F O S T E R I N G
SUSTAINABLE GROWTH
23
ANNUAL REPORT
20 Table of
Contents
04
Strategic Report
IDH at a Glance
Chairman’s Message
06
12 Highlights of 2023
14
18 Chief Executive’s Report
24 A Note from Our Vice President and Group CFO
26 Our Markets
42 Our Brands
48 Our Services
52
56
Competitive Strengths & Growth Strategy
Principal Risks, Uncertainties, & Their Mitigation
64
Performance
Financial & Operational Review
TCFD Report
66
80
88 Corporate Social Responsibility
92
Corporate Governance
94 Board of Directors
98 Corporate Governance Report
104 Audit Committee Report
108 Remuneration Committee Report
110 Nomination Committee Report
114 Directors’ Report
118
Financial Statements
120
Independent Auditors’ Report
129 Consolidated Financial Statements
134 Notes to the Consolidated Financial Statements
2023
Annual Report
01
STRATEGIC
REPORT
4 IDH 2023 Annual Report
EGP 4.1 BN Revenue in 2023EGP 468 MNNet profit in 2023 Strategic Report
Who We Are
Integrated Diagnostics Holdings (“IDH”, the “Group”, or the
in its fifth geography, Saudi Arabia, with the roll-out of two
“Company”) is a leading consumer clinical laboratory, and
branches in the capital city, Riyadh. Throughout its network,
one of the largest diagnostic players in the Middle East and
IDH continues to employ a Hub, Spoke, and Spike model to
Africa, with operations in Egypt, Jordan, Nigeria, Sudan,
ensure scalability and operational efficiency.
and Saudi Arabia. Boasting a track record stretching over 40
years and multiple international accreditations, the Com-
Alongside its organic growth, IDH remains on the lookout
pany stands as a premier and trusted provider of pathology
for strategic acquisition opportunities in new markets where
and radiology services across its growing footprint. Today,
the Company’s brand name and business model enable it to
IDH offers its patients an extensive and continually growing
effectively capitalise on healthcare and consumer trends to
portfolio of approximately 3,000 high-quality diagnostic tests
expand its operations. IDH has been a Jersey-registered entity
as well as a broad radiology offering ranging from MRI to PET-
with a Standard Listing on the Main Market of the London
CT scans. As at year-end 2023, the Group’s branch network
Stock Exchange since May 2015. Meanwhile, the Company’s
stood at 6011 branches spread across four geographies. Addi-
EGP-denominated and dual-listed ordinary shares have
tionally, in January 2024, the Company launched operations
been listed on the Egyptian Exchange since May 2021.
Our Markets
IDH currently boasts operations in Egypt, Jordan,
Nigeria, Sudan, and Saudi Arabia. The Company’s
chosen markets present similar characteristics,
including fragmented and underpenetrated diag-
nostic sectors, favourable demographic profiles, and
increasingly attractive regulatory and investment
environments. Together, these factors ensure ample
room for development and provide robust drivers for
the Company’s future growth.
IDH launched operations in its fifth and latest mar-
ket of Saudi Arabia in January 2024. The launch of its
first two locations in the Kingdom see the Company
enter one of the region’s most attractive markets,
with supportive macroeconomic fundamentals and
appealing demographic factors. The venture was
launched in partnership with Fawaz Alhokair Group
and in the coming period aims to establish a fully
fledged pathology diagnostic services brand offering
a wide array of services across Saudi Arabia.
Egypt
Jordan
8
40+
key brands with strong awareness
in underserved markets
track record at the subsidiary levels
4.1 EGP/BN
in revenue in 2023, +14% versus
2022
EGX
listed since May 2021
LSE
listed since May 2015
601
branches as of 31 December 2023
(of which 17 in Sudan are currently closed)
5
Saudi
countries across the Middle East
& Africa
Nigeria
Sudan
1 IDH’s branch network includes 17 branches in Sudan that have been closed due to ongoing conflict in the country.
6 IDH 2023 Annual Report
2023 Annual Report IDH 7
Strategic Report | Who We Are
Our Services
Clinical Pathology Offering
IDH offers approximately 3,000 internationally accredited pathology tests through its brands, ranging from
basic blood glucose tests for diabetes to advanced molecular testing for genetic disorders. IDH’s Mega Lab
is a CAP-accredited facility, a testament to IDH’s patient care and confidence in its laboratory’s practices.
Immunology
Microbiology
Haematology
Endocrinology
Clinical Chemistry
Molecular Biology
Cytogenetics
Histopathology
Genetics
Radiology Offering
In addition to its pathology offering, IDH also offers
a host of radiology services through its Al Borg Scan
brand in Egypt, as well as its Echo-Lab brand in
Nigeria. The Group’s new radiology venture, Al Borg
Scan, was launched in 2018 with the aim of expand-
ing the Company’s service offering, complementing
its pathology portfolio, and becoming a one-stop-
shop provider of diagnostic services in its home
and largest market, Egypt. To date, Al Borg Scan is
the only radiology provider in Africa to enjoy the
prestigious American College of Radiology (ACR)
accreditation, testament to the quality offered across
its branches. Today, IDH’s radiology services include
PET-CT, CT scans, MRI, Mammography, Ultrasound,
X-Ray, EMG, EEG, ECG, and Gamma Camera. Dur-
ing 2023, the Company continued to expand its
radiology network with the addition of a seventh
Al Borg Scan location. From its growing network,
its radiology subsidiary has served over 399,000
patients since inception.
Diagnostic Radiology
Interventional Radiology
Nuclear Radiology
PET-CT
CT
Mammography
Ultrasound
EMG
EEG
MRI
X-Ray
ECG
Our Brands
IDH’s core operational brands include Al Borg, Al Borg Scan, and Al Mokhtabar in Egypt; Biolab in Jordan;
Ultralab and Al Mokhtabar in Sudan; Echo-Lab in Nigeria; and Biolab KSA in Saudi Arabia.
8 IDH 2023 Annual Report
2023 Annual Report IDH 9
Strategic Report | Who We Are
Our Patients
Through its operations, the Company serves two
principal client types: contract (corporate) and
walk-in (individuals). The Company also provides
house call services to each of these client types, in
addition to a lab-to-lab service for the corporate
segment.
IDH’s walk-in clients, also known as “self-payers”,
include individuals paying out of pocket for diag-
nostics services. This category made up 36% of the
Group’s total revenues in 2023.
IDH’s contract clients, which constituted the remaining
64% of consolidated revenues for the year, encompass
institutions that include syndicates, unions, private
and public insurance companies, banks, and corpora-
tions who enter into one-year renewable contracts at
set rates per test and per-client.
An Asset-Light Business Model
IDH is able to grow in a capital-efficient manner,
utilising an asset-light business model for its lab-
oratory offering. This model is comprised of two
integral components; first, the Company’s scalable
“Hub, Spoke and Spike” network of branch laborato-
ries. Second, the Group’s dynamic and long-lasting
relationships with major suppliers, enabling rapid
expansion opportunities without the need to pur-
chase expensive medical diagnostic equipment.
Hub, Spoke, and Spike
IDH’s CAP-accredited Mega Lab functions as the
"Hub". The centre is equipped with the latest in diag-
nostic equipment and provides the necessary tools
and capacity to effectively process tests and services
for samples collected by the B-Labs (Spokes) and
C-Labs (Spikes). Meanwhile, the Group uses its
B-Labs to process routine tests, while leveraging
their capacities to manage traffic to the Mega Lab
as necessary. In parallel, C-Labs serve primarily
increasing
as collection centres,
significantly
the Company’s reach and allowing it to serve a
wider patient base nationwide. The Company also
launched an encompassing radiology venture to
complement its lab and pathology offering. This
venture diversifies the Group’s revenue streams
while boosting further growth at IDH’s conventional
pathology segment. This “plug and play” business
model is the operational backbone of the Group,
providing considerable leverage in extracting rev-
enue while forming long-lasting supplier relation-
ships to create substantial cost synergies at all levels
to be used for testing, as well as ongoing mainte-
nance and support services. As a direct consequence
of its scale and expanding volumes, IDH comforta-
bly covers minimum annual payments. Meanwhile,
the Company achieves economies of scale through
significant operating volumes and strategic pricing
power, reducing costs per test and avoiding the
initial outlay usually required for the purchase of
additional medical diagnostic equipment.
IDH’s agreements with its key suppliers have a typical
tenure of five to seven years, with equipment substi-
tution following the renewal of contracts. Extended
tenures effectively shield the Company from price
fluctuations resulting from a turbulent macroeco-
nomic environment, providing a significant advantage,
specifically considering the continued inflationary
pressures faced by the Company over the past couple
of years. In line with its commitment to stellar service
quality, the Group primarily partners with top inter-
national suppliers, including Siemens, Roche, Abbott
Laboratories, Sysmex, General Electric, and Philips.
Integrated Diagnostics Holdings
Suppliers
of operation.
Supplier Relationships
As one of the forefront providers of diagnostics ser-
vices in the MENA region, in both scale and service,
the Group enjoys significant bargaining power with
suppliers, allowing it to secure favourable terms for
both medical equipment and test kits. IDH’s supplier
contracts, which also include the provision of equip-
ment to analyse laboratory test results, have min-
imum annual commitment payments to cover the
medical diagnostic equipment, kits, and chemicals
10 IDH 2023 Annual Report
2023 Annual Report IDH 11
Strategic Report
2023 Highlights
Financial Highlights
Operational Highlights
Consolidated Revenue
Conventional revenue2
of EGP 4,123 million was recorded in 2023,
representing a 14% year-on-year increase.
Excluding Covid-19-related contributions from last
year’s figure (which amounted to EGP 702 million,
or 19% of consolidated revenues in 2022), IDH
booked an impressive 42% year-on-year increase
in conventional revenue during 2023.
Gross Profit
Adjusted EBITDA3
of EGP 1,524 million was recorded in 2023, up
4% from EGP 1,462 million in 2022. Gross profit
margin (GPM) stood at 37% in 2023, down from
41% one year prior.
of EGP 1,192 million was recorded in 2023, up 2%
year-on-year and with an EBITDA margin of 29%
(versus 33% in 2022).
Net Profit
Earnings per Share
of EGP 468 million was recorded in 2023, down
11% from EGP 527 million in 2022. IDH’s net
profit margin (NPM) stood at 11% for the year,
down from 15% in 2022.
stood at EGP 0.85 in 2023 compared to EGP
0.90 in 2022.
2 Conventional (non-Covid-19) tests include IDH’s full service offering excluding Covid-19 related tests.
3
Adjusted EBITDA is calculated as operating profit plus depreciation and amortization, excluding non-recurring expenses, specifically an EGP 11.9 million
one-off expense owed to the Egyptian government for vocational training, EGP 18.2 million in pre-operating expenses in Saudi Arabia, EGP 5.0 million
impairment expense in Sudan due to the ongoing situation in the country, and an EGP 18.0 million impairment expense in goodwill and assets in Nigeria.
As of year-end 2023, IDH
operated a total branch network
of 6014 branches, spread across
four markets. This represents
a 49-branch increase over the
previous year.
Consolidated test volumes for
the year reached a record-high
36.1 million test in 2023, up a
solid 10% year-on-year on the
back of strong growth in Egypt.
Conventional test volumes were
up 17% versus 2022, testament
to the strong underlying demand
enjoyed by IDH.
Consolidated average revenue
per test recorded EGP 114
in 2023, a 4% increase from
last year’s figure. Meanwhile,
conventional revenue per test
expanded 22% year-on-year.
During 2023, IDH served a
total of 8.5 million patients, a
marginal 2% decline compared
to 2022, primarily reflecting last
year’s Covid-19-related high
base. In parallel, the Company
booked a record-high 4.2
average tests per patient during
the year, up significantly from
3.7 tests in 2022.
In Egypt, IDH continued
to post strong results,
with consolidated revenue
reaching EGP 3,411 million,
an impressive 18% year-
on-year rise on the back of
increasing test volumes and
average revenues per test.
In Jordan, IDH reported
lower consolidated revenues,
reflecting the large contribution
made by Covid-19-related
testing in the previous year.
Meanwhile, conventional
revenue in local currency
terms for the year recorded a
solid 8% rise versus last year’s
figure, supported by rising
test volumes and showcasing
the underlying health of IDH's
Jordanian operations.
In Nigeria, Echo-Lab recorded
a 15% year-on-year increase
in revenues in local currency
terms (up 22% in EGP terms),
reaching NGN 2.0 billion in
2023. Meanwhile, inflationary
pressures and an expanded
cost base in Nigeria weighed
down on EBITDA profitability,
expanding adjusted EBITDA
losses to NGN 498 million in
2023, down from NGN 337
million one year prior.
IDH’s Sudanese operations
booked total revenues for
the year of SDG 220 million,
down 60% year-on-year (in
EGP terms, revenue declined
44% versus 2022) as the
country’s operations continue
to be heavily affected by the
ongoing conflict, which has
led to the closure of 17 of the
country’s 18 branches since
April 2023.
IDH launched its first two
Saudi Arabian branches in
2024, one in January and
another in March. In the
long run, the venture aims
to establish itself as a fully
fledged clinical pathology
diagnostic services provider
boasting a branch network
covering the entire Kingdom.
The new venture will be
fully consolidated on IDH’s
accounts starting in 2024.
4 IDH's branch network includes 17 branches in Sudan that have been closed due to the ongoing conflict in the country.
12 IDH 2023 Annual Report
2023 Annual Report IDH 13
Strategic Report
Chairman’s Message
Despite a challenging year for the healthcare sector, I am
pleased to report that 2023 was a year of sustained growth
and solid progress for your Company. IDH’s manage-
ment team was effective in delivering on the Board’s
agreed strategic objectives and remains committed to
diversifying into other jurisdictions to deliver and drive
further growth.
Navigating Challenges
We continued to face a challenging operating environ-
ment across both Egypt and Nigeria, where currency
devaluations, persistent inflation, and foreign exchange
restrictions were a major impediment to our operational
successes.
In Sudan, we decided, following the continued civil
war, to halt our operations in the country, cutting all
operating expenditure while retaining the business.
Despite these ongoing challenges we are proud to
have recorded strong, double-digit revenue growth in
2023 supported by record-high test volumes.
We also achieved 42% year-on-year growth in our
conventional revenue, which counter balances the
contribution of Covid-19-related testing in the pre-
vious year’s results and reflects the resilience of the
business.
Our core focus remains delivering excellence of care to
our loyal patients and communities. We are cognisant
of the socio-economic challenges of our patients and
ensured that our tests remained accessible to as many
people as possible.
In response to the ongoing economic challenges,
management took proactive measures to shield the
business as much as possible from exchange-rate
fluctuations and ongoing uncertainty. Our manage-
ment team leveraged the Company’s solid and long-
established relationships with our strategic suppliers
to secure long-term contracts with semi-fixed rates.
Heading into 2024, the recent developments in Egypt
leave us cautiously optimistic that the country’s econ-
omy is in recovery mode with increasing foreign direct
investment and a floating exchange rate policy.
New Beginnings
We are also pleased to report that the Group expanded
its operations in Saudi Arabia, with the inauguration of
two branches in Riyadh, one in January and another in
March 2024.
The Kingdom has an impressive record of rapid
economic growth, a growing population, and a frag-
mented diagnostic market that is complimentary with
your Company’s integrated and value-added business
model.
Driving Change
We are exploring the opportunities to embrace gen-
erative artificial intelligence (AI) and drive additional
revenue, leveraging the vast data base that we control
with stringent security and privacy.
We are enthusiastic about the potential enhancements
in the diagnostics field as AI solutions are being incor-
porated in to traditional testing protocols.
Management is also exploring cost reduction measures
and economies of scale, embracing new disruptive
technologies.
2023 was a year
of sustained
growth and solid
progress for your
Company, with IDH's
management team
remaining effective
in delivering on the
Board's strategic
objectives.
Environmental, Social, and
Governance (ESG)
We are committed to maintaining transparent and sus-
tainable operations across our markets. Accordingly, we
published our second Sustainability Report in January
2024, addressing our ESG practices and the initiatives
we take to increase our stakeholder impact.
Risk Matrix
Our Audit Committee consistently monitors our risk
matrix, ensuring that we have the right policies in
place to ensure business continuity, while promoting a
productive work environment for our team.
Lord St John of Bletso
Chairman
14 IDH 2023 Annual Report
2023 Annual Report IDH 15
Strategic Report | Chairman’s Message
We are enormously grateful and proud of our dedicated
and loyal workforce, led by our highly experienced
management team. Having most of the staff based
out of our Smart Village headquarters in Cairo has
enhanced staff morale and team building.
Over the past year, we continued to attract and retain
the highest calibre of medical and non-medical talent.
In January 2024, we welcomed aboard Sherif El Zeiny
as Vice President, Group Chief Financial Officer, and
Board Member. Sherif brings a wealth of experience in
financial management and corporate strategy and will
play a pivotal role in ensuring our future success.
Our Thanks to Our Shareholders
Finally, we would like to extend our thanks to our
shareholders and reiterate our commitment that we
shall do everything possible to drive maximum value.
Despite the challenges we continue to face across our
markets, we are confident that our resilient business
model and value-creation strategies will assist in this
aspiration going forward.
Since our initial public offering back in 2015, your
Company has been committed to paying a regular divi-
dend. Foreign exchange restrictions in Egypt meant we
were unable to distribute dividends for the year ended
31 December 2022 and have also been unable to dis-
tribute dividends for the year that just ended.
We enter 2024
eager to build on
the foundation laid
in 2023 so that we
may continue to
deliver sustainable
value for our
shareholders.
to support operations, capital expenditure plans, and
potential acquisitions.
We enter 2024 eager to build on the foundation laid in
2023 so that we may continue to deliver sustainable
value for our shareholders while offering our patients
world-class quality and superior experience.
Despite this decision, our dividend policy has not
changed. As part of our asset-light strategy, our dividend
policy is to return to shareholders the maximum amount
of excess cash after taking into account the capital needed
Lord St John of Bletso
Chairman
16 IDH 2023 Annual Report
2023 Annual Report IDH 17
Strategic Report
Chief Executive’s Report
Dr. Hend El-Sherbini
Chief Executive Officer
2023 was a year characterised by growth and execu-
tion, as the Company delivered robust revenue growth
despite a challenging operating environment and took
important steps forward on our long-term growth and
value creation strategy. After months of preparation, in
January 2024, we added a fifth market to our portfolio
with the official launch of Biolab KSA in Saudi Arabia.
At the same time, we continued to capitalise on the
important growth opportunities offered by our exist-
ing markets to drive strong year-on-year consolidated
revenue growth and continue expanding our reach in
the process. We ended the year on very solid footing,
having once more demonstrated the resilience of our
business model, the potential of our chosen markets,
and the effectiveness of our growth strategies.
A Year of Macroeconomic Turbulence
As a business operating in this part of the world, we
are no strangers to macroeconomic volatility. 2023
was no different, as our markets of operation were
confronted with devaluation, record-high inflation,
tightening monetary policies, and fluctuating energy
prices. Over the last two years, our home and largest
market of Egypt has been particularly impacted by
global economic headwinds stemming from the post-
Covid-19 recovery, the Russia-Ukraine conflict, and
the most recent escalation in the Israeli-Palestinian
conflict. Meanwhile, inflation has remained at record-
highs throughout 2023, continuing to put increasing
pressure on consumers and businesses alike. On a
similar note, following a devaluation of the Nigerian
Naira (NGN) in early 2023, Nigerians have been con-
fronted with rising inflation and soaring diesel prices.
Finally, the eruption of a civil war in one of our oldest
geographies, Sudan, resulted in the near complete halt
of IDH’s operations in the country, with the majority of
our branches indefinitely shut down.
Despite all this, our two largest markets, Egypt and Jor-
dan, remained resilient, supported by attractive fun-
damentals that are set to drive their long-term growth
over the coming decade. Leveraging our established
brand name and strong market positioning, we are
ideally positioned to capitalise on these fundamentals,
drive future growth, and generate sustainable value for
all stakeholders.
A Year of Sustainable Growth and Value
Creation
Throughout 2023, IDH continued delivering on its
promise of caring for its patients, providing unparal-
leled quality and accuracy in its testing, and building
long-term relationships across its communities. At the
same time, in line with our commitment to sharehold-
ers, we continued to drive growth and profitability
across the business, recording remarkable results
throughout the year.
Looking at our results in more detail, in the 12 months
ended 31 December 2023, we recorded total revenues
in excess of EGP 4,100 million, up a solid 14% from last
year’s figure that had included significant contribu-
tions from Covid-19-related testing. Excluding Covid-
19-related contributions from the comparable period,
revenue growth at our conventional business was even
more notable, coming in at 42% for the year and sitting
89% above pre-pandemic revenues of EGP 2,1795 million
in 2019. Conventional revenue growth was supported
by steady rises in test volumes; increased contributions
from our house call services, which sit comfortably
above pre-pandemic averages at 14%; and increased
growth momentum from our fast-growing radiology
venture, Al Borg Scan, which saw the launch of a seventh
branch in 2023. More specifically, in 2023, we performed
17% more conventional tests compared to the previous
5 Excluding contributions from the 100 million lives campaign in 2019
Throughout 2023,
IDH continued
delivering on
its promise of
caring for its
patients, providing
unparalleled quality,
and building long-
term relationships
across its
communities.
12 months. Conventional revenue growth was also sup-
ported by our strategic price increases, which saw aver-
age revenue per conventional test increase to EGP 114
versus EGP 94 last year. These increases, which remain
below market averages, not only ensured that our
tests continued to be affordable for as many people as
possible but also enabled us to build stronger relation-
ships with our patients, boosting long-term retention.
As a result of these efforts, one of our most important
operational metrics, average tests per patient, reported
its highest figure on record, coming in at 4.2 tests in 2023
up from 3.7 in 2022.
18 IDH 2023 Annual Report
2023 Annual Report IDH 19
On a geographic basis, we recently launched operations
in our fifth geography, Saudi Arabia, expanding our
geographic reach in one of the region’s fastest-growing
economies characterised by favourable demograph-
ics. Meanwhile, Egypt, our largest market, continued
to represent the lion share of consolidated revenues,
contributing 82.7% in 2023. Total revenues in our home
market rose by 18% for the year to record EGP 3.4 bil-
lion, supported by higher volumes and prices. Similar
to trends seen at the consolidated level, conventional
revenues in Egypt rose by an impressive 40% versus
2022. Throughout the year, we performed 33.4 million
tests, a robust 13% year-on-year increase, testament
to the growing attractiveness of our offering. We also
recorded the highest ever number of tests per patient
at 4.2, as the revamped loyalty programmes introduced
as part of our post-Covid-19 strategy delivered the
desired results. Higher test and patient volumes were
also supported by an expanded branch network, which
saw the addition of 44 new branches in 2023, as well
as by our house call services, which remain a preferred
method to access our services for a significant segment
of our patient base. Meanwhile, the Company booked
an 18% increase in average revenue per conventional
test on the back of strategic price hikes introduced at
the start of the year. Revenues in Egypt were further
boosted by an increasing contribution from our fast-
growing radiology venture, Al Borg Scan. The venture
recorded revenues of EGP 155 million for the year,
up 82% from 2022. To build on this momentum, in
September 2023, we rolled out a seventh Al Borg Scan
location with our radiology network now spanning the
entire Greater Cairo area and ensuring that we rapidly
capture a growing share of this high-fragmented and
quickly expanding market segment.
Meanwhile, in Jordan we recorded similar trends,
with conventional revenues reporting a year-on-year
increase of 68%. Conventional growth was also evi-
dent in local currency terms, reaching JOD 14 million,
and representing an 8% rise compared to 2022. Con-
ventional revenue growth in Jordan was wholly driven
by higher test volumes, which grew to 2.4 million tests
during the year, as the Company continued to focus
on driving volumes in the highly price-regulated
geography. Meanwhile, consolidated revenues in
Jordan were down 34% compared to 2022, due to
significant contributions from Covid-19 testing in the
previous year (constituting 41% of Jordan's revenues).
Due to its material insignificance in 2023, we have
opted not to report on Covid-19-related revenues
since the start of the year. In Nigeria, our operations
posted a 15% rise in revenues in NGN terms, on the
back of higher test prices as Echo-Lab continued to
adjust its mix in favour of its higher-priced offerings.
Top-line growth in Nigeria was achieved despite a
12% year-on-year decline in test volumes. It is also
important to mention that the devaluations of the
Naira seen between February 2023 and February 2024,
along with an expanding cost base, has led to widened
EBITDA losses, reaching NGN 498 million during the
year. Finally, in Sudan, our operations remain highly
affected by the ongoing conflict, which has seen the
temporary closure of 17 out of 18 branches starting in
April 2023. Since the start of the conflict, we have con-
tinued to closely monitor the situation, prioritising as
always the health and safety of our staff and patients.
Throughout the year, we continued to employ a
proactive cost management strategy to mitigate the
impacts on our cost base of rising inflation and a
weakening EGP. As part of our staff retention strat-
egy, during the year, we introduced higher-than-
usual salary hikes to support our people during the
ongoing period of high inflation. Meanwhile, we
were once again happy to note that our long-term
supplier relationship and the sheer scale of our
operations enabled us to negotiate and secure very
competitive prices for test kits, helping to limit the
rise of our raw materials bill over the 12-month
period. Moreover, as the year progressed, the antici-
pated seasonal slowdowns during the first half of the
year began to fade, and the effects of our strategic
price hikes across Egypt and Nigeria began to take
effect, we saw a steady normalisation of our margins
during the second half of the year, compared to 1H
2023. As a result, we ended the full year with an
adjusted EBITDA margin of 29%, in line with the
guidance communicated to investors at the start of
the year.
Expanded Footprint
We started 2024 on an exciting note, with the launch
of the first two branches of Biolab KSA in partnership
with our Jordanian subsidiary, Biolab, and Izhoor, a
company owned by Fawaz Alhokair, chairman of the
renowned Saudi retail group, Fawaz Alhokair Group.
The two branches are located in the Kingdom’s capi-
tal city of Riyadh, with their day-to-day management
under the supervision of Biolab’s founder and CEO,
Dr. Amid Abdelnour, and his team. The inauguration
of Biolab KSA’s first two locations marked our entrance
into the Saudi Arabian market, one of the fastest grow-
ing and most attractive markets in the region. Once
fully ramped up, Biolab KSA aims to become a fully
fledged diagnostic services provider capable of cap-
turing the vast opportunities offered by the currently
underserved and highly fragmented Saudi market.
Over the coming years, the Saudi Arabian market is
expected to witness rapid growth supported by a grow-
ing and increasingly health-conscious population, as
well as a large elderly population afflicted by a high
prevalence of non-communicable diseases.
This latest expansion falls perfectly in line with our
long-term growth strategy, which sees us target
potential opportunities for greenfield and brownfield
investment in markets where our business model is
best fit to capitalise on prevailing demographic factors
and industry dynamics. In the coming years, we expect
our current and potential expansions in the GCC to
contribute an increasing share to the Group’s top line,
helping us to further diversify our revenue base and
guarantee the business’ long-term sustainability.
Our Sustainability Journey
As our footprint, operations, and patient base continue
to grow, we remain as committed as ever to developing
our sustainability frameworks and adhering to global
environmental, social, and governance (ESG) best prac-
tices. Across all our operations, ESG monitoring and
compliance play a pivotal role, ensuring we give back to
the communities we serve and leave a lasting impact on
our people beyond our traditional diagnostics services.
This commitment has been largely reflected in the
ambitious steps taken over the past three years to set
defined goals and strategies for our ESG initiatives and
increase our accountability towards investors and stake-
holders. In 2022, we worked closely with a leading ESG
consultant to design and implement an encompassing
strategy for our business, setting clear long-term goals
and guiding our efforts for the coming years. In 2023, we
remained on track, delivering the desired progress set
forth by our defined sustainability strategy and targets,
under the guidance and supervision of a specialised
ESG committee on our Board of Directors. To this end,
in January 2024, we published our second Sustainability
Report, with an enhanced focus on sustainability data
management, delivering on our commitment to main-
tain transparent and sustainable operations across our
geographies. Moreover, starting last year, we have been
including the Task Force on Climate-related Financial
Disclosures (TCFD) in the Company’s annual report in
line with listing requirements. We have remained com-
mitted to increasing our transparency in sustainability
disclosures. Our updated TCFD can be found on page
80 of this report.
Our experienced and highly competent Board of
Directors continues to provide the support and
guidance necessary for the uninterrupted growth
of our business. Our Board brings together a host
of established professionals boasting varied and
extensive experience in their respective fields. IDH’s
Board of Directors comprises mainly non-executive
directors and is further strengthened by robust and
constantly refined governance framework. On this
note, I am happy to announce that in January 2024,
we welcomed Sherif El Zeiny on board, filling the role
of Group Chief Financial Officer, Vice President, and
Executive Director on IDH’s Board of Directors. Sher-
if’s extensive experience in financial management
and corporate strategy is sure to prove invaluable to
the Company as we continue to identify new areas
through which to expand our presence and cement
our foothold across the region. In the period prior to
Sherif joining the Company, our finance team, rely-
ing on their specialised training and knowledge of
both LSE and EGX reporting requirements, worked
tirelessly to ensure the Company's efficient operation
during this transitional phase. I want to extend my
20 IDH 2023 Annual Report
2023 Annual Report IDH 21
Strategic Report | Chief Executive’s Report
gratitude to all the members of our staff and manage-
ment team who contributed to our success during the
second half of the year and ensured a smooth hando-
ver to Sherif when he officially joined in January.
Our Outlook for 2024
Despite the significant macroeconomic hurdles we
have had to overcome over the past two-year period,
IDH has continued to prove its resilience, relying on
its proven strategies and expertise to achieve notable
operational and financial success throughout the
entire period. Our impressive results in 2023, specifi-
cally, have underscored the success of our long-term
growth strategies to expand our conventional business
and usher in a new era of sustained success following
the end of the Covid-19 pandemic. I remain confident
in IDH's abilities to navigate macroeconomic pres-
sures and deliver yet another year of sustained growth
and expansion in 2024.
Across our more established markets of Egypt, Jor-
dan, and Nigeria, our priorities remain unchanged.
Throughout these markets, we will continue to target
double-digit revenue growth supported by a combi-
nation of higher volumes and prices. Meanwhile, in
Egypt, we will continue to grow our branch network to
widen our reach and expand our patient base across
the country. We will also continue to ramp up our radi-
ology venture in Egypt, Al Borg Scan, growing its con-
tribution to the country’s revenues and providing an
all-encompassing test offering for our patients. On the
pricing front, across both Egypt and Nigeria, regularly
scheduled price increases were introduced at the start
of the year. In the coming months, we will evaluate the
available room to implement further price hikes with
our primary goal remaining the retention and support
of our patients during these difficult times.
In terms of our profitability, we expect continued
margin normalisation throughout 2024, as businesses
and consumers adapt to the initial effects of the
devaluation. Throughout the year, IDH will continue
to leverage its standing as a leader in the industry to
negotiate favourable terms with our test kit suppliers
and ensure we maintain our costs ratios and margins
in line with historical averages. In parallel, we are
constantly studying avenues for cost optimisation
throughout our operations, maintaining adequate
stocks and streamlining our operations where pos-
sible to eliminate all unnecessary expenses.
In parallel, we are excited to continue ramping up
our new Saudi venture in partnership with Biolab
and Izhoor. In the coming year, we will look to
establish the Biolab KSA brand in the Riyadh market
through targeted marketing campaigns and through
the delivery of exceptional quality to patients. Mean-
while, we will also look to rapidly expand our branch
network and operations, cementing our position
as a full-fledged diagnostics provider in the Saudi
Arabian market.
While our long-term dividend policy that sees us
return to shareholders the maximum amount of
excess cash after taking careful account of the cash
needed to support operations and expansions remains
unchanged, the continued economic headwinds and
foreign currency shortages in Egypt have led the Board
of Directors to opt not to distribute dividends for the
year ended 31 December 2023.
Dr. Hend El-Sherbini
Chief Executive Officer
22 IDH 2023 Annual Report
2023 Annual Report IDH 23
Strategic Report
A Note from Our Vice President
and Group CFO
We will remain
focused on growing
patient and test
volumes across
both existing and
new markets while
making tactical
investments to drive
future growth.
As I embark on this exciting new journey with IDH,
I look forward to leveraging my multi-decade expe-
rience across a wide spectrum of industries and
markets to deliver incremental value to our patients,
shareholders, and wider communities. What Dr.
El Sherbini and the IDH team have been able to
achieve over the past years is inspiring, and I am
eager to contribute to the Group’s continued growth
and success.
A Digital Business Optimised for
Growth
In a rapidly changing world, harnessing the latest
technology and digital solutions has become imper-
ative. Over the coming year, we will be implement-
ing a Group-wide digitalisation strategy aiming not
only to roll out world-class solutions across various
aspects of the business but also to ensure that these
are integrated to maximise their value-added.
In similar fashion, we will also work to enhance our
internal data collection and processing capabilities
to provide managers at all levels of the Company
with the information they need to make informed
decisions, optimise the quality we deliver to patients,
and drive growth across the business. In particu-
lar, our efforts in the near term will pivot towards
assessing and deploying new artificial intelligence
(AI) tools and remaining at the forefront of a rapidly
changing diagnostic industry.
Profitable Growth
As always, the number one goal remains achieving
sustainable growth. On the one hand, we will remain
focused on growing patient and test volumes across
both existing and new markets while making tacti-
cal investments to drive future growth. On the other
hand, we will look to optimise all aspects of the busi-
ness, maintaining lean operations to navigate ongo-
ing cost pressure coming from a weakening EGP and
rising inflation.
Expanding Our Reach
With the roll out of our first Saudi Arabian branch
in early 2024, the Company has officially entered
into its fifth geography. Having previously worked
in Saudi Arabia, I look forward to supporting the
management team on the ground to ensure a rapid
and successful ramp up of operations. In parallel,
we will continue to be on the lookout for attractive
opportunities to grow our footprint and penetrate
new markets where our business model and supe-
rior know-how are well-placed to succeed.
Accountability and Credibility
Maintaining sound financial policies and adhering
to strong governance frameworks are at the heart of
any successful business. I am excited to be working
with Dr. Hend El Sherbini and my esteemed col-
leagues on IDH's Board of Directors as we start to
build a future of financial growth and operational
expansion for the Company, while ensuring we
continue to provide the Company with the guidance,
accountability, and credibility needed to make this
new chapter another successful one.
Sherif El Zeiny
Board Member, Vice President, and Group CFO
Sherif El Zeiny
Group Chief Financial Officer and Executive
Director
24 IDH 2023 Annual Report
2023 Annual Report IDH 25
Strategic Report | Our Markets
Our Markets
Key Market Dynamics
Barriers to Market Entry
5
countries of operation
6016
operational branches,
+49 versus 2022
Test results are usually received in-person by patients
(typically accompanied by a specialist report), which
the patients then return to the original physician
who ordered testing for diagnosis. IDH also provides
same-day electronic delivery of test results to patients
via SMS, with test results also available via the Com-
pany’s mobile app. IDH’s sales and marketing activi-
ties actively target:
• Physicians: through direct sales visits to individual
practitioners, educational and peer congresses,
client information leaflets, volume-based loyalty
programmes, and the organisation or sponsorship of
conferences.
• Walk-in Patients: through social media channels,
mass-market and targeted health awareness cam-
paigns, outdoor advertising, television, radio, and
online advertising.
• Contract Patients: through direct outreach to insur-
ers and employers.
The emerging markets in which IDH operates boast
many similar characteristics that differ substantially
from those of many Western markets. In emerging mar-
kets, the healthcare sector is divided between publicly
and privately funded institutions, allowing patients a
greater degree of freedom when choosing healthcare
providers. Additionally, general practitioners (also
referred to as family medicine practitioners or primary
care specialists) are not widely available; as a result, they
do not stand as gatekeepers through which patients
receive primary or specialist medical attention as they
typically do in more mature Western markets.
Patients requiring medical attention may choose to
receive it through visiting an emergency room, an
outpatient clinic or polyclinic, or seeking the advice
of a specialised physician directly. In doing so, medi-
cal personnel may order tests while recommending
a specific service provider, although in most cases,
patients are free to choose the service provider of
their liking. The choice of service provider depends
on several factor, including perceived service qual-
ity, pricing, insurance compatibility, and several
other factors. Walk-in patients (referred to as “self-
payers”) pay out of pocket in advance of the required
tests being completed.
6 IDH’s branch network includes 17 branches in Sudan that have been closed due to ongoing conflict in the country.
Brand Equity and Reputation
Patients are loyal to the Company’s leading brands, with a successful track
record spanning more than four decades.
Accreditation of Facilities
State-of-the-art testing capabilities and facilities are required to attract
contract clients. IDH currently boasts accreditations from CAP, ACR, ISO,
JAS, HCAC, and JCI.
Market Reach
The fragmented markets in which IDH operates demand a widespread
geographic presence for broad customer reach. The Company currently
operates the largest private labs network in Egypt, with operations in four
additional geographies.
Relationship with Key Stakeholders
Long-lasting relationships with stakeholders, including physicians and
suppliers, are required to support a scalable platform.
Economies of Scale
IT-enabled platforms, critical mass (higher margins), decades of
unparalleled experience, and the latest in medical equipment mitigate
against new entrants
26 IDH 2023 Annual Report
2023 Annual Report IDH 27
Strategic Report | Our Markets
Egypt
IDH’s home and largest market of Egypt has been
at the centre of the Company’s growth story for over
four decades and, today, continues to play a key role
in driving performance and setting new standards for
the Group’s other markets. In Egypt, the Company
operates under two separate segments, pathology and
radiology, creating a fully fledged service provider and
enabling the Company to position itself as a one-stop
shop for its patients’ diagnostic needs. At its pathology
segment, the Group operates two leading pathology
labs, Al Mokhtabar and Al Borg Laboratories. Mean-
while, in 2018, in line with its long-term growth and
value creation strategy, IDH launched its radiology
venture, Al Borg Scan, capturing the attractive oppor-
tunities offered by the underpenetrated market with an
expanding branch network across Greater Cairo.
Egypt’s diagnostic market can be split into two distinct
sectors, public and private infrastructure, with the
latter consisting of labs attached to private hospitals
as well as standalone labs (chains and single-doctor
labs). On a geographic basis, Egypt’s most important
cities account for the majority of labs nationwide, leav-
ing ample opportunity to capture underserved areas
of the country and reach a wider patient base across
Egypt’s 27 governorates. Moreover, the corporate
2023 Key Highlights
83%
Contribution to
CONSOLIDATED
REVENUE
in 2023
market is growing as the main driver for diagnostics
services, contributing more to the sector’s top line as
more companies expand healthcare coverage for their
employees.
IDH enjoys a strong competitive position in the
Egyptian diagnostic industry, expanding its reach and
cementing its place as a market leader while creating
significant barriers to entry by leveraging its successful
40-year track record. Today, IDH continues to be the
number one private provider by market share in the
country, with a leading position in the corporate insur-
ance sector. Although there have been no recent official
544
branches as at year-end
2023, +44 versus 2022
3.4 EGP BN
revenues in 2023,
up 18% y-o-y
8.0 MN
patients served in 2023,
up 5% y-o-y
Long-standing brands
with impeccable
reputations have
fostered patient loyalty
Solid stakeholder
relationships, including
those with physicians,
patients, corporate
clients, suppliers, and
hospitals
A scalable, asset-light
business model that
enables expansion in
fragmented markets
International accreditations,
most notably the coveted
College of American
Pathologists (CAP)
certification of the Mega
Lab, as well as the American
College of Radiology (ACR)
accreditation
government statistics released, IDH commissioned the
Boston Consulting Group (BCG) in 2016 to complete a
comprehensive study of the Egyptian diagnostic mar-
ket. As a result of this study, BCG estimated IDH’s two
lab brands accounted for over 50% of revenues in the
Egyptian private chain market.
