TIDMIDHC
RNS Number : 7623U
Integrated Diagnostics Holdings PLC
27 November 2019
Integrated Diagnostics Holdings Plc
9M2019 Results Update
Wednesday, 27 November 2019
Integrated Diagnostics Holdings Plc records strong revenue and
test growth with solid margins in 9M 2019
(London) Integrated Diagnostics Holdings ("IDH," "the Group," or
"the Company"), a leading consumer healthcare company with
operations in Egypt, Jordan, Sudan and Nigeria, released today
unaudited highlights of its financial and operational performance
in the first nine months of 2019(1) , reporting total unaudited
revenues of EGP 1,649 million and unaudited net profits of EGP 361
million.
Results
9M2019 9M2018 change
===================== =============== =============== ========
Revenues 1,649 1,377 20%
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Cost of Sales (856) (698) 23%
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Gross Profit 793 680 17%
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Gross Profit Margin 48% 49% (1 pts)
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Operating Profit 573 486 18%
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EBITDA(2) 686 540 27%
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EBITDA Margin 42% 39% 3 pts
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Net Profit 361 355 2%
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Net Profit Margin 22% 26% (4pts)
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Cash Balance 432 541 -20%
--------------------- --------------- --------------- --------
* Post IFRS 16
Financial Highlights
-- Revenue for the nine-month period increased 20% to EGP 1,649
million supported by strong growth in both the number of patients
served and tests performed during the period, as well as improved
pricing. Egypt continues to be the primary driver of total revenue,
recording a 24% increase in revenue to EGP 1,410 million in 9M
2019
-- Gross profit reached EGP 793 million in 9M 2019, up 17%
year-on-year, with a relatively stable margin compared to last
year.
-- Operating profit increased 18% year-on-year to EGP 573
million in 9M 2019. It is worth noting that IDH launched its new
healthcare management services under its Wayak subsidiary in
3Q2019, which drove higher SG&A expenses as the new service
ramps up operations. Excluding Wayak, operating profit would have
been EGP 576 million, up 19% year-on-year.
-- EBITDA(2) for 9M 2019 increased 27% year-on-year to EGP 686
million due to higher revenues and affected by the adoption of IFRS
16. EBITDA margin for the period was 42%, up from the 39% recorded
in 9M 2018.
-- Normalised EBITDA for IFRS 16 and excluding Wayak's results
was up 19% year-on-year to EGP 642 million for 9M 2019, with an
unchanged margin of 39% for the period.
-- Net profit recorded a 2% year-on-year increase to EGP 361
million in 9M 2019. Excluding Wayak, net profit recorded a 3%
increase to EGP 365 million. Net profit margin for the period
contracted to 22% compared to 26% in the same period of 2018.
Bottom-line profitability was affected by higher interest expenses
related to the financing of the new headquarters and Al Borg Scan's
expansion, lower interest income following the distribution of EGP
451 million in dividends for FY2018 and the effect of adopting IFRS
16. Normalising for the effect of IFRS 16 and excluding Wayak's
results, net profit records EGP 377 million in 9M2019, up 6%
year-on-year and with a margin of 23%.
-- Net cash flow from operating activities stood at EGP 442
million for 9M 2019 up from EGP 365 million recorded in 9M 2018.
This continues to reflect IDH's strong cash-generating ability and
indicating the non-cash nature of IFRS 16 related
reclassifications.
(1) By the terms regulating the company's listing on the LSE,
IDH is required to release audited financials at the half- and
full-year marks. Management and the Board of Directors have
committed to providing performance updates in the first and third
quarters as an outgrowth of the Company's commitment to
transparency. All figures in this update are accordingly unaudited
and provided from Management accounts.
(2) EBITDA is calculated as operating profit plus depreciation
and amortization.
Operational Highlights
-- IDH's branch network stood at 442 branches as of 30 September
2019, up from 414 branches as of 30 September 2018, having opened
32 new branches and closed 4 non-performing branches in Sudan.
-- Total patients served reached 5.6 million in 9M 2019, up 11%
compared to the 5.0 million served in 9M 2018 supported by both
rising walk in and contract patients.
-- Total number of tests performed increased 18% year-on-year to
23.1 million in 9M 2019 on the back of strong contract test
volumes.
-- Average revenue per test came in at EGP 71 for 9M 2019, a 2%
year-on-year rise. Excluding tests related to the 100 million
Healthy Lives campaign, average revenue per test would have
recorded an 11% year-on-year rise for the nine-month period.
