Integrated Diagnostics Holdings (IDH), a healthcare diagnostics service provider with operations in Egypt, Jordan, Sudan, and Nigeria, reported on Thursday a 141 percent year-on-year growth in revenue for the first half of the year.
Revenue recorded 2.293 million Egyptian pounds during the first half of 2021 versus the comparable period of last year supported by both IDH’s COVID-19-related tests and a sustained recovery in its conventional test offering, the company said in a statement.
Top-line growth for the first half of 2021 was dual-driven, as tests performed and average price per test posted year-on-year expansions of 45 percent and 66 percent, respectively. COVID-19-related tests contributed to 48 percent of IDH’s top-line during the first six months of the year compared to the 9 percent contribution made during the first half of 2020.
Excluding COVID-19-related tests, IDH witnessed a 38 percent year-on-year expansion in revenue generated from its conventional test offering. The year-to-date performance was buoyed by an impressive second quarter, which saw IDH build on the strong momentum from the start of the year to record revenues of 1.164 million pounds for the second quarter of 2021, up 159 percent versus the second quarter of 2020 and 3 percent from the first quarter of 2021.
Consolidated revenues continued to be supported by IDH’s house call service in Egypt and Jordan, which in the first half of 2021 contributed to 23 percent of total revenue versus the 18 percent contribution made this time last year. Through its house call service, IDH served more than 646,000 patients in the first half of 2021 (up 88 percent versus the first half of 2020), performing more than 3.4 million tests (up 49 percent versus the first half of 2020).
Leveraging an expanded reach, IDH said it was able to carry out an average of 3,600 house call visits per day in the first half of 2021, up significantly from the 1,900 visits per day performed in the first half of 2020.
Gross profit grew by 193 percent year-on-year in the first half 2021 to record 1,305 million pounds with an associated margin of 57 percent versus 47 percent in the same period last year. Improved gross profitability came on the back of strong top-line growth and the subsequent dilution of fixed costs for the period such as direct salaries and wages and other expenses. Gross profit for the second quarter of 2021 recorded 667 million pounds, up 4 percent from the previous quarter and with a gross margin of 57 percent.
Operating profit recorded 1.094 million, a 295 percent year-on-year expansion, with an associated margin of 48 percent versus 29 percent last year.
“The remarkable growth in operating profit was supported by strong gross profitability, the dilution of SG&A outlays for the period due to their relatively fixed nature, and a normalisation of provisions booked in the first half 2021, which recorded EGP 10 million versus EGP 28 million in 1H 2020 to account for expected credit losses in accordance with IFRS 9.” IDH statement read.
Normalised EBITDA reached 1.203 million pounds in the first half 2021, an increase of 227 percent from the comparable period of last year. IDH said the normalised EBITDA is calculated as operating profit plus depreciation and amortization and minus one-off fees incurred in the first half of 2021 (29 million pounds) related to the company’s Egyptian Exchange (EGX) listing completed in May 2021.
EBITDA margin expanded to 52 percent for the period versus 39 percent in the first half of 2020. Solid improvements in EBITDA profitability were driven by strong top-line growth in the first half of 2021 and the subsequent dilution of IDH’s fixed costs for the period.
On a quarterly basis, normalised EBITDA recorded 603 million pounds, up 267 percent year-on-year and largely in line with last quarter’s figure. Normalised EBITDA margin stood at 52 percent for the quarter, down from the 53 percent margin recorded in the first quarter of 2021 as IDH booked higher accounting fees (related to the EGX requirement to publish quarterly reviewed financial statements) and additional bonus payments to senior management during the second quarter of 2021.
Net profit expanded 283 percent year-on-year to record 668 million pounds in the first half of 2021, with a net profit margin of 29 percent versus 18 percent in the first half of 2020.
“Net profit growth was supported by strong EBITDA level profitability and comes despite IDH booking EGP 29 million in one-off fees related to the Company’s dual-listing in May 2021. In 2Q 2021, net profit stood at EGP 327 million with an associated margin of 28 percent.”
