%

Revenue per Test Analysis

Total Revenue per Test

246

334

36%


 


â–²37%

 

 

 

 

 

 

Nigeria (1.5% of Group revenue in 1H 2024)

Echo-Lab, IDH's Nigerian subsidiary, posted a 37% year-on-year growth in revenues in local currency, reaching NGN 1,284 million during the first half of 2024. Growth was driven by a 65% increase in the average revenue per test. Meanwhile, test volumes in Nigeria were down 17% year-on-year, booking 113 thousand for 1H 2024, as inflationary pressures continued to significantly impact the population's purchasing power. In EGP terms, Echo-Lab booked EGP 39 million in revenues during 1H 2024, down 33% year-on-year. In addition to declining test volumes at the market, average revenue per test declined to EGP 341 during the six-month period, reflecting the translation effect from multiple devaluations of the Naira over the past year.

 

Quarterly operations in Nigeria generated NGN 682 million, marking a 45% increase compared to the previous year. In EGP terms, it amounted to EGP 23 million, reflecting a 15% decrease year-on-year.

 

 

Saudi Arabia (0.2% of Group revenue in 1H 2024)

IDH expanded its footprint into Saudi Arabia in the first quarter of 2024, launching two Biolab KSA locations in Riyadh, the capital. The first branch opened in January, and the second followed in March 2024. Saudi Arabia's promising demographics, rapidly expanding economy, and a fragmented diagnostics sector present considerable opportunity for IDH. The goal of this expansion is to become a comprehensive provider of clinical pathology diagnostic services, with a widespread network of branches across the Kingdom.

 

In its first operational half of the year, Biolab KSA posted revenues of SAR 339 thousand, performing 7 thousand tests and booking an average revenue per test of SAR 46. In Q2 2024 alone, the company's revenue reached SAR 281 thousand compared to SAR 58 thousand in the first quarter, driven by more than a threefold increase in the number of patients as well as a higher revenue per test.

 

Sudan

Due to the ongoing situation in Sudan, which started with the eruption of violent conflict in April 2023, IDH has decided to halt all operations in the country starting in Q1 2024. All 18 of IDH's branches in the country have now been indefinitely shut down.

 

 

 

 

 



 

Revenue Contribution by Country


1H 2023

1H 2024

Change

Egypt Revenue (EGP mn)

1,514

2,069

37%

      Pathology Revenue (EGP mn)

1,451

1,966

35%

          Radiology Revenue (EGP mn)

63

104

65%

Egypt Contribution to IDH Revenue

80.9%

82.8%

 

Jordan Revenue (EGP mn)

290

386

33%

Jordan Revenues (JOD mn)

6.8

6.5

-4%

Jordan Revenue Contribution to IDH Revenue

15.5%

15.4%

 

Nigeria Revenue (EGP mn)

58

39

-33%

Nigeria Revenue (NGN mn)

937

1,284

37%

Nigeria Contribution to IDH Revenue

3.1%

1.5%

 

Saudi Arabia Revenue (EGP k)

 

4,246

-

Saudi Arabia Revenue (SAR k)

-

339

-

Saudi Arabia Contribution to IDH Revenue

-

0.2%

 

 

Average Exchange Rate


1H 2023

1H 2024

Change

USD/EGP

30.7

42.0

37%

JOD/EGP

42.8

59.1

38%

NGN/EGP

0.1

0.03

-52%

SAR/EGP


11.2

N/A

 

Patients Served and Tests Performed by Country


1H 2023

1H 2024

Change

Egypt Patients Served (mn)

               3.7

               3.9

6%

Egypt Tests Performed (mn)

             15.1

             16.5

10%

Jordan Patients Served (k)

              183

              172

-6%

Jordan Tests Performed (k)

            1,180

            1,154

-2%

Nigeria Patients Served (k)

                69

                59

-14%

Nigeria Tests Performed (k)

              136

              113

-17%

Saudi Arabia Patients Served (k)

-

1

-

Saudi Arabia Tests Performed (k)

-

7

-

Total Patients Served (mn)

3.9

4.1

5%

Total Tests Performed (mn)

16.5

17.8

8%

 

Branches by Country


30 June 2023

30 June 2024

Change

Egypt

531

551

20

Jordan

27

26

-1

Nigeria

12

12

-

Saudi Arabia

-

2

2

Sudan[6]

18

-

-18

Total Branches

          588

          591

3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

 

 

Cost of Goods Sold

IDH reported cost of goods sold at EGP 1,573 million for the first half of the year, reflecting a 30% year-on-year increase. As a percentage of revenue, cost of goods sold accounted for 63.0% in 1H 2024, down from 64.9% in the same period last year. The reduction in the cost of goods sold as a percentage of revenue was mainly attributed to lower direct wages and salaries, as well as reduced depreciation expenses relative to revenue.

Cost of Goods sold Breakdown as a Percentage of Revenue


1H 2023

1H 2024

Raw Materials

21.5%

21.5%

Wages & Salaries

20.4%

19.5%

Depreciation & Amortisation

9.4%

8.5%

Other Expenses

13.5%

13.4%

Total

64.9%

63.0%

 

Raw material costs (34% of consolidated cost of goods sold in 1H 2024) the largest contributor to cost of goods sold in 1H 2024, totalled EGP 538 million, which represents a 34% increase year-on-year. As a percentage of revenue, raw materials stood at 21.5%, at par with 1H 2023.

Wages and salaries including employee share of profits (31% share of consolidated cost of goods sold) remained the second largest contributor to the cost of goods sold during the period, posting EGP 488 million, a 28% year-on-year increase. As a percentage of revenue, direct wages and salaries accounted for 19.5%, down from 20.4% in the same period last year. This decline is a direct result of IDH's optimized headcount compared to the previous year.

 

Direct Wages and Salaries by Region


1H 2023

1H 2024

Change

Egypt (EGP mn)

287

358

25%

Jordan (EGP mn)

78

109

40%

Jordan (JOD mn)

2

2

1%

Nigeria (EGP mn)

16

11

-32%

Nigeria (NGN mn)

272

358

32%

Saudi Arabia (EGP mn)

-

11

-

Saudi Arabia (SAR k)

-

978

-

 

Direct depreciation and amortization costs (14% of consolidated cost of goods sold) rose to EGP 212 million in 1H 2024, marking a 20% increase compared to the previous year. These costs represented 8.5% of revenues, down slightly from the figure recorded in 1H 2023. The rise in depreciation expenses is attributed to the expansion of IDH's branch network, which saw the addition of 7 new branches in Egypt over the past six months and 20 over the past year.

Other expenses (21% of consolidated cost of goods sold) recorded EGP 335 million in 1H 2024, reflecting a 32% increase year-on-year. As a percentage of revenues, these expenses remained steady at 13.4%, consistent with the same period last year. The main components of other expenses during this time were repair and maintenance fees, hospital contracts, and cleaning costs.