In an effort to expand its service offering and create a
fully fledged service provider in its home market, IDH
launched Al Borg Scan, the Company’s newest and
fastest-growing radiology venture in Egypt, in 2018.
This venture has since booked notable and consistent
operational and financial success, steadily establish-
ing itself as a notable player in the radiology market.
Over the past few years, to capitalise on the strong
momentum enjoyed by the venture, IDH has invested
significant resources to boost Al Borg Scan’s branch
network. As at year-end 2023, the venture was operat-
ing seven branches across Greater Cairo, with its latest
branch launched in September 2023. Moreover, testa-
ment to the superior quality and service offered by the
subsidiary, Al Borg Scan is currently the sole radiology
provider in Africa to boast the prestigious American
College of Radiology (ACR) accreditation.
Growth in the Egyptian diagnostics industry is sup-
ported by robust market fundamentals, including:
• A large and growing population of over 100 million,
making Egypt the most populous country in the Mid-
dle East and North Africa (MENA) region; in terms
of demographics, it hosts a significant and growing
elderly population.
• An increasing prevalence of diseases, including com-
municable and non-communicable diseases, tropical
diseases, and lifestyle diseases, such as diabetes.
• A growing governmental role to increase awareness
on the importance of diagnostic testing in preventa-
tive healthcare, supporting the growth in laboratory
diagnostics as a tool in clinical practice.
• The roll-out of mandatory health insurance and
the subsequent increase in demand for private
diagnostic testing.
Macroeconomic Developments
The Egyptian economy has been facing strong head-
winds starting in 2022 and carrying on in 2023. Over
the last two years, Egyptian people and businesses
have witnessed multiple currency devaluations, faced
record-high inflation and the subsequent tightening
of monetary policy, and had to confront the spill overs
of two conflicts in Ukraine and Gaza. In early 2024,
the Egyptian government announced a series of initia-
tives and agreements that are expected to significantly
alleviate the short- and medium-term pressures on the
Egyptian economy and business community.
28 IDH 2023 Annual Report
2023 Annual Report IDH 29
Strategic Report | Our Markets
2023 in Review
Between March 2022 and January 2023, the Egyptian
Pound was devalued multiple times, going from trad-
ing at EGP 15.7 to the US dollar to EGP 30.9 to the
US Dollar. While the official exchange rate remained
fixed at 30.9 to the US Dollar for the remainder of
2023, in the unofficial black market, the exchange rate
progressively climbed reaching as high as 53.0 to the
US Dollar by year end. Similar trends continued in
early 2024, with the black market surpassing the 70.0
to the US Dollar mark in the final week of January.
With Egypt being heavily dependent on USD-
denominated imports, the devaluation of the EGP has
expectedly led to record-high inflation in the country,
with the annual urban inflation rate reaching 33.7% in
December 2023. As a result, the Central Bank of Egypt
(CBE) hiked interest rates in an attempt to tackle
inflationary pressures. The CBE’s main operation and
discount rates stood at 19.75% in December 2023,
versus 16.75% at the start of the year and the 9.75% in
early March 2022.
2024 Outlook
On 1 February 2024, interest rates were hiked a fur-
ther 200 basis points to 21.75%. Significant improve-
ments in the country’s economic situation and
outlook were recorded starting in late February and
early March 2024, following the signing of a historic
USD 35 billion agreement between the Egyptian
government and Abu Dhabi’s sovereign wealth fund,
ADQ, granting the latter development rights to Ras
El Hekma on Egypt’s North Coast. Following the
announcement, the black-market rate decreased
significantly, settling in the low 50 to the US Dollar
range. This is expected to be just the first in a series
of announcements and initiatives aimed at attract-
ing FX and investments back into the country.
On 6 March 2024, the CBE devalued the Egyptian
Pound, settling at nearly EGP 49.5 to the US Dollar at
official bank rates, compared to the EGP 30.85 that
had remained nearly unchanged for the past year.
Following the decision, the CBE increased interest
rates by another 600 basis points, reaching 27.75%.
In parallel, and largely due to external geopolitical
factors as well as a decline in domestic production,
Egypt has been facing an energy crisis starting in the
summer months of 2023. As a result, the government
has introduced scheduled blackouts nationwide
in an effort to curb spiking demand on the back of
a heat wave that began in late July 2023. Significant
temporary import cuts from Israel due to the ongo-
ing Israeli-Palestinian conflict placed further pres-
sures on natural gas supply, forcing extended power
cuts to continue well into the fall.
In the final months of 2023, all three major rating
agencies S&P Global Ratings, Fitch Ratings, and
Moody’s downgraded Egypt’s sovereign debt between
October and November 2023, owing to increased risks
to external financing, macroeconomic stability, and
the trajectory of already-high government debt, in
addition to slow reform progress and FX constraints.
Several of these concerns were significantly reduced
by the landmark agreement signed by the Egyptian
government in February 2024, which is outlined in the
following section.
On the heels of the devaluation, Egypt and the
International Monetary Fund (IMF) finalized an
agreement, securing an expanded loan package
of USD 8 billion. At the same time, in 2024, the
Egyptian government is looking to raise over USD
6 billion from its privatization programme through
the sale of stakes in government and military-owned
businesses to private local and foreign investors.
Combined, these are set to cover Egypt’s short-term
financing needs for the coming three to four years.
While the short-term impacts of the devaluations
between 2022 and 2024 (both in the official rate and
unofficial black market) have been severe, these are
expected to have long-term benefits for the Egyptian
economy. From attracting greater foreign direct
investment and remittances to boosting exports and
tourism revenues, an Egyptian Pound that reflects its
true market value is set to be a cornerstone of Egypt’s
macroeconomic recovery in the coming years.
Improving sentiment is also reflected in estimates
and forecasts from major international agencies.
Following the last devaluation of the EGP in March
2024, Moody’s revised its outlook on the country
from negative to positive, citing Egypt’s transition
to a managed float system, the expanded package
from the IMF, and the government’s commitment
to a tightened fiscal policy as drivers for a healthy
private sector environment, helping restore investor
confidence. In FY2023-24 the Egyptian economy
is forecasted to grow 3.0% according to estimates
from the International Monetary Fund (IMF), and
by 3.5% according to forecasts by the World Bank
and S&P. Meanwhile, according to BMI, inflation
is expected to cool to an average of 27.4% year-on-
year in 2024 from 34.1% in 2023, as a favourable
base effect outweighs the inflationary impact of the
devaluation. The Egyptian government is targeting
average annual inflation of around 15% in FY2024-
25. Finally, it is worth noting that in December 2023,
President Abdel Fattah El-Sisi was re-elected for a
new six-year term.
Financial and Operational Highlights
IDH’s home and largest market, Egypt, recorded a solid
acceleration starting in May 2023, recording sustained
top-line growth throughout the second half of the
year and closing out 2023 with consolidated revenue
of EGP 3,411 million, up 18% year-on-year. Excluding
the significant contributions made by Covid-19-related
testing in 2022, conventional revenue growth was even
more impressive at 40% for the year, boosted by 18%
increases both in test volumes and average revenue per
conventional test.
IDH’s fast-growing radiology venture, Al Borg Scan, con-
tinued to post impressive results throughout the second
half the year, with revenues reaching EGP 155 million
in 2023, representing an 82% year-on-year increase.
Top-line expansion during the year was primarily due
to higher scan volumes, which rose 43% year-on-year
in 2023, partially due to the ramp up of operations at
the venture’s newest branches. Additionally, average
revenue per scan increased 27% year-on-year, reaching
EGP 717, further contributing to revenue expansion. In
September 2023, Al Borg Scan inaugurated its seventh
branch, located in Cairo’s Nasr City neighbourhood. The
launch of this latest branch is directly in line with the
Company’s long-term strategy of expanding its presence
in Greater Cairo and cementing its position as a leader
in the country’s highly fragmented radiology market.
In the year ended 31 December 2023, IDH’s house
call service in Egypt continued to make a robust
contribution of 16% to total revenues in the country.
This remains significantly ahead of the service’s pre-
pandemic contribution, highlighting not only the
segment’s growth potential but also the effectiveness
of IDH’s investment and ramp up strategy, specifically
throughout the Covid-19 pandemic.
Finally, our Egypt-based subsidiary, Wayak, which
utilises IDH’s vast patient database to create elec-
tronic medical records and offer customised services
for our patients, completed 177,000 orders in 2023,
representing a 33% year-on-year increase. On the
profitability front, the venture’s EBITDA losses con-
tinued to narrow steadily, recording EGP 28,000 in
2023 versus the EGP 3.8 million in EBITDA losses
booked in 2022.
Turning to profitability, IDH’s Egyptian operations
recorded adjusted EBITDA of EGP 1,058 million, a 1%
year-on-year increase compared to FY 2022. Adjusted
EBITDA margin recorded 31%, a five-point year-on-year
decrease. Lower EBITDA profitability reflects higher
SG&A outlays, which increased 18% year-on-year and
weighed down on profitability during the year.
Operationally, IDH rolled out 44 new branches in Egypt
during 2023, including a new Al Borg Scan branch.
Through its expanded branches and house call services,
IDH served 8.0 million patients in 2023, up 5% year-on-
year, and performed 33.4 million tests, 13% above last
year’s figure. Meanwhile, conventional test volumes
jumped an impressive 18% year-on-year, demonstrating
the strong demand for the Company’s traditional offering.
30 IDH 2023 Annual Report
2023 Annual Report IDH 31
Strategic Report | Our Markets
Jordan
IDH first began operations in the Jordanian market
in 2011 when it acquired a 60% stake in Biolab, a
market-leading diagnostic testing provider in Jordan
with a track record surpassing two decades. Biolab
is run by Dr. Abdelnour, the venture’s founder, and
currently operates a branch network of 27 branches
spread across the Kingdom’s major cities.
Boasting one of the most developed healthcare
infrastructures in the Middle East, Jordan enjoys
strong operating fundamentals, with Amman con-
solidating a significant proportion of services and
over 70% of Jordanians medically insured. More-
over, as per information in 2021, the majority of
medically insured Jordanians are covered through
public insurance, with 38.1% covered through Royal
Medical Services (RMS) under the Jordanian Armed
Forces, 34.4% covered through the Civil Insurance
Program (CIP) provided by the Ministry of Health,
and 12.1% enjoying private insurance schemes. As a
result, the Jordanian market allows IDH the space to
continually grow its business despite the placement
of strict pricing regulations, which have remained
unchanged since their issuance by the Jordanian
Ministry of Health in 2008. Due to this fact, Biolab
focuses on driving volume growth in its operations,
2023 Key Highlights
15%
Contribution to
CONSOLIDATED
REVENUE
in 2023
expanding its service offering and portfolio to attract
more patients, increase loyalty, and boost average
testing per patient. Today, Biolab proudly stands as
the single largest lab in the Jordanian private sector
in terms of profitability.
Unlike operations in Egypt, Biolab does not operate
the typical Hub, Spoke, and Spike business model,
but rather operates a network of 27 branches offer-
ing a scalable platform for continuous and efficient
expansion. While Biolab’s branches are capable of
performing many of the 1,365 pathology tests offered
to patients, certain specialised tests are performed at
27
branches as at year-end
2023, +4 versus 2022
604 EGP MN
revenues in 2023,
down 1% y-o-y
372 K
patients served in 2023,
down 58% y-o-y
the four core labs, classified as specialty labs, creat-
ing a testing hub in Amman’s forefront medical area.
Biolab’s service offering encompasses an extensive
suite of laboratory tests and customised wellness
packages, provided with the highest standards of
patient-centric care. Tests performed include, but
are not limited to, haematology, endocrinology,
immunochemistry, parasitology, oncology, immu-
nology, transfusion medicine, molecular genetics
and antenatal diagnostics, and gene sequencing.
Additionally, Biolab does not share purchasing, sup-
ply and logistics, IT, marketing, or sales functions
with its Egyptian parent company.
Biolab finalized an agreement with Georgia Health-
care Group PLC (GHG) to establish a Mega Labora-
tory (Mega Lab) in Tbilisi, Georgia in 2020. The
multidisciplinary Mega Lab is the largest of its kind in
Georgia, standing at 7,500 square metres. Since 2019,
Mega Lab has been collaborating with approximately
100 medical institutions, including leading hospitals.
In accordance with the agreement, Biolab holds an
8.025% equity stake in the project and receives annual
IT support service fees for 10 years, in addition to
annual management fees for two years, in exchange
for the provision of information technology and man-
agement services provided.
Despite significant operating difficulties throughout
2020 and 2021 due to the Covid-19 pandemic, the
planned integration of the Mega Lab with GHG’s
network progressed according to schedule, with the
successful technology transfer of all 76 locations,
including the installation of the lab’s Laboratory
Information Management Systems (LIMS), in mid-
2021. The Mega Lab plans to develop and introduce
a B2B network of healthcare providers outside the
Group to reach its full operating potential, with
GHG’s network expected to only utilise one-third of
the facility’s total capacity.
Meanwhile, in July 2022, following multiple “Mock
Audits”, policy revisions, and rigorous staff training
programmes, Mega Lab was awarded the prestigious
JCI accreditation. With the successful awarding of
the accreditation, Biolab had officially fulfilled the
services stipulated in its management agreement.
Macroeconomic Developments
Despite growing economic hardships across the
wider MENA region, Jordan has maintained its eco-
nomic growth trend, with GDP estimated to record
an increase of 2.6% in 2023. Moreover, this growth
is estimated to continue well into the coming years,
with GDP growth anticipated to come in at 2.7% in
2024 and 3.0% between 2025 and 2028 according
to the latest International Monetary Fund (IMF)
estimates. Meanwhile, prices remain under control
throughout the Kingdom, with the average inflation
rate as per IMF estimates expected to narrow to 2.6%
in 2024, down from 2.7% in 2023, while remain-
ing steady at 2.5% for the coming five-year period.
Steady macroeconomic fundamentals and a growing
economy have continued to encourage foreign invest-
ment, with foreign direct investment as reported by
the Central Bank of Jordan in the first six months of
2023 reaching USD 776 million, a 20.9% year-on-year
increase. Supportive regulatory frameworks in the
form of easing license registrations, streamlining
services, and visa and investor cards have also been
integral in positioning the Kingdom as an attractive
foreign investment destination.
Financial and Operational Highlights
In IDH’s second largest market, Jordan, IDH booked
consolidated revenue of JOD 14 million in 2023, 42%
below last year’s figure (down 1% year-on-year in
EGP terms). The significant year-on-year decline is
wholly attributable to the high base effect resulting
from Covid-19-related testing in 2022, which had
significantly boosted last year’s consolidated top line.
32 IDH 2023 Annual Report
2023 Annual Report IDH 33
Despite economic
downturns in several
of IDH's geographies,
its two largest
markets, Egypt and
Jordan, remained
resilient, supported
by attractive
fundamentals.
Excluding this contribution, conventional revenues
recorded an 8% year-on-year expansion, supported by
an 8% rise in conventional test volumes. In EGP terms,
conventional revenues grew 68%, reaching EGP 604
million in 2023. Growth in IDH’s Jordanian operations
when looked at in EGP terms captures, in part, the
significant impact from the translation effect due to
multiple devaluations of the Egyptian Pound between
comparable periods.
IDH’s Jordanian subsidiary, Biolab, posted an adjusted
EBITDA of JOD 3.6 million, down 34% year-on-year in
2023 and yielding an adjusted EBITDA margin of 26%
(versus 23% in 2022). In EGP terms, adjusted EBITDA
came to EGP 157 million, up 16% from 2022. The
increase in adjusted EBITDA in EGP terms is due to the
translation effect following the devaluation of the EGP
in late 2022 and early 2023.
Operationally, Biolab inaugurated four new labs in
2023, taking its total network to 27 branches as at 31
December 2023. During the past year, Biolab served
372,000 patients, performing 2.4 million tests on a
consolidated basis. Meanwhile, conventional tests
performed increased a solid 8% year-on-year in 2023.
34 IDH 2023 Annual Report
2023 Annual Report IDH 35
Section Flag | Section Subtitle Strategic Report | Our Markets
Nigeria
IDH first began operations in Nigeria in February
2018, following the acquisition of Eagle Eye Echo-
Scan Limited (Echo-Scan) through an alliance with
Man Capital LLC (Man Capital), the London-based
investment arm of the Mansour Group, called Dynasty
Holding Group (Dynasty), which is 51% owned and
controlled by IDH. Following the agreement, Dynasty
partnered with the International Finance Corpora-
tion (IFC) to invest in Echo-Scan (since rebranded
as Echo-Lab). The acquisition was driven by a strong
growth opportunity in the country, with the diagnos-
tics industry valued at c. USD 140 million in 2017 and
with an anticipated value of USD 830 million by 2025,
based on research conducted at the time of due dili-
gence by the Boston Consulting Group (BCG).
Standing as the largest population on the African
continent, at over 224 million in 2023, and sharing
similarities with the Egyptian market during the
1980s and 1990s in terms of structure, development
pace, and shifting disease profiles, Nigeria’s demo-
graphic characteristics provide an attractive invest-
ment opportunity. Currently, half of the population
— a staggering 110 million people — is 17 years old
or younger. Moreover, according to estimates from
Morgan Stanley, the population is expected to more
2023 Key Highlights
2%
Contribution to
CONSOLIDATED
REVENUE
in 2023
than double in the next 50 years to reach 485 mil-
lion, adding more people than any other country in
the world over that time. Moreover, the diagnostics
market is highly fragmented and underpenetrated,
leaving ample room for economies of scale and
significant market share of a large and renowned
player. The diagnostics services industry can be
broadly divided into three groups, with the largest
of which being independent labs (chains and single
labs), followed by public and private hospitals.
The Group has introduced a comprehensive integra-
tion and value-creation strategy in Nigeria since its
12
branches as at year-end
2023, unchanged versus
2022
96 EGP/MN
revenues in 2023,
up 22% y-o-y
132 K
patients served in 2023,
down 11% y-o-y
acquisition of Echo-Lab, aiming to expand its network
throughout the country, renovate existing branches,
and expand its service portfolio through the procure-
ment of state-of-the-art equipment. As at year-end
2023, Nigerian operations had received a total invest-
ment of USD 14.3 million since inception. As a result,
Nigerian operations have continued their steady ramp
up, posting 22% year-on-year top-line growth in 2023.
In EGP terms, Nigerian operations booked top-line
growth of 22% year-on-year, with revenues coming
in at EGP 96 million. Revenue growth for the period
was driven by 32% and 39% year-on-year increases
in average revenue per test in NGN and EGP terms,
respectively, as the Company continued to imple-
ment strategic price hikes in response to inflationary
pressures in the country.
Macroeconomic Developments
With new presidential leadership starting in February
2023, the government took steps to remove oil subsi-
dies and reform the Central Bank’s leadership, lead-
ing to the abolishment of the multiple exchange rate
system and effectively allowing the Nigerian Naira to
float. Following this decision, the Naira expectedly
dropped in value, losing approximately 29% versus
the US Dollar. Following a period of instability, the
Naira is anticipated to settle at around NGN 650–700
to the US Dollar. The floating of the Naira, coupled
with soaring diesel prices, has placed significant
pressure on prices nationwide, with inflation rates
continuing to increase and reaching 28.9% in Decem-
ber 2023, compared to 21.3% at year-end 2022.
The government is currently in the process of complet-
ing a USD 10 billion reform plan to stabilize the Nige-
rian Naira, largely based on securitising dividends of
the country’s LNG company. In addition, other FX
inflows that are likely to yield quicker results include
a USD 1.5 billion facility from the World Bank, as well
as potential inflows from foreign investors increas-
ingly attracted to the Nigerian market following the
floating of the currency. According to the IMF’s latest
estimates, the Nigerian Economy is forecasted to grow
by 2.9% and 3.0% in 2023 and 2024, marginally down
from the 3.3% GDP growth booked in 2022.
Financial and Operational Highlights
Echo-Lab reported revenue growth of 15% in local
currency terms for 2023, reaching NGN 1,961 million.
Despite recording top-line growth during 2023, Nige-
rian operations booked a 12% year-on-year decrease
in test volumes, conducting 266,000 tests during the
year, compared to 303,000 tests in the previous year.
It is also worth mentioning that average revenue per
test increases in EGP terms partially reflected the
translation effect due to a weakened EGP. Meanwhile,
patient volumes recorded 132,000, down 11% versus
2022.
Meanwhile, Nigerian operations posted increased
EBITDA losses, recording an adjusted EBITDA loss of
NGN 498 million in 2023, compared to NGN 337 mil-
lion in the previous year. Decreased test volumes and
profitability in the country continue to reflect signifi-
cant economic headwinds in the country, affecting
consumer behaviour and expanding the Company’s
cost base. As a result of this economic uncertainty,
which has included two separate currency devalua-
tions between early 2023 and 2024, management has
decided to record an NGN 18 million impairment
expense in goodwill and assets in Nigeria, accounting
for rising diesel prices and inflation that are antici-
pated to continue into the remainder of 2024. Mean-
while, IDH’s management team in Nigeria continues
to assess the impacts of the economic downturns on
the Company’s operations, putting in place strategies
for further price hikes in response to higher costs
while prioritising patient retention.
36 IDH 2023 Annual Report
2023 Annual Report IDH 37
Strategic Report | Our Markets
Sudan
IDH currently operates under two brand names in
Sudan, Ultralab and Al Mokhtabar Sudan. Egypt’s Al
Borg acquired majority interest in Ultralab in 2011,
while Al Mokhtabar Sudan was established in 2010,
before the Group’s acquisition of Al Mokhtabar in
Egypt.
Sudan’s economic progress continues to be severely
affected by continued economic and political tur-
moil, starting with the secession of South Sudan in
2011 and the associated loss of the majority of the
country’s oil production. This unrest continued
throughout the remainder of the decade, culminat-
ing in the removal of the country’s president, Presi-
dent Al-Bashir, in 2019 and resulting in a subsequent
military coup, seeing the military take effective con-
trol of the government.
Despite a significant easing of tensions in 2022, a
violent conflict erupted in April 2023 between two
rival groups; the Sudanese Armed Forces (SAF) and
the Rapid Support Forces (RSF). The conflict is cur-
rently ongoing and has resulted in the death of more
than 13,000 people, injury of an additional 33,000,
and the displacement of 10.7 million as of January
2024. IDH’s two brand names in Sudan have been
2023 Key Highlights
decrease. IDH continues to closely monitor the
evolving situation, prioritising the health and safety
of its staff and patients. Operationally, during 2023,
the company served 14,000 patients and completed
40,000 tests.
Adjusted EBITDA in Sudan stood at SDG 21 million for
the year, up from an EBITDA loss of SDG 2 million in
FY 2022.
0.3%
Contribution to
CONSOLIDATED
REVENUE
in 2023
dramatically affected, with 17 of the Company’s 18
branches in the country closed starting April 2023.
The Company currently operates one remaining
facility and continues to monitor the situation to
safeguard its people and operations in the country
as possible.
Macroeconomic Developments
Prior to the eruption of fighting in Sudan, the coun-
try had enjoyed a positive economic outlook for the
coming years. In December 2020, the US govern-
ment had officially removed Sudan from its States
Sponsors of Terrorism list, paving the way for access
to international funds and investment, including
from the International Monetary Fund (IMF). The
lifting of sanctions also opened significant growth
opportunities for IDH, with the country open to
international suppliers and allowing the Company
to leverage its supplier relationships to import test
kits directly and improve efficiency and profitability.
Due to the ongoing internal conflict, the Sudanese
economy has suffered significantly, with GDP esti-
mated to shrink by 18% year-on-year in 2023. In
addition, inflation is estimated at 256% as at year-end
2023, up notably from 139% one year prior. Concur-
rently, unemployment in the country is expected to
increase drastically, reaching 46% of the workforce
in 2023 from 32% in 2022 accordingly to the latest
IMF estimates.
Financial and Operational Highlights
The ongoing conflict in the country has significantly
affected IDH’s operations, leading to the closure
of 17 of the Company’s 18 branches in the country
since April 2023. During 2023, Sudanese operations
booked revenues of SDG 220 million, down 60%
year-on-year compared to 2022. In EGP terms, rev-
enues stood at EGP 11 million, a 44% year-on-year
187
branches as at year-
end 2023, versus 17 in
2022
11 EGP MN
revenues in 2023,
down 44% y-o-y
14 K
patients served in
2023, down 80% y-o-y
7 17 of IDH’s branches in Sudan have been closed due to ongoing conflict in the country.
38 IDH 2023 Annual Report
2023 Annual Report IDH 39
Strategic Report | Our Markets
Saudi Arabia
In October 2022, IDH and Biolab, the Group’s Jor-
danian subsidiary, signed a partnership with Izhoor
Medical, a Company owned by Fawaz Alhokair,
aimed at launching a fully fledged diagnostic ser-
vices provider in Saudi Arabia. The venture is owned
51% by IDH, while the remaining 49% will be owned
by Izhoor. The venture’s total investments are set to
reach USD 19.7 million over the coming three years.
IDH will consolidate the results of the new venture.
The venture is led by Dr. Amid Abdelnour, Biolab’s
founder and CEO, with day-to-day operations over-
seen by the Biolab team, which will look to transfer
its operational expertise and high-quality standards
to the Saudi Arabian market.
In January 2024, the Company successfully rolled
out operations in the Kingdom, with the launch of
two branches in its capital city, Riyadh. The launch
of its Saudi venture is in line with the Company’s
long-term growth strategy, penetrating attractive
markets in the region with solid macroeconomic
fundamentals, robust demographic characteristics,
and supportive regulatory environments. Ulti-
mately, the partners are looking to develop a fully
fledged pathology diagnostic services provider,
offering a wide array of diagnostics services across a
far-reaching branch network in the Kingdom.
Market Overview
The strategic partnership with Izhoor Medical marks
IDH’s entrance into a fifth geography, with Saudi
Arabia representing one of the region’s most attrac-
tive markets for healthcare players and businesses as
a whole. The Kingdom boasts a stable and expanding
economy, in addition to a growing and increasingly
health-conscious population. In addition, the stra-
tegic government reforms implemented through its
Vision 2030 programme continue to encourage the
entrance of foreign investors, with healthcare spe-
cifically undergoing structural changes to encourage
private sector participation. On this front, nearly 300
Once fully ramped
up, Biolab KSA
aims to become
a fully fledged
diagnostic services
provider capable
of capturing vast
opportunities in the
highly fragmented
Saudi market.
hospitals and 2,250 healthcare centres are set to be
privatised by 2030, creating ample growth potential
for both new market entrants and existing healthcare
players. This potential is further magnified by the
fact that the government has been investing heav-
ily in the sector, with 17% (USD 50.4 billion) of the
government’s 2023 budget allocated for healthcare
spending (KSA currently accounts for nearly 60% of
total healthcare spending in the Gulf Cooperation
Council (GCC)).
Today, Saudi Arabia boasts a young population of
32.2 million, with 63% of Saudis under 30 years old,
with robust growth coming from both Saudi and
non-Saudi nationals as the Kingdom positions itself
as a global economic hub and continues to attract
more people. This population increase, coupled
with a growing focus on healthy lifestyles, has
boosted demand for quality healthcare, including in
targeted marketing campaigns and through the deliv-
ery of exceptional quality to patients. At the same
time, efforts will also be devoted to rapidly expanding
the venture’s branch network and operations. Once
the venture is fully ramped up, it will be operating
on a similar “Hub, Spoke, and Spike” business model
as IDH’s Egyptian operations. In the longer term, the
partners are targeting the launch of the KSA Mega
Lab in 2025, which will support a growing network of
smaller B, C, and D labs. By 2027, the venture is aim-
ing to operate a network of more than 50 labs, with six
to come online by year-end 2024.
the diagnostic testing space, and driven the need for
private players to support public facilities in meeting
the increased demand.
Looking at the macroeconomic picture, while total
GDP is set to come in 1.1% lower in 2023 versus the
previous year reflecting lower oil revenues, non-oil
GDP continued its steady expansion, growing 4.3%
according to World Bank estimates for 2023. The
IMF expects both total and non-oil GDP to continue
growing in the coming years, supported by the coun-
try’s diversification efforts. More specifically, GDP
growth in 2025 is forecasted to come in at 5.5%.
Outlook
In 2024, IDH and its partners will press forward with
the new venture’s multi-pronged ramp up. In the com-
ing year, one of the primary aims will be to establish
the Biolab KSA brand in the Riyadh market through
40 IDH 2023 Annual Report
2023 Annual Report IDH 41
Strategic Report
Our Brands
IDH operates several core brands throughout its
various geographies, including Al Mokhtabar, Al
Borg, and Al Borg Scan in Egypt; Biolab in Jordan;
Ultralab and Al Mokhtabar Sudan in Sudan; Echo-
Lab in Nigeria; and Biolab KSA in Saudi Arabia.
Additionally, the Group introduced its Egypt-based
data analytics venture, Wayak, in 2019, which utilises
a proprietary data analytics tool to provide patients
healthcare management services while compiling
electronic medical records.
Al Mokhtabar – Egypt
Al Borg Laboratories – Egypt
Al Mokhtabar’s first lab was launched over four
decades ago in 1979, under the leadership of Dr.
Moamena Kamel, Professor of Immunology at
Cairo University. MK Lab was later rebranded
as Al Mokhtabar and has since established
itself as a premier provider of world-class care
boasting a portfolio of over 2,500 clinical analy-
ses in the areas of immunology, haematology/
coagulation, clinical chemistry, parasitology,
microbiology/infectious diseases, toxicology,
cytology, surgical pathology, flowcytometry,
molecular biology, and cytogenetics.
The first medical laboratory to successfully
operate the Hub, Spoke, and Spike business
model, Al Borg Laboratories was established
in 1991. Today, Al Borg holds a holistic port-
folio of over 2,000 tests covering all fields of
medical testing, both conventional and non-
conventional. The company caters to walk-in,
corporate, insurance, and lab-to-lab clients.
Al Borg Scan – Egypt
Established by IDH to capitalise on the growing
opportunities of a high-value, underserved, and
highly fragmented radiology sector, Al Borg Scan
offers a full range of radiology services with an
expanding branch network across the Greater
Cairo area. Al Borg Scan harnesses the strong
brand equity and stellar reputation of Al Borg
to unlock a wide customer base and cement its
position as a leading provider of medical imaging.
The venture has maintained its impressive growth
momentum since launch, operating a total of seven
branches and launching its most recent branch in
September 2023. Al Borg Scan relies on the latest in
medical technology to offer the highest quality in
MRI, CT, ultrasound, x-ray, mammogram, and cath
lab services. Additionally, the venture is run by the
country’s foremost radiologists, ensuring the high-
est level of service and building a national brand in
Egypt that enables the Group to deliver its vision of
becoming a one-stop-shop provider of diagnostic
services to its patients, combining both pathology
and ACR-accredited radiology.
Al Borg Scan Key Highlights
7
operational branches as at 31
December 2023
161 K
216 K
patients served in 2023
scans performed in 2023
Al Mokhtabar Key Highlights
Al Borg Laboratories Key Highlights
Wayak – Egypt
312
224
operational branches as at 31 December 2023
operational branches as at 31 December 2023
4.7 MN
3.2 MN
patients served in 2023
patients served in 2023
19.9 MN
tests performed in 2023
13.2 MN
tests performed in 2023
Launched in 2019, Wayak, IDH’s Egypt-based subsid-
iary, harnesses the potential of the Group’s vast and
growing patient database and its wide geographic
reach to initiate electronic medical records for its
patients and offer customised patient services.
Through Wayak’s cutting-edge operations, IDH has
been able to provide an encompassing offering to
its chronic patients, from medication home-delivery
to diagnostic testing reminders, referrals to service
providers under IDH’s network at discounted prices,
and follow-up services.
Wayak Key Highlights
176.5 K
operational branches as at 31
December 2023
132.2 K
patients served in 2023
EGP (0.3) MN
EBITDA in 2023 (versus EGP -3.8 MN
in 2022)
42 IDH 2023 Annual Report
2023 Annual Report IDH 43
Strategic Report | Our Brands
Biolab – Jordan
Biolab was originally launched in 2001 as IDH
sought to realise its vision of becoming a leader in
Jordan’s private medical laboratory sector. Biolab
currently offers a portfolio of over 1,350 diagnostic
tests to a customer base of patients, physicians, hos-
pitals, and referring clinical laboratories through a
nationwide branch network of 27 branches. Biolab
holds accreditations from the Jordanian Ministry
of Health (MoH), the Health Care Accreditation
Council (HCAC), and the Jordanian Food and
Drug Administration (JFDA), with two branches
accredited with ISO 15189 and Joint Commission
International (JCI) and one branch boasting CAP
accreditation since 2018. Additionally, in 2023,
Biolab was awarded the ISO/IEC 27001 accredita-
tion for information security.
Biolab Key Highlights
27
operational branches as at 31
December 2023
372 K
2.4 MN
patients served in 2023
tests performed in 2023
Ultralab – Sudan
Ultralab was founded in 2008 and quickly
established itself as Sudan’s largest and most
reputable laboratory chain. Since the eruption of
political conflict in Sudan in April 2023, all of the
company’s branches have been shut down. IDH
continues to monitor the evolving situation in
the country, taking necessary steps to safeguard
its people and operations in Sudan and updating
the market whenever applicable.
Ultralab Key Highlights
0
operational branches as at 31
December 2023
9 K
26 K
patients served in 2023
tests performed in 2023
Echo-Lab – Nigeria
IDH acquired Nigerian medical diagnostics firm
in 2018 to
Echo-Lab (previously Echo-Scan)
continue the Group’s expansion efforts and lever-
age the country’s supportive demographics and
growth potential. The acquisition enabled the
Company to expand its exposure and penetrate
a fragmented market with characteristics similar
to those in IDH’s other geographies. Echo-Lab
employs a comprehensive suite of pathology and
radiology diagnostic testing, combining different
test categories under one stellar brand name.
Al Mokhtabar Sudan – Sudan
Al Mokhtabar Sudan was established in 2010,
prior to IDH’s acquisition of Al Mokhtabar in
Egypt. Al Mokhtabar Sudan provides a similar
diagnostic service offering as that of Ultralab,
with both companies following IDH’s efficient
Hub, Spoke, and Spike model, replicating the
approach employed by Al Borg and Al Mokh-
tabar in Egypt.
Echo-Lab Key Highlights
12
operational branches as at 31
December 2023
132 K
266 K
patients served in 2023
tests performed in 2023
Al Mokhtabar Sudan Key Highlights
1
operational branch as at 31
December 2023
5 K
14 K
patients served in 2023
tests performed in 2023
44 IDH 2023 Annual Report
2023 Annual Report IDH 45
Strategic Report | Our Brands
IDH's established
brand names
ideally prime
the Company to
capture new growth
opportunities and
expand its reach
across its existing
markets.
Biolab KSA – Saudi Arabia
Starting in January 2024, the Group operates
two branches in Saudi Arabia’s capital city,
Riyadh, under the brand name Biolab KSA.
The Saudi venture is owned jointly by IDH,
Biolab, and Izhoor Medical, a company owned
by Fawaz Alhokair. This newly launched ven-
ture harnesses the growth potential of one
of the region’s fastest growing economies,
characterised by a growing and increasingly
health-conscious population, to provide an
encompassing pathology services provider.
46 IDH 2023 Annual Report
2023 Annual Report IDH 47
Strategic Report
Our Services
Through its market-leading brands, IDH offers a full
spectrum of approximately 3,000
internationally
accredited pathology tests ranging from basic blood
glucose tests for diabetes to advanced molecular
testing for genetic disorders. To complement its tra-
ditional pathology offering, the Group also offers a
full suite of radiology services through its radiology
venture, Al Borg Scan, in Egypt and Echo-Lab in
Nigeria. Moreover, IDH’s Egypt-based subsidiary,
Wayak, leverages the Company’s vast and growing
patient database to provide its patients with custom-
ised services, including medication home-delivery,
diagnostic testing reminders, and referrals to service
providers.
Pathology
IDH’s comprehensive pathology test portfolio covers immunology, haematology, endocrinology, clinical
chemistry, molecular biology, parasitology, histopathology, and microbiology
Immunology
Microbiology
Haematology
Endocrinology
Clinical Chemistry
Molecular Biology
Parasitology
Histopathology
Genetics
Radiology
Through Al Borg Scan (Egypt) and Echo-Lab (Nigeria), IDH's comprehensive radiology services include, but are
not limited to, magnetic resonance imaging (MRI), computed tomography (CT), ultrasound, x-ray, mammograms,
and cath lab facilities.
Internationally Accredited Test Portfolio
The Group boasts a host of internationally acclaimed accreditations, with a robust internal audit process to ensure
the Company continues to deliver on its promise of world-class services to its patients while maintaining the
reputations of its brand names.
ISO
ISO accreditation requires an initial inspection of laboratory practices, calibration,
and medical analysis by a renowned international accreditation body. In the case of Al
Mokhtabar and Al Borg, it was URS certification, internationally accredited by the United
Kingdom Accreditation Service. For Biolab, on the other hand, the initial inspection was
conducted by the Jordanian Accreditation System (JAS). The inspection involves thorough
examination of the clinical chemistry area, the virology unit, the haematology unit, and
the general laboratory management practice. The Company’s ISO 9001 accreditations for
both Al Mokhtabar and Al Borg passed accreditation reviews in December 2022 and are
valid for three years. Additionally, in 2022, the Company was awarded ISO 45001, pertain-
ing to occupational health and safety, and ISO 14001, regarding environmental safety, for
its operations in Al Mokhtabar and Al Borg.
College of American Pathologists (CAP)
Unlike ISO accreditation, CAP certification is awarded to individual labs rather than the
Group’s operations as a whole and is widely considered the global leader in laboratory
quality assurance. The Group’s central Mega Lab in Cairo, which was inaugurated in
2015, first received its CAP certification in February 2018 and is renewable every two
years. The Mega Lab replaces two smaller, independent “A-labs”, one of which was also
CAP-certified. The accreditation was renewed in October 2023.
American College of Radiology (ACR)
In 2022, both Al Borg Scan’s nuclear medicine (NucMed) and ultrasound units obtained
the prestigious ACR accreditation, making Al Borg Scan the first laboratory to earn the
accreditation in Africa. ACR accreditation is widely considered one of the most pres-
tigious certifications for radiology service providers in the world. Through a complete
review of a facility’s equipment, medical personnel, and quality assurance processes,
ACR accreditation helps guarantee that patients receive the highest level of image qual-
ity and safety. To obtain the certificate, Al Borg Scan underwent a rigorous examination
of its facilities and operational practices. Over the last two years, IFC healthcare quality
experts worked with Al Borg Scan to evaluate the baseline level of implementation of
quality standards. They also provided guidance on required improvements in infra-
structure, policies, and processes to ensure the venture remains fully compliant with
ACR standards and requirements.
48 IDH 2023 Annual Report
2023 Annual Report IDH 49
Strategic Report | Our Services
General Authority for Healthcare Accreditation and Regulation (GAHAR)
GAHAR accreditation standards were set forth with a patient-centric focus, in line with
the highest international accreditation standards, while accounting for Egyptian laws
and culture. GAHAR was established in step with the Egyptian government’s pursuit of
ensuring quality healthcare provision for its citizens, in line with the Egyptian health-
care direction set forth under Egypt’s 2030 Vision. To date, IDH has acquired GAHAR
accreditation for 13 of its labs, including IDH’s Mega Lab.