A dividend of $ 29.1 million ($ 0.0485 per share) for the year ended 31 December 2020 was distributed to shareholders on 29 July 2021. This represents an increase of 4 percent compared to a final dividend of $28 million in aggregate in the previous financial year.
Operational Highlights
IDH’s network stood at 495 branches as of 30 June 2021, up from 462 branches and 481 branches as of 30 June 2020 and 31 December 2020, respectively.
Total tests performed recorded 16.3 million in the first half of 2021, up 45 percent year-on-year. Higher test volumes were supported by both IDH’s COVID-19-related test offering as well as a sustained recovery in the company’s conventional test offering, with the latter up 29 percent versus the first six months of 2020.
In the second quarter of 2021, IDH performed 8.3 million tests, up 2 percent from the previous quarter as IDH performed both more COVID-19-related and conventional tests during the second quarter of the year compared to the previous quarter. The quarter-on-quarter expansion is particularly noteworthy as the second quarter included the expected slowdown related to the holy month of Ramadan and Eid vacation.
Average revenue per test expanded 66 percent year-on-year to 141 pounds in the first half of 2021. Controlling for the generally higher value COVID-19-related tests, average revenue per test would have increased 7 percent versus last year.
Total patients served reached 4.7 million in the first half of 2021, a 62 percent year-on-year increase. Meanwhile, average test per patient declined to 3.5 in the first half of 2021 from 3.9 last year as an increasing number of patients visit the company’s labs for single COVID-19 tests (PCR, Antigen, and Antibody).
Egypt
Revenue generated by IDH’s Egyptian operations expanded 140 percent year-on-year on the back of solid growth across both test and patient volumes. On a service basis, top-line growth was supported by both COVID-19-related and conventional tests, and was further bolstered by the group’s house call service which in the first half of 2021 made up 25 percent of Egypt’s top-line versus 20 percent last year. Excluding COVID-19-related contributions in the first half of 2021, conventional tests performed and revenue generated in Egypt expanded 29 percent and 38 percent year-on-year, respectively.
Al-Borg Scan recorded revenue of 20 million pounds in the first half of 2021, an increase of 124 percent compared to last year. The number of radiology tests performed during the first six months of 2021 reached 34,297, more than double the tests performed last year.
Wayak turned EBITDA positive during the second quarter of 2021 on the back of growing revenue and optimised overhead costs. On a year-to-date basis, Wayak’s revenue nearly tripled versus last year to reach 4.3 million pounds in the first half of 2021 supported by a growing customer base.
Jordan
In Jordan, revenue increased 176 percent year-on-year on the back of strong volume growth for the period. Top-line growth was supported by Biolab’s COVID-19-related test offering coupled with solid growth in its conventional test offering, with the latter having made a full recovery from last year’s slowdown.
In fact, excluding COVID-19-related tests, the number of tests performed and revenue generated would have increased 43 percent and 41 percent, respectively.
In August, Biolab was selected as the preferred bidder to operate testing stations in Amman’s Queen Alia International Airport (QAIA). This landmark partnership will allow IDH to continue playing a frontline role in the fight against COVID-19, while helping to further expand Biolab’s volumes and revenue in the coming period.
Hend El-Sherbini, CEO of Integrated Diagnostics Holdings
Hend El-Sherbini, IDH’s CEO, said: “On a regional front, both our Egyptian and Jordanian operations continued to report strong revenue growth supported by our conventional and COVID-19-related service offering.”
“Top-line growth in both countries was further buoyed by our home call services which continue to grow in popularity especially in our home market of Egypt, where tests performed directly in patient homes made up 25 percent of the country’s top-line in the first half of 2021.”
Nigeria
In Nigeria, revenues continued their steady expansion, growing 68 percent year-on-year (76 percent in NGN terms) in the first half of 2021 supported by a 47 percent increase in tests performed versus last year.