 

 

 

 

 

 

 

 

Gross Profit

The Company reported a gross profit of EGP 925 million for the first six months of the year, representing a 41% year-on-year increase compared to the previous year. The Gross Profit Margin (GPM) also improved to 37%, up from 35% in 1H 2023. Improved margins were achieved by reducing the cost of goods sold as a percentage of revenue, enhancing fixed asset utilization to lower depreciation, and optimizing headcount to decrease direct salary expenses relative to revenue.

 

Selling, General and Administrative (SG&A) Expenses

SG&A expenses for 1H 2024 totaled EGP 490 million, marking a 25% increase year-on-year. As a percentage of revenues, SG&A accounted for 20%, down from 21% in the same period last year. The rise in SG&A expenses was mainly due to the following factors:

·      Higher indirect wages and salaries reached EGP 173 million, a 23% increase compared to the previous year. This rise was driven by annual wage increases and the translation effect from Jordanian salaries as well as Saudi Arabian salaries due to a weakened EGP. However, indirect salaries and wages as a percentage of revenue decreased to 6.9% from 7.5% in 1H 2023, thanks to the optimization of IDH's headcount.

·      G&A other expenses rose by 38% year-on-year to EGP 175 million, primarily due to increased accounting and professional fees quoted in foreign currency impacted by a weaker EGP in the income statement.

Advertising expenses increased by 50% year-on-year to support the ramp-up of the company's operations in Saudi Arabia, which began in Q1 2024. These expenses now represent 43% of the company's total advertising costs.

Selling, General and Administrative Expenses


1H 2023

1H 2024

Change

Wages & Salaries

141

173

23%

Accounting and Professional Fees

70

103

47%

Market - Advertisement expenses

52

78

50%

Other Expenses

74

78

5%

Depreciation & Amortisation

20

21

5%

Impairment loss on trade and other receivable

23

17

-26%

Travelling and transportation expenses

14

18

28%

Other (income)/expense

3

(1)

N/A

Total

393

490

25%

 

EBITDA

During 1H 2024, IDH achieved an EBITDA of EGP 668 million, representing a 45% year-on-year increase, driven by the continued normalization of costs over the past 12 months. The EBITDA margin also improved to 27%, up from 25% in 1H 2023.

 

It is worth noting that EBITDA has been impacted by the recent expansion of IDH's operations in Saudi Arabia and the EGX delisting fees of EGP 99.4 million. Adjusting for non-recurring items, IDH would have recorded EBITDA of EGP 767 million, reflecting a margin of 30.7%.

 

EBITDA by Country

In Egypt, IDH reported an EBITDA of EGP 663 million for 1H 2024, a 63% increase compared to the previous year. The EBITDA margin rose significantly to 32%, up from 27% a year earlier. Improved profitability in the region was driven by a 3.0 percentage point reduction in SG&A expenses to 16%, primarily due to lower advertising costs.

 

In Jordan, IDH's subsidiary Biolab reported an EBITDA of JOD 1.5 million for 1H 2024, a 6% decrease from the previous year, with a margin of 23%, relatively stable to the margin in 1H 2023. In EGP terms, EBITDA amounted to EGP 89 million, marking a 29% year-on-year increase and a margin of 23%. The growth in EBITDA when converted to EGP is attributed to the devaluation of the EGP over the past year.

 

In Nigeria, ongoing economic challenges and rising inflation have impacted IDH's cost base, resulting in increased EBITDA losses for the first half of the year. In 1H 2024, EBITDA losses amounted to NGN 436 million, down from NGN 233 million in the same period of 2023. When converted to EGP, EBITDA losses were EGP 13 million in 1H 2024, an improvement from EGP 15 million the previous year. This reduction in EBITDA losses in EGP terms is due to the translation effect of the devaluation of the Nigerian Naira.

 

In Saudi Arabia, EBITDA losses amounted to SAR 6 million as the new venture starts to scale up its operations. In EGP terms, these EBITDA losses totalled EGP 70 million.

 

Regional EBITDA in Local Currency

 


1H 2023

1H 2024

Change

Egypt EBITDA

EGP mn

407

663

63%

Margin

 

27%

32%


Jordan EBITDA

JOD mn

1.6

1.5

-7%

Margin

 

24%

23%


Nigeria EBITDA

NGN mn

-233

-436

87%

Margin

 

-25%

-34%


Saudi Arabia EBITDA

SAR mn

-

-6.1

-

Margin

 

-

-


 

Interest Income / Expense

IDH's interest income recorded EGP 55 million, increasing considerably from EGP 30 million in 1H 2023. Higher interest income during the quarter period the increase in interest rates imposed by the CBE during the past 12 months.

 

Interest expense[7] stood at EGP 89 million, up 17% year-on-year in 1H 2024. The marginal increase in interest expenses were mainly driven by:

 

·      Higher interest on lease liabilities related to IFRS 16 due to the addition of new branches to IDH's network.

·      Higher interest expenses following the CBE decision to increase rates in December 2023 and February 2024. It is important to note that IDH's interest bearing debt [8] (excluding accrued interest) decreased to EGP 94 million as at 30 June2024, from EGP 111 million at year-end 2023. In 2023, as part of IDH's strategy to reduce foreign currency risk, the Company agreed with General Electric (GE) for the early repayment of its contractual obligation of USD 5.7 million. To finance the settlement, IDH utilized a bridge loan facility, with half the amount being funded internally, while the other half (amounting to EGP 55 million) was provided through a bridge loan by Ahly United Bank- Egypt (AUBE). Interest expenses related to the AUBE facility recorded EGP 11 million in Q2 2024. The bridge loan was fully settled in Q2 2023.

·      Fast track payments worth EGP 3.7 million, which encompass discounts provided for the rapid payment of receivables in 1H 2024.

 

 

 

Interest Expense Breakdown

EGP mn

1H 2023

1H 2024

Change

Interest on Lease Liabilities (IFRS 16)

45.2

53.8

19%

Interest Expenses on Leases

13.7

12.6

-8%

Interest Expenses on Borrowings[9]

11.6

12.2

5%

Bank Charges

5.4

6.3

18%

Fast Track Payment

-

3.7

-

Total Interest Expense

75.9

88.6

17%

 

Foreign Exchange

IDH booked a foreign exchange gain of EGP 297 million in 1H 2024, up from EGP 102 million during the same period of the previous year. The foreign exchange gain was due to intercompany balances revaluation.

 

Taxation

Tax expenses, including income and deferred tax, rose to EGP 207 million during 1H 2024, up from EGP 98 million one year prior. IDH's effective tax rate slightly declines to 30% in 1H 2024. The decline in effective tax rate for the first half compared to IDH's historical averages is primarily due to the increase in foreign exchange gain recorded during the periods as a result of intercompany transactions. It is important to highlight that there is no tax payable for IDH's two holding-level companies.

 

Taxation Breakdown by Region

EGP Mn

1H 2023

1H 2024

Change

Egypt

91.4

194.9

113%

Jordan

6.6

11.5

74%

Nigeria

-0.1

0.0

N/A

KSA

-

0.9

-

Total Tax Expenses

98.4

207.3

111%

 

Net Profit

IDH booked a net profit of EGP 480 million in 1H 2024, a 127% year-on-year increase due to the substantial increase in foreign exchange gain from intercompany transactions. Meanwhile, the Company's Net Profit Margin (NPM) came in at 19% compared to 11% in 1H 2023.