Meanwhile IDH's average revenue per patient was up 7.5%year-on-year
during the period (8.8%excluding the campaign).
-- IDH's average test per patient was up 6% year-on-year to 4.1 in 9M 2019.
-- Continued operational progress with Nigeria expansion, with
eight out of 12 branches renovated, including a new branch
inaugurated in October 2019.
-- Good momentum with radiology unit, Al-Borg Scan, with the
launch of its new Shubra Branch expected in the coming months.
-- Successful launch of new subsidiary Wayak, using data
analytics to offer healthcare services to database of 13 million
patients.
Commenting on the Group's performance for the nine-month period,
IDH Chief Executive Officer Dr. Hend El-Sherbini said:
"IDH's growth during the nine-month period was driven by both
higher patient and test volumes and an improvement in average
pricing, with the conclusion of the state-sponsored 100 Million
Healthy Lives campaign seeing average revenue per test normalising.
Additionally, growth was also driven by increasing contribution
from Al Borg Scan, which is delivering strong results and an upward
trajectory in revenues and EBITDA. Meanwhile group profitability
remained intact, with IDH's normalised EBITDA up 19% and with a
stable 39% margin."
"We are also making headway with our strategic initiatives,
including the continued rollout of new branches in Nigeria with a
steady ramp-up in operations in this new geography that holds
significant growth potential for the Group. The quarter just ended
also saw us launch our new healthcare management services venture
Wayak, which deploys data mining and artificial intelligence
platforms to capitalise on our large database of over 13 million
patients and create new revenue streams for IDH."
"Management remains confident as regards to its full-year
targets and I look forward to reporting in the months ahead on yet
another year of operational excellence and strong financial
performance."
Analyst and Investor Call Details
An analyst and investor call will be hosted at 1pm GMT | 3pm
EEST on Wednesday 27 November 2019. You may dial in using the
conference call details below:
Country Dial In
UK 0800-640-6441
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UK (local) 020-3936-2999
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Canada 1-613-699-6539
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Turkey 0850-390-2046
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UAE 0800-0357-04553
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All other locations +44-20-3936-2999
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Access code: 423768
Participants can also join by web through
www.incommuk.com/customers/online and entering the access code
423768. You will be prompted to enter your name and email
address.
About Integrated Diagnostics Holdings (IDH)
IDH is a leading consumer healthcare company in the Middle East
and Africa with operations in Egypt, Jordan, Sudan and Nigeria. The
Group's core brands include Al Borg and Al Mokhtabar in Egypt, as
well as Biolab (Jordan), Ultralab and Al Mokhtabar Sudan (both in
Sudan) and Echo-Scan (Nigeria). A long track record for quality and
safety has earned the Company a trusted reputation, as well as
internationally recognised accreditations for its portfolio of over
1,400 diagnostics tests. From its base of 442 branches as of 30
September 2019, IDH will continue to add laboratories through a
Hub, Spoke and Spike business model that provides a scalable
platform for efficient expansion. Beyond organic growth, the
Group's expansion plans include acquisitions in new Middle Eastern
and African markets where its model is well-suited to capitalise on
similar healthcare and consumer trends and capture a significant
share of fragmented markets. IDH has been a Jersey-registered
entity with a Standard Listing on the Main Market of the London
Stock Exchange (ticker: IDHC) since May 2015.
IDH's forward-looking strategy rests on leveraging its
established business model to achieve four key strategic goals,
namely: (1) continue to expand customer reach; (2) increase the
number of tests per patient; (3) expand into new geographic markets
through selective, value-accretive acquisitions; and (4) introduce
new medical services by leveraging the Group's network and
reputable brand position. Learn more at idhcorp.com.
Shareholder Information
LSE: IDHC.L
Bloomberg: IDHC:LN
Listed: May 2015
Shares Outstanding: 150 million
Contact
Mr. Sherif El-Ghamrawi
Investor Relations Director
T: +20 (0)2 3345 5530 | M: +20 (0)10 0447 8699 |
sherif.elghamrawi@idhcorp.com
Hudson Sandler (International media relations)
Dan de Belder
Bertie Berger
T: +44 (0) 207 7964133 | idh@hudsonsandler.com
Forward-Looking Statements
These nine-month results 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 Year-End 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.