Quality Assurance
Employee Training
IDH’s quality assurance programme ensures that all
internal diagnostic processes, lab testing procedures,
and results analyses maintain their level of accuracy.
The quality assurance programme also ensures that
the standards of the Group’s ISO and CAP accredi-
tations are met through the regular inspection of
hardware and equipment, ensuring compliance
with procedure manuals, inspecting the accuracy
of results, and conducting competency assessments
for staff. The programme also guarantees the timely
renewal of all its accreditations. Meanwhile, the
internal audit team uses a specific audit checklist for
the basic and routine tests conducted in the Group’s
C-labs, including conformity of process; testing the
competency of employees through oral, observa-
tional, practical, and written tests; and conducting
managerial audits to assess the labs’ management
and administrative efficiency.
The Group values education as an essential avenue for
ensuring quality across its laboratories and branches.
To this end, IDH operates a dedicated training facility in
Cairo with four training laboratories to develop the skills
of its employees. In 2023, the training team was composed
of one manager, two medical consultants, one director,
one section head, one supervisor, along with two learning
and development senior specialists. The centre provides
training to c. 659 employees every month, including
doctors, chemists, receptionists, branch and area man-
agers, sales personnel, and administrators. The training
curriculum provided at the facility is set based on perfor-
mance KPIs, internal audit reports, management reviews,
competency assessment, and customer feedback and
complaints. IDH’s employee training is structured along
four modules covering both technical and non-technical
skills: new employee training, competency based, need-
based, and practical re-training.
50 IDH 2023 Annual Report
2023 Annual Report IDH 51
Strategic Report
Competitive Strengths &
Growth Strategy
IDH effectively utilises its market-leading position, flexible business model, scalable platform, and seasoned
management to deliver on the Group’s long-term growth strategy while manoeuvring economic headwinds at
several of its operating markets.
Competitive Strengths
Exposure to resilient markets with favourable dynamics
IDH operates in geographies characterised by robust structural growth drivers, with
generally underserved and highly fragmented diagnostic services sectors. Meanwhile,
the counter-cyclical nature of the diagnostic and healthcare industries means that IDH
can remain resilient and maintain the growth of its business even in the face of economic
and political challenges that the Company may face in its markets. This is increasingly
evident in the Company’s performance during 2023, with IDH recording sustained top-
line growth while maintaining profitability despite ongoing challenges in several of its
markets, including its home and largest market, Egypt.
Strong market position with over four decades of industry experience
IDH’s markets of operation are defined by rigid barriers to entry (as detailed in Our
Markets on page 27). These barriers provide a significant operating advantage for
established players who, like IDH, are able to capitalise on stellar brand reputations
and patient loyalty to maintain and expand their business. IDH boasts a track record
spanning over four decades, throughout which its subsidiaries have cemented their
positions as top-tier service providers. In addition, the Company’s internationally
accredited facilities, scalable business model, and key relationships with suppliers have
continually aided IDH in its quest to expand its reach across its chosen markets.
Scalable asset-light business model
IDH employs a Hub, Spoke, and Spike business model that enables a capital efficient
expansion of the Group’s footprint. The Group operates a centralised Mega Lab fitted
with state-of-the-art, high-capacity equipment. The facility enjoys ample throughput
and supports the rapid deployment of asset-light, plug and play C-labs for sample col-
lection and simple testing across its markets. At IDH’s Mega Lab, safety remains a top
priority, with testing procedures continually reviewed and enhanced. This large-scale
operation ensures that IDH can enjoy the benefits of economies of scale and provides
the Company a unique competitive advantage over its regional peers.
Strong balance sheet and cash generation capacity
Leveraging the Group’s asset-light model, which facilitates minimal borrowing and signif-
icant strategic flexibility, the Company is able to maintain a strong financial position and
keep low amounts of leverage to fund its expansion. In parallel, core profitability remains
strong, with the Company able to report high EBITDA margins and sustain healthy cash
balances despite difficult operating conditions in several of its markets..
Experienced and entrepreneurial management
IDH relies on a highly experienced management team, boasting decades of experi-
ence in their respective field, while its experienced Board of Directors wields its wealth
of healthcare, MENA region, and investment experience to guide the Company’s
operations.
52 IDH 2023 Annual Report
2023 Annual Report IDH 53
Strategic Report | Competitive Strengths & Growth Strategy
Long-Term Growth Strategy
The Company effectively harnesses the benefits associ-
ated with its competitive advantages to capture the
significant growth opportunities offered by its markets
of operation and deliver on a four-pillar growth strategy
focused on (1) maintained expansion of its patient base;
(2) widened service portfolio to boost average tests per
patient; (3) strategic penetration of new geographic
markets through specific, value-accretive acquisitions;
and (4) introduction of new medical services achieved
by leveraging the Group’s reputable brand position.
49
new branches in 2023
8.5 MN
patients served in 2023
Expand Customer Reach
IDH constantly identifies potential opportunities
through which it can increase customer reach,
expand its patient base, and access underserved
geographies. IDH expands at a rate of 25–30
branches per annum, positioning the Company
as the largest private sector player in its home and
largest market of Egypt. IDH’s scalable, asset-light
business model eases the quick and efficient roll-
out of new labs and further expands its presence
in both the Middle East and Africa. Additionally,
the Company’s wide range of complementary
services, including house calls, e-services, and
results delivery solutions create a top-of-the-line
patient experience, enhancing customer satisfac-
tion and boosting loyalty. The Company’s house
call service, in particular, has been enjoying steady
growth over the past years, with contributions to
consolidated revenues in 2023 sitting comfortably
above pre-Covid-19 levels at 14%. The Group also
seeks to expand its business by appealing to the
corporate segment through attractive deals with
institutions, ranging from public entities, such as
ministries and syndicates, to private companies.
Additionally, the Company participates in govern-
mental campaigns, including the 100 million lives
campaign that ran from November 2018 to June
2019 and served 224,000 patients.
Increase Tests per Patient
To boost average test per patient and increase
patient loyalty, the Group is active on multiple
fronts. First, the Company’s Mega Lab is capable
of conducting several complex tests that are not
available elsewhere in Egypt. Additionally, IDH
bundles testing services into discounted pack-
ages offered to repeat customers, further driving
volume growth and average revenue per patient
— an important growth driver in periods of high
inflation. To this end, in 2021, the Group launched
its loyalty programme, designed to boost patient
loyalty and increase the Company’s average tests
per patient. This new programme immediately
increasing tests per
yielded positive results,
patient to its highest levels ever recorded at the
contract segment. Furthermore, the Company
actively participates in awareness campaigns
focused on particular illnesses and advocates for
healthy lifestyle choices as preventative measures
against lifestyle diseases, while highlighting the
importance of regular testing. These efforts and
their associated community engagement have
successfully boosted IDH’s volume growth and
increased average test and revenues per patient,
while growing the Company’s brand reputation in
the market.
Geographic Expansion
IDH constantly seeks strategic acquisition oppor-
tunities within the Middle East and Africa where
markets are highly fragmented, under penetrated,
and characterised by supportive demographic
factors. IDH’s proven business model is well-
positioned to leverage prevailing consumer trends
in this region to rapidly expand its footprint and
boost its business. While relying on the strength
of its balance sheet, IDH delivers on its objectives
through value-accretive acquisitions and partner-
ships. Most recently, the Company entered Saudi
Arabia through its newest venture launched in
partnership with Biolab and Izhoor Holding (a
company owned by Fawaz Alhokair). In the long-
run, the venture aims to establish itself as a fully
fledged, pathology diagnostic service provider
in the Kingdom. Saudi Arabia presents a unique
investment opportunity for the Company, with a
highly fragmented market in one of the region’s
fastest-growing economies. The market’s growth
in the coming years is set to be supported by an
ageing population with a high prevalence of non-
communicable diseases. At the same time, rising
demand will also come on the back of a growing
trend towards health-consciousness, specifically
among youth.
Diversify into New Medical Services
The Group believes that its brand equity, track
record, and patient following ideally position it
to pursue upcoming opportunities in adjacent
markets. Delivering on this notion, the Company
launched its Egypt-based radiology venture in
2018, expanding its footprint in the high-value
and under penetrated Egyptian radiology seg-
ment. In addition to diversifying its revenue
streams, the introduction of this venture inched
the Company closer to realising its vision of
becoming a one-stop shop for diagnostic testing
services, offering a full portfolio encompassing
both pathology and radiology services.
Furthermore, IDH marked its expansion into
data-driven, tailored healthcare management
services through Wayak in September 2019.
These services allow the Company to provide an
increasingly well-rounded and tailored health-
care experience for its patients, increasing reten-
tion rates in the process.
54 IDH 2023 Annual Report
2023 Annual Report IDH 55
Strategic Report
Principal Risks, Uncertainties,
& Their Mitigation
As is typical with any corporation, IDH is exposed to
certain risks and uncertainties that may yield adverse
effects on the Company’s performance. IDH’s Chair-
man, Lord St John of Bletso, continually emphasises
the importance of the risk matrix as an integral driver
of the Group’s long-term success, and one which must
be equally shared by the Board of Directors and senior
management.
While no system is capable of mitigating every risk,
and while some risks, as at the country level, are
largely without potential mitigants, the Group has
placed complex processes, procedures, and baseline
assumptions that provide mitigation. The Board and
senior management agree that the principal risks and
uncertainties facing the Group include:
Specific Risk
Mitigation
Country/regional risk — Economic and Forex
Egypt: IDH is directly impacted by the economic condi-
tions of its largest market, Egypt, and, to a lesser extent,
those of its other operating geographies. Egypt accounted
for c. 83% of consolidated revenues in 2023 (80% in 2022)
and 89% of adjusted EBITDA (90% in 2022).
Egypt’s most recent economic headwinds began in early
2022 with the start of the Russia-Ukraine war. The country
has been particularly impacted by the conflict due to its
significant dependency on both countries for both wheat
imports and tourism revenues. This was further exacer-
bated by a global tightening of monetary conditions to
combat record-high inflation during the post-Covid-19
recovery and widespread outflow of capital from emerg-
ing markets. Finally, the most recent escalation in Gaza
has had significant impacts on the Egyptian economy
with inflows of foreign currency weighed down by lower
tourism and Suez Canal revenues.
To tackle the shortage of foreign reserves (FX), the
government introduced plans to boost FX reserves and
maintain investor confidence. In February 2024, the
country finalized a USD 35 billion investment deal with
Abu Dhabi’s sovereign fund, ADQ. The agreement marks
a major step towards reducing the short- and medium-
term pressures on the country.
Overall, management reiterates that IDH employs a
robust and resilient business model that has helped
the Company navigate several economic and political
downturns, including two revolutions, while allowing
the business to expand its offering and record positive
growth. Moreover, as part of IDH’s long-term growth
strategy, the Company is working to diversify its geo-
graphic exposure, decreasing its exposure to any single
country. To this end, in December 2023, the Company
launched its Saudi Arabian venture under the name
Biolab KSA. Once fully ramped up, the venture will offer
a full suite of diagnostic testing services and, by 2026,
contribute over 10% of IDH’s revenues.
IDH has maintained an active approach in shielding the
business from exchange rate fluctuations in its markets.
As part of its mitigation strategy, IDH secures contracts
with tenures ranging from five to seven years (with semi-
fixed FX rates) and purchases laboratory test kits on
contract with volume-linked prices. Moreover, thanks to
its sheer operational volume and long-standing supplier
relationships, the Company is able to negotiate favour-
able test kit prices with all its major suppliers. Addition-
ally, the Company takes proactive steps to hedge against
foreign currency risks on a case-by-case basis when
applicable. Most recently, in 2023, the Company negoti-
ated for the early repayment of its contractual obligation
of USD 5.7 million with General Electric.
Specific Risk
Mitigation
Following the announcement, on 6 March 2024, the Cen-
tral Bank devalued the Egyptian Pound, settling at nearly
EGP 49.5 to the US Dollar at official bank rates. This is the
fourth devaluation since March 2022, with the EGP hav-
ing lost more than 68% of its value. The EGP is expected
to settle between 45 and 50 to the USD in the second half
of 2024. The convergence between the official and black-
market rates, and an exchange rate that more accurately
reflects the true market value of the EGP, are expected to
attract increased FDI and remittances, as well as boost
tourism and exports in line with the government’s ambi-
tious targets.
Headline inflation reached 35.7% in February 2024.
Meanwhile, the Egyptian Central Bank’s (CBE) main
operations and discount rates stood at 27.75% in early
March 2024, up 800 basis points from January 2023 and
from 9.75% in March 2022 before the start of the latest
economic crisis.
Egypt held presidential elections in December 2023,
which saw President Abdelfattah El Sisi win a new six-
year term.
Foreign currency risk: IDH is exposed to foreign cur-
rency risk, placing potential pressure on the cost side of
the business. While the majority of the Company’s suppli-
ers receive payments in EGP, due to the fact that materials
are imported, prices vary based on the exchange rate
between EGP and foreign currencies. Additionally, a
small portion of suppliers are priced in foreign currency
and paid in EGP based on the prevalent exchange rate at
the time of purchase.
IDH utilised a bridge loan facility, with half the amount
funded internally, while the other half (amounting to
EGP 55 million) was provided through a bridge loan
by Ahli United Bank – Egypt. The bridge loan was fully
settled in Q2 2023.
Starting in January 2023, IDH has renegotiated the terms
of its contracts with its major suppliers to pay for its
supplies in EGP. Some contracts with major suppliers,
however, are fixed at USD prices, with payments made in
EGP at the official exchange rate at the time of payment.
As such, there have been no USD payments for supplies
since the beginning of 2023. Furthermore, the Company
was able to conclude several agreements with suppli-
ers to set prices at rates lower than devaluation rates,
resulting in an overall increase of raw material propor-
tion to sales to 22.2% in 2023, versus 20.4% in 2022. The
Company plans to continue leveraging its established
reputation and position as a leading diagnostic services
provider in the region to negotiate favourable prices
and mitigate the effects of foreign currency fluctuations
whenever possible.
56 IDH 2023 Annual Report
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Strategic Report | Principal Risks, Uncertainties, & their Mitigation
Specific Risk
Mitigation
Specific Risk
Mitigation
Nigeria: with the election of Bola Ahmed Tinubu as
the winner of the Nigerian elections in February 2023,
the Nigerian Naira was allowed to float. Within the first
day, the Naira lost approximately 29% of its value, with
its long-term value expected to stabilise at NGN 650–700
to the US Dollar (currently at 1,025 in the parallel mar-
ket). Despite this being a necessary and positive move,
analysts believe that more policy reforms are required
to affect tangible economic change in the country,
most of which the president has not yet addressed. As a
result of the devaluation and foreign currency shortages,
Nigerian inflation has maintained an upward trend, with
inflation rates reaching 31.7% in February 2024 and die-
sel prices continuing to soar. Diesel prices stood at NGN
1,270 per litre in February 2024, up from NGN 800 per
litre in February 2023.
Country risk — Political and Security
Sudan: Sudan’s economic progress continues to be
affected by economic and political turmoil, starting with
the secession of South Sudan in 2011 and the associated
loss of the majority of the country’s oil production. This
unrest continued throughout the remainder of the decade,
eventually culminating in the removal of the country’s
president, President Al-Bashir, in 2019 via a military coup.
Despite a significant easing of tensions in 2022, a violent
conflict erupted in April 2023 between two rival groups;
the Sudanese Armed Forces (SAF) and the Rapid Support
Forces (RSF). The conflict is currently ongoing and has
resulted in the death of more than 13,000 people, injury of
an additional 33,000, as well as the displacement of 10.7
million as of the end of 2023. The conflict has resulted in
the indefinite closure of 17 of IDH’s branches in the coun-
try, with currently only one operational branch remaining.
Nigeria: the country faces security challenges on several
fronts, including re-emerging ethnic tensions and resur-
gent attacks by Islamist militants in the northeast. Political
instability is further magnified by economic pressures,
with several currency devaluations, the emergence of a
parallel foreign currency market, increased inflation, and
spiking diesel prices following subsidy removal.
In response to the high inflationary pressures in Nigeria,
management is carefully studying avenues of cost reduc-
tion at its operations, while implementing strategic price
increases. In 2023, average revenue per test in Nigeria
rose 32% year-on-year, highlighting the success of man-
agement’s mitigation strategy.
It is worth mentioning that Nigerian operations are natu-
rally shielded from foreign currency risk and inflation,
due to IDH’s asset base in the country that can be sold
in USD.
It is worth highlighting that in FY 2023, Sudan only con-
stituted 0.3% of consolidated revenues. With regards to
the ongoing conflict, management continues to actively
monitor the evolving situation in the country, taking
necessary steps and prioritising the safety of its person-
nel on the ground and its laboratories. This included
the temporary suspension of all commercial activities
at the start of the conflict at 17 of its 18 branches. IDH is
also taking steps to keep its stakeholders updated on the
developing situation.
In FY 2023, Nigeria comprised just 2.3% of IDH’s con-
solidated revenues. Additionally, while security and
political challenges do affect operations in the country,
IDH’s industry remains largely inelastic, with devel-
opments dealing minimal effects to patient and test
volumes. This is particularly apparent given the consis-
tent growth in operational KPIs, with test and patient
volumes recording a compound annual growth rate of
15% and 5%, respectively, between 2018 and 2023. It is
important to mention, however, that recent economic
downturns in Nigeria have hindered financial and
operational growth, with IDH recording a 12% year-
on-year decline in test volumes in 2023, while booking
expanded adjusted EBITDA losses, reaching NGN 498
million during the year.
Economic pressures culminated in a Nigerian Union
strike in September 2023 to protest subsidy removal and
its subsequent effects, with several critics blaming newly
appointed president, Tinubu, of not taking quick enough
actions to cushion the effects of his policies.
While these political challenges are particularly difficult
to mitigate, IDH takes the necessary steps to safeguard
its employees and operations. The Group employs rigor-
ous standards to evaluate the country’s political climate,
ensuring it is well-equipped to deal with any develop-
ments as they unfold.
While this specific conflict has no direct mitigations
from the Company’s side, IDH continues to actively
monitor the situation, placing an emphasis on remain-
ing updated on the effects of the war on IDH’s markets
of operation and the subsequent repercussions on IDH’s
business. However, it is worth noting that IDH’s business
is inherently resilient to macroeconomic and political
difficulties due to its inelastic nature of healthcare and
diagnostics demand. While the Company does not
expect any major direct impact from this war on its oper-
ations, it will continue monitoring events and update the
market as necessary.
Israel-Palestine War
The latest escalation of the Israeli-Palestinian conflict
erupted on 7 October 2023 following an attack by Gaza-
based group, Hamas. Israel has since launched a retaliation
campaign on Gaza, enacting a total siege on the territory.
As of the end of February 2024, the conflict has resulted in
the death of 30,000 people and the injury of an additional
70,000.
With the Gaza Strip bordering IDH’s home and largest
market, Egypt, and with several other of the Company’s
geographies situated within the region, namely Jordan and
Saudi Arabia, the continued conflict between Israel and
Palestine creates the potential for significant economic
and political headwinds. The conflict has the potential to
affect tourism revenues in neighbouring countries, while
shaking investor confidence and potentially leading to an
outflow of foreign investment.
Since the beginning of the conflict, Egypt has been
adversely affected due to natural gas import cuts from
Israel, resulting in shortages and necessitating the intro-
duction of scheduled electricity cuts nationwide to cope
with the lack of supply. Meanwhile, tourism has remained
resilient, with the country recording record-high volumes
in 2023 with the expectation of further growth in 2024.
Finally, due to ongoing attacks by Houthi rebels on ships
transiting through the Red Sea, Egypt recorded a decline
of 47% year-on-year in revenues from the Suez Canal in
January 2024 on the back of a 37% decline in ship volumes.
58 IDH 2023 Annual Report
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Strategic Report | Principal Risks, Uncertainties, & their Mitigation
Specific Risk
Mitigation
Specific Risk
Mitigation
Global supply chain disruptions
While disruptions to global supply chains, which
negatively impacted businesses and consumers all
over the world during the post-Covid-19 recovery, have
partially eased, they remain well below optimal levels
of efficiency. Despite this, global supply chain disrup-
tions have had limited impacts on IDH’s operations
throughout 2022 and 2023.
IDH’s management team continually monitors the
evolving situation and have taken proactive steps to
build up its inventory to shield the Group from any
potential future disruptions. IDH is in continual dia-
logue with key suppliers to gauge the risk associated
with a shortage of materials and is yet to identify a
weakness. Throughout 2023, thanks to IDH’s proactive
inventory build-up and sourcing strategy, the Group
continued to face no problems acquiring raw materials.
Legal and regulatory risk to the business
The Group’s business is subject to, and thus affected by,
extensive, rigid, and constantly evolving laws and regu-
lations, in addition to changing enforcement regimes
in each of its operating geographies. Furthermore,
the Group’s position as a major player in the Egyptian
private clinical laboratory market subjects it to antitrust
and competition-related restrictions, as well as the
chance of investigation
The Group’s general counsel and the quality assurance
team work together to keep IDH fully informed of, and
in compliance with, both legislative and regulatory
updates.
On the antitrust front, the private laboratory segment
(of which IDH is part) accounts for only a small propor-
tion of the total market, which consists of small private
labs, private chain labs, and large governmental and
quasi-governmental institutions.
Supplier risk
IDH faces the risk of suppliers re-opening price nego-
tiations in the face of increased inflationary pressures
and/or a possible, albeit limited, devaluation risk.
IDH’s supplier risk is concentrated among its three
largest suppliers — Siemens, Roche, and Sysmex – who
provide the Company with kits constituting 46% of the
total value of raw materials in FY 2023 (31% in FY 2022).
Remittance of dividend regulations and
repatriation of profit risk
The Group’s ability to remit dividends abroad may be
adversely affected by the imposition of remittance
restrictions. Specifically, under Egyptian law, compa-
nies seeking to transfer dividends overseas are required
to obtain necessary government clearance and are
subject to higher taxation on payment of dividends.
Moreover, following the recent devaluation of the EGP,
lack of foreign currency supply in Egyptian banks has
resulted in increased difficulty in sourcing foreign cur-
rency under strict regulation.
IDH enjoys strong, long-standing relationships with its
key suppliers, to whom IDH remains a large regional
client as a leader in its geographies. Due to the sheer
volume of kits the Group purchases on a regular basis,
the Company is able to successfully negotiate favour-
able pricing conditions and mitigate the effects of
inflationary pressures to maintain relatively stable raw
material costs as a percentage of revenues.
Total raw material costs as a percentage of sales stood
at 22.2% in FY 2023, compared to 20.4% one year prior.
This is also up from 18.9% in 2021.
As a foreign investor in Egypt, IDH did not face issues
in the repatriation of dividends. However, with the
onset of foreign currency scarcity in early 2022, the
Company faced significant hurdles in sourcing the
USD balance needed to fulfil its dividend obligations.
The Company continues to closely monitor the evolv-
ing economic situation to shield the business from
potential challenges.
Pricing pressure in a competitive, regulated
environment
The Group may face pricing pressures from several
third-party payers, including national health insur-
ance, syndicates, and other governmental bodies,
which are potentially capable of adversely affecting
Group revenue. Pricing may also be restricted in cases
by recommended or mandatory fees set by government
ministries and other authorities.
The risk may be more apparent in cases of increased
inflationary pressures, particularly following the devalu-
ation of the Egyptian Pound and its subsequent effects.
The Group may face pricing pressure from existing
competitors and new market entrants.
This is an external risk for which there exist few mitigants.
In the case of price competition escalation between mar-
ket players, the Group relies on its wide national footprint
as a mitigant; c. 64% of the Company’s revenues in FY
2023 were generated through IDH’s contract segment,
which prefers IDH’s national network and established
position over patchworks of local players.
IDH enjoys limited ability to influence changes to man-
datory pricing policies set forth by governmental agen-
cies, as with those in Jordan, where basic tests account
for the majority of IDH’s business in that nation, are sub-
ject to price controls. Instead, IDH’s operations in Jordan
are focused on driving volume growth as a catalyst for
expanding revenues.
IDH banks on its strong brand equity in its markets of
operation to enjoy a solid positioning. As such, IDH is
a price maker, especially in Egypt where the Group cur-
rently controls the largest network of branches among
all private sector players. Furthermore, the Group faces
no potential risk of governmental price regulations in its
home and largest market, Egypt, which constituted 83%
of revenues in 2023.
60 IDH 2023 Annual Report
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Strategic Report | Principal Risks, Uncertainties, & their Mitigation
Specific Risk
Mitigation
Specific Risk
Mitigation
Climate-related risks
IDH’s operations currently face low physical and transi-
tional risks related to climate change.
In 2022, the Company decided to begin reporting based
on the Task Force on Climate-Related Financial Disclo-
sures (TCFD) programme to provide stakeholders with
a clear framework to access its climate-related risks and
opportunities. Despite this, overall risks and opportuni-
ties related to climate change are considered immate-
rial, specifically in the short to medium term. For TCFD
disclosures related to 2023, please refer to pages 80 to 86
of this report.
Cybersecurity risks
IDH controls a vast and growing database of confidential
data for its patient records; to this end, there is a cyberse-
curity risk for both data confidentiality and security.
In July 2023, the Company reported a cybersecurity
incident after detecting unauthorised activity on its
servers.
Business continuity risks
Management concentration risk: IDH is dependent
on a highly experienced management team boasting
decades of experience in their respective fields. The
loss of key members of IDH’s team could materially
affect the Company’s operations and business.
Effective 30 June 2023 Omar Bedewy stepped down as
IDH's CFO. The position of CFO was filled on an interim
basis by the Financial Controller for six months until
the appointment of Sherif El Zeiny in January 2024.
Business interruption: virtually, all aspects of the
Group’s business use IT systems extensively. This
includes test and exam results reporting, billing, cus-
tomer service, logistics, and management of medical
data. Similarly, business interruption at one of the
Group’s larger facilities could result in significant mate-
rial losses and reputational damage to IDH’s business.
This could be a result of natural disasters, fire, riots, or
extended power failures. The Group, therefore, depends
on the continued and uninterrupted performance of its
systems.
The Company places top priority on its data security,
regularly conducting stress tests of its IT infrastructure
to confirm the effectiveness of its internal controls.
Additionally, its cybersecurity controls and protocols
are regularly updated to address potential shortcomings
and remain up-to-date and in full adherence with data
security regulations in its markets.
In response to the reported breach, immediate steps
were taken to evaluate and contain the incident, launch
an incident response plan, and engage specialist sup-
port services. While the incident did not involve patient
data nor directly impact IDH’s operations, all appropri-
ate regulatory authorities were informed of the inci-
dent, and the Company continues to conduct regular
tests of its systems to ensure their security, prioritising
the security of its patients’ data.
IDH comprehends the importance of strengthening its
human capital to support its future growth plans. The
Company is therefore committed to expanding its senior
management team, under the experienced leadership
of its CEO, Dr. Hend El Sherbini, to add and maintain
the talent needed for the expansion of its footprint. The
Group has constituted an Executive Committee, led by
Dr. El Sherbini, and composed of head of departments.
The Executive Committee meets every second week.
Following the departure of Mr. Bedewy, IDH's Regional
Financial Controller stepped in as Interim CFO until Mr.
El Zeiny took on the role on a permanent basis. During
the transitional period, IDH’s management team, led by
Dr. Hend El Sherbini, prioritised the smooth continua-
tion of all business operations and ensured an effective
handover to the new CFO.
The Group has in place a full disaster recovery plan,
with procedures and provisions for spares, redundant
power systems, and the use of mobile data systems as
alternatives to landlines, among multiple other factors.
To ensure its readiness, IDH performs disaster recovery
plan tests on a regular basis, with updates and internal
and external audits.
In Egypt and Jordan, to mitigate the impact of potential
branch closures on operations, the Group has been ramp-
ing up its house call services. Moreover, the Group’s impor-
tant role in conducting PCR testing for Covid-19 in both
Egypt and Jordan makes it unlikely that branches would be
closed, even if new restrictive measures were introduced.
62 IDH 2023 Annual Report
2023 Annual Report IDH 63
02
PERFORMANCE
64 IDH 2023 Annual Report
2023 Annual Report IDH 65
EGP 4.1 BNRevenue in 2023EGP 1.2 BNAdjusted EBITDA in 2023EGP 468 MNNet Profit in 2023 Performance
Financial & Operational Review
Financial Results (IFRS)
EGP mn
Revenues
Conventional Revenues
Covid-19-Related Revenues8
Cost of Sales
Gross Profit
Gross Profit Margin
Operating Profit
Adjusted EBITDA9
Adjusted EBITDA Margin
Net Profit
Net Profit Margin
Cash Balance10
FY 2022
FY 2023
Change
FY 2022
FY 2023
Change
Revenue Analysis
3,605
2,903
702
(2,143)
1,462
41%
832
1,172
33%
527
15%
816
4,123
4,123
-
(2,598)
1,524
37%
738
1,192
29%
468
11%
835
14%
42%
-100%
21%
4%
-4 pts
-11%
2%
-4 pts
-11%
-3 pts
2%
Total Revenue (EGP mn)
Conventional Revenue (EGP mn)
Total Covid-19-Related Revenue (EGP mn)
3,605
2,903
702
Conventional Revenue
Total Covid-19-Related Net Sales
Test Volume Analysis
Contribution to Consolidated Results
81%
19%
14%
42%
-100%
4,123
4,123
-
100%
-
FY 2022
FY 2023
Change
Total Tests (mn)
Conventional Tests Performed (mn)
Total Covid-19-Related Tests Performed (mn)
32.7
31.0
1.7
Conventional Tests Performed
Total Covid-19-Related Tests Performed
95%
5%
Contribution to Consolidated Results
10%
17%
-100%
36.1
36.1
-
100%
-
Note (1): Throughout the document, percentage changes between reporting periods are calculated using the exact value (as per the Consolidated Financials)
and not the corresponding rounded figure.
Revenue per Test Analysis
Revenue and Cost Analysis
Consolidated Revenue
In 2023, IDH recorded consolidated revenues of
EGP 4,123 million, up 14% year-on-year. Total
revenue growth was supported primarily by higher
test volumes, which rose 10% year-on-year, as well
as by increased average revenue per test, which
booked a 4% year-on-year increase. The year-on-
year growth is especially notable when consider-
ing the contribution of EGP 70211 million made by
Covid-19-related12 testing during FY 2022. Excluding
Covid-19 contributions, IDH booked conventional13
revenue growth of 42% year-on-year, up from EGP
2,903 million in FY 2022. IDH’s FY 2023 conventional
results were boosted by an impressive performance
in the second half of the year, as business across its
two largest markets of Egypt and Jordan recorded a
strong acceleration beginning in May 2023.
8 Starting Q1 2023, IDH has opted to stop reporting on its Covid-19-related revenues and test volumes due to their material insignificance to the
consolidated figures and to Egypt’s and Jordan’s country-level results. During last year (FY 2022), IDH had recorded EGP 702 million in Covid-19-related
revenues and had performed 1.7 million Covid-19-related tests.
9 Adjusted EBITDA is calculated as operating profit plus depreciation and amortization, excluding non-recurring expenses, specifically an EGP 11.9
million one-off expense owed to the Egyptian government for vocational training, EGP 18.2 million in pre-operating expenses in Saudi Arabia, EGP 5.0
million impairment expense in Sudan due to the ongoing situation in the country, and an EGP 18.0 million impairment expense in goodwill and assets in
Nigeria.
10 Cash balance includes time deposits, treasury bills, current accounts, and cash on hand.
11 Covid-19-related revenue in FY 2022 includes EGP 63 million in concession fees paid by Biolab to Queen Alia International Airport and Aqaba Port as
part of its revenue sharing agreement.
12 Covid-19-related tests include both core Covid-19 tests (Polymerase Chain Reaction (PCR), Antigen, and Antibody) as well as other routine inflammatory
and clotting markers including, but not limited to, Complete Blood Picture, Erythrocyte Sedimentation Rate (ESR), D-Dimer, Ferritin and C-reactive Protein
(CRP), which the Company opted to include in the classification as “other Covid-19-related tests” due to the strong rise in demand for these tests witnessed
following the outbreak of Covid-19.
13 Conventional (non-Covid) tests include IDH’s full service offering, excluding Covid-19 related tests.
Total Revenue Per Test (EGP)
Conventional Revenue Per Test (EGP)
Covid-19-Related Revenue Per Test (EGP)
FY 2022
FY 2023
Change
110
94
413
114
114
-
4%
22%
-100%
Revenue Analysis: Contribution by Patient Segment
Contract Segment (64% of Group revenue in 2023)
At the contract segment, consolidated revenues grew 26%
year-on-year, driven by higher test volumes and average
revenue per test. During the year, the contract segment’s
average number of tests per patient posted a record high
4.4, a result of both the normalisation of patient mix follow-
ing the Covid-19 pandemic, as well as the continued suc-
cess of IDH’s loyalty programme, which was introduced
in FY 2021. Meanwhile, conventional revenues at IDH’s
contract segment booked EGP 2,627 million in FY 2023, a
robust 47% year-on-year growth driven by 21% growth in
test volumes and a 22% increase in average revenues per
conventional test at the segment, respectively.
Walk-in Segment (36% of Group revenue in 2023)
In parallel, at the walk-in segment, consolidated rev-
enues declined a marginal 2% during FY 2023, record-
ing EGP 1,495 million, down from EGP 1,519 million in
66 IDH 2023 Annual Report
2023 Annual Report IDH 67
Performance | Financial and Operational Review
the previous year when Covid-19-related testing had
boosted results. Similar to the contract segment, aver-
age tests per patient grew 28% year-on-year to book 3.6
tests during FY 2023, setting another record high for the
Company. Conventional revenue at the walk-in segment
recorded EGP 1,495 million in FY 2023, increasing 34%
year-on-year. Conventional revenue growth at the seg-
ment was supported by a 33% year-on-year increase in
average revenue per test, while test volumes remained
unchanged compared to the previous year.
Detailed Segment Performance Breakdown
Walk-in Segment
Contract Segment
Total
House Calls
In the year ended 31 December 2023, IDH’s house
call service in Egypt continued to make a robust
contribution of 16% to total revenues in the country.
This remains significantly ahead of the service’s pre-
pandemic contribution, highlighting not only the
segment’s growth potential but also the effectiveness
of IDH’s investment and ramp up strategy, specifically
throughout the Covid-19 pandemic.
Wayak
During FY 2023, Wayak completed 177,000 orders,
representing a 33% year-on-year increase. On the
profitability front, the venture’s EBITDA losses con-
tinued to narrow steadily, recording EGP 28,000 in
FY 2023 versus the EGP 3.8 million in EBITDA losses
booked in FY 2022.
FY22
FY23
Change
FY22
FY23
Change
FY22
FY23
Change
Detailed Egypt Performance Breakdown
Revenue (EGP mn)
1,519
1,495
Conventional Revenue (EGP mn)
1,119
1,495
-2%
34%
2,086
2,627
1,784
2,627
26%
47%
3,605
4,123
2,903
4,123
14%
42%
Total Covid-19-Related Revenue
(EGP mn)
Patients ('000)
% of Patients
Revenue per Patient (EGP)
Tests (‘000)
% of Tests
400
-
-100%
302
-
-100%
702
-
-100%
2,592
1,788
-31%
6,129
6,724
10%
8,721
8,512
-2%
30%
586
21%
836
43%
70%
340
79%
391
7,313
6,473
-11% 25,372
29,629
22%
18%
78%
82%
15%
17%
413
484
32,685
36,102
17%
10%
Conventional Tests (‘000)
6,462
6,473
0.2%
24,523
29,629
21%
30,985
36,102
17%
Total Covid-19-related tests (‘000)
Revenue per Test (EGP)
851
208
-
-100%
849
231
11%
Conventional Revenue per Test
(EGP)
173
231
33%
-
89
89
82
73
-100%
1,700
8%
110
22%
94
3.7
-
114
114
4.2
-100%
4%
22%
13%
Test per Patient
2.8
3.6
28%
4.1
4.4
6%
Revenue Analysis: Contribution by Geography
Egypt (82.7% of Group revenue in 2023)
IDH’s home and largest market, Egypt, maintained the
robust performance seen starting in May 2023, record-
ing sustained top-line growth in the fourth quarter of
the year to close out FY 2023 with consolidated revenue
of EGP 3,411 million, up 18% year-on-year. Excluding
the significant contributions made by Covid-19-related
testing in FY 2022 (16% of Egypt’s revenue in FY 2022),
conventional revenue growth was even more impressive
at 40% for the year, boosted by an 18% increases both in
test volumes and average revenue per conventional test.
Al Borg Scan
IDH’s fast-growing radiology venture continued to
post impressive results throughout the second half of
the year, with revenues reaching EGP 155 million in
FY 2023, representing an 82% year-on-year increase.
Top-line expansion during the year was primarily due
to higher scan volumes, which rose 43% year-on-year
in FY 2023, partially due to the ramp up of opera-
tions at the venture’s newest branches. Additionally,
average revenue per scan increased 27% year-on-
year, reaching EGP 717, and further contributing to
revenue expansion. In September 2023, Al Borg Scan
inaugurated its seventh branch, located in Cairo’s
Nasr City neighbourhood. The launch of this latest
branch is directly in line with the Company’s long-
term strategy of expanding its presence in Greater
Cairo and cementing its position as a leader in the
country’s highly fragmented radiology market.
EGP mn
Total Revenue
Conventional Revenue
Pathology Revenue
Radiology Revenue
Total Covid-19-related Revenue
Conventional revenue
Pathology Revenue
Radiology Revenue
Total Covid-19-related revenue
Contribution to Egypt Results
FY 2022
FY 2023
Change
18%
40%
38%
82%
-100%
2,894
2,444
2,358
86
450
84%
82%
3%
16%
3,411
3,411
3,256
155
-
100%
95%
5%
Jordan (14.7% of Group revenue in 2023)
In IDH’s second largest market, Jordan, IDH booked
consolidated revenue of JOD 14 million in FY 2023,
42% below last year’s figure (down 1% year-on-year
in EGP terms). The significant year-on-year decline
is wholly attributable to the high base effect resulting
from Covid-19-related testing in FY 2022, which had
significantly boosted last year’s consolidated top line.
Excluding this contribution, conventional revenues
recorded an 8% year-on-year expansion, supported
by an 8% rise in conventional test volumes. In EGP
terms, conventional revenues grew 68%, reaching
EGP 604 million in FY 2023. Jordanian growth in EGP
terms includes the significant impact from the trans-
lation effect due to multiple devaluations of the EGP
between comparable periods.
Detailed Jordan Performance Breakdown
EGP mn
Total Revenue
Conventional Revenue
Total Covid-19-Related Revenues (PCR and Antibody)
Contribution to Jordan Results
Conventional Revenue
Total Covid-19-Related Revenue (PCR and Antibody)
FY 2022
FY 2023
Change
-1%
68%
-100%
612
359
253
59%
41%
604
604
-
100%
-
68 IDH 2023 Annual Report
2023 Annual Report IDH 69
Performance | Financial and Operational Review
Nigeria (2.3% of Group revenue in 2023)
IDH’s Nigerian subsidiary, Echo-Lab, maintained the
growth momentum seen throughout the year, reporting
revenue growth of 15% in local currency terms and reach-
ing NGN 1,961 million in FY 2023. In EGP terms, Nigerian
operations booked top-line growth of 22% year-on-year,
with revenues coming in at EGP 96 million. Revenue
growth for the period was driven by 32% and 39% year-
on-year increases in average revenue per test in NGN and
EGP terms, respectively, as the Company continued to
implement strategic price hikes in response to inflation-
ary pressures in the country. It is also worth mentioning
that average revenue per test increases in EGP terms also
partially reflected the translation effect due to a weakened
EGP. Revenue growth for the year was achieved despite a
12% year-on-year decrease in test volumes, which stood
at 266,000 tests during FY 2023.