 

When accounting for contributions from foreign exchange gains during both periods, IDH booked an adjusted net profit of EGP 183 million in 1H 2024, growing 68% year-on-year from EGP 109 million during the same period of last year. The Company's adjusted net profit margin stood at 7% during the period, up from 6% in 1H 2023.

 

 

 

 

 

 

 

ii.  Balance Sheet Analysis

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets

Property, Plant and Equipment

IDH recorded property, plant and equipment (PPE) cost of EGP 2,921 million as of 30 June 2024, up from EGP 2,554 million at the end of 2023. The increase in CAPEX as a share of revenue during the past six-month period is largely due to the addition of new branches, renovation of existing branches, improvements of IDH's headquarters (constituting 2.5% of revenues), in addition to the translation effect related to Jordan, Nigeria, and Saudi Arabia (comprising 12.2% of revenues).

 

Total CAPEX Addition Breakdown - 1H 2024


EGP mn

% of Revenue

Leasehold Improvements/new branches

60.9

2.4%

Al-Borg Scan Expansion

2.4

0.1%

Total CAPEX Additions Excluding Translation

63.3

2.5%

Translation Effect

303.6

12.2%

Total CAPEX Additions

366.9

14.7%

 

Trade Receivables and Provisions

Net trade receivables at 30 June 2024 amounted to EGP 753 million, up 32% year-to-date. Meanwhile, IDH's net receivables' Days on Hand (DoH) booked 146 days, up from 134 days at the end of 2023.

Provision for doubtful accounts in 1H 2024 was recorded at EGP 17 million, a decrease from EGP 23 million in the previous year. This reduction is attributed to improved economic conditions, increased stability, and reduced inflation, which have led to a noticeable increase in collected amounts during the accounting period.

 

Inventory

At 30 June 2024, IDH booked an inventory balance of EGP 462 million, up 23% compared to the end of 2023. Meanwhile, Days Inventory Outstanding (DIO) increased to 148 days, from 133 days at 31 December 2023. Increased DIO highlights management's proactive strategy of accumulating inventory to hedge against inflationary pressures.

Cash and Net Debt

Cash balances and financial assets at amortised cost at 30 June 2024 reached EGP 1,254 million, up from EGP 835 million at year-end 2023.

 

EGP million

31 Dec 2023

30 June 2024

Treasury Bills

133

256

Time Deposits 

289

322

Current Accounts

391

624

Cash on Hand

21

52

Total

835

1,254

 

IDH's net debt[10] balance came in at EGP 35 million as of the end of 1H 2024, down from EGP 361 million as at year-end 2023.

 

 

 

 

EGP million

31 Dec 2023

30 June 2024

Cash and Financial Assets at Amortised Cost[11]

835

1,254

Lease Liabilities Property*

(828)

(944)

Total Financial Liabilities (Short-term and Long-term)

(240)

(236)

Interest Bearing Debt ("Medium Term Loans")

(128)

(109)

Net Debt Balance

 (361)

 (35)

Note: Interest Bearing Debt includes accrued interest for each period.

*If excluding Lease Liabilities Property (IFRS 16), IDH would have recorded net cash of EGP 909 million

 

Lease liabilities and financial obligations on property came in at EGP 944 million at the end of Q2 2024, with the increase attributed to the translation effect of JOD-denominated liabilities in Jordan following the devaluation of the EGP in early 2024.

Meanwhile, financial obligations related to equipment stood at EGP 236 million as at 30 June 2024, with the increase attributable to increases in USD-linked contracts with equipment suppliers following the devaluation of the Egyptian Pound.

Finally, interest bearing debt[12] (excluding accrued interest) reached EGP 94 million at the end of Q2 2024, down from EGP 111 million at year-end 2023.

 

Liabilities

Trade Payable[13]

Trade payable as of 30 June 2024 stood at EGP 283 million, up from EGP 272 million at the end of 2023. Meanwhile, Days Payable Outstanding (DPO) came in at 98 days, down from 113 days at 31 December 2023.

Put Option

The put option current liability stood at EGP 456 million as at 30 June 2024, up from EGP 314 million at 31 December 2023, and is related to both:

·      The option granted in 2011 to Dr. Amid, Biolab's CEO, to sell his stake (40%) to IDH. The put option is in the money and exercisable since 2016 and is calculated as 7 times Biolab's LTM EBITDA minus net debt.

·      The option granted in 2018 to the International Finance Corporation from Dynasty - shareholders in Echo Lab - and it is exercisable in 2024. The put option is calculated based on fair market value (FMV).

 

 

The put option non-current liability amounted to EGP 42 million at the end of 1H 2024, up from EGP 43 million at 31 December 2023, and is related to the option granted in 2022 to Izhoor, IDH, and Biolab as part of their JV agreement in Saudi Arabia. The option allows the non-defaulting party, at its sole and absolute discretion, to serve one or more written notices to the defaulting party. The notices enable the non-defaulting party to buy the defaulting party's shares at the fair price, sell its shares to the defaulting party at the fair price, or request the dissolution and liquidation of the JV company. It is important to note that the put option, which grants these rights to the non-defaulting party, does not have a specified expiration date.

 

 

 

 

 

Principle 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.

In the short term, other factors influencing the economic landscape include rising geopolitical stability, inflationary pressures in Egypt and Nigeria, and currency devaluation in both countries. These factors may weigh on the cost base in the near future.

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

28 August 2024

 

 

 

 

 

 

 

 

 

INTEGRATED DIAGNOSTICS HOLDINGS plc - "IDH"

AND ITS SUBSIDIARIES

 

 

 

 

 

 

Consolidated Interim Financial Statements

for the quarter ended 30 June 2024

 

 



 

Consolidated statement of financial position as at 30 June 2024

 


Notes

30 June 2024

 

31 December

2023

 

 

 

EGP'000

 

EGP'000

 

 

 

(Unaudited)

 

(Audited)

 

 Assets

 

 

 

 

 

Non-current assets

 




 

Property, plant and equipment

4

1,489,713


1,414,725

 

Intangible assets and goodwill

5

1,783,585


1,710,183

 

Right of use assets

6

778,462


683,025

 

Total non-current assets


4,051,760


3,807,933

 

 

 

 

 

 

 

Current assets





 

Inventories

 

462,465


374,650

 

Trade and other receivables

8

960,109


727,235

 

Financial assets at fair value through profit and loss

7

40,134


25,157

 

Financial assets at amortized cost

9

456,902


161,098

 

Cash and cash equivalents

10

797,347


674,253

 

Total current assets


2,716,957


1,962,393

 

Total assets

 

6,768,717

 

5,770,326

 

Equity

 

 

 

 

 

Share capital

 

1,072,500


1,072,500

 

Share premium reserve


1,027,706


1,027,706

 

Capital reserves


(314,310)


(314,310)

 