Operational & Financial Review
IDH reported revenues for the first nine months of the year of
EGP 1,649 million, increasing 20% year-on-year supported by strong
growth in both the number of patients served and tests performed
during the period, as well as an improvement in average revenue per
test. Growth was more pronounced at the contract segment, which
recorded a 22% year-on-year rise in revenues for the period that
was largely volume-driven. Meanwhile, the walk-in segment recorded
a 17% year-on-year increase in revenues driven primarily by the
number of tests and higher pricing.
Revenue Growth Drivers
9M2019 9M2018
============================== ======= =======
Volume 18% 4%
============================== ======= =======
Price & Mix 4% 22%
============================== ======= =======
Foreign Currency Translation (2%) (1%)
============================== ======= =======
Total 20% 25%
============================== ======= =======
On a geographical basis, Egypt continued to be the main driver
for total revenue growth, recording a 24% year-on-year rise in
revenues. Growth in Egypt came on the back of rising test volumes
across both the walk-in and contract segments, with the latter
being supported by the 100 million Healthy Lives awareness
campaign. Egypt's performance was further buoyed by the ramp up of
operations at the new Al Borg Scan branch - the Group's radiology
unit - which contributed c.3.7% to Egypt's total revenue growth in
9M2019.
Revenue Growth Drivers by Geography
9M2019 9M2018
========= ======= =======
Egypt 19% 22%
========= ======= =======
Jordan 0.7% 2%
========= ======= =======
Sudan (0.3%) (0.5%)
========= ======= =======
Nigeria (0.2%) 2.2%
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Total 20% 25%
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IDH's cost of sales increased 23% year-on-year with the Group
maintaining strong gross profitability of 48% (9M2018: 49%) despite
the lower contribution margin from the 100 million Healthy Lives
awareness campaign during the first half of the year. Additionally,
lower SG&A as a percentage of revenue saw EBITDA margin reach
42% (stable at 39% when normalised for IFRS 16). Profitability was
also supported by the strong improvement in Jordan where EBITDA
grew 81% y-o-y in 9M2019 and EBITDA margin expanded 15 percentage
points to 36%. Similarly, operations in Sudan generated a positive
EBITDA in 9M2019 with a 22% margin versus a negative contribution
in the same period last year.
On the operational front, IDH expanded its geographic footprint
to 442 branches as at the end of September 2019 compared to the 414
operated as of 30 September 2018. The Group's expansion drive
continues to be supported by its state-of-the-art Mega Lab which
allows IDH to deploy its Hub, Spoke and Spike business model in
Egypt to roll out capital-efficient "C" labs more rapidly. Over the
last year, IDH has opened 30 labs in Egypt and two in Nigeria while
closing four non-performing branches in Sudan.
Branches by Country
30 September 2019 30 September 2018 Change
================ ================== ================== =============
Egypt 390 360 8%
================ ================== ================== =============
Jordan 19 19 -
================ ================== ================== =============
Sudan 21 25 (16%)
================ ================== ================== =============
Nigeria 12 10 20%
================ ================== ================== =============
Total Branches 442 414 7%
================ ================== ================== =============
Our Customers
IDH serves two principal types of clients: contract (corporate),
including institutions such as unions, private insurance companies
and corporations, and walk-in (individuals).
IDH served a total of 5.6 million patients between both
segments, an increase of 11% compared to the same period of last
year. Total tests performed were 23.1 million in 9M 2019, a 18%
year-on-year rise.
The ratio of contract to walk-in patients during the nine-month
period ended 30 September 2019 stood at 72:28 largely in line with
the 71:29 ratio recorded in the same period of 2018. The increase
in contract patients as a share of the total reflects an
accelerated growth in contract volumes during the period on the
back of the 100 million Healthy Lives awareness campaign in
Egypt.
Key Performance Indicators
Contract Segment Walk-in Segment Total
================== =========================== =========================== ==================================
9M2018 9M2019 Change 9M2018 9M2019 Change 9M2018 9M2019 Change
================== ======== ======== ======= ======== ======== ======= ========= ============ =========
Revenue (EGP
'000) 796,313 967,730 22% 581,037 680,645 17% 1,377,350 1,648,376 20%
% of Revenue 58% 59% 42% 41% 100% 100%
Patients ('000) 3,553 4,025 13% 1,465 1,562 7% 5,018 5,587 11%
% of Patients 71% 72% 29% 28% 100% 100%
Revenue per
Patient (EGP) 224 240 7% 397 436 10% 274 295 7%
Tests ('000) 14,703 17,780 21% 4,933 5,298 7% 19,636 23,078 18%
% of Tests 75% 77% 25% 23% 100% 100%
Revenue per
Test (EGP) 54 54 - 118 128 9% 70 71 2%
Test per Patient 4.1 4.4 7% 3.4 3.4 1% 3.9 4.1 6%
Revenue Analysis: Contribution by Patient Segment
The Group's contract segment witnessed an impressive 22%
year-on-year rise in revenues for the period, making up 59% of
total Group revenue and contributing 63% to total growth in 9M
2019. In the first nine months of the year, IDH served 4.0 million
contract patients, a 13% y-o-y rise, and performed 17.8 million
contract tests, a 21% y-o-y rise.