Sudan (0.3% of Group revenue in FY 2023)
Ongoing conflict in Sudan has significantly affected IDH’s
operations in the country, leading to the closure of 17 of
the Company’s 18 branches in the country since April
2023. During FY 2023, Sudanese operations booked rev-
enues of SDG 220 million, down 60% year-on-year com-
pared to FY 2022. In EGP terms, revenues stood at EGP
11 million, a 44% year-on-year decrease. IDH continues
to closely monitor the evolving situation, updating the
market with material developments as necessary.
Revenue Contribution by Country
Egypt Revenue (EGP mn)
Conventional (EGP mn)
Pathology Revenue (EGP mn)
Radiology Revenue (EGP mn)
Covid-19-related (EGP mn)
Egypt Contribution to IDH Revenue
Jordan Revenue (EGP mn)
Conventional (EGP mn)
Covid-19-related (EGP mn)
Jordan Revenues (JOD mn)
Conventional (JOD mn)
Jordan Revenue Contribution to IDH Revenue
Nigeria Revenue (EGP mn)
Nigeria Revenue (NGN mn)
Nigeria Contribution to IDH Revenue
Sudan Revenue (EGP mn)
Sudan Revenue (SDG mn)
Sudan Contribution to IDH Revenue
Average Exchange Rate
USD/EGP
JOD/EGP
NGN/EGP
SDG/EGP
FY 2022
FY 2023
Change
Patients Served and Tests Performed by Country
2,894
2,444
2,358
86
450
80.3%
612
359
253
23.9
12.9
17.0%
79
1,698
2.2%
20.3
547
0.6%
3,411
3,411
3,256
155
-
82.7%
604
604
-
14.0
14.0
14.7%
96
1,961
2.3%
11.4
220
0.3%
18%
40%
38%
82%
-100%
-1%
68%
-100%
-42%
8%
22%
15%
-44%
-60%
FY 2022
FY 2023
Change
19.7
27.7
0.05
0.04
30.8
43.1
0.05
0.05
56.3%
55.6%
8.1%
38.7%
Egypt Patients Served (mn)
Egypt Tests Performed (mn)
Conventional Tests (mn)
Covid-19-Related Tests (mn)
Jordan Patients Served (k)
Jordan Tests Performed (k)
Conventional Tests (k)
Covid-19-Related Tests (k)
Nigeria Patients Served (k)
Nigeria Tests Performed (k)
Sudan Patients Served (k)
Sudan Tests Performed (k)
Total Patients Served (mn)
Total Tests Performed (mn)
Branches by Country
Egypt
Jordan
Nigeria
Sudan
Total Branches
FY 2022
FY 2023
Change
7.6
29.5
28.3
1.2
890
2,789
2,243
546
149
303
70
139
8.7
32.7
8.0
33.4
33.4
-
372
2,424
2,424
-
132
266
14
40
8.5
36.1
5%
13%
18%
-100%
-58%
-13%
8%
-100%
-11%
-12%
-80%
-71%
-2%
10%
31 December 2022
31 December 2023
Change
500
23
12
17
552
544
27
12
18
601
44
4
-
1
49
70 IDH 2023 Annual Report
2023 Annual Report IDH 71
Performance | Financial and Operational Review
Cost of Goods Sold
IDH reported cost of goods sold amounting to EGP
2,598 million during FY 2023, a 21% year-on-year
increase compared to the previous year. As a share of
revenue, cost of goods sold recorded 63% during the
year, up from 59% one year prior. The increase in cost
of goods sold during the period was primarily driven
by higher raw material costs, increased direct salaries
and wages, and higher depreciation expenses.
Cost of Goods Sold Breakdown as a Percentage of Revenue
Raw Materials
Wages and Salaries
Depreciation and Amortisation
Other Expenses
Total
FY 2022
FY 2023
20.4%
17.0%
7.9%
14.2%
59.4%
22.2%
18.8%
8.8%
13.3%
63.0%
Raw material costs (35% of consolidated cost of goods
sold in FY 2023) continued to be the largest contributor
to cost of goods sold throughout FY 2023, recording EGP
914 million and expanding 24% year-on-year. During the
year, raw materials constituted 22% of revenues, up from
20% in FY 2022. Additionally, the Company recorded a
one-off expense of EGP 17.4 million related to the expiry
of Covid-19-related test kits, which also served to increase
raw material costs during the year.
Wages and salaries, including employee share of
profits (30% share of consolidated cost of goods
sold), remained the second largest contributor to cost
of goods sold during the year, increasing 26% year-
on-year to reach EGP 774 million. Higher wages and
salaries continued to reflect higher than usual salary
adjustments to compensate for unprecedented infla-
tion at the Group’s largest market, Egypt. Additionally,
direct wages and salaries were further inflated due to
the hiring of new staff across IDH’s network to sup-
port the roll-out of new branches, 49 of which were
launched during FY 2023. Finally, it is important to
highlight that the translation effect from salaries in
both Jordan and Nigeria continued to expand direct
wage and salaries expenses, reflecting the weakening
of the EGP throughout the year.
Direct Wages and Salaries by Region
Egypt (EGP mn)
Jordan (EGP mn)
Jordan (JOD mn)
Nigeria (EGP mn)
Nigeria (NGN mn)
Sudan (EGP mn)
Sudan (SDG mn)
FY 2022
FY 2023
Change
475
116
4.3
18
392
4
111
589
155
3.6
27
576
3
53
24%
33%
-16%
49%
47%
-33%
-52%
Direct depreciation and amortization costs (14% of
consolidated cost of goods sold) grew 27% year-on-
year in FY 2023, booking EGP 362 million. Increased
depreciation and amortization costs during the year
primarily reflect the roll-out of 49 additional branches
to IDH’s network, including the launch of Al Borg
Scan’s seventh radiology branch in September.
Other expenses (21% of consolidated cost of goods
sold) reached EGP 548 million during the year, increasing
23% year-on-year and constituting 13% of consolidated
revenues for the year. It is worth noting that the increase
in other expenses excludes EGP 63 million paid in con-
cession fees as part of Biolab’s agreement with Queen Alia
International Airport and Aqaba Port to provide Covid-19
testing to passengers in January and February of 2022.
When including these fees, IDH recorded an increase
in other expenses amounting to 7% year-on-year. The
increase in other expenses is mainly attributable to
higher repair and maintenance costs, cleaning expenses,
transportation expenses, and consulting fees, which con-
tinue to reflect both the effects of the devaluated Egyptian
Pound and higher costs associated with the expansion
of Al Borg Scan’s operations. Additionally, increased
gasoline prices, as well as repair and maintenance costs
in Nigeria, coupled with a persistent inflationary environ-
ment and a weaker Naira (versus the USD), continued to
push up total costs in the country.
Gross Profit
IDH recorded a gross profit of EGP 1,524 million in FY
2023, an increase of 4% year-on-year. The Company’s
gross profit margin stood at 37%, four percentage
points below the previous year due to the aforemen-
tioned increases in cost of goods sold during the year.
Selling, General, and Administrative Expenses
Selling, General, and Administrative
(SG&A) Expenses
SG&A outlays during FY 2023 stood at EGP 787 million,
growing 25% year-on-year. As a share of revenues, SG&A
outlays constituted 19% in FY 2023, up from 17% one year
prior. Higher SG&A expenses are mainly attributable to:
• Increased indirect wages and salaries, which came in at
EGP 273 million, a 38% year-on-year increase. During
FY 2023, indirect wages and salaries constituted 7%
of revenues, up from 5% one year prior. This increase
was driven by USD-denominated directors’ compen-
sations, the addition of a new board member during
the first quarter of the previous year (who received
compensation starting March 2022), higher salaries in
Jordan due to the translation effect, and an increase
in social security expenses. Increased social security
expenses (up by EGP 15.5 million year-on-year) also
weighed on indirect wages and salaries for FY 2023.
• Higher other expenses, which increased 26% year-
on-year. The increase in other expenses was mainly
driven by higher USD-denominated consulting and
accounting fees at the holding level.
• Non-recurring expenses, including a non-recurring
expense paid for the government’s vocational train-
ing fund, pre-operating expenses in Saudi Arabia,
a one-off expense in Sudan, and an impairment in
goodwill and assets in Nigeria, which amounted to
EGP 53 million in FY 2023.
FY 2022
FY 2023
Change
Wages and Salaries
Accounting and Professional Services Fees
Market – Advertisement Expenses
Other Expenses – Operation
Depreciation and Amortisation
Impairment Loss on Trade and Other Receivable
Travelling and Transportation Expenses
Impairment in Assets
Impairment in Goodwill
Provision for End of Service
Provision for Legal Claims
Provision for Egyptian Government Training Fund for Employees
Other income
Total
197
130
123
112
33
30
17
2
-
-
4
-
(18)
630
282
134
98
143
39
51
27
7
11
-
3
12
(20)
787
43%
3%
-21%
28%
20%
71%
62%
266%
-
-
-11%
-
16%
25%
72 IDH 2023 Annual Report
2023 Annual Report IDH 73
Performance | Financial and Operational Review
Adjusted EBITDA
Due to the nature of several non-recurring expenses
affecting IDH’s EBITDA-level profitability, the Com-
pany has elected to present an adjusted EBITDA
figure, along with its associated margin. Adjusted
EBITDA excludes several one-off expenses that weigh
down profitability. Namely, these expenses are an
EGP 11.9 million one-off expense owed to the Egyp-
tian government for vocational training (covering
the past five-year period), pre-operating expenses
in preparation for the launch of operations in Saudi
Arabia amounting to EGP 18.2 million, EGP 5.0 mil-
lion in impairment expenses in Sudan due to the
ongoing conflict in the country, and EGP 18.0 million
in impairment expenses in goodwill and assets in
Nigeria.
In FY 2023, the Company booked an adjusted
EBITDA14 of EGP 1,192 million, increasing 2% year-
on-year and reflecting cost normalisation compared
to the previous year. Meanwhile, adjusted EBITDA
margin recorded 29%, four points below FY 2022 due
to higher SG&A outlays as discussed previously. It is
worth mentioning that adjusted EBITDA is adjusted
for several non-recurring expenses, including an
EGP 12 million non-recurring expense for a provi-
sion of 1% of Egyptian profits, in accordance with
article 134 of the labour law on Vocational Guidance
and Training issued by the Egyptian government in
2003. In accordance with the law, IDH’s Egyptian
operations are required to provide 1% of net profits
each year into a training fund. Integrated Diagnos-
tics Holdings plc has taken legal advice and consid-
ered market practices in Egypt relating to the law,
and more specifically, whether vocational training
courses undertaken by the Company’s Egyptian sub-
sidiaries suggest that obligations have been satisfied
by in-house training programmes provided by those
entities. Since the issuance of the law, IDH’s Egyp-
tian subsidiaries have not been requested by the
government to pay, nor have they voluntarily paid,
any amounts into the external training fund.
Adjusted EBITDA by Country
In Egypt, IDH booked an adjusted EBITDA of EGP
1,058 million, a 1% year-on-year increase compared
to FY 2022. Adjusted EBITDA margin recorded 31%,
a five-point year-on-year decrease. Lower adjusted
EBITDA profitability reflects higher SG&A outlays,
which increased 18% year-on-year and weighed
down on profitability during the year.
IDH’s Jordanian subsidiary, Biolab, posted an
adjusted EBITDA of JOD 3.6 million, down 34% year-
on-year in FY 2023 and yielding an adjusted EBITDA
margin of 26% (versus 23% in FY 2022). In EGP terms,
adjusted EBITDA came to EGP 157 million, up 16%
from FY 2022. The increase in adjusted EBITDA in
EGP terms is due to the translation effect following
the devaluation of the EGP in late FY 2022 and early
FY 2023. In Q4 2023, adjusted EBITDA recorded JOD
0.8 million in Q4 2023, nearly doubling the JOD 0.4
million booked in the comparable period of last year.
The Company’s adjusted EBITDA margin came in at
25%, up from 12% in Q4 2022. In EGP terms, Biolab
booked adjusted EBITDA of EGP 34 million, up from
EGP 14 million in Q4 2022.
In Nigeria, increasing inflationary pressures and an
expanded cost base resulted in widening adjusted
EBITDA losses, despite revenue growth throughout
the year. More specifically, adjusted EBITDA losses
expanded to NGN 498 million in FY 2023, from NGN
337 million in the previous year. During Q4 2023,
the Company booked an adjusted EBITDA loss of
NGN 204 million, down from NGN 215 million dur-
ing Q4 2022. In EGP terms, adjusted EBITDA losses
narrowed to EGP 7 million in Q4 2023, from EGP
12 million in the same period of the previous year,
partially reflecting the translation effect following
the weakening of the EGP.
In Sudan, adjusted EBITDA came in at SDG 21 million,
up from an EBITDA loss of SDG 2 million in FY 2022.
Regional EBITDA in Local Currency
Egypt EBITDA
Margin
Egypt Adjusted EBITDA
Margin
Jordan EBITDA
Margin
Nigeria EBITDA
Margin
Nigeria Adjusted EBITDA
Margin
Sudan EBITDA
Margin
Sudan Adjusted EBITDA
Margin
EGP
EGP
JOD
NGN
NGN
SDG
SDG
FY 2022
FY 2023
Change
1,031
36%
1,053
36%
5.5
23%
(337)
-20%
(337)
-20%
(2)
-0.3%
(2)
-0.3%
1,046
31%
1,058
31%
3.6
26%
(1,023)
-52%
(498)
-25%
(76)
-35%
21
10%
1%
1%
-34%
203%
48%
-
n/a
Interest Income / Expense
IDH’s interest income reached EGP 73 million during FY
2023, down from EGP 95 million during the previous year.
Lower interest income for the year was primarily a result
of lower cash balances due to the distribution of a record
cash dividend during last year.
Interest expense15 stood at EGP 161 million, up 19%
year-on-year in FY 2023. Increasing interest expenses are
mainly due to:
• 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's decision
to increase rates by 1,100 bps since March 2022. It is
important to note that IDH’s interest bearing debt bal-
ance decreased to EGP 111 million as at 31 December
Interest Expense Breakdown
Interest on Lease Liabilities (IFRS 16)
Interest Expenses on Leases
Interest Expenses on Borrowings16
Bank Charges
Loan-related Expenses on IFC facility17
Shareholder Dividend Deferral Agreement18
Fast Track Payment
Total Interest Expense
2023 from EGP 116 million at year-end 2022. Earlier in
the year, as part of IDH’s strategy to reduce foreign cur-
rency risk, the Company agreed with General Electric
(GE) for the early repayment of its contractual obliga-
tion of USD 5.7 million. To finance the settlement, IDH
utilised 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 Ahli United Bank – Egypt (AUBE). Interest expenses
related to the AUBE facility recorded EGP 23 million in
FY 2023. The bridge loan was fully settled in Q2 2023.
• Fast-track payments worth EGP 7.1 million, which
encompass discounts provided for the rapid payment
of receivables in FY 2023.
FY 2022
FY 2023
Change
73.4
21.4
11.9
12.9
12.5
3.4
-
135.5
93.3
25.5
22.9
12.2
-
-
7.1
161.0
27%
19%
92%
-6%
-100%
-100%
-
19%
14 Adjusted EBITDA is calculated as operating profit plus depreciation and amortization, excluding non-recurring expenses, specifically an EGP 11.9
million one-off expense owed to the Egyptian government for vocational training, EGP 18.2 million in pre-operating expenses in Saudi Arabia, EGP 5.0
million impairment expense in Sudan due to the ongoing situation in the country, and an EGP 18.0 million impairment expense in goodwill and assets in
Nigeria.
74 IDH 2023 Annual Report
15 Interest expenses on medium-term loans include EGP 23 million related to the Group’s facility with Ahli United Bank Egypt (AUBE).
16 Interest expenses on medium-term loans include EGP 23 million related to the Group’s facility with Ahli United Bank Egypt (AUBE). Meanwhile, the
Group’s facility with the Commercial International Bank (CIB) was fully repaid as of 5 April 2022.
17 Loan-related expenses on IFC facility represents commitment fees on the facility granted by IFC and Mashreq with a total value of USD 60 million. The
facility was cancelled in May 2023.
18 As announced on 27 July 2022, as part of IDH’s agreement with Hena Holdings Ltd and Actis IDH Limited (its two largest shareholders) in consideration
for the two shareholders agreeing to defer their right to receive their pro rata share of the Dividend Payment, IDH agreed to pay to each interest on the
outstanding amounts due at the rate of 10% per annum (with interest accruing on a daily basis) for a two-month period starting 27 July 2022. Payment to
both shareholders was successfully completed on 18 August 2022.
Performance | Financial and Operational Review
Foreign Exchange
IDH booked an EGP 88 million foreign exchange
gain in FY 2023, down 53% year-on-year and partially
reflecting intercompany balances revaluation.
Taxation
Tax expenses, which include both income and deferred
tax, recorded EGP 269 million in FY 2023, down 18%
year-on-year from FY 2022. IDH’s effective tax rate
stood at 36%, two points below that of the previous year.
It is important to highlight that there is no tax payable
for IDH’s two holding-level companies. Meanwhile,
tax was paid from the Group’s operating subsidiaries
(Egypt 32%, Jordan 34%, Nigeria 0.2%).
Total CAPEX Addition Breakdown – FY 2023
EGP Mn
EGP mn
% of Revenue
Leasehold Improvements/New Branches
Al Borg Scan Expansion
Total CAPEX Additions Excluding Translation
Translation Effect
Total CAPEX Additions
202.7
92.0
294.7
13.5
308.2
4.9%
2.2%
7.1%
0.3%
7.5%
Taxation Breakdown by Region
EGP Mn
Egypt
Jordan
Nigeria
Sudan
Total Tax Expenses
Net Profit
IDH reported a net profit of EGP 468 million during FY
2023, down 11% year-on-year and yielding a net profit
margin of 11%. Lower net profitability for the year came
as a result of lower EBITDA profitability, coupled with
previously discussed decreases in interest income,
higher interest expenses, and several non-recurring
expenses.
Non-Recurring Expenses
IDH recorded several one-off expenses during the year,
namely:
• EGP 11.9 million for the provision of 1% of Egyptian
profits towards the Government Training Fund.
• EGP 18.2 million due to pre-operating expenses in
Saudi Arabia.
• EGP 5.0 million in impairment expenses due to the
ongoing conflict in Sudan.
• EGP 18.0 million in impairment expenses in good-
will and assets for operations in Nigeria.
FY 2022
FY 2023
Change
274.3
21.8
30.6
0.4
327.1
251.6
17.1
-0.1
0.5
269.0
-8%
-22%
-100.3%
24%
-18%
Balance Sheet Analysis
Assets
Property, Plant, and Equipment
As of year-end 2023, IDH recorded property, plant, and
equipment (PPE) cost of EGP 2,554 million, increas-
ing from EGP 2,208 million at 31 December 2022.
The increase in CAPEX as a share of revenues during
FY 2023 was primarily driven by the addition of new
branches, renovations of existing branches, and head-
quarter improvements (constituting 7.1% of revenues),
as well as the translation effect related to Jordan,
Sudan, and Nigeria (constituting 0.3% of revenues).
Accounts Receivable and Provisions
Accounts receivable as at year-end 2023 came in at EGP
570 million, a year-on-year increase of 44%. In parallel,
IDH’s receivables’ Days on Hand (DoH) recorded 134
days, up from 124 days as at 31 December 2022.
Provision for doubtful accounts recorded EGP 51
million in FY 2023, up 71% year-on-year. Increased
provisions for doubtful accounts reflect slower col-
lection rates due to increasing economic headwinds
and persistent inflation throughout IDH’s markets, in
particular its home and largest market, Egypt.
Inventory
IDH booked an inventory balance of EGP 375 million
as of the end of FY 2023, increasing from EGP 265
million one year prior. Meanwhile, Days Inventory
Outstanding (DIO) increased to 133 days, from 127
days at year-end 2022. Increased DIO is attributable to
management’s strategy of accumulating inventory to
hedge against inflation during the past year.
Cash and Net Debt
Cash balances and financial assets at amortised costs
at the end of FY 2023 reached EGP 835 million, up from
EGP 816 million at year-end 2022
Cash Breakdown
EGP Mn
Treasury Bills
Time Deposits
Current Accounts
Cash on Hand
Total
31 Dec 2022
31 Dec 2023
293
123
382
18
816
133
289
392
21
835
IDH’s net debt19 balance came in at EGP 358 million as of the end of FY 2023, down 4% from EGP 373 million as at
year-end 2022.
EGP Mn
31 Dec 2022
31 Dec 2023
Cash and Financial Assets at Amortised Cost20
Lease Liabilities Property
Total Financial Liabilities (Short-Term and Long-Term)
Interest Bearing Debt (Medium-Term Loans)
Net Debt Balance
816
(727)
(335)
(127)
(373)
835
(828)
(240)
(125)
(358)
Note: Interest Bearing Debt includes accrued interest for each period.
19 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.
20 As outlined in Note 18 of IDH’s Consolidated Financial Statements, some term deposits and treasury bills cannot be accessed for over three months and
are therefore not treated as cash. Term deposits, which cannot be accessed for over three months, stood at EGP 49 million at December 2023 (2022: EGP 60
million). Meanwhile, treasury bills not accessible for over three months stood at EGP 112 million at December 2023 (2022: EGP 107 million).
76 IDH 2023 Annual Report
2023 Annual Report IDH 77
Performance | Financial and Operational Review
Lease liabilities and financial obligations on property
came in at EGP 828 million at year-end 2023, with the
increase primarily driven by the roll-out of an addi-
tional 49 branches over the past year.
• 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 43 million at the end of FY 2023, down from EGP
51 million at the same time last year, 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 default-
ing 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.
Meanwhile, financial obligations related to equipment
stood at EGP 240 million as at the end of 2023, with
the decline attributable to IDH’s early repayment of its
obligations with General Electric (GE), in line with the
Company’s efforts to hedge against foreign currency
risk. Half of this settlement was financed internally,
while the remainder was financed through a bridge
loan facility from AUBE.
Finally, interest bearing debt21 (excluding accrued
interest) reached EGP 111 million at year-end 2023,
down from EGP 116 million one year prior.
Liabilities
Accounts Payable22
Accounts payable as at 31 December 2023 stood at
EGP 272 million, up from EGP 270 as at year-end 2022.
Meanwhile, Days Payable Outstanding (DPO) came in
at 113 days, down from 151 days one year earlier.
Put Option
The put option current liability stood at EGP 314 mil-
lion as at year-end 2023, down from EGP 440 million at
31 December 2022, and is related to:
• The option granted in 2011 to Dr. Amid, Biolab’s
CEO, to sell his stake (40%) to IDH. The put option
has been in the money and exercisable since 2016
and is calculated as seven times Biolab’s LTM
EBITDA minus net debt. Biolab’s put option liability
decreased following the significant decline in the
venture’s EBITDA for the period.
21 IDH’s interest bearing debt as at 31 March 2023 included EGP 172 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 utilised a bridge loan facility of EGP 55 million. The facility was withdrawn in Q1 2023 and settled in Q2 2023.
22 Accounts payable is calculated based on average payables at the end of each period.
78 IDH 2023 Annual Report
2023 Annual Report IDH 79
Performance
TASK FORCE ON CLIMATE-RELATED
FINANCIAL DISCLOSURES (TCFD)
RESPONSE REPORT
pillars set out in the TCFD’s recommendations, and
where we are not currently fully compliant with the
TCFD recommendations, we have set out our current
position and strategy and timeline for compliance.
We are currently considering the guidance included
within the TCFD’s all sector guidance. While this has
not yet been factored into our analysis or following
disclosures, we will be factoring this into our plans for
further compliance during the coming financial year,
with an aim to improve our discourse against these
requirements in the coming years.
At IDH, we acknowledge the impossibility of operating
without impacting nature, but our goal is to minimise
negative effects and actively work towards reversing
past damage. We are committed to protecting and
restoring ecosystems as a crucial component of our
climate action efforts. As a testament to this commit-
ment, IDH has recently submitted its second report
in compliance with the TCFD regulations. In 2022,
as a first-time TCFD Reporter, we were committed
to implementing the recommendations of the TCFD
that aim to provide investors and other stakeholders
with useful information on climate-related risks and
opportunities that are relevant to our business. In our
second reporting, we were committed to closing a few
gaps, consolidating our action plan with clear dates to
close the remaining gaps and achieve full compliance
by the end of 2026.
We revisited our climate risk assessment, and, overall,
we believe that the risks and opportunities related
to climate change — in the short to medium term
(defined as the next five years) — remain low due to
the nature of our business (being a services business
operating in the healthcare sector). Our main emis-
sions relate to operating our 600+ centres in terms
of electricity utilised in lighting, air conditioning,
and diagnostic equipment. IDH’s Scope 3 emissions
encompass those associated with the manufacturing
of the machinery and materials utilised at our centres
and those associated with other travel/external test-
ing in the performance of our services. In the longer
term (defined as 10 years plus), the main risks/oppor-
tunities come from the impact of climate change as a
whole in the regions in which we operate (i.e. where
climate change results in certain areas becoming
uninhabitable).
Last year, the Group set out their first ever TCFD
report. In doing this, we set ambitious targets to
fully comply with the TCFD recommendations by
the end of 2026, as we had already published our
own first ESG report during 2022 and had appointed
external consultants to help us align this to the TCFD
requirements. While improvements have been made
during 2023, particularly in relation to the gover-
nance and management aspects, it has been difficult
to obtain reliable data for the metrics and scenario
analysis elements of TCFD, given the geographies
we operate in, the size of our branch network, and
the fact that this data had not been previously col-
lected. The Group has experienced, and continues
to experience, operational challenges in each of our
geographies as a result of external factors outside
the control of the Group, as highlighted elsewhere in
our report, which the company has had to respond
to. Given all this, we have revised our expected time-
frame for the completion of the remaining elements
of TCFD non-compliance from 31 December 2024
to 31 December 2026. We now have data for 33%
(2022:11%) of our branches and, therefore, while
we are improving the level of data, it will take longer
than initially expected to complete this exercise in
order for us to present relevant and reliable data.
that this will form an iterative process as we con-
tinue to develop our policies, processes, and dis-
closures over the coming years. As a second timer
TCFD reporter, we have been working since last year
with our external experts on closing the gaps in the
data and improving its accuracy and completeness.
Nevertheless, we believe that we still have a number
of areas of non-compliance and partial-compliance
with the TCFD requirements, as detailed in the fol-
lowing sections.
In this context, we have considered our “comply or
explain” obligation under the Financial Conduct
Authority’s Listing Rule 9.8.6R (8) and confirm that
we have made disclosures consistent with the TCFD
Recommendations and Recommended Disclosures
in this Annual Report and Accounts, except in the
following areas:
• Strategy – Describing the impact of climate-related
risks/opportunities on IDH's business and strategy
and describing the resilience of this under different
scenarios (e.g. a 2°C or lower scenario).
• Risk management – Describing IDH's processes for
managing climate-related risks and the process of
how these, and their identification, are integrated
into IDH's overall risk management.
• Metrics and targets – Disclosing the metrics used by
IDH to assess climate-related risks/opportunities,
disclosing Scope 1–3 emissions and the targets used
by IDH to assess performance against these targets.
We set out below more details on how we are seeking
to align with these recommendations, recognising
We report below for the second time against the 11
thematic
recommended disclosures under
four
80 IDH 2023 Annual Report
2023 Annual Report IDH 81
Performance | Task Force on Climate-Related Financial Disclosures (TCFD) Response Report
Recommended
Disclosures
Response Status
Recommended
Disclosures
Response Status
Governance
a) Describe the
board’s oversight
of climate-related
risks and
opportunities.
compliant
In 2022, IDH developed a Sustainability Strategy for the years 2023–2030 based on four pillars (Sound Gov-
ernance, Next Economy, Flourishing Society, and Liveable Planet). The work ensured that the Group could
reaffirm and review important points, such as mission and strategy, in addition to ensuring a strategic look
at the Group’s risks, which will be periodically reported to the Executive Management Team, Audit Com-
mittee, and Board of Directors. During the year, this was performed by the Board of Directors as a whole
and as part of the normal procedures around assessing the principal risks and uncertainties of the Group
and the wider opportunities and strategic goals of the Group, given the low risk/opportunities assessed
relating to climate risk/opportunity in the short-to-medium term.
Climate change forms one of the sub-pillars of Liveable Planet, where the following actions and targets
have been put in place: 1- building a comprehensive impact/risk assessment mechanism and adoption
of a climate scenario, 2- developing and adopting a corporate-wide GHG data management system, and
3- developing a Decarbonization Plan with clear and feasible carbon reduction targets, consistent with the
climate risk assessment results. While the pillars of this strategy have been agreed upon, we are currently
working on collating and validating the data required to monitor and report against these targets (which
also includes the data required to perform meaningful scenario analysis). The ESG strategy was dissemi-
nated to all functions and subsidiaries in 2023 with our aim to complete integration by the end of 2024. The
adoption and implementation of the strategy is expected to start by the end of 2024 and, therefore, further
reporting will be made on progress of this in our 2024 Annual Report.
In 2023, we established an ESG committee (Sustainability Steering Committee). The committee was
appointed by the CEO and the Board. The committee comprised representatives from key stakeholder
groups. The members of the steering committee were chosen based on their expertise, experience, and
ability to provide governance guidance and oversight on sustainability. Roles and responsibilities were
clearly assigned. The committee will oversee the Group’s approach to managing climate-related risks and
opportunities, along with the implementation of the Group’s sustainability strategy. It will provide strategic
guidance and oversight on IDH's sustainability and impact initiatives, including the development and
implementation of IDH's sector programmes and landscape initiatives. The committee reviewed and
approved IDH's annual sustainability report, which provides an overview of the organisation’s progress
on key sustainability metrics and initiatives. Additionally, it will help ensure that IDH's activities are
aligned with international sustainability standards and guidelines, including the United Nations' Sustain-
able Development Goals (SDGs) and the Paris Agreement on climate change. We will also establish a
formalised Environmental and Social Management System (ESMS) based on existing HSE policies and
procedures by 2024 and integrate ESG criteria into the internal audit system by 2025.
On the Board of Directors level, the Audit Committee will oversee and obtain regular updates from the
aforementioned management steering committee about climate change-related issues. The main topics
of discussion will revolve around the progress made against achieving the ESG Strategy’s targets and action
plans, including an update on the climate-related risks and opportunities. ESG and climate disclosure is
currently done through the Group’s annual sustainability report and general risk assessment processes,
developed in accordance with the GRI standards and includes the progress made against the strategy’s
goals and targets for addressing climate-related issues, and covering all GRI material indicators. While a
report was issued during 2022, this was not aligned to TCFD requirements and hence, going forward, we
will reflect on this for improvement during 2024.
Governance b)
Describe
management’s
role in assessing
and managing
climate-related
risks and
opportunities.
Compliant
Strategy a)
Describe the
climate-related
risks and
opportunities the
organisation has
identified over the
short, medium,
and long term.
Compliant
Day-to-day responsibility for the management and reporting on IDH’s sustainability related issues
in general and climate-related issues falls within the scope of the Investment Relations (IR) Depart-
ment and are directly supervised by the Group’s IR Director. The Group CFO authorises the yearly
sustainability budget and decarbonization action plans and projects, including energy efficiency
projects, fleet, and energy procurement. Specific climate initiatives will be managed by the relevant
department, including the Facilities, Supply Chain, and Procurement departments. Management
consider climate-related risks and opportunities in their future cash flow assessments; however,
given the aforementioned low risk, these have not had any material impact.
In 2021, the IR department assigned an external ESG consulting firm for the assurance of its first
sustainability report. In 2023, another external ESG consulting firm was assigned with a larger
scope comprising: 1- helping management and the Board develop the Group’s ESG Strategy;
2- quantifying the GHG emissions for the year 2022 and assisting in developing the Group’s ESG
and GHG data management system; and 3- the assurance of IDH’s second Sustainability Report
(ESG Report for 2022). Currently, we are working on implementing the strategy and decarboniza-
tion plan and assurance of IDH’s third Sustainability Report (expected to be published by 30 June
2024). The IR Department has assigned a main ESG focal point for the collection and monitoring of
climate-related issues. The IR focal point will be closely working with ESG (and climate) champions
at the different departments. All staff involved in the management of climate-related issues will
receive a one-day comprehensive training and a capacity building workshop on climate change
fundamentals, GHG quantification and identification, and assessment of climate-related risks and
opportunities.
Overall assessment: Overall, the Board of Directors and management deemed that the risks
and opportunities relating to climate change are not signifciant, specifically those arising in the
short-to-medium term. This is on the basis that IDH is a service-related business operating in the
healthcare sector. The main suppliers of our equipment are blue-chip multinational companies,
and our operations are spread in over 601 branches across the four countries of operation as of 31
December 2023. However, we are committed to establishing a resilient, diverse, and responsible
supply chain. Therefore, by 2024, we will implement sustainable procurement guidelines and launch
a Sustainable Vendor database by 2025. Additionally, we will enhance our collaboration with local
diagnostic service providers by offering guidance and support to help them meet international
sustainability standards, building upon the IFC criteria screenings initiated before 2023. Further-
more, we will strengthen our efforts by introducing minimum ESG criteria for our suppliers by 2024,
aligning them with our existing IFC criteria screening system. Evolving from our current supplier
assessments, our goal is for all suppliers to adhere to the minimum ESG criteria established by
IDH by 2026. Moreover, we will ensure that 100% of newly contracted direct material expendi-
tures are tied to contracts incorporating social and environmental responsibility requirements.
IDH’s operations are not energy nor water-intensive, with less then 2% of total cost of operations
spent on energy and water consumption, making it less susceptible to climate risks and impacts
related to energy and water supply. In order to tackle policy and reputational risks, IDH has taken
actions relating to strategy development, sustainability reporting, and GHG quantification, and it has
put in place appropriate actions for developing practical and feasible decarbonization plans. The
aim is to have in place fully developed reporting and climate management systems by the end of
2026. The long-term risks, such as rising sea levels in more susceptible coastal cities and a possible
suspension of physical activities due to extreme precipitation events, will necessitate an appropriate
mitigation action plan to be put in place.
82 IDH 2023 Annual Report
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Performance | Task Force on Climate-Related Financial Disclosures (TCFD) Response Report
Recommended
Disclosures
Response Status
Recommended
Disclosures
Response Status
Risks: The transition and physical risks associated with climate change have been initially identified
and qualitatively assessed. The following represent the initially identified risks on the short, medium,
and long terms.
Transition Risks: The expected increase in electricity tariffs and fuel prices, and therefore the
increase in the expenses associated with energy consumption, represents the most relevant poten-
tial transition risk to IDH over the short term. The expenses associated with energy consumption
and operational costs in general are expected to increase. However, it is also expected that the tariff
increase will be gradually introduced to the Egyptian market, thus allowing sufficient time for impact
mitigation to take place. Changes in Policy were the second identified short-term transition risk.
The climate-related disclosure requirements and, accordingly, performance and progress towards
climate targets, including enhanced emissions-reporting obligations, are increasing significantly. In
this regard, IDH has started to take multiple steps, including the ESG Committee initiative, sustain-
ability reporting, GHG accounting, and decarbonization. By the end of 2026, the Group will have in
place a data management and sustainability (and climate) reporting system.
On the medium term, reputational risks will eventually arise if appropriate actions are not taken. How-
ever, it will be mainly affected by the overall ESG performance of the Group. Since IDH has already started
to put a strategy and an action plan in place and is planning to allocate sufficient and qualified human
resources in place, this impact has been also identified of low significance.
Physical Risks: Among the medium-term identified physical risks is the effects of water scar-
city on operational processes. The long-term risks, such as rising sea levels in more susceptible
coastal cities, such as Alexandria and Delta, and a possible reduction/suspension of physical
activities due to extreme precipitation events (storm and flooding), are of high significance and
will necessitate a mitigation action plan to be put in place.
Opportunities: Resource efficiency and access to new markets have been identified as the two main
climate-related opportunities for IDH.
As described above, the short-term identified risks and opportunities were found to be of
low significance (with negligible residual impacts after applying the planned mitigation
measures). Starting in 2024, and following the full integration of the ESG strategy, the ESG/
Sustainability Steering Committee will be routinely revisiting the initially identified climate
risks and reassessing their impact on a quarterly basis to take the appropriate mitigation
actions when they become of significant impact. This review process will begin in April 2024.
The following have been identified in the last reporting cycle as the main actions to be taken
to eliminate the residual impacts and to maximise the identified opportunities over the short
and medium terms:
• Develop a decarbonization plan focused on resource efficiency in terms of managing and
reducing energy and water consumption.
Develop a corporate-wide ESG data management and monitoring system.
•
• Enhance ESG and climate disclosures. For the latter, the Group is exploring the possibility of
disclosing climate data through CDP.
Since the last reporting cycle, the following have been achieved:
• A detailed decarbonization plan has been developed. This focused on resource efficiency in
terms of managing and reducing energy and water consumption.
• We have developed a corporate-wide GHG data management and monitoring system, and we
are currently working on extending this system to cover all the essential ESG indicators by 31
December 2024.
• Related to climate disclosures, we have decided to postpone CDP disclosure to April 2025
(reporting on 2024 activities). By then, we would have a stronger climate management system in
place and would have covered 100% of our physical boundaries.
Strategy a)
Describe the
climate-related
risks and
opportunities the
organisation has
identified over the
short, medium,
and long term.
Compliant
Strategy b)
Describe the
impact of
climate-related
risks and
opportunities on
the organisation’s
businesses,
strategy, and
financial
planning.
Partially
Compliant
– expected
to be
compliant
by 31 Dec
2026.
As previously reported, we confirm that we do not expect a significant change to our strategy as
a result of the initially identified transition climate risks. However, IDH is well-aware that for the
long-term risks, mostly physical ones, it will be necessary to develop new strategic actions. These
will be based on climate scenario analysis, which will be done by 2026 and reported upon in 2027
in order to more clearly understand the impacts of climate-related physical risks on its businesses,
strategies, and financial performance. Due to the complexity of this analysis, given IDH operates in
610+ branches across four countries, significant time will be required to collate and then validate
this data from which our scenario’s will be based. As IDH has never before been required to collate
or report this data, we have identified initial challenges in obtaining reliable data for all of our opera-
tions and, for this reason, we have, in 2023, employed an external ESG specialist firm to assist IDH's
management and the Board with this assessment.
Due to the low risk of climate-related impacts, we did not include a separate process in our 2022
annual report. The initial list of risks/impacts has been developed in 2023 and covered both
transition and physical risks. The work also included the development of an impact assessment
methodology and process tailored to IDH, which covers both physical and transitional risks and
opportunities. The list of risks and impacts was re-visited, and all risks were re-assessed in Decem-
ber 2023 and their significance confirmed. We plan to revisit the identified list of impacts and redo
the assessment in December 2024.
Due to the low risk/opportunities arising from climate change, as noted above, there were no sepa-
rate processes specifically for managing climate-related risks.
Going forward, as part of IDH’s new strategy and policy, processes are to be adopted to manage
climate-related risks, which will therefore be integrated into our business-as-usual processes. These
will include the below four areas:
1. Electricity
2. Policies
3. Water
4. Supply chain
Plans are set in place to conduct internal capacity building in order to achieve the above. Also, the
processes for identifying, assessing, and managing climate-related risks are yet to be integrated into
the organisation’s overall risk management, which is expected to be completed by the end of 2024.