Legal reserve


51,641


51,641

 

Put option reserve

12

(497,838)


(356,583)

 

Translation reserve


(364,254)


(82,341)

 

Retained earnings


1,810,855


1,280,287

 

Equity attributable to the owners of the Company


2,786,300


2,678,900

 

Non-controlling interests

 

765,517

 

421,888

 

Total equity


3,551,817


3,100,788

 

 

 

 

 

 

 

 





 






 

Non-current liabilities





 

Provisions


20,635


17,758

 

Borrowings

13

53,972


67,465

 

Other financial obligations

14

959,217


891,350

 

Non-current put option liability

12

41,733


42,786

 

Deferred tax liabilities

19-C

433,912


374,729

 

Total non-current liabilities


1,509,469

 

1,394,088

 

Current liabilities


 

 

 

 

Trade and other payables

11

816,631


637,761

 

Other financial obligations

14

220,469


176,704

 

Current put option liability

12

456,105


313,796

 

Borrowings

13

40,105


43,680

 

Current tax liabilities


174,121


103,509

 

Total current liabilities


1,707,431

 

1,275,450

 

Total liabilities

 

3,216,900

 

2,669,538

 

Total equity and liabilities

 

6,768,717

 

5,770,326

 

 

 

 

 

 

 

 

The accompanying notes form an integral part of these consolidated financial statements.





 

This condensed consolidated interim financial information was approved and authorised for issue by the Board of Directors and signed on their behalf on 28 August 2024 by:

 

 

 

 


Dr. Hend El Sherbini


Hussein Choucri

Chief Executive Officer

 

Independent Non-Executive Director

 

 

 











 

Consolidated income statement for the quarter ended 30 June 2024

 


Notes

30 June

2024

 

30 June

2023

 


EGP'000

 

EGP'000

 







(Unaudited)


(Unaudited)

Revenue

21

        2,497,840


          1,871,942

Cost of sales


      (1,572,938)


         (1,214,008)

Gross profit

 

           924,902

 

             657,934

 





Marketing and advertising expenses


         (142,075)


           (112,473)

Administrative expenses

16

         (331,531)


           (254,340)

Impairment loss on trade and other receivable


           (17,198)


             (23,269)

Other (expenses)/income


                 838


             (14,763)

Operating profit


           434,936

 

             253,089

 





Net fair value losses on financial assets at fair value

17

(10,474)













Finance costs

18

           (88,636)


             (75,879)

Finance income

18

           351,553


             132,234

Net finance (costs)/income


           262,917


               56,355

Profit before income tax

 

           687,379

 

             309,444

 





Income tax expense

19-B

         (207,310)


             (98,394)

Profit for the period

 

           480,069

 

             211,050

 





Profit attributed to:

 




      Owners of the Company


           530,568


             223,590

      Non-controlling interests


           (50,499)


             (12,540)



           480,069

 

             211,050

Earnings per share

21




Basic and diluted


0.88

 

0.37
















 

The accompanying notes form an integral part of these consolidated financial statements.

 

 


 

 

 

Consolidated statement of comprehensive income for the quarter ended 30 June 2024



30 June

2024

 

30 June

2023

 


EGP'000 

 

EGP'000 

 


(Unaudited)

 

(Unaudited)

Net profit for the period

 

             480,069

 

            211,050

Items that may be reclassified to profit or loss:

Exchange difference on translation of foreign operations


               64,160


             (10,151)

Other comprehensive income for the period, net of tax

 

               64,160


             (10,151)

Total comprehensive income for the period


             544,229


            200,899






Attributable to:

 

             248,655

 

            114,652

Owners of the Company

 

             295,574

 

              86,247

Non-controlling interests


             544,229


            200,899

 

 

 




 

Consolidated statement of cash flows for the quarter ended 30 June 2024


Note

30 June

2024

 

30 June

2023

 


EGP'000

 

EGP'000

 


(Unaudited)

 

(Unaudited)

Cash flows from operating activities

 




Profit before tax


            687,379


         309,444

Adjustments for:

 




Depreciation of property, plant and equipment

4

            146,071


         126,755

Depreciation of right of use assets

6

             82,201


           65,632

Amortisation of intangible assets

5

               4,595


             3,872

Interest income

17

            (54,760)


          (30,075)

Interest expense

17

             78,554


           70,496

Bank Charges


             10,081


             5,383

Gain on disposal of Property, plant and equipment


               2,651


              (603)

Impairment in trade and other receivables


             17,198


           23,269

Equity settled financial assets at fair value


            (14,977)


            (5,526)

ROU Asset/Lease Termination


              (1,575)


              (348)

Unrealised foreign currency exchange (gains) losses

17

          (296,793)


        (102,159)

FV Through P&L


             10,474


                    -

Change in Provisions


               2,877


           12,644

Change in Inventories


            (69,932)


          (90,933)

Change in trade and other receivables


          (168,206)


        (103,219)

Change in trade and other payables


            101,474


           33,226

Net cash generated from operating activities

 

            537,312

 

         317,858

 

 




Tax paid during period

 

            (81,883)


        (157,734)

Net cash generated from operating activities

 

            455,430


         160,124

 

 




Cash flows from investing activities

 




Interest received on financial asset at amortised cost


             54,925


           30,494

Payments for the purchase of financial assets at amortized cost


          (333,179)


        (150,423)

Proceeds for the sale of financial assets at amortized cost


             55,391


         138,815

Payments for acquisition of property, plant and equipment

4

            (70,319)


        (164,174)

Payments for acquisition of intangible assets

5

                 (880)


            (1,401)

Proceeds from sale of Property, plant and equipment


               1,067


             1,874

Payment for purchase of global depository receipts (short-term investment)

17

          (151,710)


                    -

Proceeds from sale of global depository receipts (short-term investments)

17

            141,236


                    -

Net cash flows generated (used in) from investing activities

 

          (303,469)

 

        (144,815)

 





Cash flows from financing activities

 




Proceeds from borrowings


               6,117


           54,936

Repayments of borrowings


            (23,185)


          (63,418)

Interest paid


            (77,763)


          (67,735)

Bank charges paid


            (10,081)


            (5,383)

Payment of finance lease liabilities


            (99,617)


        (161,410)

Cash injection by owner of non-controlling interest


             48,055


                    -

Net cash flows used in financing activities

 

          (156,474)

 

        (243,010)

 





Net (decrease) increase in cash and cash equivalents

 

              (4,513)

 

        (227,701)

Cash and cash equivalents at the beginning of the year


            674,253


         648,512

Effect of exchange rate


            127,607


           54,769

Cash and cash equivalents at the end of the period

10

            797,347

 

         475,580

 





 

 

Non-cash investing and financing activities disclosed in other notes are:

·      acquisition of right-of-use assets - note 6

·      Property, plant and equipment - note 4

·      Put option liability - note 12

 

The accompanying notes on pages 7 - 22 form an integral part of these consolidated financial statements.   