Average revenue per contract test came in flat compared to last
year at EGP 54 for 9M 2019, marking a turning point after
consecutive declines over the previous quarters on account of
volumes generated from the awareness campaign. Meanwhile, average
revenue per contract patient increased 7% year-on-year to EGP 240
in 9M 2019.
Revenues from IDH's walk-in segment made up 41% of IDH's total
revenues in 9M 2019 at EGP 681 million, a 17% year-on-year rise.
Segment growth was dual-driven by volume and price, with average
revenues per walk-in test increasing 9% y-o-y to EGP 128, in line
with inflationary pressures, while the total number of walk-in
tests increased 7% y-o-y for the period to 5.3 million tests.
Overall the walk-in segment contributed c.37% to IDH's consolidated
revenue growth in 9M 2019.
The Group's overall average revenue per test increased 2%
year-on-year to EGP 71 in 9M 2019. Factoring out the tests
performed as part of the 100 million Healthy Lives awareness
campaign, average revenue per test would have increased 11%
year-on-year to EGP 78. On the other hand, IDH's blended average
revenue per patients was up 7% year-on-year to EGP 295. Going
forward, with the campaign having come to an end, management
expects these key metrics to return to their previous levels.
Revenue Analysis: Contribution by Geography
Revenue Contribution by Country
9M2019 9M2018
========= ======= =======
Egypt 85.5% 82.9%
========= ======= =======
Jordan 11.7% 13.3%
========= ======= =======
Sudan 1.5% 2.1%
========= ======= =======
Nigeria 1.3% 1.8%
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In Egypt, IDH's home market, revenues came in at EGP 1,410
million in 9M 2019, a 24% year-on-year rise for the period largely
supported by rising test volumes across both the walk-in and
contract segments, with the latter being supported by the 100
million Healthy Lives awareness campaign. Total patients served
increased 12% y-o-y to 5.2 million, with the total number of tests
performed increasing 19% y-o-y to 21.2 million.
On a segment basis, contract patients in Egypt increased 13%
y-o-y to 3.8 million for 9M 2019, while walk-in patients reached
1.3 million, up 10% compared to 9M 2018. The number of contract
tests increased 21% y-o-y to 16.8 million in 9M 2019, with 2.4
million related to the 100 million Healthy Lives awareness
campaign, while the number of walk-in tests increased 11% y-o-y to
4.4 million in the first nine months of the year. The contract
segment saw its revenues rise 22% to EGP 871 million in 9M 2019,
while the walk-in segment recorded revenues of EGP 539 million, up
25% y-o-y for the period.
The Group's Jordanian operations recorded a 5% y-o-y rise in
revenues to EGP 193 million, (up 10% y-o-y in JOD terms) as
Jordanian consumers began to adjust to new inflationary pressures
following the government's austerity measures. Biolab, the Group's
Jordanian subsidiary, reported a 10% y-o-y rise in patients served
in 9M 2019, with the total number of tests performed increasing 9%
y-o-y for the period.
In Sudan, results continue to be impacted by the devaluation of
the Sudanese pound as revenues in EGP terms came in 12% below last
year's figure at EGP 25 million for 9M 2019. On the other hand, in
SDG terms, revenues were up 52% in the first nine months of the
year as increasingly favourable pricing more than offset the lower
test volumes on account of political unrest earlier this year.
Growth in SGD terms was largely driven by the walk-in segment which
saw a rise in revenue per test as the Group passed on price
increases in step with currency devaluation. It should be noted
that test volumes in Sudan started to pick up in September 2019 by
c.25% compared to September 2018.
At the Group's Nigerian subsidiary, revenues recorded a 14%
y-o-y fall to EGP 21 million as the Group's operations are still
undergoing restructuring, however, in NGN terms revenue was up 6%
y-o-y in 9M 2019. As of September 2019 the Group had renovated a
total of eight out of 12 branches in the country, and later rolled
out its new Akowonjo branch in October.