Strategy c)
Describe the
climate-related
risks and
opportunities the
organisation has
identified over the
short, medium,
and long term.
Non-
compliant
– expected
to be
compliant
by 31 Dec
2026.
Risk Manage-
ment a)
Describe the
organisation’s
processes for
identifying and
assessing climate-
related risks.
Compliant
Risk Manage-
ment b)
Describe the
organisation’s
processes for
identifying and
assessing climate-
related risks.
Partially
compliant-
expected
to be
compliant
by 31 Dec
2026.
Risk Manage-
ment c)
Describe the
organisation’s
processes for
identifying and
assessing climate-
related risks.
Partially
compliant
– expected
to be
compliant
by 31 Dec
2026.
84 IDH 2023 Annual Report
2023 Annual Report IDH 85
Performance | Task Force on Climate-Related Financial Disclosures (TCFD) Response Report
Recommended
Disclosures
Response Status
Metrics and
Targets a)
Disclose the
metrics used by
the organisation
to assess climate-
related risks and
opportunities
in line with its
strategy and risk
management
process.
Partially
compliant
– expected
to be
compliant
by 31 Dec
2026.
In 2023, we are continuing to work with our previously appointed environmental consultancy to
quantify our GHG emissions, develop our ESG and carbon footprint reports, develop our environ-
mental policies, put in place our decarbonization plan, and monitor the development of our data
collection system. Our 2022 emissions were reported in our annual Sustainability Report and will
continue to do so in coming reports. In 2023, we started the planning phase of our sustainability
management system, designed to streamline data collection by generating reports based on input
data, eliminating the need to individually contact each department. All relevant sustainability data
will be included by departments within the system, and reports will be generated in a standardized
format. Throughout the year, each department will input its data into the system, and reports will
be generated accordingly. In Phase 1 of implementation in 2024, we will execute this process and
identify challenges through focal points. To date, the carbon footprint metric (CO2e) is the only met-
ric being identified and used by the organisation to assess climate-related risks and opportunities.
The identification process of other metrics will be finalized by 31 December 2026 and reported in
December 2027.
In 2022, we covered 11% of total operations. In 2023, we increased the coverage to 33%, and we are work-
ing on achieving 100% coverage by 31 December 2026 and reporting in line with TCFD requirements by
31 December 2027.
Metrics and
Targets b)
Disclose Scope
1, Scope 2, and,
if appropriate,
Scope 3 green-
house gas (GHG)
emissions, and
the related risks.
Non
compliant
– expected
to be
compliant
by 31 Dec
2026.
Metrics and
Targets c)
Describe the tar-
gets used by the
organisation to
manage climate
related-risks and
opportunities
and performance
against targets..
Partially
compliant
– expected
to be
compliant
by 31 Dec
2026.
As the baseline emissions were quantified in 2022, we enhanced our data collection in 2023. Our
next step is to adopt science-based climate targets for Scope 1, 2, and 3 GHG emissions starting
2024. Recognising the significance of setting appropriate targets and metrics, we have set a deadline
of 31 December 2026 for compliance with the TCFD. This is crucial, as reporting against these tar-
gets will require robust data for both the current and previous years.
86 IDH 2023 Annual Report
2023 Annual Report IDH 87
Performance
Corporate Social Responsibility
IDH remains steadfast in its commitment to operating
in a manner that values and maintains the intercon-
nection between the growth of its business and the
communities it serves. In its home and largest market,
Egypt, IDH boasts a long history of community work
and assistance through its Moamena Kamel Founda-
tion. The foundation regularly provides medical assis-
tance, as well as many other services, to individuals
who cannot otherwise afford it. In parallel, the Com-
pany provides free, or heavily discounted, diagnostic
services to thousands of members of the community
every year. Throughout its operations, it also collabo-
rates with charitable organisations across the country
to provide medical services, nutrition, and education
to hundreds of underprivileged families, while sup-
porting the renovation and expansion of essential
medical facilities nationwide.
The Company is also an active community player in
its other geographies, hosting medical days in schools,
associations, and corporations, with the goal of raising
awareness on non-communicable diseases and their
prevention methods, while promoting healthy and
sustainable lifestyles. Biolab, IDH’s Jordanian subsid-
iary, is committed to supporting and initiating several
programmes that affect real change in the community,
launching social development programmes, medical
days, among several other initiatives. In Nigeria, Echo-
Lab remains dedicated to offering initiatives, including
health screenings in churches, local markets, and
colleges nationwide. Finally, in Sudan, Ultralab par-
ticipated in several community outreach programmes,
providing medical services for underserved com-
munities free of charge, in addition to post-graduate
educational and training opportunities for youth. It is
important to note that to safeguard the health of IDH’s
staff on the ground, community outreach initiatives
in Sudan were suspended in April 2023, following
the start of the ongoing civil conflict. The Company
remains committed to resuming its community work
once conditions on the ground allow for it.
Egypt
Moamena Kamel Foundation
Building on the Company’s guiding principle of provid-
ing leading medical assistance and services, at impec-
cable quality, to its communities, IDH views corporate
social responsibility (CSR) initiatives as an imperative
extension of its core operations.
The Moamena Kamel Foundation
for Training
and Skill Development was founded in 2006 by Dr.
Moamena Kamel, Professor of Pathology at Cairo
University; founder of IDH subsidiary, Al Mokhtabar
Labs; and mother of CEO, Dr. Hend El Sherbini. In
line with its strong commitment to CSR initiatives, the
Company dedicates up to 1% of the net after-tax profit
of its subsidiaries, Al Borg and Al-Mokhtabar, to fund
the Foundation’s initiatives. In 2023, this amounted
to EGP 6.6 million (based on the Group’s net after-tax
profits for FY 2022), versus EGP 8.9 million in 2022.
The Foundation is primarily focused on impacting the
lives of the residents of Cairo’s Al Duweiqa community,
in addition to several other villages across Egypt. This is
achieved through the implementation of an integrated
programme and vision that encompass economic,
social, and healthcare development initiatives offering
several primary services, including:
• Women’s Empowerment
• Healthcare
• Social Development and Inclusion
• Education
• Nutrition
Women’s Empowerment
Social Development and Inclusion
Empowerment in “ينمطا صيحفا” – Breast
Awareness Campaign
Throughout 2023, IDH organised a total of nine ses-
sions raising awareness, celebrating Women’s Month,
and holding campaigns during Breast Cancer Detec-
tion Month, in collaboration with Baheya Hospital and
sponsored by Al Borg Scan.
As a result of these initiatives, the Company directly
impacted over 270 women through its sessions, with
71% of those in attendance being NGO beneficiaries
while an additional 25% were employees at different
companies across Egypt.
Healthcare
Supporting Kasr El Aini Hospital
Building on the successful relationship established in
2019, IDH and Al Kasr Al Aini have become integral
partners, with the hospital representing a large propor-
tion of the Company’s CSR efforts. In 2023, the Company
focused its support on the hospital’s Kidney Dialysis
Unit, providing it with the medical disposables needed
to continue treating underprivileged patients without
charge. Throughout the year, the Foundation supported
over 11,500 sessions.
Supporting the National Cancer Institution
One of the largest specialised national institutions
in the country, the National Cancer Institution, is in
need of constant support to continue caring for and
curing Egypt’s most in-need patients. Throughout the
year, IDH provided the institution with an anaesthesia
device to further enhance its capabilities and ensure a
safer experience for its patients.
Supporting the Ibrahim Badran Convoys
In an effort to drive positive impacts across some of the
most underserved and in-need communities in Egypt,
IDH proudly partnered with the Ibrahim Badran Foun-
dation to provide medical support to remote areas of
Upper Egypt through the provision of diagnostic tests
at significantly discounted rates. Throughout the year,
IDH supported in 58 convoys, conducting more than
6,000 tests and helping in diagnosing and treating the
area’s most prevalent diseases, including anaemia,
paediatric parasitology, and dermatology.
Other Social Initiatives
• In November 2023, the Moamena Kamel Founda-
tion collaborated with the Egyptian Red Crescent to
raise awareness on family relationships, including
"Mother and Child Disagreements" in the Al Sayda
Eisha district, through a number of sessions titled,
“Disagree without Violence”. The sessions were
attended by over 70 members of the community.
• In June 2023, the Moamena Kamel Foundation
and Al Mokhtabar partnered with the Egyptian
Ministry of Labour to sponsor the “Safety Forum”
for those in the industrial sector. The forum was
meant to increase awareness on safety and occu-
pational health among companies in the health,
industry and tourism sectors. The forum also saw
the introduction of Al Mokhtabar and its Mega
Lab as one of the country’s leading examples of
occupational safety, adhering to the highest inter-
national safety standards.
88 IDH 2023 Annual Report
2023 Annual Report IDH 89
Performance | Corporate Social Responsibility
Education
“Amaly” Training Programme for Fresh Graduates
The Amaly Programme for Chemists provides a quali-
fied chemist programme, relying on both theoretical
and practical training, for students of Cairo University’s
Faculty of Agriculture, specifically in the Arabic and
English Biotechnology Department. During 2023, the
programme completed five separate rounds, benefit-
ting a total of 135 students.
to “Rest Assured”, provides support to female-headed
households in Giza. In 2023, the programme provided
households with 10 months’ worth of food baskets to
boost food security, stability, and dietary diversity. In line
with this project, the Egyptian Food Bank also launched
an educational campaign to raise awareness about
healthy nutrition practices to women. During 2023, the
programme served over 11,000 people across Giza.
Al Kasr Al Aini Session Hall Renovation
During 2023, the Company completed the renovation
of Al Kasr Al Aini’s Department of Vascular Surgery ses-
sion hall. The hall accommodates a total of 40 students,
and it was in need of renovation and an equipment
upgrade to ensure it maintained its ability to effectively
train future medical experts. The Company provided
an ultrasound machine, curtains, an air conditioner,
and 40 student chairs as part of the renovation.
Nutrition
Other Nutrition Initiatives
• During 2023, the Moamena Kamel Foundation
established a nutritional awareness programme
for mothers and children, helping raise awareness
about proper nutrition and educating members of
the community on preventative measures for malnu-
trition. As part of the initiative, several sessions were
held in the Sayda Eisha Youth Centre and Al Sherok
NGO. The sessions were attended by over 65 women.
• A collaboration with Misr El Kheir Foundation that
resulted in the distribution of 3,000 food boxes,
with over 15,000 beneficiaries, across the Greater
Cairo area.
“Etameny” Project
Launched by IDH in collaboration with the Egyptian
Food Bank, the “Etameny” project, which translates
• A collaboration with the Egyptian Food Bank for the
distribution of 4,000 food boxes, with a total reach of
more than 20,000 beneficiaries, across Upper Egypt.
Jordan
IDH’s subsidiary, Biolab, remains steadfast in its
support and initiation of programmes and events
set to leave lasting impacts on the communities it
serves. These initiatives raise awareness on non-
communicable diseases, encourage healthy lifestyle
choices, and educate beneficiaries on the importance
of preventive testing through well-organised events
in collaboration with governmental entities, corpora-
tions, and educational institutions across Jordan.
Healthcare
Community Events
Biolab organises several community events through-
out the year, centred around promoting healthy
lifestyles and increasing community engagement.
As part of these events, the Company distributes
pamphlets encouraging preventive examinations
and sharing information on healthy lifestyle choices.
Biolab also offered discounted Inbody free tests dur-
ing the community event, reaching over 200 benefi-
ciaries in total.
Health Awareness Days and Bazaars
Delivering on its commitment to giving back to the com-
munity, Biolab organises several health awareness days
around the country, offering haemoglobin and glucose
tests to members of the community. Throughout 2023,
the Company organised several health awareness days,
in partnership with the Ministry of Health (MoH),
several leading universities and schools in Jordan, and
leading medical associations in the country. In addition
to haemoglobin and glucose tests, Biolab also distrib-
uted vouchers granting discounts on Inbody free tests.
The events reached over 400 beneficiaries in total.
Medical Days and Corporate Health Fairs
Throughout the year, Biolab participated in corporate
medical days and health fairs in partnership with Amazon
and the US embassy, encouraging preventive testing and
raising awareness about non-communicable diseases to
employees. Throughout the events, the Company distrib-
uted vouchers for discounted testing, reaching approxi-
mately 250 employees across the two events.
90 IDH 2023 Annual Report
2023 Annual Report IDH 91
02
CORPORATE
GOVERNANCE
92 IDH 2023 Annual Report
2023 Annual Report IDH 93
7Experienced professionals on IDH’s Board5Non-Executive Board Members Corporate Governance
Corporate Governance
Board of Directors
As at 31 December 2023, IDH’s Board of Directors is
comprised of five non-executive members, includ-
ing the non-executive chairman and one executive
director, all of whom offer significant experience in
the healthcare market, MENA region, and investment
activities. On 18 January 2024, the Board appointed
Sherif El Zeiny as an Executive Director, Group
Financial Officer, and Vice President of Finance and
Strategies.
Lord St John of Blesto (Age 66)
Non-Executive Chairman and Chairman of the
Nomination Committee
Prof. Dr. Hend El Sherbini (Age 55)
Group Chief Executive Officer
Sherif El Zeiny (Age 60)
Group Chief Financial Officer and Executive
Director
Hussein Choucri (Age 73)
Non-Executive Director and Chairman of the
Remuneration Committee
Lord St John has been an active Crossbench member
of the House of Lords, UK Parliament, since 1978. He
serves on the boards of several listed and unlisted
companies, including Yellow Cake plc, Smithson
Investment Trust plc, Gulf Marine Services plc, Strand
Hanson Ltd, Airport Holdings Mauritius, Kneoworld
UK Limited, and GMS Resources Limited. He also
holds mentoring advisory roles with Farrant Group
Ltd., Qredo Ltd., BetWay Ltd., Geobear Ltd, and ROC
Technologies Ltd. Lord St John has a strong interest in
the charitable sector and serves as a trustee to several
charities focused on wildlife conservation, poverty
reduction, education, and healthcare. He graduated
with a BA in Law and BSocSc in Psychology from Cape
Town University, a BProc from the University of South
Africa, and Masters of Law (LLM) from the London
School of Economics. He practised as an attorney
before his 25-year career in financial services in the
City of London.
Dr. Hend has been IDH Group’s Chief Executive Officer
since 2012 and, prior to that, served as the CEO of Al
Mokhtabar – Egypt’s oldest brand – between 2004
and 2012. She received her MBBCh and her Master’s
degree in Clinical and Chemical Pathology from Cairo
University in the early 1990s, and she also holds a Mas-
ter’s degree in Public Health from Emory University in
Atlanta. Dr. Hend completed her PhD in Immunology
from Cairo University in 2000, where she is also a pro-
fessor of clinical pathology at the university’s Faculty
of Medicine. She sits on the Board of American Society
of Clinical Pathology (Egypt) and consults on the inter-
national certification process. Dr. Hend completed an
Executive MBA from the London Business School in
2015 and was featured as one of Forbes' most powerful
women between 2016 and 2023.
Mr. El Zeiny is a certified Board Director and Execu-
tive Partner with over three decades of experience in
financial management, business leadership, and cor-
porate strategy. He currently serves as Vice President
and Group Chief Financial Officer at IDH. Throughout
his career, he has filled several executive positions in
various leading regional and international corpora-
tions, most recently serving as Vice President and Chief
Financial Officer at Elsewedy Electric Group. Prior to
Elsewedy Electric Group, he held several positions at
Mentor Graphics MENA (currently Motor Siemens),
NCR Egypt, Siemens Egypt’s Energy and Automation
Division, and General Motors Egypt. Mr. El Zeiny holds
an MBA from the City University of Seattle, a Non-
Executive Director Diploma from the Financial Times,
and a BA in Accounting from Cairo University.
Mr. Choucri is the Chairman and Managing Director
of HC Securities and Investment, which he established
in May 1996. He currently sits on the boards of EDITA
Food Industries S.A.E, Fawry Banking and Payment
Technology Services Ltd. (Fawry), and the Egyptian
Center for Economic Studies (ECES). Mr. Choucri
served as the Managing Director of Morgan Stanley
from 1987 to 1993 and served as Advisory Director at
Morgan Stanley from 1993 to 2007. He received his
Management Diploma from The American University
in Cairo in 1978.
94 IDH 2023 Annual Report
2023 Annual Report IDH 95
Corporate Governance | Board of Directors
Dan Olsson (Age 58)
Non-Executive Director and Chairman of the
Audit Committee
Richard Henry Phillips (Age 59)
Non-Executive Director
Mr. Olsson has long and extensive international
experience in the diagnostic and healthcare services
sector, where he has served in a range of executive
positions — among others, as head of diagnostics in
the pan-European healthcare group Capio; CEO of
Unilabs, a pan-European diagnostic provider; and
CEO of Helsa, a Swedish healthcare group. He cur-
rently works as an independent advisor and holds
non-executive positions at Purch AB and Ambea AB
(Publ). Mr. Olsson has worked in the healthcare sec-
tor since 1999. Mr. Olsson studied Economics at the
University of Lund in Sweden.
Mr. Phillips is a founding partner of Actis LLP, the
emerging markets private equity group. As Actis LLP is
one of the Company’s major shareholders, Mr. Phillips
is not considered by the Board as being independent.
He is the Head of Private Equity for Actis and is a mem-
ber of the Actis Investment Committee. Mr. Phillips
is a director on the board of a number of companies,
including Honoris United Universities, GHL Plc., Les
Laboratories Medis SA, and others. Mr. Phillips holds a
degree in Economics from the University of Exeter.
Yvonne Stillhart (Age 56)
Independent Non-Executive Director
Ms. Stillhart is a seasoned Non-Executive Director,
bringing nearly two decades of extensive board-level
leadership experience in both listed and private enti-
ties across Europe, the Middle East, and Africa. Ms.
Stillhart holds positions as a Board Member, contrib-
uting her expertise to the Audit and Risk Committees
at UBS Asset Management Switzerland Ltd, Aberdeen
Private Equity Opportunities Trust Plc., and serves as
the Board Chairperson at EPE Capital Ltd. In Senior
Executive capacities, she co-founded and held execu-
tive leadership responsibilities at a leading private
equity manager in Switzerland. Her proficiency in
investment and finance expertise, proactive risk
management, and digital expertise were integral in
transforming growth-driven companies in a sustain-
able manner. Her qualifications include a Directors'
Certificate from Harvard Business School, a Qualified
Risk Director accreditation from the DCRO Institute,
and the ESG Competent Boards Certificate. Ms. Still-
hart is fluent in German, English, Spanish, and French.
96 IDH 2023 Annual Report
2023 Annual Report IDH 97
Corporate Governance
Corporate Governance Report
The Board of Directors (the “Board”) is responsible for
providing strong leadership and effective decision-
making, safeguarding in the process the interests of all
shareholders of Integrated Diagnostics Holdings. Under
my chairmanship, the Board has maintained an unwav-
ering commitment to providing oversight and guidance
to senior management as the Group continues to execute
its regional growth strategy.
IDH is a Jersey-registered entity with a Standard List-
ing on the Main Market of the London Stock Exchange
(LSE) since May 2015 and a secondary listing on the
Egyptian Stock Exchange (EGX) since May 2021.
Given the Company’s standard listing on the LSE, it is
not required to comply with the requirements of the
2018 UK Corporate Governance Code (the “Code”)
as issued by the Financial Reporting Council. During
the year to 31 December 2023, the Board continued to
work towards a robust governance framework where
appropriate and applicable to IDH’s circumstances.
We are compliant with Financial Conduct Authority
Disclosure Guidance and Transparency Rules (DTR)
subchapters 7.1 and 7.2, which set out certain man-
datory disclosures: 7.1 concerns audit committees
and bodies carrying out equivalent functions, and 7.2
concerns corporate governance standards that are
included in the Directors Report or, in this case, as part
of the Strategic Review (DTR 7.2.1).
To that end, we have an Audit Committee as well as
Remuneration and Nomination Committees. The Board
may establish additional committees as appropriate
going forward. This Annual Report includes reports from
the Audit, Remuneration, and Nomination Committees.
Moreover, over the course of the past year, IDH has worked
on complying with EGX listing rules and UK listing rules,
in addition to the corporate governance requirements
that are set for foreign companies with dual listing.
The Board is committed to implementing best practices
in corporate governance, calling on both the expertise of
individual Directors and that of outside parties, including
legal counsel and global professional services firms.
Functioning of the Board
The Board met five times during the course of 2023.
Details of the individual Directors’ attendance is shown
on page 100. The Board has invested significant time
discussing and evaluating the Group’s strategy and pros-
pects for future growth and has held a separate strategy
day during the year, the outcome of which is presented
in our statement of strategy on page 54. We are confident
that we have in place the right strategy and management
team to deliver shareholder returns going forward.
Board Skills and Composition
Under its Articles of Association, the Group must have a
minimum of two Directors. While there is no maximum
number of Directors, the Board presently comprises
seven Board members. Sherif El Zeiny joined the Board
as Group Chief Financial Officer and Vice President of
Finance and Strategies in January 2024. Mr. El Zeiny’s
extensive experience in financial management and
business leadership, coupled with his proven tenure in
transforming businesses into regional leaders, provides
significant added value to the Board of Directors.
As at 31 December 2023, our Board comprised four
Non-Executive Directors, one Executive Director, and
the Chair who was independent upon appointment.
Together, the Directors offer IDH a world standard mix
of expertise in areas that include strategy, finance, and
medical diagnostics, as well as diverse experience in
Europe, the Middle East, and Africa. We have relevant
commercial and technical experience to help direct
the Group as it delivers on its strategy in a very techni-
cal field and across rapidly changing geographies. The
Board and their biographies are set out on pages 94 to
97 of this Annual Report and are summarised in the
following table.
Board of Directors of Integrated Diagnostics Holdings Plc
Name
Position (Date of Appointment)
Lord St John of Bletso
Non-Executive Chairman (12 January 2015)
Prof. Dr. Hend El Sherbini
Executive Director, Group Chief Executive Officer (23 December 2014)
Hussein Choucri
Non-Executive Director (12 January 2015)
Dan Olsson
Non-Executive Director (12 January 2015)
Richard Henry Phillips
Non-Executive Director (23 December 2014)
Yvonne Stillhart
Sherif El Zeiny
Independent Non-Executive Director (1 March 2022)
Executive Director, Group Chief Financial Officer (18 January 2024)
Leadership
We continue to operate on the basis of a clear division of
responsibilities between the role of the Chairman and
that of the Group Chief Executive. The Board continues to
believe that this segregation of roles remains appropriate,
taking into account the size and structure of the Group.
efficiently run, allowing all Directors to openly and con-
structively challenge the proposals made by the Group’s
senior management. I am pleased to report that through-
out the year, each Director has properly exercised those
powers with which they have been vested by the Group’s
Articles of Association and relevant laws.
As Chairman, I ensure that the Board is effective in the
execution of all aspects of its role. The Group Chief Execu-
tive Officer, meanwhile, is responsible for managing the
day-to-day running of the business. In this, she is sup-
ported by a senior management team. The Group Chief
Executive and I have a good working relationship and
discuss matters of Group strategy and performance on a
regular basis. We also work together to ensure that Board
meetings cover relevant matters, including a quarterly
review of financial and operational performance (includ-
ing key performance indicators), and in partnership with
the Group Secretary ensure that all Directors:
• are kept advised of key developments;
• receive accurate, timely, and clear information upon
which to call in the execution of their duties; and
• actively participate in the decision-making process.
Agendas for meetings of the Board are reviewed and
agreed upon in advance to ensure each Board meeting is
The Board operates under a Schedule of Matters
Reserved, which is annually reviewed. Matters reserved
to the Board means any decision that may affect the over-
all direction, supervision, and management of the Group,
including, but not limited to:
• approving annually a strategic plan and objectives
for the following year for the Group;
• approving any decision to cease to operate all or any
material part of the Group’s business or to enter into
any new business or geographic areas;
• monitoring the delivery of the Group’s strategy,
objectives, business plan, and budget;
• adopting or amending the Group’s business plan or
annual budget;
• approving the Group’s annual report and accounts
and quarterly financial statements and/or any
change in the accounting principles or tax policies of
any member of the IDH group and/or any change in
the end of the financial year of any member of the
98 IDH 2023 Annual Report
2023 Annual Report IDH 99
Corporate Governance | Corporate Governance Report
IDH group, except as contemplated by the business
plan or annual budget, as required by law, or to com-
ply with a new accounting standard;
• any member of the IDH group declaring or paying
any dividend or distribution;
Apart from these reserved matters, the Board delegates
specific items to its principal committees, namely the
committees on Audit, Remuneration, and Nomination.
Each committee is authorised to seek any information it
requires from senior management.
• approving the issue of all circulars, prospectuses,
listing particulars, and general meeting notices to
shareholders of the Group;
• ensuring the Group has effective systems of internal
control and risk management in place by (i) approv-
ing the Group’s risk appetite statements and (ii)
approving policies and procedures for the detection
of fraud, the prevention of bribery, and other areas
considered by the Board to be material;
• undertaking an annual review of the effectiveness of
the Group’s risk management and internal control
and reporting on that review in the Group’s annual
report. The review should cover all controls, includ-
ing financial, operational, and compliance controls
and risk management;
• carrying out a robust assessment of the principal
risks facing the Group, including those that threaten
its business, future performance, solvency, or liquid-
ity and to report on such assessment in the Group’s
annual report; and
• adopting or amending the Group’s environmental
policy and monitoring its delivery; and
• reviewing the Group’s overall corporate governance
arrangements and approving any changes thereto.
A summary of the Board’s committees are set out from
page 101. Reports from the Chairmen of the Audit,
Remuneration, and nomination committees appear
starting pages 104, 108, and 110 of this Annual Report,
respectively.
Board Meetings During 2023
The Board met five times during the year, one of which
was held on an ad hoc basis to consider the Group’s
Budget. Details on our Directors’ attendance at Board
and committee meetings are shown in the table below. In
the event that any Director is unable to attend a meeting
of the Board or committee of which they are a member,
he or she receives the necessary papers, including agen-
das, meeting outcomes, and any documents presented
for review or information. Furthermore, I endeavour
to discuss with them in advance of the meeting to
obtain their views and decisions on the proposals to be
considered. Prior to Board meetings, all Non-Executive
Directors meet either by themselves, together with the
CEO, or with the entire Board. This time is usefully spent
enabling Board members to build rapport, share views,
and consider issues impacting the company, resulting in
improved board dynamics and better decision-making.
Table of Director Attendance at 2023 Meetings
Name
Board
Audit (a)
Remuneration (c)
Nomination
Number of Meetings
Directors:
Lord St John of Bletso
Prof. Dr. Hend El Sherbini
Hussein Choucri
Dan Olsson
Richard Henry Phillips
Yvonne Stillhart
Sherif El Zeiny*
* Sherif El Zeiny was appointed on 18 January 2024.
5
5
5
5
5
5
5
n/a
7
n/a
n/a
7
7
n/a
7
n/a
1
n/a
n/a
1
1
n/a
1
n/a
2
2
n/a
2
2
n/a
n/a
n/a
Board Effectiveness
Having spent considerable time in both formal meet-
ings and in learning about the skills of our Directors
one-on-one — and drawing on my past experience as a
Director — I am confident that the Board has the skills,
talent, and industry knowledge it needs to effectively
deliver the Group’s agreed strategy. The Board, facilitated
by the Company Secretary, carries out regular internal
evaluations and considers the feedback from each Direc-
tor in setting the agenda and strategic direction of the
Company. In addition, training requirements for each
Director are considered, and the Board receives regular
updates from the Company Secretary or specific training
from external legal counsel as deemed appropriate.
It is my considered judgement that the Board receives
from senior management sufficiently detailed budgets,
forecasts, strategy proposals, reviews of the Group’s finan-
cial position and operating performance, and annual and
half yearly reports to ensure that it may be effective. This
enables us to effectively ask questions of senior manage-
ment and to hold discussions on the Group’s strategy
and performance. In 2023, senior management delivered
regular reports to the Board ahead of regularly scheduled
Board meetings.
Any concerns raised by Directors are clearly recorded
in the minutes of each meeting. I review Board min-
utes in my capacity as Chairman before these minutes
are circulated to all Directors in attendance and then
tabled for approval at the next meeting, at which time
any necessary amendments are made.
The Group has obtained customary directors’ and offi-
cers’ indemnity insurance, covering the Chairman and
the Non-Executive Directors.
The Board has delegated several areas of responsibility to
its committees. The composition of the Board’s commit-
tees was considered during the year.
Audit Committee
The Audit Committee is responsible for overseeing
IDH’s internal financial reporting and ensuring the
integrity of the Group’s financial statements. The Com-
mittee is also responsible for reviewing and monitor-
ing the effectiveness of the Group’s risk management
processes and internal controls, as well as for ensuring
that audit processes are robust.
At the date of this report, the following were the members of the Audit Committee:
Name
Dan Olsson
Hussein Choucri
Yvonne Stillhart
Nomination
Chairman of the Committee
Committee Member
Committee Member
More information on the Audit Committee is available in the Audit Committee Report on page 104 of this report.
Remuneration Committee
The Remuneration Committee is responsible for the remuneration for the services rendered by Directors and
select members of senior management.
At the date of this report, the following were members of the Remuneration Committee:
Name
Hussein Choucri
Dan Olsson
Yvonne Stillhart
Nomination
Chairman of the Committee
Committee Member
Committee Member
100 IDH 2023 Annual Report
2023 Annual Report IDH 101
information necessary for shareholders to assess
the Group’s position, performance, business model,
and strategy.
Lord St John of Bletso
Chairman
27 March 2024
Corporate Governance | Corporate Governance Report
More information on the Remuneration Committee is available in the Remuneration Committee Report on page
108 of this report.
Nomination Committee
The Nomination Committee assists the Board in reviewing the structure, size, and composition of the Board. It is
also responsible for reviewing succession plans for the Directors, including the Chairman and Chief Executive and
other senior management.
Committee composition
The Nomination Committee comprises the below members:
Name
Lord St John of Bletso
Hussein Choucri
Dan Olsson
Nomination
Chairman of the Committee
Committee Member
Committee Member
The Nomination Committee comprises Non-Executive
Directors.
More information on the Nomination Committee is
available in the Nomination Committee Report on
page 110 of this report.
Investor Relations
Engagement with shareholders continues to be a key
function at both the senior management and the Board
levels. Our investor relations function held hundreds of
meetings with current and potential investors during
the course of the year. Management met with investors
at several investor conferences and roadshows during
2023, in addition to handling hundreds of one-on-one
call requests and queries throughout the year.
In 2023, we published three-month, half-year, and
nine-month reviewed results, in addition to audited
full-year results, and further released a trading update
on performance at the three-month periods. We intend
to continue publishing reviewed results for the first-,
second-, and third-quarter marks in 2024 to abide by
the Egyptian Exchange’s listing rules.
The Board communicates with shareholders through
public announcements disseminated via the London
Stock Exchange, analyst briefings, roadshows, and
press interviews. Copies of public announcements and
financial results are published on the Group’s website,
along with a number of other investor relations tools. It
is worth highlighting that the Group launched new cor-
porate and investor relations websites in 2018, offering
more comprehensive and better structured informa-
tion on the Group, along with additional shareholder
tools and a richer interface.
The Board receives regular updates from the senior
management team on the views of major shareholders
and on milestones in the investor relations programme.
We will continue throughout 2024 to grow our investor
relations programme to ensure that our shareholders
and stakeholders remain informed of the Group’s strat-
egy and ongoing financial and business performance.
On this note, I would like to announce that in Janu-
ary 2024, we welcomed Tarek Yehia as IDH’s new
Director of Investor Relations. Tarek brings with him
a wealth of experience in investor relations, commu-
nications, and corporate finance, spanning nearly 15
years. Previously, he held senior investor relations
positions in several of Egypt’s forefront companies.
I am confident that Tarek’s unique experiences will
prove extremely valuable in furthering our investor
relations programme, ensuring timely communica-
tion of our results and strengthening the Company’s
relationship with its shareholders.
Annual General Meeting
We will hold our eighth Annual General Meeting
as a listed company on 29 May 2024 in London,
UK. Details of the AGM are included in the Notice
of Meeting that accompanies this Annual Report
and which is available on our website. At the
AGM, all of the Group’s Directors will retire and
submit themselves for re-election. The outcome
of the voting at the AGM will be announced
by way of London/Egypt
Stock Exchange
announcements, and full details will be published
on the Company’s website shortly after the AGM.
Fair, Balanced, and Understandable
The Board recognises its duty to ensure that the
Annual Report and Accounts 2023, taken as a whole,
is fair, balanced, and understandable and provides
the information necessary for shareholders to assess
the performance, strategy, and business model of
the Group. The Board has placed reliance on the fol-
lowing to form this opinion: The process by which
the Annual Report and Accounts 2023 was prepared,
including detailed project planning and a compre-
hensive review process. The review of the Annual
Report and Accounts 2023 by the Committee, plac-
ing reliance on the experience of the Committee
members. Reports prepared by senior management
regarding critical accounting judgements and sig-
nificant accounting policies. Discussions with, and
reports prepared by, the external auditor. Regular
financial information received throughout the year,
including monthly KPIs reports. As detailed in the
Directors’ responsibility statement on page 116,
each of the Directors has confirmed that, to the best
of each person’s knowledge and belief, the Annual
Report and Accounts 2023, taken as a whole, is fair,
balanced, and understandable and provides the
102 IDH 2023 Annual Report
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Corporate Governance
Audit Committee Report
Council. The Committee has also been actively working
to ensure IDH’s financial reporting complies with EGX
rules and requirements set out for foreign companies
with a dual listing.
During 2023, the Audit Committee met seven (7) times.
The Committee members reviewed the integrity and
content of external financial reporting, risk management,
and internal controls and reported the findings and
recommendations to the Board. Outside of scheduled
meetings, the Audit Committee also communicated
regularly throughout 2023 with the Group Chief Financial
Officer and Vice President of Finance and Strategies, as
well as the external auditors. The external auditors are
invited to attend meetings of the Committee on a regular
basis. The Group Chief Financial Officer and Vice Presi-
dent of Finance and Strategies, who is a member of the
Board, also attends the meetings, and other members of
the senior management team attend as required; these
include the Director of Investor Relations, the Chief Inter-
nal Audit Director, and the Group Secretary.
There are also private meetings between the Audit
Committee and the external auditors outside the audit
timetable at which senior management is not present.
The Committee will continue with the practice of meet-
ing in private with the external auditors in the future.
FRC Audit Quality Review
The FRC is the UK’s independent regulator responsible
for promoting high-quality corporate governance and
reporting to foster investment. The FRC’s responsibili-
ties include independent monitoring of audits of listed
and certain other public interest entities performed by
firms registered to conduct audits in the UK by a Rec-
ognised Supervisory Body (further details are set out on
the FRC’s website). This monitoring is performed by the
FRC’s Audit Quality Review (AQR) team. The reviews of
individual audit engagements are intended to contrib-
ute to safeguarding and promoting improvement in the
overall quality of auditing in the UK.
Dan Olsson
Chairman of the Audit Committee
I am pleased to present the Audit Committee report
for the year ended 31 December 2023. This report is
intended to provide shareholders with an insight in to
how key topics were considered during the year, the
activities of the committee and how the committee
discharged its responsibilities in 2023.
The Audit Committee will meet not less than three
times a year. The Audit Committee comprises three
Non-Executive Directors who hold the necessary
competence in accounting and/or auditing, recent
financial experience, and have competence relevant
to the sector in which the Group is operating.
In addition to myself as Chair of the Committee, Hus-
sein Choucri and Yvonne Stillhart are also members of
the Committee. The Committee as a whole considers
it has the relevant financial experience in financial
and healthcare industry matters to carry out its duties
with the appropriate knowledge and challenge as set
out under the 2018 UK Corporate Governance Code
(“the Code”) as issued by the Financial Reporting
During the year, we were informed that the Financial
Reporting Council (FRC) had selected the audit of IDH
plc’s December 2022 Annual Report and Accounts for
review by its AQR team as part of their routine sampling
activity. Audit quality review is undertaken by the FRC
as part of its annual inspection of audit firms. The FRC
review considered the audit of key areas of judgement
and estimation, including the application of key judge-
ment and assumptions for the expected credit loss
model, the audit of revenue, and the involvement of
the Group auditor in the component audits. The review
did not highlight any areas for improvement.
Roles and Duties of the Audit
Committee
The Audit Committee’s role is to assist the Board with
the discharge of its responsibilities in relation to finan-
cial reporting, including:
• reviewing the Group’s annual and half-year financial
statements and quarterly financial statements;
• reviewing the Group’s accounting policies and inter-
nal and external audits and controls;
• reviewing and monitoring the scope of the annual
audit and the extent of the non-audit work under-
taken by external auditors;
• advising on the appointment of external auditors
and reviewing the effectiveness of the internal audit,
internal controls, whistleblowing, and fraud systems
in place within the Group;
• ensuring that the quality of information on sustainabil-
ity factors, including on climate change, is comparable
and meets the standards of financial information.
• Oversee the Group's cybersecurity strategy ensuring it
is regularly updated and systematically adhered to.
The Board has ultimate responsibility for the Group’s
internal controls; however, they have delegated
oversight of the Group’s system of internal controls
to the Audit Committee so as to safeguard the assets
of the Group and the interests of shareholders. The
Audit Committee thus reviews the effectiveness of the
Group’s internal controls on an ongoing basis to ensure
the keeping of proper accounting records, safeguard-
ing the assets of the Group, and detecting fraud and
other irregularities. The Audit Committee reports back
to the Board with its findings and recommendations.
The Board has, accordingly, established that the
Group has in place internal controls to manage risk,
including:
• the identification and management of risk at the
level of operating departments by the heads of
those departments; and
• regular Board-level discussions of the major busi-
ness risks of the Group, together with measures
being taken to contain and mitigate those risks.
The Group’s principal risks and uncertainties and
mitigation for them are set out on pages 56–63 of this
Annual Report.
The Board has furthermore put in place a control
framework at the Group level that applies to all sub-
sidiaries, including:
• board approval of the overall Group budget and
strategic plans;
• a clear organisational structure delineating lines
reporting
responsibility, authorities, and
of
requirements;
• defined expenditure authorisation levels;
• a regular process for operational reviews at the
senior management level on a weekly, monthly, and
quarterly basis, covering all aspects of the business;
• a strategic planning process that defines the key
steps senior management must take to deliver on
the Group’s long-term strategy;
• a comprehensive system of financial reporting,
including weekly flash reports to management,
monthly reporting to management, and an annual
budget process involving both senior management
and the Board — the Board received reports on a
quarterly basis in 2023; and
104 IDH 2023 Annual Report
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Corporate Governance | Audit Committee Report
• as part of the reporting process in 2023, manage-
ment reviewed monthly and year-to-date actual
results against the prior year, against budget, and
against forecast. Any significant changes and
adverse variances are reviewed by the Group Chief
Executive and by senior management, and reme-
dial action is taken where appropriate.
Audit Committee Meetings During 2023
During 2023, the Audit Committee had seven (7) scheduled meetings. At each scheduled meeting, the Committee
considered the matters outlined above under the subheading “Roles and Duties of the Audit Committee”.
Committee Member
Meeting Attended
Dan Olsson
Hussein Choucri
Yvonne Stillhart
7
7
7
Significant Issues
The Audit Committee held regular meetings across the
period with the external auditors. In these meetings,
the external auditors presented their audit plan and
shared their assessment of financial statement risks.