 









Consolidated statement of changes in equity for the quarter ended 30 June 2024

 

EGP'000

Share Capital 

Share premium reserve

Capital reserves

Legal reserve*

Put option reserve

Translation reserve

Retained earnings

Total attributed to
 the owners of the
 Company

Non-Controlling interests

Total Equity

Balance at 1 January 2023

 1,072,500

  1,027,706

    (314,310)

51,641

  (356,583)

     (82,341)

   1,280,287

  2,678,900

   421,888

  3,100,788

Profit for the period

               -

               -

                -

              -

              -

               -

      530,568

     530,568

    (50,499)

     480,069

Other comprehensive income for the period

               -

               -

                -

              -

              -

   (281,913)

                -

    (281,913)

   346,073

       64,160

Total comprehensive income at 31 March 2024

               -

               -

                -

              -

              -

   (281,913)

      530,568

     248,655

   295,574

     544,229

Contributions and distributions











Movement in put option liabilities

               -

               -

                -

              -

  (141,255)

               -

                -

    (141,255)

              -

    (141,255)

Non-controlling interests cash injection in subsidiaries during the period

               -

               -

                -

              -

              -

               -

                -

                -

     48,055

       48,055

Total contributions and distributions

               -

               -

                -

              -

  (141,255)

               -

                -

    (141,255)

     48,055

      (93,200)

Balance at 30 June 2024 (Unaudited)

 1,072,500

  1,027,706

    (314,310)

     51,641

  (497,838)

   (364,254)

   1,810,855

  2,786,300

   765,517

  3,551,817

 

 

 

 

 

 

 

 

 

 

 

Balance at 1 January 2023

 1,072,500

  1,027,706

    (314,310)

51,641

  (490,695)

       24,173

      783,081

  2,154,096

   292,885

  2,446,981

Profit for the period

               -

               -

                -

              -

              -

               -

      223,590

     223,590

    (12,540)

     211,050

Other comprehensive loss for the period

               -

               -

                -

              -

              -

   (108,938)

                -

    (108,938)

     98,787

      (10,151)

Total comprehensive income at 31 March 2023

               -

               -

                -

              -

              -

   (108,938)

      223,590

     114,652

     86,247

200,899

Transactions with owners of the Company

 










Contributions and Distributions

 










Movement in put option liabilities

               -

               -

                -

              -

   204,543

               -

                -

     204,543

              -

     204,543

Total contributions and distributions

               -

               -

                -

              -

   204,543

               -

                -

     204,543

              -

     204,543

Balance at 30 June 2023 (Unaudited)

 1,072,500

  1,027,706

    (314,310)

     51,641

  (286,152)

     (84,765)

   1,006,671

  2,473,291

   379,132

  2,852,423

 

 

 

 

 

 

 

 

 

 

 

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


The accompanying notes on pages 7 - 22 form an integral part of these consolidated financial statements.




 

(In the notes all amounts are shown in Egyptian Pounds "EGP'000" unless otherwise stated)

1.         Reporting entity

Integrated Diagnostics Holdings plc "IDH" or "the Company" is a Company which was incorporated in Jersey on 4 December 2014 and established according to the provisions of the Companies (Jersey) Law 1991 under Registered No. 117257.  These condensed consolidated interim financial information as of and for the six months ended 30 June 2024 comprise the Company and its subsidiaries (together referred as the 'Group'). The Company is a dually listed entity, in both London Stock Exchange (since 2015) and in the Egyptian Exchange (during May 2021).

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

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

This condensed consolidated interim financial information was approved for issue by the Directors of the Company on 28 August 2024.

 

2.         Basis of preparation

 

A)        Statement of compliance

These condensed consolidated interim financial information have been prepared as per IAS 34 'Interim Financial Reporting' (As adopted by the IASB). as the accounting policies adopted are consistent with those of the previous financial year ended 31 December 2023 and corresponding interim reporting period.

These condensed consolidated interim financial information do not include all the information and disclosures in the annual consolidated financial Statement, and should be read in conjunction with the financial Statement published as at and for the year ended 31 December 2023 which is available at www.idhcorp.com,. In addition, results of the six months period ended 30 June 2024 are not necessary indicative for the results that may be expected for the financial year ending 31 December 2024.

 

B)        Basis of measurement

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

C)        Functional and presentation currency

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

 

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

 

3.         Significant accounting policies

In preparing these condensed consolidated interim financial information, the significant judgments made by the management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that were applied to the consolidated financial statements for the year ended 31 December 2023."The preparation of these condensed consolidated interim financial information requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expense. Actual results may differ from these estimates. Information about significant areas of estimation uncertainty and critical judgement in applying accounting policies that have the most significant effect on the amount recognised in the condensed consolidated interim financial statement is described in note 3.2 of the annual consolidated financial statements published for the year ended 31 December 2023. In preparing these condensed consolidated interim financial information, the significant judgments made by the management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that were applied to the consolidated financial statements for the year ended 31 December 2023".

 


4.   Property, plant and equipment

 


Land & buildings

Medical, electric
 & information
system equipment

Leasehold
improvements

Fixtures, fittings & vehicles

Project under construction

Payment on account

Total

Cost

 







At 1 January 2024

460,869

1,254,894

644,956

155,168

38,227

10,882

2,564,996

Additions

-

44,180

12,149

7,689

6,301

-

70,319

Disposals

-

(2,741)

(2,926)

(1,366)

-

-

(7,033)

Exchange differences

24,665

122,127

110,468

40,926

5,375

-

303,561

Transfers

-

-

30,034

-

(30,034)

-

-

Balance at 30 June 2024

485,534

1,418,460

794,681

202,417

19,869

10,882

2,931,843

Depreciation

 







At 1 January 2024

69,311

655,649

353,808

71,503

-

-

1,150,271

Depreciation for the period

4,200

79,895

52,211

9,767

-

-

146,073

Disposals

-

(1,998)

(408)

(909)

-

-

(3,315)

Exchange differences

2,499

73,725

50,501

22,376

-

-

149,101

Balance at 30 June 2024

76,010

807,271

456,112

102,737

-

-

1,442,130

Net book amount

 

 

 

 

 

 

 

At 30 June 2024 (Unaudited)

409,524

611,189

338,569

99,680

19,869

10,882

1,489,713

At 31 December 2023

391,558

599,245

291,148

83,665

38,227

10,882

1,414,725


5.  Intangible assets and goodwill

 

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


Goodwill

Brand name

Software

Total

Cost

 

 

 

 

Balance at 1 January 2024

1,304,967

403,461

99,358

1,807,786

Additions

-

-

880

880

Disposals

-

-

66

66

Exchange differences

50,375

22,093

11,995

84,463

Balance at 30 June 2024

1,355,342

425,554

112,299

1,893,195


 

 

 

 

Amortisation

 

 

 

 

Balance at 1 January 2024

17,718

392

79,493

97,603

Amortisation

-

-

4,594

4,594

Disposals

-

-

66

66

Exchange differences

(127)

37

7,437

7,347

Balance at 30 June 2024

17,591

429

91,590

109,610


 

 

 

 

Net book amount

 

 

 

 

At 30 June 2024(Unaudited)

1,337,751

425,125

20,709

1,783,585

At 31 December 2023

1,287,249

403,069

19,865

1,710,183

 

Goodwill impairment reviews are undertaken annually or more frequently if events or changes in circumstances indicate a potential impairment. No indicators of impairment have been identified during the six months ended 30 June 2024.  