Cost of Sales
IDH's cost of sales increased to EGP 856 million in 9M 2019, a
23% y-o-y rise. The Group's gross profit was up 17% y-o-y to EGP
793 million in 9M 2019 with gross profit margin for the period
decreasing one percentage point to 48%.
COGS Breakdown as a Percentage of Revenue
9M2019 9M2018
================== ======= =======
Raw Materials 18.5% 18.7%
================== ======= =======
Wages & Salaries 17.7% 16.7%
================== ======= =======
Depreciation 6.1% 3.6%
================== ======= =======
Other Expenses 9.6% 11.6%
================== ======= =======
Total 51.9% 50.6%
================== ======= =======
Raw materials costs increased to EGP 305 million in 9M 2019, up
18% y-o-y and continuing to contribute the largest proportion of
total consolidated COGS at 35.6%. The average raw material cost per
test performed over the period stood at EGP 13.2 in 9M 2019, in
line with last year despite the lower contribution margin of tests
related to the 100 million Healthy Lives campaign. Raw materials as
a percentage of sales stood at 18.5% compared to 18.7% in 9M 2018,
in line with management's efficiency and cost-reduction
initiatives. Moreover, factoring out the effect of the 100 million
Healthy Lives campaign, raw materials as a percentage of sales was
17.9%.
Direct salaries and wages made up the second largest share of
total COGS in the nine-month period to September 2019 at 34.1%, as
they reached EGP 292 million for the period, up 27% y-o-y. As a
percentage of sales, direct salaries and wages increased just one
percentage point to 17.7% in 9M 2019.
Direct depreciation and amortisation increased to EGP 101
million, a 103% y-o-y increase in 9M 2019 driven by capitalised
leases amounting to EGP 265 million (gross) related to the
implementation of IFRS 16 (EGP 33 million). The increase in
depreciation expense is also attributable to the addition of Al
Borg-Scan's depreciation (EGP 5.7 million), which began operations
with its first branch in October 2018. As a result, direct
depreciation and amortisation as a percentage of sales rose to 6.1%
in 9M 2019 compared to 3.6% in the same period of last year.
EBITDA
IDH's consolidated EBITDA recorded a 27% year-on-year expansion
in 9M 2019 to EGP 686 million, with an EBITDA margin of 42%.
Normalising for the IFRS effect and Wayak's results, EBITDA
recorded EGP 642 million, up 19% y-o-y and with a stable 39%
margin. It should be noted that Wayak's pre-operating and
operational expenses reduced the Group's EBITDA by EGP 3.6
million.
In Egypt, EBITDA increased 24% y-o-y to EGP 636 million with a
45% margin and contributed the largest share to the Group
consolidated EBITDA in 9M2019 (Egypt's EBITDA excluding Wayak
recorded EGP 639 million). Jordan witnessed an 81% y-o-y rise in
EBITDA for 9M 2019, with EBITDA margin increasing to 36% from the
21% figure recorded in 9M 2018. This was largely due to raw
material cost optimization along with further cost savings
attributable to salaries and the decrease in rent related to the
training centre. Sudan's EBITDA for 9M 2019 was EGP 5.5 million, up
from the negative EGP 3.5 million figure reported in the same
period of last year. EBITDA margin was 22% compared to the negative
12% margin recorded in 9M 2018. Stronger EBITDA results were
supported by a significant increase in 3Q 2019 revenues and a
decrease in salaries as the Company replaced Egyptian expats with
Sudanese employees. Lastly, in Nigeria, EBITDA losses increased to
EGP 26 million up from the negative EGP 12 million EBITDA recorded
in 9M 2018. As branch renovations are completed along with the
installation of new state-of-the-art radiology equipment, Nigeria
is expected to turn EBITDA positive during 2020.
IFRS 16 Effect on Regional EBITDA
EBITDA Excluding Margin Rent Expense EBITDA Including Margin
IFRS 16 IFRS 16
========= ================= ======= ============= ================= =======
Egypt 604 43% 32 636 45%
========= ================= ======= ============= ================= =======
Jordan 58 30% 12 70 36%
========= ================= ======= ============= ================= =======
Sudan 4.0 16% 2 6 22%
========= ================= ======= ============= ================= =======
Nigeria (27) - 2 (26) -
========= ================= ======= ============= ================= =======
Total 638 39% 48 686 42%
========= ================= ======= ============= ================= =======
Interest Income / Expense
IDH recorded interest income of EGP 29 million in 9M 2019, down
29% year-on-year compared to EGP 40 million in the same nine months
of 2018. The decline comes on the back of rate cuts by the Central
Bank of Egypt during 2019, along with the decrease in cash balances
during 1H 2019 to secure the dividends' payment in June 2019.