Areas of risk and focus for the audit include revenue
recognition, procedures around management override
of controls, assessments of control over our subsidiar-
ies, and valuations of options over non-controlling
interests. Detailed discussions were held around cor-
porate governance and steps being taken to strengthen
the control environment.
During the year, the Audit Committee, external audi-
tors, and IDH’s management team agreed to record an
NGN 18 million impairment expense in goodwill and
assets in Nigeria, accounting for economic volatility in
the country and the anticipation of continued head-
winds into 2024. Meanwhile, IDH’s management team
in Nigeria continues to assess the impacts of economic
downturns in the country, putting in place strategies
for price increases to counteract persistent inflation
while prioritising patient retention and operational
expansion in the country.
Internal Auditor
The scope of the internal auditor encompasses, but is not
limited to, the examination and evaluation of the adequacy
and effectiveness of the Group’s governance, risk manage-
ment, and internal controls, as well as the quality of perfor-
mance in carrying out assigned responsibilities to achieve
the Group’s stated goals and objectives. This includes:
• Evaluating risk exposure relating to the achievement of
the Group’s strategic objectives.
• Evaluating the reliability and integrity of information
and the means used to identify, measure, classify, and
report such information.
• Evaluating the systems established to ensure compli-
ance with those policies, plans, procedures, laws, and
regulations, which could have a significant impact on
the Group.
• Evaluating the means of safeguarding assets and, as
appropriate, verifying the existence of such assets.
• Monitoring and evaluating governance processes.
• Reporting periodically on the internal audit activity’s
purpose, authority, responsibility, and performance
relative to its plan.
• Reporting significant risk exposures and control issues,
including fraud risks, governance issues, and other
matters needed or requested by the Board/Audit
Committee.
Recommendation
Ultimately, it is the Board’s responsibility to review
and approve the Group’s full-year and half-year
financial statements, as well as to determine that,
taken as a whole, the Annual Report is balanced,
understandable and provides the information neces-
sary for shareholders to assess the Group’s position
and performance, business model, and strategy. It is
the Audit Committee’s role to assist the Board in dis-
charging its responsibilities with regards to financial
reporting, as well as external and internal audits and
controls. Following a review of the process around the
annual audit and the content of the financial state-
ments, the Audit Committee advised the Board at its
meeting on 25 March 2024 that it is their opinion that
the financial statements as at 31 December 2023 pro-
vide a true and fair view of the financial performance
of the Group and recommend that it be adopted by
the Board and recommended to shareholders for
approval at the forthcoming Annual General Meeting.
Dan Olsson
Chairman, Audit Committee
27 March 2024
The Internal Auditor reports to the Audit Commit-
tee, and the Committee received four reports on the
findings of the internal audit in 2023. The Committee
also received a report from the Internal Audit on their
annual review of the system of internal control and risk
management. The Committee continues to monitor
and review the effectiveness and capabilities of the
Internal Audit during the year.
External Auditor Independence
PwC has acted as the Group’s external auditor through-
out the year. The auditors’ independence was consid-
ered by the Committee during the year and, following
careful consideration, it was agreed that the auditors
remained independent.
The Audit Committee reviewed the work completed
by the external auditors. The Audit Committee con-
firms that during 2023, PwC audit services amounted
to EGP 65.0 million (2022: EGP 38.4 million). The
external auditors' fees include those related to the
dual-listing of IDH’s shares on both the LSE and
the EGX, which necessitates the publishing of three
reviewed financial statements for 1Q, 2Q, and 3Q, in
addition to audited financial statements for the full
year in consolidated and standalone forms.
Non-audit fees paid during 2023 amounted to EGP 0.3
million (versus EGP 0.2 million in 2022).
External Auditor
Following consideration of the performance of the
auditors, the services provided during the year, and a
review of its independence and objectivity, the Com-
mittee has recommended to the Board the re-appoint-
ment of PwC as Auditor to the Company. As such, the
notice of the 2024 Annual General Meeting includes a
resolution, to be approved by shareholders, that PwC
be re-appointed as Auditor.
106 IDH 2023 Annual Report
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Corporate Governance
Remuneration Committee Report
Hussein Choucri
Chairman, Remuneration Committee
The Non-Executive Directors are all entitled to the
reimbursement of reasonable expenses.
Remuneration of Directors in 2023 (Audited) 23
Figures in EGP24
Base Salary /
Fees 2023
Base Salary /
Fees 2022
Annual Bonus
2023^
Annual Bonus
2022^
Total 2023
Total 2022
Executive Director
Dr. Hend El
Sherbini25
16,615,351
10,398,605
450,000
450,000
17,065,351
10,848,605
Non-Executive Directors
In this report from the Remuneration Committee (the
“Committee”), I outline on behalf of my colleagues
and myself the basis on which Directors and select
members of senior management will be remunerated
for their service in 2023. A detailed discussion of the
basis on which the aforementioned (as well as one key
member of senior management) were remunerated for
their service in 2023 appears below.
At the date of this report, the following were members of the Remuneration Committee:
Lord St John of
Bletso
3,075,866
1,967,268
Hussein
Choucri
1,999,315
1,278,726
Committee Member
Meeting Attended
Dan Olsson
2,153,110
1,381,215
Hussein Choucri
Dan Olsson
Yvonne Stillhart
Chairman of the Committee
Committee Member
Committee Member
Yvonne Stillhart
1,999,315
1,065,605
-
-
-
3,075,866
1,967,268
1,999,315
1,278,726
2,153,110
1,381,215
1,999,315
1,065,605
Chairman Lord St John of Bletso is entitled to receive
an annual salary of USD 100,000. He is entitled to
the reimbursement of reasonable expenses. Non-
Executive Directors Hussein Choucri, Dan Olsson,
and Richard Henry Phillips, have been engaged by
the Group as Non-Executive Directors under letters of
appointment. Hussein Choucri is entitled to an annual
fee of USD 65,000, Dan Olsson is entitled to an annual
fee of USD 70,000, and Yvonne Stillhart is entitled to an
annual fee of USD 65,000. Richard Henry Philips will
not be entitled to receive any fee from the Group for
his role.
Hussein Choucri
Chairman, Remuneration Committee
27 March 2024
23 There are no taxable benefits, corporate pensions, or long-term incentive plans for the Company’s Directors.
24 Average US$:EGP exchange rate was 30.8 during 2023.
25 Dr. Hend El Sherbini receives part of her annual bonus in the form of an annual award amounting to EGP 450,000.
^ BOD members are not eligible for profit share distributions.
108 IDH 2023 Annual Report
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Corporate Governance
Nomination Committee Report
Role of the Nomination Committee
• Regularly reviewing the structure, size, and compo-
sition (including the skills, knowledge, experience,
and diversity) of the Board and its Committees
and making recommendations to the Board when
appropriate.
• Leading the process for new appointments to the
Board.
• Ensuring orderly succession planning to both the
Board and the senior management team and review-
ing it at least on an annual basis.
• Supporting the development of a diverse pipeline for
succession.
• Ensuring that there is a rigorous annual evaluation
of the performance of the Board, its Committees, the
Chair, and Individual Directors.
• As Chairman of the Committee, I will report to the
Board on the business carried out at the previous
Committee meeting and inform of any recommen-
dations made by the Committee.
Succession Planning: Board Level
In January 2024, the Committee supported the
recruitment and appointment of Sherif El Zeiny as
Group Chief Financial Officer, Vice President, and
Executive Director.
Succession planning: Senior Management
During the year, the Committee supported the
strengthening of the Executive Committee with
Samah El Saghier, Group Chief People and Culture
Officer; Tarek Yehia, Investor Relations Director; and
Sherif El Zeiny, Group Chief Financial Officer and
Vice President.
Diversity
We have increased our focus on succession and tal-
ent management for the Board and senior manage-
ment. The Committee plans to develop an orderly
Lord St John of Blesto
Chairman, Remuneration Committee
The Nomination Committee (the “Committee”)
introduced several key initiatives throughout 2023,
prioritising the implementation of safe succession
planning on both the Board and senior management
levels, promoting diversity within its ranks, and
ensuring the appropriate size and structure of the
Board of Directors to ensure its effectiveness. In this
report, I outline the key responsibilities and initia-
tives taken by the Committee to this end.
Activities for the year ended 31 December 2023:
• Reviewed the structure, size, and composition of
the Board and its Committees.
• Considered the independence of the Directors.
• Introduced a skills matrix.
• Agreed on the internal evaluation of the Board and its
Committees, facilitated by the Company Secretary.
• Considered the Board’s succession plans.
• Recommended the re-appointment of Directors at
the 2024 Annual General Meeting to the Board.
succession plan for the Board's Non-Executive Direc-
tors. The Committee recognises that in order for the
Board to discharge its fiduciary duties, members
should possess a broad range of social, educational,
and professional backgrounds, as well as bring along
different skills, experiences, and cognitive strengths.
By consistently monitoring the diversity of our workplace
with a strict focus on merit, and while employing an
objective set of criteria, we ensure our ability to effectively
compete in the world’s increasingly diverse marketplace.
Our disclosures and statement on the diversity of our
Board, senior Board positions, and executive man-
agement in compliance with Listing Rule 14.3.33R
(1) (the “New Rules”) are set out below.
The New Rules Set the Following Targets:
• At least 40% of the Board are women;
• At least one of the senior Board positions (Chair,
Chief Executive Officer (CEO), Senior Independent
Director (SID), or Chief Financial Officer (CFO) is
a woman; and
• At least one member of the Board is from a minority
ethnic background (which is defined by reference
to the categories recommended by the Office of
National Statistics (ONS) as coming from a non-
white ethnic background).
The tables below show the data required to be pre-
sented by the New Rules. While the Group is not
currently in full compliance with all requirements,
we believe that we currently have the right people
fulfilling these executive roles, based on professional
background and experience.
While we do not believe it is appropriate to set strict
goals to comply with these targets at present, we
believe that the composition of the Board should
be driven by the specific needs and skill gaps of the
Group, and we continuously review our position on
the matter. Meanwhile, the Board is committed to
improving diversity in the workforce and will continue
to consider the matter as a key pillar in its succession
planning and recruitment process.
Board and Senior Management Composition by Sex
Sex Representation
Number of Board
members
Percentage of
the Board
Number of senior
positions on the
Board (CEO, CFO,
SID, and Chair)
Number in
executive
management
Percentage
of executive
management
Men
Women
4
2
66.67%
33.33%
1
1
9
6
60%
40%
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Corporate Governance | Nomination Committee Report
Board and Senior Management Composition by Ethnic Background
Ethnic Representation
Number of Board
members
Percentage on
the Board
Number of senior
positions on the
Board (CEO, CFO,
SID and Chair)
Number in
executive
management
Percentage
of executive
management
White British or
other White (includ-
ing minority white
groups)
Other ethnic groups,
including Arab
Notes:
4
2
66.67%
33.33%
1
1
_
15
_
100%
1. All data is at 31 December 2023.
2. Sherif El Zeiny (male) was appointed as Board member in January 2024 and is excluded from the data.
3. Executive management is represented by all direct reports of the Chief Executive Officer in non-administrative roles. The role of the Company Secretary
is excluded as the role is outsourced to an external service provider.
4. Data is collected via self-reporting.
I look forward to meeting shareholders at the AGM on 29 May 2024.
Lord St John of Blesto
Chairman of the Nomination Committee
27 March 2024
112 IDH 2023 Annual Report
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Corporate Governance
Directors’ Report
The statements and reviews on pages 4 to 63 comprise
the Strategic Report, which contains certain informa-
tion that is incorporated into this Directors’ Report by
reference, including indications as to the Group’s likely
future business developments.
Directors
The Directors who held office as at 31 December 2023
and up to the date of this report are set out on pages 94
to 97, along with their biographies. The remuneration
of the Board of Directors is set out in the Remuneration
Report on page 109.
Directors’ and Officers’ Liability Insurance and
Indemnification of Directors
Subject to the conditions set out in the Companies (Jer-
sey) Law 1991 (as amended), the Group has arranged
appropriate Directors’ and Officers’ liability insurance
to indemnify the Directors against liability in respect of
proceedings brought by third parties. Such provisions
remain in force at the date of this report.
Principal Activities
The Group’s principal activity is the provision of medi-
cal diagnostics services. An overview of the Group’s
principal activities is an integral component of the
Strategic Review included in this Annual Report begin-
ning on page 4.
Business Review and Future
Developments
A review of the development and performance of the
Group’s business forms an integral part of this Annual
Report in different sections, including the Chairman’s
Message (pages 14 to 16), Chief Executive’s Report
(pages 18 to 22), Strategic Report (beginning page 4),
and particularly the Performance section (beginning
on page 66). Financial statements for 2023 appear in the
Audited Financial Statements (starting on page 118).
Results and Dividends
The Group’s Results for 2023 are set out in the Audited
Financial Statements starting on page 118. While IDH
maintains its long-term dividend policy that sees
the Company return to shareholders the maximum
amount of excess cash after taking careful account of
the cash needed to support operations and expansions,
the Board of Directors has agreed that a dividend will
not be paid this year in light of the ongoing uncertainty
and lack of foreign currency availability in Egypt.
Principal Risks and Uncertainties
The principal risks and uncertainties that may affect
IDH’s business, as well as their potential mitigants, are
outlined on pages 56 to 63 of this Annual Report.
Share Capital
The Group has 600,000,000 ordinary shares, each with
a nominal value of USD 0.25. There are no other shares
in issue, other than ordinary shares.
Substantial Share Holdings
As at 31 December 2023, the Company ascertained
from its own analysis that the following held interests
of 3% or more of the voting rights of its issued share
capital:
Substantial Share Holdings
Shareholder
Hena Holdings Ltd.
Actis IDH B.V.
International Finance Corporation
(IFC) and IFC MENA Fund
Fidelity Investments
T. Rowe Price International
Stewart Investors
Number of Voting Rights
% of Voting Rights
162,445,383
126,000,000
34,755,198
21,068,972
20,607,367
18,038,382
27.07
21.00
5.79
3.51
3.43
3.01
Note (1): The table displays the top five shareholders in IDH across both exchanges (LSE and EGX).
Note (2): As at year-end 2023, 94.82 % of IDH’s shares were listed on the LSE, with the remaining 5.18% listed on the EGX. The table above demonstrates the
top six shareholders across both the LSE and EGX.
The Directors certify that there are no issued securities
that carry special rights with regard to control of the
Company. There are similarly no restrictions on voting
rights. Chief Executive Officer Dr. Hend El-Sherbini and
her mother, Dr. Moamena Kamel, jointly hold the shares
held by Henna holdings, which include the described
voting rights.
The Company has not been informed of any changes to
the above interests between 31 December 2023 and the
date of this Report.
Corporate Responsibility
The Group’s report on Corporate Responsibility is set out
on page 88.
Corporate Governance
The Group’s report on Corporate Governance is on pages
94 to 117.
Articles of Association
The Company’s Articles of Association set out the rights
of shareholders, including voting rights, distribution
rights, attendance at general meetings, powers of
Directors, proceedings of Directors, as well as borrow-
ing limits and other governance controls. A copy of
the Articles of Association can be requested from the
Group Company Secretary.
The Articles of Association may be amended by mem-
bers of the Company via special resolution at a General
Meeting of the Company. The Company is not seeking
any amendments at the forthcoming annual general
meeting.
Rules on the Appointment and
Replacement of Directors
Rules on the appointment and replacement of Directors
are set out in the Group’s Articles of Association, a copy
of which may be requested from the Group Company
Secretary.
Agreements Related to Change of Control
of the Group
In 2022, there was an agreement related to the IFC’s
USD-45-million loan agreement whereby within 60 days
114 IDH 2023 Annual Report
2023 Annual Report IDH 115
Corporate Governance | Directors’ Report
of receipt of notice from IFC that a Major Shareholder
Event has occurred, IDH should prepay the aggregate
outstanding principal amount of the loan in full, together
with accrued interest and increased costs (if any) thereon
and all other amounts payable under the agreement,
including the amount payable under unwinding costs if
the prepayment is not made on an Interest Payment Date.
IDH's management has since decided to irrevocably
terminate the IFC loan agreement since the intended
purpose of the loan, which was to finance an acquisition
in Pakistan, was not realised and negotiations on the deal
were terminated.
Conflicts of Interest
No Directors took on additional significant commit-
ments during the year that impacted their ability to carry
out their duties. No contract with the Company or any
subsidiary undertaking of the Company in which any
Director was materially interested existed at the end of
the financial year.
Political Donations
The Group made no political donations in 2023 (2022: nil).
Financial Instruments
The Group’s principal financial instruments comprise
cash balances, balances with related parties, trade receiv-
ables and payables, and other payables and receivables
that arise in the normal course of business. The Group’s
financial instruments, risk management objectives, and
policies are set out in Note 3 and Note 5 to the Financial
Statements.
Employees
The Group has two (2) Executive Directors, namely the
Group Chief Executive, Dr. Hend El Sherbini, and the
Group Chief Financial Officer and Vice President of
Finance and Strategies, Sherif El Zeiny, as identified in
the Corporate Governance section. Their biographical
information appears on page 94 of this Annual Report,
and their compensation is reported in the Remuneration
Committee Report on page 109. IDH has service agree-
ments with the Group Chief Executive and with the Group
Chief Financial Officer and Vice President of Finance and
Strategies. Dr. Hend El Sherbini leads the Company’s
Executive Committee, which also includes all heads of
departments and meets every second week to review
and discuss performance, priorities, and upcoming
events in light of the Group’s strategic plans. In view of
the Company’s regional growth plans, IDH is committed
to building out its senior management team in prepara-
tion for a larger footprint. The Group and its subsidiaries
employed an average of 6,692 employees in 2023 (2022:
6,718) across Egypt, Jordan, Sudan, and Nigeria.
Creditor Payment Policy
Individual subsidiaries of the Group are responsible for
agreeing on the terms and conditions under which busi-
ness transactions with their suppliers are conducted. It is
the Group’s policy that payments to suppliers are made in
accordance with all relevant terms and conditions.
Going Concern
The Directors have considered a number of downside sce-
narios, including the most severe but plausible scenario,
for a period of 16 months from the signing of the financial
statements. They have also assessed the likelihood of any
key one-off payments arising, such as dividends or those
in respect of M&A activities. Under all of these scenarios,
there remains significant headroom from a liquidity and
covenant perspective. Therefore, the Directors believe the
Group has the ability to meet its liabilities as they fall due,
and the use of the going concern basis in preparing the
financial statements is appropriate.
Due to the persistence of foreign currency shortages in
IDH’s home and largest market, Egypt, the Company’s
Board of Directors has decided not to distribute divi-
dends for the year ended 31 December 2023. Despite
this decision, management reiterates that its long-term
dividend policy, which sees the Company return to
shareholders the maximum amount of excess cash
after taking careful account of the cash needed to
support operations and expansions, has remained
unchanged.
Statement of Directors’ Responsibilities
The Directors are responsible for preparing the Annual
Report and the financial statements in accordance with
applicable laws and regulations.
Company law requires the Directors to prepare finan-
cial statements for each financial year. Under that
law, the Directors have prepared the Group financial
statements in accordance with International Financial
Reporting Standards (IFRSs) as adopted by the Euro-
pean Union.
Under Company law, Directors must not approve the
financial statements unless they are satisfied that they give
a true and fair view of the state of affairs of the Group and
of the profit or loss of the Group for that period. In prepar-
ing the financial statements, the Directors are required to:
• select suitable accounting policies and then apply
them consistently;
• state whether applicable IFRSs as adopted by the Euro-
pean Union have been followed, subject to any mate-
rial departures disclosed and explained in the financial
statements;
• make judgements and accounting estimates that are
reasonable and prudent; and
• prepare the financial statements on the going concern
basis, unless it is inappropriate to presume that the
Group will continue in business.
The Directors are responsible for safeguarding the
Group's assets and, hence, for taking reasonable steps
for the prevention and detection of fraud and other
irregularities.
The Directors are also responsible for keeping adequate
accounting records that are sufficient to show and explain
the Group’s transactions and disclose with reasonable
accuracy at any time the financial position of the Group
and enable them to ensure that the financial statements
comply with the Companies (Jersey) Law 1991.
The Directors are responsible for the maintenance and
integrity of the Group’s website. Legislation in the United
Kingdom governing the preparation and dissemination
of financial statements may differ from legislations in
other jurisdictions.
Directors’ Confirmations
Each of the Directors, whose names and functions are
listed in the Board of Directors section of the Annual
Report, confirms that, to the best of their knowledge:
• the Group financial statements, which have been
prepared in accordance with IFRSs as adopted by the
European Union, give a true and fair view of the assets,
liabilities, financial position ,and profit of the Group;
and
• the Financial and Operational Review includes a fair
review of the development and performance of the
business and the position of the Group, together with a
description of the principal risks and uncertainties that
it faces.
In the case of each Director in office at the date the Direc-
tors’ Report is approved:
• so far as the Director is aware, there is no relevant audit
information of which the Group’s auditors are unaware;
and
• they have taken all the steps that they ought to have
taken as a Director in order to make themselves aware
of any relevant audit information and to establish that
the Group’s auditors are aware of that information.
Annual General Meeting (AGM)
The Company will hold its 2024 AGM on 29 May 2024
in London, UK. The Board remains keen to encourage
engagement with shareholders. To that end, the Direc-
tors would like to invite questions from shareholders
in advance of and during the AGM. Should sharehold-
ers wish to submit questions to the Board prior to the
deadline for proxy voting, they can do so, and these will
be responded to on an individual basis. In addition, the
Board will offer shareholders the opportunity to dial into
the AGM, at which time they can also submit questions
to the Board.
Details of the AGM are included in the Notice of Meeting
that accompanies this Annual Report and which is avail-
able on our website.
At the AGM, all of the Group’s Directors will retire and
submit themselves for re-election.
The outcome of the voting at the AGM will be announced
by way of a London/Egypt Stock Exchange announce-
ments, and full details will be published on the Group’s
website shortly after the AGM.
Auditors
PwC have confirmed their willingness to act as the Com-
pany’s external auditors, and a separate resolution will
be proposed at the forthcoming AGM concerning their
re-appointment and to authorise the Board to agree their
remuneration.
By order of the Board,
Dr. Hend El Sherbini
Executive Director
27 March 2024
116 IDH 2023 Annual Report
2023 Annual Report IDH 117
04
FINANCIAL
STATEMENTS
118 IDH 2023 Annual Report
2023 Annual Report IDH 119
Independent auditors’ report
to the members of Integrated
Diagnostics Holdings plc
Report on the audit of the financial statements
Opinion
In our opinion, Integrated Diagnostics Holdings plc’s group financial statements:
•
•
•
give a true and fair view of the state of the group’s affairs as at 31 December 2023 and of its profit and cash
flows for the year then ended;
have been properly prepared in accordance with International Financial Reporting Standards as adopted in
the European Union; and
have been prepared in accordance with the requirements of the Companies (Jersey) Law 1991.
We have audited the financial statements, included within the Annual Report, which comprise: the Consolidated
statement of financial position as at 31 December 2023; the Consolidated income statement, the Consolidated
statement of comprehensive income, the consolidated statement of cash flows, and the Consolidated statement of
changes in equity for the year then ended; and the notes to the financial statements, comprising material account-
ing policy information and other explanatory information.
Our opinion is consistent with our reporting to the Audit Committee.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and appli-
cable law. Our responsibilities under ISAs (UK) are further described in the Auditors’ responsibilities for the audit
of the financial statements section of our report. We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our opinion.
Independence
We remained independent of the group in accordance with the ethical requirements that are relevant to our audit
of the financial statements in the UK, which includes the FRC’s Ethical Standard, as applicable to listed entities,
and we have fulfilled our other ethical responsibilities in accordance with these requirements.
To the best of our knowledge and belief, we declare that non-audit services prohibited by the FRC’s Ethical Stan-
dard were not provided.
Other than those disclosed in note 8.6, we have provided no non-audit services to the company or its controlled
undertakings in the period under audit.
Our audit approach
Context
Integrated Diagnostics Holdings plc (“IDH”) is a company incorporated in Jersey with shares listed on the Lon-
don Stock Exchange (“LSE”) and the Egyptian Exchange (“EGX”). PricewaterhouseCoopers LLP (“PwC UK”) are
appointed to audit the consolidated financial statements of IDH for the purposes of the requirements of the LSE
and Jersey Law. All trading operations of IDH are outside of the UK (generally in the Middle East and Africa).
Therefore, the role of PwC UK is predominantly that of a group auditor with other PwC network firms acting as
component auditors.
Overview
Audit scope
• Components were considered to be individual legal entities within the group. Full scope audits were per-
formed on 4 significant components which covered 97% of reported revenues and 97% of reported profit
before tax. The four components included the 3 main trading subsidiary companies in Egypt and the trading
subsidiary company in Jordan. These were selected due to their relative size.
Additional testing was by the Group audit team performed on balances within subsidiaries that were not in
scope where these represented at least 5% of the consolidated balance and were above group materiality.
Procedures over the consolidation, central areas including impairment testing, the Annual Report and con-
solidated financial statements were all performed by the group auditor.
•
•
Key audit matters
• Accuracy of revenue recognised from customers
Materiality
• Overall materiality: EGP 35,568,000 (2022: EGP 44,847,000) based on 4.5% of profit before tax and non-
recurring expenses in 2023 and 4.5% of profit before tax and fair value losses on financing US dollar dividends
in 2022.
Performance materiality: EGP 26,676,000 (2022: EGP 33,635,000).
•
The scope of our audit
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the
financial statements.
Key audit matters
Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in the
audit of the financial statements of the current period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) identified by the auditors, including those which had the greatest
effect on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts of the engage-
ment team. These matters, and any comments we make on the results of our procedures thereon, were addressed
in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do
not provide a separate opinion on these matters.
This is not a complete list of all risks identified by our audit.
120 IDH 2023 Annual Report
2023 Annual Report IDH 121
Financial Statements Independent auditors’ report
to the members of Integrated
Diagnostics Holdings plc
The key audit matters below are consistent with last year.
Key audit matter
How our audit addressed the key audit matter
Accuracy of revenue recognised from customers
The Group reported revenue of EGP 4,122,506,000
from health diagnostics related activities, during the
year ended 31 December 2023. There is an inherent
risk around the accuracy of revenue recorded from
the services rendered, as revenue consists of a high
volume of transactions involving different products,
services, and pricing mechanisms.
Consequently, a significant portion of our audit effort
was directed towards testing the accuracy of revenue.
Refer to the following notes to the consolidated
financial statements for further details:
Note 3: Material accounting policy information and
other explanatory information
Note 6: Revenue
We performed audit procedures over this significant
area, which included a combination of tests of controls
and substantive procedures as described below:
• We obtained an understanding of the various
significant revenue streams and identified the
relevant controls, IT systems and reports.
• We assessed the Group’s revenue accounting
policies, including the key judgments and esti-
mates applied by management in consideration
of the requirements of IFRS 15.
• We performed manual controls testing and
substantive procedures, to verify accuracy of
revenue. This included testing the end-to-end
reconciliations of data records extracted from
the source system to the cash / credit balances
ledger.
• We used data analytic tools to assess the
reasonableness of the total value of the revenue
recorded based on price lists.
• We performed a reconciliation between revenue
transactions and cash collected and selected a
sample of the revenue transactions and tested
their accuracy and validity to underlying source
documentation.
• We also assessed the adequacy of the Group’s
disclosures in the consolidated financial state-
ments with respect to revenue.
Based upon the procedures performed above we
concluded that sufficient and appropriate audit
evidence was obtained in relation to this risk.
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the
financial statements as a whole, taking into account the structure of the group, the accounting processes and
controls, and the industry in which it operates.
IDH is headquartered in Egypt, where the finance team manages the group operations and those of the Egyptian
subsidiaries. Jordan is the largest non-Egyptian operation. There are other operations in Sudan and Nigeria. The new
branches in Saudi Arabia were not operational in 2023. All of these operate under common systems and controls, but
with separate local management and finance teams reporting into the Egyptian head office team.
Components were considered to be individual legal entities within the group. There were 14 individual com-
ponents within the group (including the company). Those components which contributed the most significant
level of revenue and profit to the group tax were considered to be significant components. Full scope audits were
performed on these components (4 in total) which covered 97% of reported revenues and 97% of reported profit
before tax. The four components included 3 trading companies in Egypt and the trading company in Jordan.
We considered the out of scope components and the potential for material error. Additional procedures were
performed where the balances represented a significant proportion of the relevant consolidated balance (deemed
to be 5%) and the balance was above materiality.
For each individual Financial Statement Line Item (“FSLI”) we considered if sufficient coverage was obtained
from the combination of the above two areas. Sufficient coverage was deemed to be 45% for a normal risk, 55% for
an elevated risk and 65% for a significant risk. Based upon this final assessment no other areas were brought into
the scope of our audit.
For all other balances not included in the above, analytical review procedures and enquiries of management were
performed. We also considered if any other risk criteria would result in additional areas being included within the
scope of our audit. We concluded that, based upon the coverage obtained above and our understanding of the
group, that no further components or balances were included in our scope.
The impact of climate risk on our audit
As part of our audit we made enquiries of management to understand the extent of the potential impact of climate
risk on the group’s financial statements, and we remained alert when performing our audit procedures for any
indicators of the impact of climate risk. Our procedures did not identify any material impact as a result of climate
risk on the group’s financial statements.
Materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for
materiality. These, together with qualitative considerations, helped us to determine the scope of our audit and the
nature, timing and extent of our audit procedures on the individual financial statement line items and disclosures and
in evaluating the effect of misstatements, both individually and in aggregate on the financial statements as a whole.
122 IDH 2023 Annual Report
2023 Annual Report IDH 123
Financial Statements Independent auditors’ report
to the members of Integrated
Diagnostics Holdings plc
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Overall group materiality
EGP 35,568,000 (2022: EGP 44,847,000).
How we determined it
Rationale for benchmark applied
4.5% of profit before tax and non-recurring expenses
in 2023 and 4.5% of profit before tax and fair value
losses on financing US dollar dividends in 2022
We believe the benchmark being used in each year
is the key measure used by the shareholders and
management in assessing the performance of the
group in each year. It is widely accepted to use a
profit based benchmark when assessing materiality
for listed groups.
For each component in the scope of our group audit, we allocated a materiality that is less than our overall group
materiality. The range of materiality allocated across components was EGP 30,000,000 and EGP 15,000,000.
Certain components were audited to a local statutory audit materiality that was also less than our overall group
materiality.
We use performance materiality to reduce to an appropriately low level the probability that the aggregate of uncor-
rected and undetected misstatements exceeds overall materiality. Specifically, we use performance materiality in
determining the scope of our audit and the nature and extent of our testing of account balances, classes of transac-
tions and disclosures, for example in determining sample sizes. Our performance materiality was 75% (2022: 75%)
of overall materiality, amounting to EGP 26,676,000 (2022: EGP 33,635,000) for the group financial statements.
In determining the performance materiality, we considered a number of factors - the history of misstatements,
risk assessment and aggregation risk and the effectiveness of controls - and concluded that an amount in the
middle of our normal range was appropriate.
We agreed with the Audit Committee that we would report to them misstatements identified during our audit
above EGP 1,778,000 (2022: EGP 2,242,000) as well as misstatements below that amount that, in our view, war-
ranted reporting for qualitative reasons.
Conclusions relating to going concern
Our evaluation of the directors’ assessment of the group’s ability to continue to adopt the going concern basis of
accounting included:
• Discussing with management and those charged with governance the performance in 2023, the budgets for
2024 and beyond and the performance in the 2024 financial year to date. These discussions included the
impact of current events on management’s forecasts and the key drivers behind any expected changes to the
current level of performance;
• Comparing the forecasts profits and cash flows to the latest approved budgets and considering actual results
achieved in the year to date and sought evidence for any unexpected trends. We considered the level of
underperformance that would need to occur before there would be insufficient facilities. We considered the
competency of management to prepare accurate forecasts by reviewing past levels of budget accuracy;
Validating management’s assessment of available cash and debt facilities to bank confirmations and commit-
ted debt facilities, including recalculating covenants and considering compliance with covenants or ability to
repay borrowings if required, based on management’s forecasts;
•
• Considered the severe but plausible downsides included in management’s model for reasonableness based
upon our understanding of the group and the likelihood of significant one off payments arising, such as settle-
ment of option payments;
Testing the accuracy of the model containing management’s forecasted future financial performance and
cashflows;
•
• Considering the macroeconomic environment of the territories in which the group operates in and the impact
•
this could have on performance and cash flows; and
Reviewing the disclosures made within the Annual Report for consistency with our audit work and compli-
ance with the respective legal and accounting requirements.
Based on the work we have performed, we have not identified any material uncertainties relating to events or
conditions that, individually or collectively, may cast significant doubt on the group’s ability to continue as a going
concern for a period of at least twelve months from when the financial statements are authorised for issue.
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of
accounting in the preparation of the financial statements is appropriate.
However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the
group’s ability to continue as a going concern.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the
relevant sections of this report.
Reporting on other information
The other information comprises all of the information in the Annual Report other than the financial statements
and our auditors’ report thereon. The directors are responsible for the other information. Our opinion on the
financial statements does not cover the other information and, accordingly, we do not express an audit opinion
or, any form of assurance thereon.
124 IDH 2023 Annual Report
2023 Annual Report IDH 125
Financial Statements
Independent auditors’ report
to the members of Integrated
Diagnostics Holdings plc
In connection with our audit of the financial statements, our responsibility is to read the other information and,
in doing so, consider whether the other information is materially inconsistent with the financial statements or our
knowledge obtained in the audit, or otherwise appears to be materially misstated. If we identify an apparent mate-
rial inconsistency or material misstatement, we are required to perform procedures to conclude whether there is
a material misstatement of the financial statements or a material misstatement of the other information. If, based
on the work we have performed, we conclude that there is a material misstatement of this other information, we
are required to report that fact. We have nothing to report based on these responsibilities.
Strategic report and Directors’ Report
In our opinion, based on the work undertaken in the course of the audit, the information given in the Strategic
report and Directors’ Report for the year ended 31 December 2023 is consistent with the financial statements and
has been prepared in accordance with applicable legal requirements.
In light of the knowledge and understanding of the group and its environment obtained in the course of the audit,
we did not identify any material misstatements in the Strategic report and Directors’ Report.
Responsibilities for the financial statements and the audit
Responsibilities of the directors for the financial statements
including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is
detailed below.
Based on our understanding of the group and industry, we identified that the principal risks of non-compliance
with laws and regulations related to healthcare and employment legislation, and we considered the extent to
which non-compliance might have a material effect on the financial statements. We also considered those laws
and regulations that have a direct impact on the financial statements such as taxation law and legislation, the
Listing Rules and Companies (Jersey) Law 1991. We evaluated management’s incentives and opportunities for
fraudulent manipulation of the financial statements (including the risk of override of controls), and determined
that the principal risks were related to overstatement of revenues or the financial performance/position of the
group through inappropriate use of journal entries or manipulation of significant accounting estimates. The group
engagement team shared this risk assessment with the component auditors so that they could include appropriate
audit procedures in response to such risks in their work. Audit procedures performed by the group engagement
team and/or component auditors included:
•
•
• Discussions with management and those charged with governance regarding any known or suspected
instances of fraud, non-compliance with laws and regulations or claims being made against the group;
Reviewing board minutes to ascertain the completeness of the above disclosures made to us;
Auditing key management estimates and judgements, including assessment of compliance with the account-
ing requirements and validity of the estimates (underlying data and accuracy of past assumptions);
Reviewing the disclosures within these consolidated financial statements for appropriateness based upon the
group’s legal and accounting requirements; and
Testing journal entries made during the year, using a risk-based target testing approach, focusing on those
which impacted reported revenues or had unusual account combinations.
•
•
As explained more fully in the Statement of directors’ responsibilities, the directors are responsible for the
preparation of the financial statements in accordance with the applicable framework and for being satisfied
that they give a true and fair view. The directors are also responsible for such internal control as they determine
is necessary to enable the preparation of financial statements that are free from material misstatement, whether
due to fraud or error.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of
instances of non-compliance with laws and regulations that are not closely related to events and transactions
reflected in the financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher
than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example,
forgery or intentional misrepresentations, or through collusion.
In preparing the financial statements, the directors are responsible for assessing the group’s ability to continue
as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis
of accounting unless the directors either intend to liquidate the group or to cease operations, or have no realistic
alternative but to do so.
Auditors’ responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in the aggregate, they could reasonably be expected to influ-
ence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures
in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities,
Our audit testing might include testing complete populations of certain transactions and balances, possibly using
data auditing techniques. However, it typically involves selecting a limited number of items for testing, rather than
testing complete populations. We will often seek to target particular items for testing based on their size or risk
characteristics. In other cases, we will use audit sampling to enable us to draw a conclusion about the population
from which the sample is selected.
A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website
at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors’ report.
Use of this report
This report, including the opinions, has been prepared for and only for the company’s members as a body in
accordance with Article 113A of the Companies (Jersey) Law 1991 and for no other purpose. We do not, in giving
these opinions, accept or assume responsibility for any other purpose or to any other person to whom this report
is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.
126 IDH 2023 Annual Report
2023 Annual Report IDH 127
Financial Statements Independent auditors’ report
to the members of Integrated
Diagnostics Holdings plc
Consolidated statement of
financial position
As at 31 December 2023
Other required reporting
Companies (Jersey) Law 1991 exception reporting
Under the Companies (Jersey) Law 1991 we are required to report to you if, in our opinion:
• we have not obtained all the information and explanations we require for our audit.
We have no exceptions to report arising from this responsibility.
Appointment
Following the recommendation of the Audit Committee, we were appointed by the members on 2 July 2021 to
audit the financial statements for the year ended 31 December 2021 and subsequent financial periods. The period
of total uninterrupted engagement is 3 years, covering the years ended 31 December 2021 to 31 December 2023.
Other matter
In due course, as required by the Financial Conduct Authority Disclosure Guidance and Transparency Rule
4.1.14R, these financial statements will form part of the ESEF-prepared annual financial report filed on the
National Storage Mechanism of the Financial Conduct Authority in accordance with the ESEF Regulatory Techni-
cal Standard (‘ESEF RTS’). This auditors’ report provides no assurance over whether the annual financial report
will be prepared using the single electronic format specified in the ESEF RTS.
David Teager
(Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
East Midlands
27 March 2024
Notes
2023
EGP’000
2022
EGP’000
Assets
Non-current assets
Property, plant and equipment
Intangible assets and goodwill
Right of use assets
Financial assets at fair value through profit and loss
Total non-current assets
Current assets
Inventories
Trade and other receivables
Financial assets at fair value through profit and loss
Financial assets at amortized cost
Cash and cash equivalents
Total current assets
Total assets
Equity
Share capital
Share premium reserve
Capital reserves
Legal reserve
Put option reserve
Translation reserve
Retained earnings
Equity attributable to the owners of the Company
Non-controlling interests
Total equity
Non-current liabilities
Provisions
Borrowings
Other financial obligations
Non-current put option liability
Deferred tax liabilities
Total non-current liabilities
Current liabilities
Trade and other payables
Other financial obligations
Current put option liability
Borrowings
Current tax liabilities
Total current liabilities
Total liabilities
Total equity and liabilities
11
12
25
14
15
16
14
18
17
19
19
19
19
19
19
19
2
21
24
25
23
9
22
25
23
24
28
1,414,725
1,710,183
683,025
-
3,807,933
374,650
727,235
25,157
161,098
674,253
1,962,393
5,770,326
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
17,758
67,465
891,350
42,786
374,729
1,394,088
637,761
176,704
313,796
43,680
103,509
1,275,450
2,669,538
5,770,326
1,326,262
1,703,636
622,975
18,064
3,670,937
265,459
543,887
-
167,404
648,512
1,625,262
5,296,199
1,072,500
1,027,706
(314,310)
51,641
(490,695)
24,173
783,081
2,154,096
292,885
2,446,981
3,519
93,751
914,191
51,000
321,732
1,384,193
701,095
148,705
439,695
22,675
152,855
1,465,025
2,849,218
5,296,199
The accompanying notes on pages 134-184 form an integral part of these consolidated financial statements.