 





 

6.     Right-of-use assets

 

 

30 June 2024

 

31 December 2023

 

(Unaudited)

 

(Audited)

Balance at 1 January

683,025


622,975

Addition for the period / year

46,091


157,482

Depreciation charge for the period / year

(82,201)


(134,033)

Terminated contracts

(4,087)


(5,170)

Exchange differences

135,634


41,771

Balance

 778,462

 

683,025

 

7.     Financial asset at fair value through profit or loss

 


30 June 2024

 

31 December 2023

 

(Unaudited)


(Audited)

Current equity investments

40,134


25,157

 

40,134

 

25,157

 

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

 

-              Ownership percentage in JSC Mega Lab at the transaction date on April 8, 2019, and as of June 30, 2024, was 8.25%.

-              On April 8, 2019, Al Mokhabariyoun Al Arab (Biolab) has signed a Shareholder Agreement with JSC Mega Lab and JSC Georgia Healthcare Group (CHG), whereas, BioLab Shall have a put option, exercisable within 12 months immediately after the expiration of five(5) year period from the signing date, which allows BioLab stake to be bought out by CHG at a price of the equity value being USD 400,000 plus 15% annual Interred Rate of Return (IRR).

 

-              If JCI accreditation is not obtained, immediately after the expiration of the 12 months period, CHG shall have a call option (the Accreditation Call option), exercisable within 6 months period, allowing CHG to purchase BioLab's Shares in JSC Mega Lab at a price of the equity value of USD 400,00.00 plus the 20% annual IRR.

 

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

 

-              In case the Management Agreement or the Purchase Agreement and/or the Service level Agreement is terminated/cancelled within 6 months period from the date of such termination/cancellation, CHG shall have a call option, which allows the CHG to purchase Biolab's Strake in JSC Megalab having value of USD 400,000.00 plus 20% annual Interred Rate of Return (IRR).

 

8.     Trade and other receivables

 

 

30 June 2024

 

31 December 2023

 

(Unaudited)

 

(Audited)

Trade receivables - net*

753,130


569,738

Prepayments

73,975


42,185

Due from related parties note (15)

3,230


5,037

Other receivables - net*

128,184


108,521

Accrued revenue

1,590


1,754


960,109

 

727,235

 

* The expected credit loss related to trade and other receivables was EGP 216,111K (2023: EGP 191,580K). Below show the movements in the provision for impairment of trade and other receivables:

 

 


30 June 2024

31 December 2023

 

(Unaudited)

(Audited)

Balance at 1 January

191,580

145,586

Charge for the period

17,200

51,255

Exchange differences

7,331

(5,261)

 

216,111

191,580



 

9.      Financial assets at amortised cost

 

 

30 June 2024

 

31 December 2023

 

(Unaudited)

 

(Audited)

Term deposits (more than 3 months)

308,845

 

49,244

Treasury bills (more than 3 months)

148,057


111,854


456,902

 

161,098

 

The maturity date of the treasury bills and Fixed-term deposits are between more than 3 months and 12 months and have average interest rates treasury bills of EGP 26.51% and Fixed-term deposits more than 3 months have average interest rates of EGP and JOD 5.46% and 5.38% respectively.

 

10.    Cash and cash equivalents

 

 

30 June 2024

 

31 December 2023

 

(Unaudited)

 

(Audited)

Cash at banks and on hand

675,846


412,561

Treasury bills (less than 3 months)

108,058


21,461

Term deposits (less than 3 months)

13,443


240,231

 

797,347

 

674,253

 

Cash at banks earns interest at floating rates based on daily bank deposit rates. Short-term deposits and treasury bills are made for varying periods of between one day and six months, depending on the immediate cash requirements of the Group, and earn interest at the respective weighted average rate. Of the above Short-term deposits relate to amounts held in Egypt with a weighted average rate of 17.71% (2023: 16.40%), Short-term deposits relate to amounts held in Jordan with a weighted average rate of 5% (2023: 5%) and Short-term deposits relates to amounts held in Nigeria with a weighted average rate of 5.6% (2023:5.6%). Treasury bills are denominated in EGP and earn interest at a weighted average rate of 22.24% (2023: 24.95%) per annum.   

 



 

11. Trade and other payables

 

 

30 June 2024

 

31 December 2023

 

(Unaudited)

 

(Audited)

Trade payable

283,469


271,741

Accrued expenses

271,318


178,499

Due to related parties note (15)

8,191


5,962

Other payables

163,455


112,750

Deferred revenue

80,517


59,918

Accrued finance cost

9,681


8,891


816,631

 

637,761

 

12. Put option liability

 


30 June 2024


31 December 2023


(Unaudited)


(Audited)

Current put option - Biolab Jordan

444,288


301,383

Current put option - Eagle Eye-Echo scan

11,817


12,413


456,105

 

313,796

 


30 June2024


31 December 2023


(Unaudited)


(Audited)

Non-current put option - Medical Health Development

41,733


42,786


41,733


42,786





 

12.    Put option liability (continued)

 

Put option - Biolab Jordan

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

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

The option is calculated at seven times EBITDA of the last 12 months minus Net Debt and its exercisable in whole starting the fifth anniversary of completion of the original purchase agreement, which fell due in June 2016. The vendor has not exercised this right at 30 June 2024. It is important to note that the put option liability is treated as current as it could be exercised at any time by the NCI. However, based on discussions and ongoing business relationships, there is no expectation that this will happen in next 18 months. The option has no expiry date

Put option - Eagle Eye-Echo scan

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

Put option - Medical Health Development

Based on the agreement made on October 27th, 2022, between Business Flower Holding LLC, Integrated Diagnostics Holdings plc and Al Makhbariyoun Al Arab there is a clause that in cases of bankruptcy and defaulting, a non-defaulting party is entitled to implement any of the following options for a defaulting party's share without reference to it:

(A) sell to the Non-Defaulting Party its Shares at the Fair Price of such Shares.

(B) buy the Non-Defaulting Party's Shares at the Fair Price of such Shares.

(C) requesting the dissolution and liquidation of the Company.

It's important to note that the put option, which grants these rights to the non-defaulting party, does not have a specified expiration date.

 

 



 

13.   Loans and borrowings

 

 

Currency

Nominal interest rate

Maturity

30 June 2024


31 December 2023

 



(Unaudited)


(Audited)

AUB ـــ BANK

EGP

CBE corridor rate*+1%

26 January 2027

80,958


94,451

AUB - BANK

EGP

Secured 5%

3 April 2025

13,119


13,121

Bank:  Sterling BANK

NGN

Secured 22%

26 May 2024

-


3,573





94,077

 

111,145

Amount held as:




 



Current liability




40,105


43,680

Non- current liability




53,972


67,465





94,077

 

111,145

 

A)            In July 2018, AL-Borg lab, one of IDH subsidiaries, was granted a medium-term loan amounting to EGP 130.5m from Ahli United Bank "AUB Egypt" to finance the investment cost related to the expansion into the radiology segment. As at 30 June 2024 only EGP 124.9 M had been drawn down from the total facility available with 43.9 M had been repaid. The loan will be fully repaid by January 2027.