Interest expense recorded EGP 49 million in 9M 2019 compared to
EGP 10 million in the comparable period of 2018. The significant
increase was driven by the implementation of IFRS 16 which added
EGP 26 million to the period's interest expense. During the
nine-month period, IDH also recorded EGP 16 million in borrowing
costs related to medium term loans for the Al Borg Scan expansion
(EGP 5 million) and the Group's new headquarters in Cairo's Smart
Village (EGP 11 million ).
Foreign Exchange
IDH recorded a net foreign exchange loss of EGP 13 million in 9M
2019 compared to EGP 12 million in 9M 2018. The figure is primarily
related to FX transactions related to secure liquidity for the June
2019 dividend distribution.
Taxation
Tax expenses recorded in 9M 2019 were EGP 180 million compared
to EGP 148 million in the same period of last year. The effective
tax rate was 33% compared to 29%. The increase in the Group's
effective tax rate recorded in 9M 2019 is largely attributable
to:
-- EGP 4.6 million related to the new tax law imposed by the
Egyptian Government (0.25% of income);
-- IFRS 16 effect is recorded on the consolidated level only and therefore not tax deductible;
-- Starting January 2019, the Jordanian corporate tax rate increased 1% to reach 21%.
There is no tax payable for IDH's two companies at the holding
level. Tax was paid on profits generated by operating companies in
Egypt and Jordan.
Net Profit
IDH's consolidated net profit recorded a 2% y-o-y increase to
EGP 361 million in 9M 2019. The Group's net profit margin for the
period contracted to 22% compared to 26% in the same period of
2018, on the back of the adoption of IFRS 16, a year-on-year
decrease in interest income, and an increase in net borrowing cost
for the period. Normalising for IFRS 16 and Wayak's results
(negative EGP 3.6 million), net profit came in at EGP 377 million,
up 6% y-o-y and representing a 23% net profit margin.
Net Effect of IFRS 16 on Net Profit
Depreciation Interest Rent Net Effect
========= ============= ========= ====== ===========
Egypt (21.8) (19.6) 32.0 (9.3)
========= ============= ========= ====== ===========
Jordan (11.2) (5.0) 12.2 (4.0)
========= ============= ========= ====== ===========
Sudan (0.9) (1.0) 1.5 (0.4)
========= ============= ========= ====== ===========
Nigeria (1.0) - 1.8 0.8
========= ============= ========= ====== ===========
Total (34.9) (25.6) 47.5 (12.9)
========= ============= ========= ====== ===========
Balance Sheet
On the assets side of the balance sheet, IDH held gross
property, plant and equipment (PPE) of EGP 1,099 million as at 30
September 2019, an increase from EGP 982 million as of 31 December
2018. The increase reflects CAPEX outlays for the addition and
renovation of branches totalling EGP 117 million, including the new
Al Borg Scan branch, and reflects foreign currency translation
adjustments of EGP 44 million.
Accounts receivable recorded EGP 263 million as at 30 September
2019 compared to EGP 220 million at year-end 2018. Accounts
receivables' days-on-hand (DOH) normalised at 132 days following
the increase witnessed at year-end 2018 on account of the 100
Million Healthy Lives Campaign. It is worth mentioning that the
campaign's receivables balance was EGP 32 million at the close of
9M 2019. Excluding campaign-related receivables, DOH would decrease
to 127 days.
The Group's "days inventory outstanding" decreased to 80 days at
the close of the first nine months of the year compared to 82 days
as at 31 December 2018.
IDH's cash balances decreased to EGP 432 million as at 30
September 2019 from EGP 665 million as at 31 December 2018,
reflecting the distribution of EGP 451 million (US$ 26.4 million)
in dividends for FY2018 paid in June 2019.
On the liabilities side, accounts payable stood at EGP 123
million at 30 September 2019 versus EGP 150 million at year end
2018. The Group's days payable outstanding (DPO) slightly decreased
to 127 days from 138 days at 31 December 2018.
The adoption of IFRS 16 led to the addition of EGP 85 million in
short-term lease liabilities and EGP 174 million in long-term lease
liabilities as at 30 September 2019.
- Ends --
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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November 27, 2019 02:00 ET (07:00 GMT)
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