These consolidated financial statements were approved and authorised for issue by the Board of Directors and
signed on their behalf on 27 March 2024 by:
Dr. Hend El Sherbini
Hussein Choucri
Chief Executive Officer
Independent Non-Executive Director
128 IDH 2023 Annual Report
2023 Annual Report IDH 129
Financial Statements Consolidated income statement
For the year ended 31 December 2023
Consolidated statement of
comprehensive income
For the year ended 31 December 2023
Net profit for the year
Other comprehensive income:
Items that may be reclassified to profit or loss:
Exchange difference on translation of foreign operations
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
Attributable to:
Owners of the Company
Non-controlling interests
2023
EGP’000
468,363
2022
EGP’000
526,583
(7,206)
(7,206)
461,157
403,790
57,367
461,157
69,081
69,081
595,664
414,553
181,111
595,664
The accompanying notes on pages 134-184 form an integral part of these consolidated financial statements.
Revenue
Cost of sales
Gross profit
Marketing and advertising expenses
Administrative expenses
Impairment loss on trade and other receivable
Other (expenses)/income
Operating profit
Net fair value losses on financial assets at fair value
through profit or loss
Finance costs
Finance income
Net finance (costs)/income
Profit before income tax
Income tax expense
Profit for the year
Profit attributed to:
Owners of the Company
Non-controlling interests
Earnings per share
Basic and diluted
Notes
6
8.1
8.2
8.3
16
8.4
8.9
8.7
8.7
8.7
9
10
2023
EGP’000
4,122,506
(2,598,159)
1,524,347
(211,623)
(510,393)
(51,255)
(13,314)
737,762
2022
EGP’000
3,605,047
(2,142,984)
1,462,063
(213,151)
(398,533)
(29,914)
11,726
832,191
-
(142,950)
(160,983)
160,577
(406)
737,356
(268,993)
468,363
510,304
(41,941)
468,363
(135,586)
299,992
164,406
853,647
(327,064)
526,583
541,110
(14,527)
526,583
0.85
0.90
The accompanying notes on pages 134-184 form an integral part of these consolidated financial statements.
130 IDH 2023 Annual Report
2023 Annual Report IDH 131
Financial Statements Consolidated statement of
cash flows
For the year ended 31 December 2023
Note
2023
EGP’000
2022
EGP’000
Cash flows from operating activities
Profit before tax
Adjustments for:
Depreciation of property, plant and equipment
Depreciation of right of use assets
Amortisation of intangible assets
Unrealised foreign exchange gains and losses
Fair value losses on financial assets at FV through profit or loss
Finance income
Finance Expense
Loss/(gain) on disposal of PPE
Impairment in trade and other receivables
Impairment in goodwill
Impairment in assets
Equity settled financial assets at fair value
ROU Asset/Lease Termination
Hyperinflation
Change in Provisions
Change in Inventories
Change in Trade and other receivables
Change in Trade and other payables
Cash generated from operating activities before income tax payment
Taxes paid
Net cash generated from operating activities
Cash flows from investing activities
Proceeds from sale of property, plant and equipment
Interest received on financial asset at amortised cost
Payments for acquisition of property, plant and equipment
Payments for acquisition of intangible assets
Payments for the purchase of financial assets at amortised cost
Proceeds from the sale of financial assets at amortized cost
Payment for purchase of global depository receipts (short-term investment)
Proceeds from sale of global depository receipts (short-term investments)
Net cash (used in)/generated from investing activities
Cash flows from financing activities
Proceeds from borrowings
Repayment of borrowings
Proceeds loan received from related party
Repayment loan paid to related party
Payments of lease liabilities
Payment of financial obligations
Dividends paid
Interest paid
Bank charge paid
Cash injection by owner of non-controlling interest
Paid cash to non-controlling interest
Net cash flows used in financing activities
Net (decrease) increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Effect of exchange rate
Cash and cash equivalents at the end of the year
11
25
12
8.7
8.7
8.7
16
21
8.9
8.9
27
27
26
26
27
27
27
17
737,356
259,455
134,033
7,750
(87,798)
-
(72,779)
160,983
(734)
51,255
11,265
6,705
(7,093)
(512)
-
14,238
(104,909)
(198,078)
(99,191)
811,946
(268,283)
543,663
2,366
73,316
(323,439)
(2,490)
(243,563)
249,868
-
-
(243,942)
71,630
(76,911)
-
-
(94,854)
(144,278)
-
(138,390)
(19,294)
74,748
(3,112)
(330,461)
(30,740)
648,512
56,481
674,253
853,647
206,993
103,099
7,251
(188,442)
142,950
(95,371)
135,586
200
29,914
1,755
-
(7,594)
305
(16,179)
(569)
(30,159)
(53,445)
(166,130)
923,811
(715,082)
208,729
10,212
95,897
(299,762)
(9,076)
(267,819)
1,603,611
(1,011,376)
868,426
990,113
40,081
(21,721)
17,025
(17,025)
(71,635)
(29,206)
(1,411,752)
(119,308)
(12,909)
8,763
-
(1,617,687)
(418,845)
891,451
175,906
648,512
Non-cash investing and financing activities disclosed in other notes are:
• acquisition of right-of-use assets – note 25
• Put option liability – note 23
The accompanying notes on pages 134-184 form an integral part of these consolidated financial statements.
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132 IDH 2023 Annual Report
2023 Annual Report IDH 133
Financial Statements
Notes to the Consolidated
Financial Statements
For the year ended 31 December 2023
(In the notes all amounts are shown in Egyptian Pounds “EGP’000” unless otherwise stated)
Corporate information
1.
The consolidated financial statements of Integrated Diagnostics Holdings plc and its subsidiaries (collectively,
“the Group”) for the year ended 31 December 2023 were authorised for issue in accordance with a resolution of
the directors on 27 March 2024. Integrated Diagnostics Holdings plc “IDH” or “the company” is a public company
incorporated in Jersey. Has been established according to the provisions of the Companies (Jersey) law 1991 under
No. 117257. The registered office address of the Company is 1IFC 5, St. Helier, Jersey, JE1 1ST, Channel Islands. The
Company is a dually listed entity, in both London stock exchange (since 2015) and in the Egyptian stock exchange
(in May 2021).
The principal activity of the group is 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 IDH has. The key jurisdictions that the group oper-
ates are in Egypt, Jordan, Nigeria, Sudan and Saudi Arabia.
The Group’s financial year starts on 1 January and ends on 31 December each year.
Group information
2.
Information about subsidiaries
The consolidated financial statements of the Group include:
Principal
activities
Country of
Incorporation
% Equity
interest
Non-Controlling
interest
Al Borg Laboratory Company
(“Al-Borg”)
Al Mokhtabar Company for Medical
Labs (“Al Mokhtabar”)
Medical Genetic Center
Al Makhbariyoun Al Arab Group
Golden Care for Medical Services
Integrated Medical Analysis Company
(S.A.E)*
SAMA Medical Laboratories Co.
(“Ultralab medical laboratory “)
AL-Mokhtabar Sudanese Egyptian Co.
Integrated Diagnostics Holdings
Limited
Dynasty Group Holdings Limited
Eagle Eye-Echo Scan Limited
Echo-Scan**
WAYAK Pharma
Medical diagnostics
service
Medical diagnostics
service
Medical diagnostics
service
Medical diagnostics
service
Holding company of
SAMA
Medical diagnostics
service
Medical diagnostics
service
Medical diagnostics
service
Intermediary holding
company
Intermediary holding
company
Intermediary holding
company
Medical diagnostics
service
Medical services
Egypt
Egypt
Egypt
Jordan
Egypt
Egypt
Sudan
Sudan
Caymans
Island
England and
Wales
2023
2022
2023
2022
99.3%
99.3%
0.7%
0.7%
99.9%
99.9%
0.1%
0.1%
55.0%
55.0%
45.0%
45.0%
60.0%
60.0%
40.0%
40.0%
100.0%
100.0%
0.0%
0.0%
100.0%
99.6%
0.0%
0.4%
80.0%
80.0%
20.0%
20.0%
65.0%
65.0%
35.0%
35.0%
100.0%
100.0%
0.0%
0.0%
51.0%
51.0%
49.0%
49.0%
Mauritius
77.18%
77.18%
22.82%
22.82%
Nigeria
Egypt
100.0%
100.0%
0.0%
0.0%
99.99%
99.99%
0.01%
0.01%
Medical Health Development***
Medical services
Saudi Arabia
51%
-
49%
-
*In the financial period of 23, Al Mokhtabar, a medical laboratory, acquired a 0.4% ownership share in Integrated Medical Analysis (S.A.E). In connection
with this acquisition, Al Mokhtabar made a payment of 3,112K to non-controlling interest. This transaction resulted in Al Mokhtabar becoming the full owner
of the stake by the end of the year 2023.
** The group consolidate “Echo scan” a subsidiary based in Nigeria despite of 39.4% indirect ownership.
for more details refer to note 4.1.
*** On March 8, 2023, the Group completed the establishment of Medical Health Development, a limited liability company based in Saudi Arabia with a total
stake of 51% directly and indirectly through one of the Group’s subsidiaries, where Integrated Diagnostics Holdings (IDH) owns 30% and Al Makhbariyoun Al
Arab Group (“Biolab”)-Jordan a subsidiary owns 21%., The group consolidate “Medical Health Development” a subsidiary based in Saudi Arabia
despite of 42.51% indirect ownership for more details refer to note 4.1.
Non-Controlling interest
Non-Controlling Interest is measured at the proportionate share basis.
Financial information of subsidiaries that have material non-controlling interests is provided below:
Proportion of equity interest held by non-controlling interests:
Medical Genetic Center
Al Makhbariyoun Al Arab Group
SAMA Medical Laboratories Co. " Ultra lab medical laboratory "
AL-Mokhtabar Sudanese Egyptian Co.
Al Borg Laboratory Company
Dynasty Group Holdings Limited
Eagle Eye-Echo Scan Limited
Medical Health Development
Country of
incorporation
Egypt
Jordan
Sudan
Sudan
Egypt
England and Wales
Mauritius
Saudi Arabia
2023
45.0%
40.0%
20.0%
35.0%
0.7%
49%
22.82%
49%
2022
45.0%
40.0%
20.0%
35.0%
0.7%
49%
22.82%
-
134 IDH 2023 Annual Report
2023 Annual Report IDH 135
Financial Statements
The summarised financial information of these subsidiaries is provided below. This information is based on
amounts before inter-company eliminations.
Al Makhbariyoun
Al Arab Group
(Hashemite
Kingdom of
Jordan)
Medical
Genetic Center
Alborg
Laboratory
Company
Other
individually
immaterial
subsidiaries
Dynasty
Group
EGP’000
Total
EGP’000
EGP’000
EGP’000
EGP’000
EGP’000
EGP’000
Summarised statement of
Income for 2023:
Revenue
(loss)/Profit
Other comprehensive
(expense)/income
Total comprehensive
(expense)/income
(loss)/Profit allocated to non-
controlling interest
Other comprehensive income/
(expense) allocated to non-
controlling interest
Summarised statement of
financial position as at 31
December 2023:
Non-current assets
Current assets
Non-current liabilities
Current liabilities
Net (liabilities)/assets
Net (liabilities)/assets
attributable to non-controlling
interest
-
(107)
604,025
32,811
1,449,344
183,045
2,065,051
387,628
96,394
(54,740)
4,214,814
548,637
-
65,142
-
(3,606)
131,234
192,770
(107)
97,953
183,045
384,022
76,494
741,407
(48)
13,124
1,296
(9,597)
(12,514)
(7,739)
-
26,333
-
(847)
71,847
97,333
Al Makhbariyoun
Al Arab Group
(Hashemite
Kingdom of
Jordan)
EGP’000
Medical
Genetic Center
EGP’000
Alborg
Laboratory
Company
EGP’000
Other
individually
immaterial
subsidiaries
EGP’000
Dynasty
Group
EGP’000
EGP’000
Total
EGP’000
670
1,801
(27)
(15,409)
494,904
254,412
(202,510)
(187,663)
751,597
405,125
(406,229)
(224,305)
681,583
830,799
(302,827)
(316,886)
51,913
(6,623)
(3,189)
(24,911)
1,980,667
1,485,514
(914,782)
(769,174)
(12,965)
359,143
526,188
892,669
17,190 1,782,225
(5,837)
143,657
3,724
39,780
4,579
185,903
Medical
Genetic
Center
Al
Makhbariyoun
Al Arab Group
Alborg
Laboratory
Company
Other
subsidiaries
with
immaterial
NCI
Dynasty
Group
Total
EGP’000
EGP’000
EGP’000
EGP’000
EGP’000
EGP’000
383
(10,339)
611,840
57,917
1,210,716
266,201
2,348,371
470,492
78,864
(54,602)
4,250,174
729,669
-
134,909
-
(3,796)
248,726
379,839
(10,339)
192,826
266,201
466,696
194,124 1,109,508
(4,655)
23,167
1,884
555
(11,913)
9,038
-
53,964
-
(876)
140,041
193,129
Medical
Genetic
Center
Al
Makhbariyoun
Al Arab Group
Alborg
Laboratory
Company
Other
subsidiaries
with
immaterial
NCI
Dynasty
Group
Total
EGP’000
EGP’000
EGP’000
EGP’000
EGP’000
EGP’000
670
1,909
(27)
(15,409)
367,404
247,636
(164,478)
(189,371)
710,836
428,668
(516,784)
(244,970)
775,581
1,212,429
(351,111)
(449,373)
121,770
14,130
(11,286)
(33,181)
1,976,261
1,904,772
(1,043,686)
(932,304)
(12,857)
261,191
377,750
1,187,526
91,433 1,905,043
(5,788)
104,476
2,674
(993)
16,608
116,977
Summarised statement of
Income for 2022:
Revenue
(loss)/Profit
Other comprehensive
(expense)/income
Total comprehensive
(expense)/income
(loss)/Profit allocated to non-
controlling interest
Other comprehensive income/
(expense) allocated to non-
controlling interest
Summarised statement of
financial position as at 31
December 2022:
Non-current assets
Current assets
Non-current liabilities
Current liabilities
Net (liabilities)/assets
Net (liabilities)/assets
attributable to non-controlling
interest
Basis of preparation
3.
Statement of compliance
Integrated Diagnostics Holdings plc “IDH” or “the company” has been established according to the provisions
of the Companies (Jersey) law 1991 under No. 117257. The Company is a dually listed entity, in both London
stock exchange and in the Egyptian stock exchange. The consolidated financial statements of the Group have been
prepared in accordance with International Financial Reporting Standards as adopted by the European Union and
the Companies (Jersey) Law 1991.
Basis of measurement
The consolidated financial statements have been prepared on a historical cost basis, except where adopted IFRS man-
dates that fair value accounting is required which is related to financial assets and liabilities measured at fair value.
136 IDH 2023 Annual Report
2023 Annual Report IDH 137
Financial Statements New standards and interpretations adopted
The Group has applied the following amendments for the first time for their annual reporting period commencing
1 January 2023:
eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of
the transferred asset. Accounting policies of subsidiaries have been changed where necessary to ensure consis-
tency with the policies adopted by the group.
• Insurance Contracts IFRS 17
• Definition of Accounting Estimates - Amendments to IAS 8
• Deferred Tax Related to Assets and Liabilities arising from a Single Transaction - Amendments to IAS 12
• Disclosure of Accounting Policies - Amendments to IAS 1 and IFRS Practice Statement 2
The amendments listed above did not have any impact on current and prior years and not expected to affect future years.
There has been one amendment that has been applied for the first time in the current year that has had an impact
on the financial statement disclosures. The amendments to IAS 1 and IFRS Practice Statement 2 Making Material-
ity Judgements provide guidance and examples to help entities apply materiality judgements to accounting policy
disclosures. The amendments aim to help entities provide accounting policy disclosures that are more useful
by replacing the requirement for entities to disclose their ‘significant’ accounting policies with a requirement ti
disclose their ‘material’ accounting policies and adding guidance on how entities apply the concept of materiality
in making decisions about accounting policy disclosures. The amendments have had an impact on the Group’s
disclosures of accounting policies, but not on the measurement, recognition or presentation of any items in the
Group’s consolidated financial statements.
New standards and interpretations not yet adopted
Certain new accounting standards, amendments to accounting standards and interpretations have been pub-
lished that are not mandatory for 31 December 2023 reporting period and have not been early adopted by the
company. These standards, amendments or interpretations are not expected to have a material impact on the
group in the current or future reporting periods and on foreseeable future transactions.
Going concern
These consolidated financial statements have been prepared on the going concern basis. On 31 December 2023,
the Group had (cash and cash equivalent balance plus treasury bills / deposits minus borrowing) amounting to
KEGP 724,206. The Directors have considered a number of downside scenarios, including the most severe but
plausible scenario, for a period of 16 months from the signing of the financial statements. We have conducted mul-
tiple sensitivity analyses to assess the impact of inflationary pressures and potential currency evaluation for the
next 16 months. We did not consider the Biolab put option since it is improbable that the option will be exercised
refer to (note 23). We assume no dividends are expected to be paid during the period for which going concern is
being assessed or those in respect of merger and acquisition ‘M&A’ activity. Under all of these scenarios, there
remains significant headroom from a liquidity and covenant perspective. Therefore, the Directors believe the
Group has the ability to meet its liabilities as they fall due and the use of the going concern basis in preparing the
financial statements is appropriate.
Basis of consolidation
3.1.
The consolidated financial statements comprise the financial statements of the Group and its subsidiaries as at 31
December 2023. Control is achieved when the Group is exposed, or has rights, to variable returns from its involve-
ment with the investee and has the ability to affect those returns through its power over the investee.
Subsidiaries
i.
Subsidiaries are all entities over which the group has control. The group controls an entity where the group is
exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those
returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on
which control is transferred to the group. They are deconsolidated from the date that control ceases.
Inter-company transactions, balances and unrealised gains on transactions between group companies are
Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated state-
ment of income statement of comprehensive income, statement of changes in equity and statement of financial
position respectively.
Changes in ownership interests
ii.
The group treats transactions with non-controlling interests that do not result in a loss of control as transactions with
equity owners of the group. A change in ownership interest results in an adjustment between the carrying amounts of
the controlling and non-controlling interests to reflect their relative interests in the subsidiary. Any difference between
the amount of the adjustment to non-controlling interests and any consideration paid or received is recognised in a
separate reserve within equity attributable to owners of the group.
When the group ceases to consolidate or equity account for an investment because of a loss of control, joint control
or significant influence, any retained interest in the entity is remeasured to its fair value, with the change in carrying
amount recognised in profit or loss. This fair value becomes the initial carrying amount for the purposes of subsequently
accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previ-
ously recognised in other comprehensive income in respect of that entity are accounted for as if the group had directly
disposed of the related assets or liabilities. This may mean that amounts previously recognised in other comprehensive
income are reclassified to profit or loss.
If the ownership interest in a joint venture or an associate is reduced but joint control or significant influence is retained,
only a proportionate share of the amounts previously recognised in other comprehensive income are reclassified to
profit or loss where appropriate.
3.2. Material accounting policy information and other explanatory information
The accounting policies set out below have been consistently applied to all the years presented in these consolidated
financial statements.
Business combinations
a)
The acquisition method of accounting is used to account for all business combinations, regardless of whether equity
instruments or other assets are acquired. The consideration transferred for the acquisition of a subsidiary comprises the:
• fair values of the assets transferred
• liabilities incurred to the former owners of the acquired business
• equity interests issued by the group
• fair value of any asset or liability resulting from a contingent consideration arrangement, and
• fair value of any pre-existing equity interest in the subsidiary.
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are,
with limited exceptions, measured initially at their fair values at the acquisition date. The group recognises any
non-controlling interest in the acquired entity on an acquisition-by-acquisition basis either at fair value or at the
non-controlling interest’s proportionate share of the acquired entity’s net identifiable assets.
Acquisition-related costs are expensed as incurred.
138 IDH 2023 Annual Report
2023 Annual Report IDH 139
Financial Statements The excess of the:
• consideration transferred,
• amount of any non-controlling interest in the acquired entity, and
• acquisition-date fair value of any previous equity interest in the acquired entity over the fair value of the net iden-
tifiable assets acquired is recorded as goodwill. If those amounts are less than the fair value of the net identifiable
assets of the business acquired, the difference is recognised directly in profit or loss as a bargain purchase.
Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their
present value as at the date of exchange. The discount rate used is the entity’s incremental borrowing rate, being the rate
at which a similar borrowing could be obtained from an independent financier under comparable terms and conditions.
Contingent consideration is classified either as equity or a financial liability. Amounts classified as a financial liability are
subsequently remeasured to fair value, with changes in fair value recognised in profit or loss.
If the business combination is achieved in stages, the acquisition date carrying value of the acquirer’s previously held
equity interest in the acquiree is remeasured to fair value at the acquisition date. Any gains or losses arising from such
remeasurement are recognised in profit or loss.
Impairment of assets
b)
Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation and are tested
annually for impairment, or more frequently if events or changes in circumstances indicate that they might be
impaired. Other assets are tested for impairment whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s
carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less
costs of disposal and value in use. For the purposes of assessing impairment, assets are grouped at the lowest lev-
els for which there are separately identifiable cash inflows which are largely independent of the cash inflows from
other assets or groups of assets (cash-generating units). Non-financial assets other than goodwill that suffered an
impairment are reviewed for possible reversal of the impairment at the end of each reporting period.
Fair value measurement
c)
The Group measures financial instruments such as non-derivative financial instruments and contingent consid-
eration assumed in a business combination at fair value at each balance sheet date.
When measuring the fair value of an asset or a liability, the Group uses observable market data as far as possible. Fair value
is categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:
• Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities.
• Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement
is directly or indirectly observable.
• Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement
is unobservable.
For assets and liabilities that are recognised in the financial statements at fair value on a recurring basis, the Group
determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on
the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
For the purpose of fair value disclosures, the Group has determined classes of assets and liabilities on the basis of the
nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy, as explained above.
The fair value less any estimated credit adjustments for financial assets and liabilities with maturity dates less
than one year is assumed to approximate their carrying value. The fair value of financial liabilities for disclosure
purposes is estimated by discounting the future contracted cash flows at the current market interest rate that is
available to the Group for similar transactions.
Revenue recognition
d)
Revenue represents the value of medical diagnostic services rendered in the year and is stated net of discounts. The
Group has two types of customers: Walk-in patients and patients served under contracts. For patients under contracts,
rates are agreed in advance on a per-test, client-by-client basis based on the pricelists agreed within these contracts.
The following steps are considered for all types of patients:
1.
Identification of the Contracts: written contracts are agreed between IDH and customers. The contracts
stipulate the duration, price per test and credit period.
2. Determining performance obligations are the diagnostics tests within the pathology and radiology services.
The performance obligation is achieved when the customer receives their test results, and so are recognised
at point in time.
3. Transaction price: Services provided by the Group are distinct in the contract, as the contract stipulates the
series of tests’ names/types to be conducted along with its distinct prices.
4. Allocation of price to performance obligations: Stand-alone selling price per test is stipulated in the contract.
In case of discounts, it is allocated proportionally to all of tests prices in the contract.
5. Revenue is being recorded after the satisfaction of the above mentioned conditions.
The group considers whether it is the principal or the agent in each of its contractual arrangements. In line with IFRS 15
“Revenue from contracts” in assessing the appropriate treatment of each contract, factors that are considered include
which party is controlling the service being performed for the customer and bears the inventory risk. Where the group
is largely controlling the service and bearing the inventory risk it is deemed to be the principal and the full consideration
received from the customer is recognised as revenue, with any amounts paid to third parties treated as cost of sales.
Customer loyalty program:
The group operates a loyalty program where customers accumulate points for purchases made which entitle them to a
discount on future purchases. The points are valid for 12 months from the time they are awarded. The value of points to
be provided is based on the expectation of what level will be redeemed in the future before their expiration date. This
amount is netted against revenue earned and included as a contract liability and only recognised as revenue when the
points are then redeemed or have expired.
Income Taxes
e)
Tax on the profit or loss for the year comprises current and deferred tax. Tax is recognised in the income statement
except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.
Current tax
i.
Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted
or substantively enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years.
Deferred tax
ii.
Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and
liabilities and their carrying amounts for financial reporting purposes at the reporting date.
Deferred tax is recognised on temporary differences arising between the tax bases of assets and liabilities and their
carrying amounts in the consolidated financial statements.
However, deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill; deferred
income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a
business combination and differences relating to investments in subsidiaries to the extent that they will probably not
reverse in the foreseeable future.
Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits
and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit will
140 IDH 2023 Annual Report
2023 Annual Report IDH 141
Financial Statements be available against which the deductible temporary differences, and the carry forward of unused tax credits and
unused tax losses can be utilised. Deferred tax is determined using tax rates (and laws) that have been enacted or
substantively enacted by the reporting date and are expected to apply when the related deferred income tax asset is
realized, or the deferred income tax liability is settled.
f)
Foreign currency translation
Functional and presentation currency
i)
Each of the Group’s entities is using the currency of the primary economic environment in which the entity oper-
ates (‘the functional currency’). The Group’s consolidated financial statements are presented in Egyptian Pounds,
being the reporting currency of the main Egyptian trading subsidiaries within the Group and the primary eco-
nomic environment in which the Group operates.
Transactions and balances
ii)
Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of
the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions, and from
the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates,
are generally recognised in profit or loss. They are deferred in equity if they relate to qualifying cash flow hedges
and qualifying net investment hedges or are attributable to part of the net investment in a foreign operation.
Foreign exchange gains and losses that relate to borrowings are presented in the statement of profit or loss, within
finance costs. All other foreign exchange gains and losses are presented in the statement of profit or loss on a net
basis within other gains/(losses).
Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates
at the date when the fair value was determined. Translation differences on assets and liabilities carried at fair
value are reported as part of the fair value gain or loss. For example, translation differences on non-monetary
assets and liabilities such as equities held at fair value through profit or loss are recognised in profit or loss as part
of the fair value gain or loss, and translation differences on non-monetary assets such as equities classified as at
fair value through other comprehensive income are recognised in other comprehensive income.
Hyperinflationary Economies
g)
The financial statements of “SAMA Medical Laboratories Co. and AL-Mokhtabar Sudanese Egyptian Co.” report
their financial statements in the currency of a hyperinflationary economy. In accordance with IAS 29 financial
reporting in Hyperinflationary Economies, the financial statements of those subsidiaries were restated by apply-
ing the consumer price index at closing rates in December 2023 Nil (2022 December, 65,137) before they were
included in the consolidated financial statements.
Property, plant and equipment
h)
All property and equipment are stated at historical cost or fair value at acquisition, less accumulated depreciation.
Historical cost includes expenditure that is directly attributable to the acquisition of the items. Subsequent costs are
included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that
future economic benefits associated with the item will flow to the group and the cost of the item can be measured
reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to
the consolidated statement of income during the financial period in which they are incurred. Land is not depreciated.
Depreciation expense is calculated using the straight-line method to allocate the cost or to their residual value
over their estimated useful lives, as follows:
Buildings
Medical, electric and information systems equipment
Leasehold improvements
Fixtures, fittings & vehicles
50 years
4-10 years
4-5 years
4-16 years
The assets useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount
is greater than its estimated recoverable amount. Gains and losses on disposals are determined by comparing
the proceeds with the carrying amount and are recognised within ‘Other (losses)/gains – net’ in the consolidated
statement of income.
Intangible assets
i)
Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets
acquired in a business combination is their fair value at the date of acquisition. Following initial recognition,
intangible assets are carried at cost less any accumulated amortisation and accumulated impairment losses.
Internally generated intangibles, excluding capitalised development costs, are not capitalised and the related
expenditure is reflected in profit or loss in the period in which the expenditure is incurred.
The useful lives of intangible assets are assessed as either finite or indefinite.
Intangible assets with finite lives are amortised over the useful economic life and assessed for impairment when-
ever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisa-
tion method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period.
Changes in the expected useful life or the expected pattern of consumption of future economic benefits embod-
ied in the asset are considered to modify the amortisation period or method, as appropriate, and are treated as
changes in accounting estimates. The amortisation expense on intangible assets with finite lives is recognised in
the statement of income in the expense category that is consistent with the function of the intangible assets. The
Group amortises intangible assets with finite lives using the straight-line method over the following periods:
• IT development and software 4-5 years
Intangible assets with indefinite useful lives are not amortised, but are tested for impairment annually, either indi-
vidually or at the cash-generating unit level. The assessment of indefinite life is reviewed annually to determine
whether the indefinite life continues to be supportable. If not, the change in useful life from indefinite to finite is
made on a prospective basis.
Goodwill
Goodwill arises on the acquisition of subsidiaries and represents the excess of the consideration transferred over
interest in net fair value of the net identifiable assets, liabilities and contingent liabilities of the acquiree and the
fair value of the non-controlling interest in the acquire.
Goodwill is stated at cost less any accumulated impairment losses. For the purpose of impairment testing, good-
will acquired in a business combination is allocated to each of the cash-generating units (CGUs), or groups of
CGUs, that is expected to benefit from the synergies of the combination. Each unit or group of units to which the
goodwill is allocated represents the lowest level within the entity at which the goodwill is monitored for internal
management purposes. the impairment assessment is done on an annual basis.
142 IDH 2023 Annual Report
2023 Annual Report IDH 143
Financial Statements Brand
Brand names acquired in a business combination are recognised at fair value at the acquisition date and have an
indefinite useful life.
The Group brand names are considered to have indefinite useful life as the Egyptian brands have been established
in the market for more than 40 years and the health care industry is very stable and continues to grow.
The brands are not expected to become obsolete and can expand into different countries and adjacent businesses,
in addition, there is a sufficient ongoing marketing efforts to support the brands and this level of marketing effort
is economically reasonable and maintainable for the foreseeable future.
Impairment of intangible assets
The Group tests annually whether goodwill and other intangibles with indefinite lives have suffered any impair-
ment. Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable
amount, which is the higher of its fair value less costs of disposal and its value in use.
The recoverable amounts of cash generating units have been determined based on value in use or realisable value.
The value in use calculation is based on a discounted cash flow (“DCF”) model. Realisable value is based on the
market value of the CGU or their underlying assets.
The cash flows are derived from the budget for the next five years and do not include restructuring activities that
the Group is not yet committed to or significant future investments that will enhance the asset’s performance of
the CGU being tested.
We test for impairment at the smallest grouping of CGUs at which a material impairment could arise or at the
lowest level at which goodwill is monitored. References to testing being performed at a CGU level throughout the
rest of the financial statements is referring to the grouping of CGUs at which at the test is performed. The grouping
of CGUs is shown in note 13 where the assumptions for the impairment assessment are disclosed.
I) Financial instruments – initial recognition and subsequent measurement
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or
equity instrument of another entity.
i)
Financial assets
Classification
The group reclassifies debt investments when and only when its business model for managing those assets changes.
The group classifies its investments in debt Instruments in the following measurement categories:
• those to be measured subsequently at fair value (either through OCI or through income statement), and
• those to be measured at amortised cost.
The classification depends on the entity’s business model for managing the financial assets and the contractual terms
of the cash flows.
For investment is equity instrument measured at fair value, gains and losses will either be recorded in income state-
ment or OCI.
For investments in equity instruments that are not held for trading, this will depend on whether the group has made
an irrevocable election at the time of initial recognition to account for the equity investment at fair value through other
comprehensive income (FVOCI).
Recognition and derecognition
According to the standard purchases and sales of financial assets are recognised on trade date, being the date
on which the group commits to purchase or sell the asset. Financial assets are derecognised when the rights to
receive cash flows from the financial assets have expired or have been transferred and the group has transferred
substantially all the risks and rewards of ownership.
Measurement
At initial recognition, the group measures a financial asset at its fair value plus, in the case of a financial asset not
at fair value through profit or loss (FVPL), transaction costs that are directly attributable to the acquisition of the
financial asset. Transaction costs of financial assets carried at FVPL are expensed in profit or loss.
Financial assets with embedded derivatives are considered in their entirety when determining whether their cash
flows are solely payment of principal and interest.
Debt instruments
Subsequent measurement of debt instruments depends on the group’s business model for managing the asset and
the cash flow characteristics of the asset. There are three measurement categories into which the group classifies
its debt instruments:
• Amortised cost: Assets that are held for collection of contractual cash flows, where those cash flows represent
solely payments of principal and interest, are measured at amortised cost. Interest income from these finan-
cial assets is included in finance income using the effective interest rate method. Any gain or loss arising on
derecognition is recognised directly in profit or loss and presented in other gains/(losses) together with foreign
exchange gains and losses. Impairment losses are presented as a separate line item in the consolidated income
statement.
• FVOCI: Assets that are held for collection of contractual cash flows and for selling the financial assets, where
the assets’ cash flows represent solely payments of principal and interest, are measured at FVOCI. Movements
in the carrying amount are taken through OCI, except for the recognition of impairment losses, interest income
and foreign exchange gains and losses, which are recognised in profit or loss. When the financial asset is
derecognised, the cumulative gain or loss previously recognised in OCI is reclassified from equity to profit or
loss and recognised in other gains/(losses). Interest income from these financial assets is included in finance
income using the effective interest rate method. Foreign exchange gains and losses are presented in other gains/
(losses), and impairment expenses are presented as separate line item in the consolidated income statement.
• FVPL: Assets that do not meet the criteria for amortised cost or FVOCI are measured at FVPL. A gain or loss
on a debt investment that is subsequently measured at FVPL is recognised in profit or loss and presented net
within other gains/(losses) in the period in which it arises. Management has assessed the underlying nature of
the investments and designated upon investment that this should be treated as an investment held at fair value
with movements going through the income statement on the basis of the size of the investment and the reasons
for making the investment.
144 IDH 2023 Annual Report
2023 Annual Report IDH 145
Financial Statements Equity instruments
The group subsequently measures all equity investments at fair value. Where the group’s management has elected to
present fair value gains and losses on equity investments in OCI, there is no subsequent reclassification of fair value
gains and losses to profit or loss following the derecognition of the investment. Dividends from such investments
continue to be recognised in profit or loss as other income when the group’s right to receive payments is established.
Changes in the fair value of financial assets at FVPL are recognised in other gains/(losses) in the statement of income
as applicable. Impairment losses (and reversal of impairment losses) on equity investments measured at FVOCI are
not reported separately from other changes in fair value.
Impairment
The group assesses on a forward-looking basis the expected credit losses associated with its debt instruments
carried at amortised cost and FVOCI. The impairment methodology applied depends on whether there has been
a significant increase in credit risk. For trade receivables, the group applies the simplified approach permitted by
IFRS 9, which requires expected lifetime losses to be recognised from initial recognition of the receivables.
Further disclosures relating to impairment of financial assets are also provided in the following notes:
Disclosures for significant estimates and assumptions
Financial assets
Trade receivables
Note 4.2
Note 5
Note 16
The Group uses an allowance matrix to measure the ECLs of trade receivables from individual customers, which
comprise a very large number of small balances.
Loss rates are calculated using a ‘roll rate’ method based on the probability of a receivable progressing through
successive stages of delinquency to write-off. Roll rates are calculated separately for exposures in different seg-
ments based on credit risk characteristics, age of customer relationship.
Loss rates are based on actual credit loss experience over the past three years. These rates are multiplied by scalar
factors to reflect differences between economic conditions during the period over which the historical data has been
collected, current conditions and the Groups view of economic conditions over the expected lives of the receivables.
ii.
Financial liabilities
Initial recognition and measurement
Financial liabilities are classified as measured at amortised cost or FVTPL. A financial liability is classified at
FVTPL if it is classified as held for trading, financial liabilities at FVTPL are measured at fair value and net gains
and losses including any interest expenses are recognised in profit or loss.
Put options included in put option liabilities are carried at the present value of the redemption amount in accor-
dance with IAS 32 in regard to the guidance on put option on an entity’s own equity shares. The group has written
put options over the equity of its (Bio Lab,Echo Scan and Medical Health Development) subsidiaries. The option
on exercise is initially recognised at the present value of the redemption amount with a corresponding charge
directly to equity. The charge to equity is recognised separately within the put option reserve and this is in line
with paragraph 23 of IFRS 10.
All of the Group’s financial liabilities are classified as financial liabilities carried at amortised cost using the
effective interest method. The Group does not use derivative financial instruments or hedge account for any
transactions. Unless otherwise indicated, the carrying amounts of the Group’s financial liabilities are a reasonable
approximation of their fair values.
The Group’s financial liabilities include trade and other payables, put option liabilities, borrowings, and other
financial obligations.
Derecognition
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires.
When an existing financial liability is replaced by another from the same lender on substantially different terms,
or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the
derecognition of the original liability and the recognition of a new liability. The difference in the respective carry-
ing amounts is recognised in the statement of income.
Offsetting of financial instruments
iii.
Financial assets and financial liabilities are offset and the net amount is reported in the consolidated statement
of financial position if there is a currently enforceable legal right to offset the recognised amounts and there is an
intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.
j)
Impairment of non-financial assets
Further disclosures relating to impairment of non-financial assets are also provided in the following notes:
Disclosures for significant assumptions and estimates
Goodwill and intangible assets
Note 4.2
Note 13
The Group assesses at each reporting date, whether there is an indication that an asset may be impaired. If any
indication exists, or when annual impairment testing for an asset is required, the Group estimates the asset’s
recoverable amount. An asset’s recoverable amount is the higher of an asset’s or CGU’s fair value less costs of
disposal and its value in use. The recoverable amount is determined for an individual asset, unless the asset does
not generate cash inflows that are largely independent of those from other assets or groups of assets. When the
carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is writ-
ten down to its recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific to the
asset. In determining fair value less costs of disposal, recent market transactions are taken into account. If no
such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated
by valuation multiples, quoted share prices for publicly traded companies or other available fair value indicators.
The Group bases its impairment calculation on detailed budgets and forecast calculations, which are prepared
separately for each of the Group’s CGUs to which the individual assets are allocated. These budgets and forecast
calculations generally cover a period of five years. A long-term growth rate is calculated and applied to project
future cash flows after the fifth year.
146 IDH 2023 Annual Report
2023 Annual Report IDH 147
Financial Statements Impairment losses of continuing operations are recognised in the statement of profit or loss in expense categories
consistent with the function of the impaired asset.
For assets excluding goodwill and indefinite lived intangible assets, an assessment is made at each reporting date to
determine whether there is an indication that previously recognised impairment losses no longer exist or have decreased.
If such indication exists, the Group estimates the asset’s or CGU’s recoverable amount. A previously recognised impair-
ment loss is reversed only if there has been a change in the assumptions used to determine the asset’s recoverable amount
since the last impairment loss was recognised. The reversal is limited so that the carrying amount of the asset does not
exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation,
had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in the consolidated
income statement.
Goodwill is tested for impairment annually and when circumstances indicate that the carrying value may be impaired.
Management takes into consideration any changes that occur and have impacts between the impairment report date of
31 October and date of end year of 31 December.
Impairment is determined for goodwill by assessing the recoverable amount of each CGU (or group of CGUs) to which
the goodwill relates. When the recoverable amount of the CGU is less than its carrying amount, an impairment loss is
recognised. Impairment losses relating to goodwill cannot be reversed in future periods.