 

The loan contains the following financial covenants which if breached will mean the loan is repayable on demand:

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

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

 

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

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

 

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

 

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

 

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

"Current ratios": Current assets divided current liabilities.

 

The terms and conditions of outstanding loans are as follows:

 

*          As at 30 June 2024 corridor rate 28.25% (2023: 20.25%) 

 

AL- Borg company didn't breach any covenants for MTL agreements. 

 

14.    Other financial obligations

 


30 June 2024


31 December 2023


(Unaudited)


(Audited)

Financial liability- laboratory equipment

236,046


240,015

Lease liabilities building

943,640


828,039


1,179,686

 

1,068,054

 

The un-discounted financial obligations for the laboratory equipment and building are as follows:

 


30 June 2024

 

Minimum payments

 

Interest

 

Principal


(Unaudited)

 

(Unaudited)

 

(Unaudited)

Less than one year

345,934

 

125,465

 

220,469

Between one and five years

1,060,303

 

296,265

 

764,038

More than five years

256,100

 

60,921

 

195,179


1,662,337

 

482,651

 

1,179,686

 


 

 

31 December 2023

 

Minimum payments

 

Interest

 

Principal


(Audited)


(Audited)


(Audited)

Less than one year

291,342


114,638


176,704

Between one and five years

1,054,902


295,586


759,316

More than Five years

166,965


34,931


132,034


1,513,209


445,155


1,068,054

 

 

Amounts recognised in profit or loss:


30 June

 

2024

 

2023


(Unaudited)


(Unaudited)

Interest on lease liabilities

53,829


45,221

Expenses related to short-term lease

3,200


5,191

 



 

15.      Related party transactions

 

The significant transactions with related parties, their nature volumes and balance during the period
30 June 2024 are as follows:







30 June 2024

Related Party

 

Nature of transaction

 

Nature of relationship

 

Transaction amount of the year


Amount due from / (to)

 

 






EGP'000


EGP'000

 









International Fertility (IVF)**


Expenses paid on behalf


Affiliate


11

 

11

H.C Security


Provide service


Entity owned by Company's board member


(56)

 

(149)







 

 

 

Life Health Care


Provided service


Entity owned by Company's CEO


(2,778)

 

595

 






 

 

 

Dr. Amid Abd Elnour


Put option liability


Bio. Lab C.E.O and shareholder


(142,905)

 

(444,288)

 


Current account


Bio. Lab C.E.O and shareholder


831

 

365

 






 

 

 

International Finance corporation (IFC)


Put option liability


Echo-Scan shareholder


596

 

(11,817)







 

 

 







 

 

 







 

 

 

Hena Holdings Ltd


shareholders' dividends deferral agreement


shareholder


 (1,647)

 

 (4,610)







 

 

 

Actis IDH Limited


shareholders' dividends deferral agreement


shareholder


 (1,357)

 

 (3,797)

Business Flowers Holding


Put option liability


shareholder


(4,986)

 

(41,733)

 






 

 

(505,423)

 

 

 

 

 

 

 

15.      Related party transactions (continued)

 







31 December 2023

Related Party

 

Nature of transaction

 

Nature of relationship

 

Transaction amount of the year


Amount due from / (to)

 

 






EGP'000


EGP'000

AL borg Scan (S.A.E)*


Expenses paid on behalf


Affiliate


(351)


-

 









International Fertility (IVF)**


Expenses paid on behalf


Affiliate


(1,771)


-

 









H.C Security


Provide service


Entity owned by Company's board member


6


(93)










Life Health Care


Provided service


Entity owned by Company's CEO


855


3,373

 









Dr. Amid Abd Elnour


Put option liability


Bio. Lab C.E.O and shareholder


138,312


(301,383)

 


Current account


Bio. Lab C.E.O and shareholder


19,542


(466)

 









International Finance corporation (IFC)


Put option liability


Echo-Scan shareholder


38,587


(12,413)










International Finance corporation (IFC)


Current account


Echo-Scan shareholder


623


-










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


Rental income


Entity owned by Company's CEO


217


1,664



Medical Test analysis




591


-










HENA HOLDINGS LTD


shareholders' dividends deferral agreement


Shareholder


(590)


(2,963)










ACTIS IDH LIMITED


shareholders' dividends deferral agreement


Shareholder


(485)


(2,440)










Business Flowers Holding


Put option liability


Shareholder


-


(42,786)

 








(357,507)

 

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

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

 

15.       Related party transactions (continued)

 

Compensation of key management personnel of the Group

 

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


30 June 2024

 

30 June 2023

 

(Unaudited)


(Unaudited)

Short-term employee benefits

43,463


22,203


43,463

 

22,203

 

16.    General and administrative expenses


For the six months ended
30 June

 

2024

 

2023

 





(Unaudited)


(Unaudited)

Wages and salaries

135,287


107,211

Depreciation

16,726


16,640

Amortisation

4,134


3,089

Consulting fees

102,942


68,354

Other expenses

72,442


59,046

Total

331,531

 

254,340

 

17. Fair value losses on financial assets at fair value through profit or loss

 

During the two quarter of 2024, Integrated Diagnostics Holdings Limited company invested in Global Depositary Receipt (GDR) tradable in stock exchanges, where the companies purchased 1.97 million shares, EGP 152 M from the Egyptian Stock Exchange and sold them during the same period on the London Stock exchange at USD 2.99 M excluding the transaction cost.

 





 

 

 

Number of shares'000

2023

 




EGP'000

 




(Unaudited)

listed equity securities

Shares bought

1,970


(151,710)

Shares sale

1,970


141,236





(10,474)

 

18.    Net finance cost

 


For the six months ended
30 June

 

2024

 

2023

Finance income

(Unaudited)


(Unaudited)

Interest income

54,760


30,075

Net foreign exchange gain

296,793


102,159

Total finance income

351,553

 

132,234


 



Finance cost

 



Fast Track Payment

(3,736)


-

Bank charges

(6,346)


(5,383)

Interest expense

(78,554)


(70,496)

Total finance cost

(88,636)

 

(75,879)

Net finance income

262,917

 

56,355

 

The increase is mainly driven by the change of exchange rate between EGP and other currencies that took place in June 2023 which resulted into foreign exchange gain during the period ended 30 June 2024.

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 six months ended 30 June

 

2024

 

2023

 

(Unaudited)


(Unaudited)

Current tax:

 



Current period

(149,628)


(87,568)

Current tax

(149,628)

 

(87,568)

Deferred tax:

 



Deferred tax arising on undistributed reserves in subsidiaries

(55,063)


(10,907)

Deferred tax relating to origination and reversal of temporary differences

(2,619)


81

Total Deferred tax expense

(57,682)

 

(10,826)

Tax expense recognised in profit or loss

(207,310)

 

(98,394)

 

C)        Deferred tax liabilities

Deferred tax relates to the following:  


30 June

2024

 

31 December

2023

 

(Unaudited)

 

(Audited)

Property, plant and equipment

(35,812)


(39,552)

Intangible assets

(119,068)


(111,033)

Undistributed reserves from Group subsidiaries

(281,938)


(226,875)

Provisions

2,906


2,731

Net deferred tax liabilities

(433,912)

 

(374,729)

 

20.    Financial instruments

The Group has reviewed the financial assets and liabilities held at 30 June 2024. It has been deemed that the carrying amounts for all financial instruments are a reasonable approximation of fair value. All financial instruments are deemed Level 3.

 

21.    Earnings per share


For the six months ended
30 June

 

2024

 

2023

 

(Unaudited)

 

(Unaudited)

Profit attributed to owners of the parent

530,568


223,590

Weighted average number of ordinary shares in issue

600,000


600,000

Basic and diluted earnings per share

 0.88

 

 0.37

 

The Company has no potential diluted shares as at 30 June 2024 and 30 June 2023, therefore the earnings per diluted share are equivalent to basic earnings per share.

 

22.    Segment reporting

 

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

The Group has five operating segments based on geographical location as the Group's Chief Operating Decision Maker (CODM) reviews the internal management reports and KPIs of each geography.

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

 

 

 

 

 


Revenue by geographic location

For the six months ended

Egypt region

Sudan region

Jordan region

Nigeria region

Saudi Arabia

Total

 

 

 

 

 

 

 

30 June 2024 (Unaudited)

2,069,240

-

385,837

38,517

4,246

2,497,840

30 June 2023 (Unaudited)

1,513,673

10,194

290,255

57,820

-

1,871,942

 


EBITDA by geographic location

For the six months ended

Egypt region

Sudan region

Jordan region

Nigeria region

Saudi Arabia

Total

 

 

 

 

 

 

 

30 June 2024 (Unaudited)

691,994

(44)

88,712

(13,455)

(70,016)

697,191

30 June 2023 (Unaudited)

406,862

1,249

68,502

(15,065)

-

461,548

 



 

22.       Segment reporting (continued)

 


Net profit / (loss) by geographic location

For the six months ended

Egypt region

Sudan region

Jordan region

Nigeria region

Saudi Arabia

Total

 

 

 

 

 

 

 

30 June 2024 (Unaudited)

560,010

11,033

5,343

(11,916)

(84,401)

480,069

30 June 2023 (Unaudited)

225,921

3,637

11,312

(29,820)

-

211,050

 

 


Non-current assets by geographic location

 

Egypt region

Sudan region

Jordan region

Nigeria region

Saudi Arabia

Total

 

 

 

 

 

 

 

30 June 2024 (Unaudited)

3,024,006

5,999

881,668

39,516

100,571

4,051,760

31 December 2023

3,091,485

3,848

609,699

47,639

55,262

 

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


For the six months ended
30 June

 

2024

 

2023

 

(Unaudited)


(Unaudited)

Profit from operations

434,936


253,089

 




Property, plant and equipment depreciation

146,071


126,755

Right of use depreciation

82,201


65,632

Amortization of Intangible assets

4,595


3,872

EBITDA

667,803


449,348

Non-recurring expenses

29,388


12,200

Normalised EBITDA

697,191

 

461,548

 

 

 

23. Significant events during the period

 

The Monetary Policy Committee of the Central Bank of Egypt decided to raise the deposit and lending interest rates by 200 basis points on 1 February 2024, then by 600 basis points on 6 March 2024. The credit and discount rates were also raised by 600 basis points on 6 March 2024.

 

The Central Bank of Egypt announced that it would allow the foreign exchange rate to be determined.

against the Egyptian pound as per market mechanisms, starting from 6 March 2024.

 

Integrated Diagnostics Holdings plc "IDH" at the Company's Extraordinary General Meetings held on 12 June 2024 and 18 July 2024, the company approved the exit from the Egyptian Stock Exchange of its ordinary shares from the Egyptian Stock Exchange. Following up on our delisting from the EGX, IDH has received preliminary approval to proceed with the delisting of its shares. IDH and the EGX coordinated the process, with the Special Operations Market (OPR) operating from August 18th to August 22nd. During this period, 18,673,728 shares were subscribed. IDH then purchased these shares on August 26th, and the buyback settlement is to be completed by August 28th. Afterwards, IDH will transfer its shares from the EGX to the London Stock Exchange (LSE).

 



[1] EBITDA is calculated as operating profit plus depreciation and amortization.

[2] Cash balance includes time deposits, treasury bills, current accounts, and cash on hand.

[3] Key operational indicators are calculated based on revenues for the periods of EGP 2,498 million and EGP 1,872 million for 1H 2024 and 1H 2023, respectively.

[4] IDH rolled out 20 new branches in Egypt and 2 in KSA, while closing 1 branch in Jordan over the past 12-month period. It is important to note that due to the ongoing conflict in Sudan, IDH's 18 branches in the country have been shut down, leading to a net growth in its branch network of 3 branches.

[5] EBITDA is calculated as operating profit plus depreciation and amortization.

[6] Due to the ongoing conflict in Sudan, IDH has terminated operations in the country, with the closure of all 18 branches.

[7] Interest expenses on medium-term loans include EGP 11 million related to the Group's facility with Ahli United Bank Egypt (AUBE).

[8] IDH's interest bearing debt as at 30 June 2024 included EGP 91 million to its facility with Ahli United Bank Egypt (AUBE) (outstanding loan balances are excluding accrued interest for the period). It is worth noting that in order to finance the early repayment settlement with General Electric, the Company utilized a bridge loan facility of EGP 55 million. The facility was withdrawn in Q1 2023 and settled in Q2 2023

[9] Interest expenses on medium-term loans include EGP 11 million related to the Group's facility with Ahli United Bank Egypt (AUBE).

[10] The net debt balance is calculated as cash and cash equivalent balances including financial assets at amortised cost, less interest-bearing debt (medium term loans), finance lease and Right-of-use liabilities.

[11] As outlined in Note 9 of IDH's Consolidated Financial Statements, some term deposits and treasury bills cannot be accessed for over 3 months and are therefore not treated as cash. Term deposits which cannot be accessed for over 3 months stood at EGP 309 million at June 2024 (2023: EGP 49 million). Meanwhile, treasury bills not accessible for over 3 months stood at EGP 148 million (2023: EGP 112 million).

[12] IDH's interest bearing debt as at 30 June 2024 included EGP 91 million to its facility with Ahli United Bank Egypt (AUBE) (outstanding loan balances are excluding accrued interest for the period). It is worth noting that in order to finance the early repayment settlement with General Electric, the Company utilized a bridge loan facility of EGP 55 million. The facility was withdrawn in Q1 2023 and settled in Q2 2023.

[13] Accounts payable is calculated based on average payables at the end of each period.




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