Intangible assets with indefinite useful lives are tested for impairment annually as at 31 October at the CGU level, as
appropriate, and when circumstances indicate that the carrying value may be impaired.
Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indi-
cate that the carrying amount may not be recoverable. An impairment loss is recognized for the amount by which the
asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less
costs of disposal and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for
which there are largely independent cash inflows (CGU). Prior impairments of non-financial assets (other than goodwill)
are reviewed for possible reversal at each reporting date.
Inventories
k)
Raw materials are stated at the lower of cost and net realisable value. Cost comprises direct materials, direct labour
and an appropriate proportion of variable and fixed overhead expenditure, the latter being allocated on the basis
of normal operating capacity. Costs are assigned to individual items of inventory on the basis of weighted average
costs. Costs of purchased inventory are determined after deducting rebates and discounts. Net realisable value
is the estimated selling price in the ordinary course of business less the estimated costs of completion and the
estimated costs necessary to make the sale.
Cash and short-term deposits
l)
Cash and short-term deposits in the statement of financial position comprise cash at banks and on hand and
short-term deposits with original maturities of three months or less, which are subject to an insignificant risk of
changes in value.
For the purpose of the consolidated statement of cash flows, cash and cash equivalents consist of cash and short-
term deposits, as defined above, net of outstanding bank overdrafts as they are considered an integral part of the
Group’s cash management.
Borrowings
m)
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently
measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption
amount is recognised in profit or loss over the period of the borrowings using the effective interest method. Fees paid
on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable
that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs. To the
extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised
as a prepayment for liquidity services and amortised over the period of the facility to which it relates.
Borrowings are removed from the statement of financial position when the obligation specified in the contract is
discharged, cancelled or expired. The difference between the carrying amount of a financial liability that has been
extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred
or liabilities assumed, is recognised in profit or loss as other income or finance costs.
Borrowings are classified as current liabilities unless the group has an unconditional right to defer settlement of the
liability for at least 12 months after the reporting period.
Borrowing costs
n)
General and specific borrowing costs that are directly attributable to the acquisition, construction or production
of a qualifying asset are capitalised during the period of time that is required to complete and prepare the asset for
its intended use or sale. Qualifying assets are assets that necessarily take a substantial period of time to get ready
for their intended use or sale. Investment income earned on the temporary investment of specific borrowings,
pending their expenditure on qualifying assets, is deducted from the borrowing costs eligible for capitalisation.
Other borrowing costs are expensed in the period in which they are incurred.
Provisions
o)
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past
event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obli-
gation and a reliable estimate can be made of the amount of the obligation. When the Group expects some or
all of a provision to be reimbursed, for example, under an insurance contract, the reimbursement is recognised
as a separate asset, but only when the reimbursement is virtually certain. The expense relating to a provision is
presented in the statement of profit or loss net of any reimbursement.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that
reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provi-
sion due to the passage of time is recognised as a finance cost.
Provisions are measured at the present value of the expenditures expected to be required to settle the obligation
using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to
the obligation. The increase in the provision due to passage of time is recognised as a finance cost.
Pensions and other post-employment benefits
p)
A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate
entity. The Group has no legal or constructive obligations to pay further contributions if the fund does not hold
sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.
Obligations for contributions to defined contribution pension plans are recognized as an expense in the income
statement in the periods during which services are rendered by employees.
148 IDH 2023 Annual Report
2023 Annual Report IDH 149
Financial Statements Segmentation
q)
The Group has five operating segments based on geographical location rather than two operating segments based
on service provided and considered as one reportable segment due to having similar characteristics.
When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount
of the right-of-use asset, to the extent that the right-of-use asset is reduced to nil, with any further adjustment
required from the remeasurement being recorded in profit or loss.
Leases as lessee (IFRS 16)
r)
At the inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or
contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in
exchange for consideration.
Short-term leases and leases of low-value assets
The Group has elected not to recognise right-of-use assets and lease liabilities for lease of low-value assets and
short-term leases. The Group recognises the lease payments associated with these leases as an expense on a
straight-line basis over the lease term.
As a lessee
At commencement or on modification of a contract that contains a lease component, along with one or more other
lease or non-lease components, the Group accounts for each lease component separately from the non-lease
components. However, for the non-leases element of the underlying asset, the Group has elected not to separate
non-lease components and account for the lease and non-lease components as a single lease component. The
Group allocates the consideration in the contract to each lease component on the basis of its relative stand-alone
price and the aggregate stand-alone price of the non-lease components.
The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use
asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease
payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of
costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is
located, less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date
to the end of the lease term, unless the lease transfers ownership of the underlying asset to the Group by the end
of the lease term or the cost of the right-of-use asset reflects that the Group will exercise a purchase option. In that
case the right-of-use asset will be depreciated over the useful life of the underlying asset, which is determined on
the same basis as those of property and equipment. In addition, the right-of-use asset is periodically reduced by
impairment losses, if any, and adjusted for certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are not paid at the com-
mencement date, discounted using the incremental borrowing rate for the IFRS 16 calculations. This is set based
upon the interest rate attached to the groups financing and adjusted, where appropriate, for specific factors such
as asset or company risk premiums.
Key judgments and critical accounting estimates
4.
4.1. Judgement
Useful economic lives of Brands
Management have assessed that the brands within the group which have a value have an indefinite life. This is
based on their strong history and existence in the market over a large number of years, in addition to the fact that
these brands continue to grow and become more profitable. As the brands have been assigned an indefinite life
then they are not amortised and assessed for impairment on an annual basis.
Control over subsidiaries
The group makes acquisitions that often see a non-controlling interest retained by the seller. The assessment of if the
group has control of these acquisitions in order to consolidate is a critical judgement in these financial statements.
The group consolidate the subsidiaries assessed for the following reasons:
1. The group holds the majority of the share capital
2. The group has the majority on the board of subsidiaries
3. The group has full control of the operations and is involved in all decisions
The group is able to consolidate its subsidiaries, Echoscan in Nigeria and Medical Health Development in Saudi
Arabia, despite owning only 39.4% and 42.51% indirect ownership, respectively. This is due to several reasons:
1. The group exercises control over all intermediate entities that connect the parent company to Echoscan and
Medical Health Development.
2. The group has a technical service agreement in place, which grants them the authority to direct and oversee
the operations of the subsidiaries in Nigeria.
3. The appointment of Dr. Amid Abdelnour as CEO in Saudi Arabia further strengthens the group’s ability to
Lease payments included in the measurement of the lease liability comprise the following:
control the subsidiary.
• fixed payments, including in-substance fixed payments;
• variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the
commencement date.
• amounts expected to be payable under a residual value guarantee, and
• the exercise price under a purchase option that the Group is reasonably certain to exercise,
• lease payments in an optional renewal period if the Group is reasonably certain to exercise an extension option,
and
• penalties for early termination of a lease unless the Group is reasonably certain not to terminate early
The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there
is a change in future lease payments arising from a change in an index or rate, there is a change in the Group’s
estimate of the amount expected to be payable under a residual value guarantee, if the Group changes its assess-
ment of whether it will exercise a purchase, extension or termination option or if there is a revised in-substance
fixed lease payment.
Despite not having majority ownership, the group’s control over the intermediate entities, technical service agree-
ment, and CEO appointment allows them to exercise control in their financial statements.
Estimates and assumptions
4.2.
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date,
that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within
the next financial year, are described below.
The Group based its assumptions and estimates on parameters available when the consolidated financial state-
ments were prepared. Existing circumstances and assumptions about future developments, however, may change
due to market changes or circumstances arising that are beyond the control of the Group. Such changes are
reflected in the assumptions when they occur.
150 IDH 2023 Annual Report
2023 Annual Report IDH 151
Financial Statements Impairment of intangible assets
The Group tests annually whether goodwill and other intangibles with indefinite lives have suffered any impair-
ment. Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable
amount, which is the higher of its fair value less costs of disposal and its value in use.
The recoverable amounts of cash generating units have been determined based on value in use. The value in use
calculation is based on a discounted cash flow (“DCF”) model. The exception to this was Echo Scan where the realis-
able value was greater than the value in use, therefore, the recoverable amount was based on the realisable value.
The cash flows are derived from the budget for the next five years and do not include restructuring activities that the Group
is not yet committed to or significant future investments that will enhance the asset’s performance of the CGU being tested.
The recoverable amount is sensitive to the discount rate used for the DCF model as well as the expected future cash-inflows
and the growth rate used for extrapolation purposes. For more detailed assumptions refer to (note 13).
Customer loyalty program
The group operates a loyalty program where customers accumulate points for purchases made which entitle them to
a discount on future purchases to be utilised within one year. A contract liability is recognised for the points awarded
at the time of the sale based on the expected level of redemption. At 31 December 2023 the level of points accumu-
lated by customers which had not expired was equivalent to 189MEGP. The estimate made by management is how
much of this amount ought to be recognised as a liability based on future usage. The level of future redemption is
estimated using historical data and adjustments for likely future trends in usage. Therefore, upon initial recognition
of the sale to a customer, if management expects the group to be entitled to a breakage amount (i.e., not all points will
be redeemed and so it is highly probable that there will be no significant reversal of revenue) this breakage amount
is recognised within revenue. This assessment is reviewed periodically, to ensure that only revenue which is highly
probable not to result in a significant reversal in future periods is recognised. Management has estimated that 60
MEGP out of the total potential amount that could be redeemed is likely to be utilised by customers. If the points
utilised during the year were 10% more than estimated, this would result in an additional charge of 6m EGP.
Impairment of financial assets
The loss allowances for financial assets are based on assumptions about risk of default and expected loss rates.
The group uses judgement in making these assumptions and selecting the inputs to the impairment calculation,
based on the group’s history and existing market conditions, as well as forward-looking estimates at the end of
each reporting period. Details of the key assumptions and inputs used are disclosed in note 16.
5.
Financial assets and financial liabilities
Cash and cash equivalents (Note 17)
Term deposits and treasury bills (Note 18)
Trade and other receivables (Note 16)
Total financial assets
Trade and other payables (Note 22)
Put option liability (Note 23)
Financial obligations (Note 25)
Loans and borrowings (Note 27)
Total other financial liabilities
Total financial instruments*
2023
EGP’000
674,253
161,098
685,050
2022
EGP’000
648,512
167,404
509,806
1,520,401
1,325,722
2023
EGP’000
556,563
356,582
1,068,054
125,439
2,106,638
(586,237)
2022
EGP’000
628,313
490,695
1,062,896
127,420
2,309,324
(983,602)
The fair values of financial assets and liabilities are considered to be equivalent to their book value.
The fair values measurements for all the financial assets and liabilities have been categorized as Level 3, it is fair
value can’t be determined by using readily observable measures and Echo-Scan put option (note 23) has been
categorized as Level 3 as the fair value of the option is based on un-observable inputs using the best information
available in the current circumstances, including the company’s own projection and taking into account all the
market assumptions that are reasonably available.
Financial instruments risk management objectives and policies
The Group’s principal financial liabilities are trade and other payables, put option liabilities, borrowings and other
financial liabilities. The Group’s principal financial assets include trade and other receivables, financial assets at
amortised cost, financial asset at fair value and cash and cash equivalents that derive directly from its operations.
The Group is exposed to market risk, credit risk and liquidity risk. The Group’s overall risk management program
focuses on the unpredictability of markets and seeks to minimize potential adverse effects on the Group’s financial
performance. The Group’s senior management oversees the management of these risks. The Board of Directors
reviews and agrees policies for managing each of these risks, which are summarised below.
The board provides written principles for overall risk management, as well as written policies covering specific
areas, such as foreign exchange risk, interest rate risk, and credit risk, use of derivative financial instruments and
non-derivative financial instruments, and investment of excess liquidity.
-Market risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of
changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other
price risk, such as equity price risk and commodity risk. Financial instruments affected by market risk include
borrowings and deposits.
The sensitivity analysis in the following sections relate to the position as at 31 December 2023 and 2022. The sen-
sitivity analysis have been prepared on the basis that the amount of net debt, the ratio of fixed to floating interest
rates of the debt and the proportion of financial instruments in foreign currencies are all constant.
The analysis excludes the impact of movements in market variables on provisions, and the non-financial assets and
liabilities of foreign operations. The following assumptions have been made in calculating the sensitivity analysis:
• The sensitivity of the relevant consolidated income statement item is the effect of the assumed changes in
respective market risks. This is based on the financial assets and financial liabilities held at 31 December 2023
and 31 December 2022.
-Interest rate risk
The Group is trying to minimize its interest rate exposure, especially in Egypt region, which has seen several
interest rate rises over the year. Minimising interest rate exposure has been achieved partially by entering into
fixed-rate instruments.
* The financial instruments exclude prepaid expenses, deferred revenue, and tax (current tax, payroll tax, withholding tax,…etc).
152 IDH 2023 Annual Report
2023 Annual Report IDH 153
Financial Statements Exposure to interest rate risk
The interest rate profile of the Group’s interest-bearing financial instruments as reported to the management of
the group is as follows:
Fixed-rate instruments
Financial obligations (note 25)
Loans and borrowings (note 24)
Variable-rate instruments
Loans and borrowings (note 24)
2023
EGP’000
1,068,054
16,694
2022
EGP’000
1,062,896
-
94,451
116,426
Cash flow sensitivity analysis for variable-rate instruments
A reasonable possible change of 100 basis points in interest rates at the reporting date would have increased
(decreased) profit or loss by the amounts EGP 945k (2022: EGP 1,164K). This analysis assumes that all other vari-
ables, remain constant.
-Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of
changes in foreign exchange rates.
The Group operates internationally and is exposed to foreign exchange risk arising from various currency expo-
sures, primarily with respect to the US Dollar, Sudanese Pound, the Jordanian Dinar, Nigerian Naira and Saudi
Riyal. Foreign exchange risk arises from the Group’s operating activities (when revenue or expense is denomi-
nated in a foreign currency), recognized assets and liabilities and net investments in foreign operations. However,
management aims to minimize open positions in foreign currencies to the extent that is necessary to conduct its
activities.
Management has set up a policy to require group companies to manage their foreign exchange risk against their
functional currency. Foreign exchange risk arises when future commercial transactions or recognised assets or
liabilities are denominated in a currency that is not the entity’s functional currency.
At year end, major financial assets / (liabilities) denominated in foreign currencies were as follows:
31-Dec-23
Cash
and cash
equivalents
22,698
-
-
Other
assets
-
-
-
Assets
Total
assets Put option
-
22,698
(301,383)
-
(42,786)
-
US
JOD
SAR
Liabilities
Finance
lease
(49,290)
-
-
Trade
payables
(28,767)
-
-
Total
liability
(78,057)
(301,383)
(42,786)
Net
exposure
(55,359)
(301,383)
(42,786)
Cash
and cash
equivalents
13,112
-
Other
assets
-
-
US
JOD
The following is the exchange rates applied:
US Dollars
Euros
GBP
JOD
SAR
SDG
NGN
US Dollars
Euros
GBP
JOD
SAR
SDG
NGN
31-Dec-22
Liabilities
Assets
Total
assets Put option
-
13,112
(439,695)
-
Finance
lease
(299,128)
-
Trade
payables
(8,840)
-
Total
liability
(307,968)
(439,695)
Net
exposure
(294,856)
(439,695)
Average rate for the year ended
31-Dec-23
30.76
33.31
38.35
43.12
8.20
0.05
0.05
31-Dec-22
19.67
20.59
24.02
27.71
5.24
0.04
0.05
Spot rate for the year ended
31-Dec-23
30.84
34.04
39.26
43.42
8.22
0.05
0.03
31-Dec-22
24.70
26.27
29.70
34.78
6.57
0.04
0.06
At 31 December 2023, if the Egyptian Pound had weakened/strengthened by 40% against the US Dollar with all
other variables held constant, total equity for the year would have increased/decreased by EGP (22.14m) (2022:
EGP 118m), mainly as a result of foreign exchange gains/losses and translation reserve on the translation of US
dollar-denominated financial assets and liabilities as at the financial position of 31 December 2023.
At 31 December 2023, if the Egyptian Pound had weakened / strengthened by 10% against the Jordanian Dinar
with all other variables held constant, total equity for the year would have increased/decreased by EGP (30m)
(2022: EGP (44m)), mainly as a result of foreign exchange gains/losses and translation reserve on translation of
JOD -denominated financial assets and liabilities as at the financial position of 31 December 2023.
At 31 December 2023, if the Egyptian Pound had weakened / strengthened by 10% against the Saudi Riyal with
all other variables held constant, total equity for the year would have increased/decreased by EGP (4m), mainly
as a result of foreign exchange gains/losses and translation reserve on translation of SAR -denominated financial
assets and liabilities as at the financial position of 31 December 2023.
154 IDH 2023 Annual Report
2023 Annual Report IDH 155
Financial Statements
Price risk
-
The group’s exposure to equity securities price risk arises from investments held by the group and classified in the
balance sheet as at fair value through profit or loss (FVPL) (note 14).
Liquidity risk
-
The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of
finance leases and loans.
Credit risk
-
Credit risk is the risk a financial loss to the Group if a customer or counterparty to a financial instrument fails to
meet its contractual obligations and it arises principally from under the Groups receivables. The Group is exposed
to credit risk from its operating activities (primarily trade receivables) and financial assets at amortised cost, such
as term deposits and treasury bills.
Credit risk is managed on a group basis, except for credit risk relating to accounts receivable balances. Each local
entity is responsible for managing and analysing the credit risk for each of their new clients before standard pay-
ment and delivery terms and conditions are offered. Credit risk arises from cash and cash equivalents, derivative
financial instruments and deposits with banks and financial institutions, as well as credit exposures to customers,
including outstanding receivables and committed transactions.
The cash balance and financial assets at amortized cost within the group is held within financial institutions, 76%
with a rating of B- ,6% is rated at least A and 18% is rated at least Aa3.
Trade receivables
The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. How-
ever, management also considers the factors that may influence the credit risk of its customer base, including the
default risk associated with the industry and country or region in which customers operate. Details of concentra-
tion of revenue are included in the operating segment note (see Note 6).
The risk management committee has established a credit policy under which each new customer is analysed
individually for creditworthiness before the Group’s standard payment and delivery terms and conditions are
offered and credit limit is set for each customer. The Group’s review includes external ratings, if available, financial
statements, industry information and in some cases bank references. Receivable limits are established for each
customer and reviewed quarterly. Any receivable balance exceeding the set limit requires approval from the risk
management committee. Outstanding customer receivables are regularly monitored and the average general
credit terms given to contract customers are 45 - 60 days.
The table below summarises the maturity profile of the Group’s financial liabilities based on contractual undis-
counted cashflows:
31 December 2023
Financial obligations
Put option liabilities
Borrowings
Trade and other payables
31 December 2022
Financial obligations
Put option liabilities
Borrowings
Trade and other payables
1 year or less
291,342
313,796
60,199
556,563
1,221,900
1 year or less
285,962
439,695
41,681
628,313
1,395,651
1 to 5 years
1,054,902
42,786
83,211
-
1,180,899
1 to 5 years
1,030,750
51,000
119,673
-
1,201,423
more than 5
years
166,965
-
-
-
166,965
more than 5
years
227,715
-
-
-
227,715
Total
1,513,209
356,582
143,410
556,563
2,569,764
Total
1,544,427
490,695
161,354
628,313
2,824,789
Cash flow forecasting is performed in the operating entities of the group and aggregated by group finance. Group
finance monitors rolling forecasts of the group’s liquidity requirements to ensure it has sufficient cash to meet
operational needs. Such forecasting takes into consideration the group’s compliance with internal financial posi-
tion ratio targets and, if applicable external regulatory or legal requirements – for example, currency restrictions.
The group’s management retain cash balances in order to allow repayment of obligations in due dates, without
taking into account any unusual effects which it cannot be predicted such as natural disasters. All suppliers and
creditors will be repaid over a period not less 30 days from the date of the invoice or the date of the commitment.
An impairment analysis is performed at each reporting date on an individual basis for major clients. In addition,
a large number of minor receivables are grouped into homogenous groups and assessed for impairment collec-
tively. The calculation is based on actual incurred historical data and expected future credit losses. The Group
does not hold collateral as security. That maximum exposure to credit risk is disclosed in note 16.
Segment reporting
6.
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.
Cash and cash equivalents
Credit risk from balances with banks and financial institutions is managed by the Group’s treasury department
in accordance with the Group’s policy. Investments of surplus funds are made only with approved counterparties
and within credit limits assigned to each counterparty. Counterparty credit limits are reviewed by the Group’s
Board of Directors on an annual basis and may be updated throughout the year subject to approval of the Group’s
management. The limits are set to minimise the concentration of risks and therefore mitigate financial loss through
a counterparty’s potential failure to make payments.
The maximum exposure to credit risk at the reporting date is the carrying value of cash and cash equivalents
disclosed in Note 17.
The preparation of the Group’s consolidated financial statements in conformity with adopted IFRSs requires
management to make judgements, estimates and assumptions that affect the reported amounts of revenues,
expenses, assets and liabilities.
The Group has five operating segments based on geographical location, with the Group’s Chief Operating Deci-
sion Maker (CODM) reviewing the internal management reports and KPIs of each geography. The CODM does not
separately review assets and liabilities of the group by reportable segment.
156 IDH 2023 Annual Report
2023 Annual Report IDH 157
Financial Statements
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 adjusted
EBITDA split (being the key profit measure reviewed by CODM), impairment loss on trade receivables and net
profit and loss between the five regions is set out below.
Revenue by geographic location
For the year ended
31-Dec-23
31-Dec-22
Egypt
region
3,410,720
2,894,042
Sudan
region
11,367
20,301
Jordan
region
604,025
611,840
Nigeria
region
96,394
78,864
Saudi
Arabia
Total
- 4,122,506
- 3,605,047
Adjusted EBITDA by geographic location
For the year ended
31-Dec-23
31-Dec-22
Egypt
region
1,058,254
1,052,881
Sudan
region
1,107
(196)
Jordan
region
157,306
136,195
Nigeria
region
(24,623)
(17,087)
Saudi
Arabia
-
-
Total
1,192,044
1,171,793
Impairment loss / (reversed of impairment) on trade receivables by geographic location
For the year ended
31-Dec-23
31-Dec-22
Egypt
region
45,268
27,734
Sudan
region
5,013
3
Jordan
region
-
(628)
Nigeria
region
974
2,805
Saudi
Arabia
-
-
Total
51,255
29,914
Net profit and loss by geographic location
For the year ended
31-Dec-23
31-Dec-22
Egypt
region
530,207
514,353
Sudan
region
(1,735)
16,978
Jordan
region
33,813
53,065
Nigeria
region
(72,536)
(57,813)
Saudi
Arabia
(21,386)
-
Total
468,363
526,583
The operating segment profit measure reported to the CODM is adjusted EBITDA, as follows:
Profit from operations
Property, plant and equipment and right of use depreciation
Amortization of Intangible assets
EBITDA
Nonrecurring items*
Adjusted EBITDA
* Nonrecurring items
IDH recorded several one-off expenses during the year, namely:
Transactions fees related to aborted Pakistan acquisition
The Egyptian government for vocational training
Pre-operating expenses in Saudi Arabia
Impairment expenses due to the ongoing conflict in Sudan
Impairment expenses in goodwill and assets for operations in Nigeria
2023
EGP’000
737,762
393,488
7,750
1,139,000
53,044
1,192,044
2023
EGP’000
-
11,865
18,196
5,013
17,970
53,044
2022
EGP’000
832,191
310,092
7,251
1,149,534
22,259
1,171,793
2022
EGP’000
22,259
-
-
-
-
22,259
The non-current assets reported to CODM is in accordance with IFRS are as follows:
Non-current assets by geographic location
For the year ended
31-Dec-23
31-Dec-22
Egypt
region
3,091,485
3,039,930
Sudan
region
3,848
14,993
Jordan
region
609,699
494,244
Nigeria
region
47,639
121,770
Saudi
Arabia
55,262
-
Total
3,807,933
3,670,937
Capital management
7.
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue in order to provide
returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce
the cost of capital.
In order to maintain or adjust the capital structure, the group may adjust the amount of dividends paid to share-
holders, return capital to shareholders, issue new shares or sell assets to reduce debt.
The repatriation of a declared dividend from Egyptian group entities are subject to regulation by Egyptian authori-
ties. The outcome of an Ordinary General Meeting of Shareholders declaring a dividend is first certified by the
General Authority for Investment and Free Zones (GAFI).
Approval is subsequently transmitted to Misr for Central Clearing, Depository and Registry (MCDR) to distribute
dividends to all shareholders, regardless of their domicile, following notification of shareholders via publication
in one national newspapers.
The Group monitors capital on the basis of the net debt to equity ratio. This ratio is calculated as net debt divided
by total equity. Net debt is calculated as (short-term and long-term financial obligation plus short-term and long
term borrowings) less cash and cash equivalents and financial assets at amortised cost.
Financial obligations (note 25)
Borrowings (note 27)
Less: Financial assets at amortised cost (note 18)
Less: Cash and cash equivalents (Note 17)
Net debt
Total Equity
Net debt
2023
EGP’000
1,068,054
125,439
(161,098)
(674,253)
358,142
3,100,788
11.6%
2022
EGP’000
1,062,896
127,420
(167,404)
(648,512)
374,400
2,446,981
15.3%
No changes were made in the objectives, Policies, or processes for managing capital during the years ended 31
December 2023 and 31 December 2022.
158 IDH 2023 Annual Report
2023 Annual Report IDH 159
Financial Statements Expense
8.
Included in consolidated income statement are the following:
8.1
Cost of sales
Raw material
Cost of specialized analysis at other laboratories
Wages and salaries
Property, plant and equipment, right of use depreciation and Amortisation
Other expenses
2023
EGP’000
875,296
38,765
773,565
362,230
548,303
2022
EGP’000
703,693
30,756
613,495
284,740
510,300
Total
2,598,159
2,142,984
8.2
Marketing and advertising expenses
Advertisement expenses
Wages and salaries
Property, plant and equipment depreciation
Other expenses
Total
8.3
Administrative expenses
Wages and salaries
Property, plant and equipment and right of use depreciation
Transactions fees related to aborted Pakistan acquisition
Other expenses
Total
2023
EGP’000
98,034
65,580
718
47,291
211,623
2023
EGP’000
216,037
38,290
-
256,066
510,393
2022
EGP’000
123,442
54,750
739
34,220
213,151
2022
EGP’000
142,689
31,864
22,259
201,721
398,533
8.4
Other expenses and income
Other expenses
Impairment in assets
Impairment in goodwill
Provision for end Of Service
Provision for legal claims
Provision for Egyptian Government Training Fund for employees
Total
Other income
Other income
Total
2023
EGP’000
(6,705)
(11,265)
(331)
(3,496)
(11,865)
(33,662)
2023
EGP’000
20,348
20,348
2022
EGP’000
(1,830)
-
-
(3,950)
-
(5,780)
2022
EGP’000
17,506
17,506
Other expenses and income
(13,314)
11,726
8.5
Expenses by nature
Raw material
Wages and Salaries
Property, plant and equipment, right of use depreciation and amortisation
Advertisement expenses
Cost of specialized analysis at other laboratories
Transportation and shipping
Cleaning expenses
Call Center
Hospital Contracts
Consulting Fees
Transactions fees related to aborted Pakistan acquisition
Utilities
License Expenses
Other expenses
2023
EGP’000
875,296
1,055,182
401,238
98,034
38,765
100,850
78,400
27,874
69,342
170,319
-
59,915
46,583
298,377
2022
EGP’000
703,693
810,934
317,343
123,442
30,756
87,490
74,290
32,976
14,357
142,012
22,259
49,453
30,492
315,171
Total
3,320,175
2,754,668
160 IDH 2023 Annual Report
2023 Annual Report IDH 161
Financial Statements
Auditors’ remuneration
8.6
The group paid or accrued the following amounts to its auditor for the financial year ended 31 December 2023 and
2022 and its associates in respect of the audit of the financial statements and for other services provided to the group.
Fees payable to the Company’s auditor for the audit of the Group’s annual
financial statements
The audit of the Company’s subsidiaries pursuant to legislation
Assurance services*
2023
EGP’000
49,217
15,779
308
65,304
*Assurance services relate to review of Corporate Governance report in Egypt that is required to be performed by the auditor.
8.7
Net finance (costs) / income
Interest expense
Bank Charges
Total finance costs
Interest income
Gain on hyperinflationary net monetary position
Net foreign exchange Gain
Total finance income
Net finance (cost) / income
2023
EGP’000
(141,688)
(19,295)
(160,983)
72,779
-
87,798
160,577
(406)
2022
EGP’000
28,919
9,443
197
38,559
2022
EGP’000
(122,677)
(12,909)
(135,586)
95,371
16,179
188,442
299,992
164,406
Employee numbers and costs
8.8
The average number of persons employed by the Group (including directors) during the year and the aggregate
payroll costs of these persons, analysed by category, were as follows:
2023
Medical
Administration
and market
Total
Medical
Administration
and market
2022
Total
5,435
1,257
6,692
5,428
1,290
6,718
Number of
employees
Medical
710,515
49,786
13,264
Administration
and market
253,729
24,386
3,502
2023
EGP’000
Total
964,244
74,172
16,766
Medical
566,385
36,053
11,057
Administration
and market
185,628
8,925
2,886
2022
EGP’000
Total
752,013
44,978
13,943
Wages and salaries
Social security costs
Contributions to defined
contribution plan
Fair value losses on financial assets at fair value through profit or loss
8.9
During 2023 the group didn’t invest in Global Depositary Receipt (GDR) tradable in stock exchanges. In the third
quarter of 2022 the ALmokhtabar and Alborg companies invested in Global Depositary Receipts (GDR) tradable
in stock exchanges, where the companies purchased 27,304 million shares, EGP 1,011.4 M from the Egyptian Stock
Exchange and sold them during the same period on the London Stock exchange at USD 45.8 M excluding the
transaction cost.
listed equity securities
Shares bought
Shares sale
27,304
27,304
Number of
shares’000
9.
a)
Income tax
Amounts recognised in profit or loss.
Current year tax
WHT suffered
Current tax
DT on undistributed reserves
DT on reversal of temporary differences
Total Deferred tax
Tax expense recognized in profit or loss
2023
EGP’000
-
-
2022
EGP’000
(1,011,376)
868,426
-
(142,950)
2023
EGP’000
(216,425)
-
(216,425)
(50,004)
(2,564)
(52,568)
(268,993)
2022
EGP’000
(210,477)
(122,731)
(333,208)
46,554
(40,410)
6,144
(327,064)
Reconciliation of effective tax rate
b)
The company is considered to be a UK tax resident, and subject to UK taxation. Dividend income into the com-
pany is exempt from taxation when received from a wholly controlled subsidiary, and costs incurred by the com-
pany are considered unlikely to be recoverable against future UK taxable profits and therefore form part of our
unrecognised deferred tax assets. Our judgement on tax residency has been made based on where we hold board
meetings, our listing on the London Stock Exchange and interactions with investors, and where our company
secretarial function is physically based. Our external company secretarial function manages a number of activities
of our parent and its board. Board meetings are chaired in London and are now largely taking place physically in
London with the expectation of one physical board meeting a year in Cairo.
Profit before tax
Profit before tax multiplied by rate of corporation tax in Egypt of 22.5%
(2022: 22.5%)
Effect of tax rate in UK of 23.5% (2022: UK 19%)
Effect of tax rates in Jordan, Sudan, and Nigeria of 21%, 30% and 30%
respectively (2022: 21%, 30% and 30%) ; and Saudi Arabia with a rate of 20%
2023
EGP’000
737,356
165,905
(2,335)
(4,188)
37,684
50,004
14,075
7,848
2022
EGP’000
853,647
192,071
1,871
(3,317)
19,960
76,177
16,653
23,649
Total
773,565
281,617
1,055,182
613,495
197,439
810,934
Tax effect of:
Details of key management remuneration are provided in note 26 and details of amounts paid to directors are
included in the Remuneration Committee Report.
Deferred tax not recognised
Deferred tax arising on undistributed dividend
Non-deductible expenses for tax purposes - employee profit share
Non-deductible expenses for tax purposes - other
162 IDH 2023 Annual Report
2023 Annual Report IDH 163
Tax expense recognised in profit or loss
268,993
327,064
Financial Statements Deferred tax
Deferred tax relates to the following:
Property, plant and equipment
Intangible assets
Undistributed reserves from group
subsidiaries
Tax Losses
Total deferred tax assets – (liability)
Assets
EGP’000
2,731
2,731
2023
Liabilities
EGP’000
(39,552)
(111,033)
(226,875)
(377,460)
(374,729)
Assets
EGP’000
-
-
-
61
61
2022
Liabilities
EGP’000
(35,804)
(109,118)
(176,871)
-
(321,793)
(321,732)
All deferred tax amounts are expected to be recovered or settled more than twelve months after the reporting period.
The difference between net deferred tax balances recorded on the income statement is as follows:
2023
Property, plant
and equipment
Intangible assets
Undistributed
dividend
from group
subsidiaries
Tax losses
2022
Property, plant
and equipment
Intangible assets
Undistributed
dividend
from group
subsidiaries
Tax losses
Net Balance 1
January
(35,804)
(109,118)
Deferred tax
recognized in
profit or loss
(3,319)
(1,915)
Effect of
translation to
presentation
currency
WHT tax paid
Net Balance
31 December
(429)
-
(39,552)
-
-
(111,033)
(176,871)
(50,004)
-
-
(226,875)
61
(321,732)
2,670
(52,568)
-
(429)
-
2,731
-
(374,729)
Net balance
at 1 January
(28,925)
(105,358)
Deferred tax
recognised in
profit or loss
(6,315)
(3,760)
(223,425)
(76,177)
Effect of
translation to
presentation
currency
(564)
-
-
WHT tax paid
-
-
Net balance
31 December
(35,804)
(109,118)
122,731
(176,871)
25,559
(332,149)
(30,335)
(116,587)
4,837
4,273
-
61
122,731
(321,732)
All movements in the deferred tax asset/liability in the year have been recognised in the profit or loss account.
Deferred tax liabilities and assets have been calculated based on the enacted tax rate at 31 December 2023 for the
country the liabilities and assets has arisen. The enacted tax rate in Egypt is 22.5% (2022: 22.5%), Jordan 21% (2022:
21%), Sudan 30% (2022: 30%) and Nigeria 30% (2022: 30%).
* Undistributed reserves from group subsidiaries
The Group’s dividend policy is to distribute any excess cash after taking into consideration all business cash
requirements and potential acquisition considerations. The expectation is to distribute profits held within sub-
sidiaries of the Group in the near foreseeable future. During 2015 the Egyptian Government imposed a tax on
dividends at a rate of 5% of dividends distributed from Egyptian entities. On September 30, 2020, the Egyptian
government issued a law to increase the tax rate to 10%. As a result, a deferred tax liability has been recorded for
the future tax expected to be incurred from undistributed reserves held within the Group which will be taxed
under the new legislation imposed and were as follows:
Al Mokhtabar Company for Medical Labs
Alborg Laboratory Company
Integrated Medical Analysis Company
Al Makhbariyoun Al Arab Company
2023
EGP’000
72,642
42,514
86,917
24,802
226,875
2022
EGP’000
44,640
31,035
83,277
17,919
176,871
Unrecognized deferred tax assets
The following items make up unrecognised deferred tax assets. The local tax law does not permit deductions for
provisions against income tax until the provision becomes realised. No deferred tax asset has been recognised on
tax losses for both Echo-Scan Nigeria and Wayak Egypt due to the uncertainty of the available future taxable profit,
which the Group can use the benefits therefrom.
Impairment of trade receivables
(Note 16)
Impairment of other receivables
(Note 16)
Provision for legal claims (Note 21)
Tax losses*
Unrecognized deferred tax asset
2023
2023
2022
Gross Amount
Tax Effect
Gross Amount
EGP’000
EGP’000
EGP’000
183,070
41,191
136,981
8,509
5,561
500,171
697,311
1,915
1,251
122,047
166,404
166,404
8,604
3,519
382,999
532,103
2022
Tax Effect
EGP’000
30,821
1,936
792
93,768
127,317
127,317
There is no expiry date for the Unrecognized deferred tax assets.
164 IDH 2023 Annual Report
2023 Annual Report IDH 165
Financial Statements
* The company has carried forward tax losses on which no deferred tax asset is recognised as follows:
Company
Integrated Diagnostics
Holdings plc
Dynasty Group
Holdings Limited
Eagle Eye-Echo Scan
Limited
WAYAK Pharma
Medical Genetic
Center
Golden care
Medical health care
2023
2023
2022
Gross Amount
Tax Effect
Gross Amount
Country
EGP’000
EGP’000
EGP’000
2022
Tax Effect
EGP’000
Jersey
418,561
104,639
325,155
81,289
England
and Wales
Mauritius
Egypt
Egypt
Egypt
Saudi
Arabia
11,445
278
24,767
15,264
8,470
21,386
2,175
42
5,573
3,435
1,906
4,277
11,359
1,839
20,564
15,156
8,926
-
2,158
276
4,627
3,410
2,008
-
500,171
122,047
382,999
93,768
Earnings per share (EPS)
10.
Basic EPS is calculated by dividing the profit for the year attributable to ordinary equity holders of the parent by
the weighted average number of ordinary shares outstanding during the year. There are no dilutive effects from
ordinary share and no adjustment required to weighted-average numbers of ordinary shares.
The following table reflects the income and share data used in the basic and diluted EPS computation:
Profit attributable to ordinary equity holders of the parent for basic
earnings EGP’000
Weighted average number of ordinary shares for basic and dilutive
EPS’000
2023
2022
510,304
541,110
600,000
600,000
Basic and dilutive earnings per share EGP’000
0.85
0.90
Earnings per diluted share are calculated by adjusting the weighted average number of shares by the effects result-
ing from all the ordinary potential shares that causes this dilution.
The Company has no potentially dilutive shares as of the 31 December 2023 and 31 December 2022, therefore; the
earnings per diluted share are equivalent to basic earnings per share.
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166 IDH 2023 Annual Report
2023 Annual Report IDH 167
Financial Statements
12.
Intangible assets and goodwill
Cost
At 1 January 2022
Additions
Effect of movements in exchange
rates
At 31 December 2022
Additions
Effect of movements in exchange
rates
Goodwill
EGP’000
Brand Name
EGP’000
Software
EGP’000
1,260,965
-
30,858
1,291,823
-
13,144
383,909
-
11,642
395,551
-
7,910
77,394
9,076
6,366
92,836
2,490
4,032
Total
EGP’000
1,722,268
9,076
48,866
1,780,210
2,490
25,086
At 31 December 2023
1,304,967
403,461
99,358
1,807,786
Amortisation and impairment
At 1 January 2022
Impairment*
Amortisation
Effect of movements in exchange
rates
At 31 December 2022
Impairment*
Amortisation
Effect of movements in exchange
rates
At 31 December 2023
Net book value
At 31 December 2023
At 31 December 2022
4,552
1,755
-
66
6,373
11,265
-
80
372
-
-
9
58,477
-
7,251
4,092
381
69,820
-
-
11
-
7,750
1,923
63,401
1,755
7,251
4,167
76,574
11,265
7,750
2,014
17,718
392
79,493
97,603
1,287,249
1,285,450
403,069
395,170
19,865
23,016
1,710,183
1,703,636
* The Group has identified an impairment indicator on the goodwill associated with the Medical Genetics Center company in both 2022 and 2023, as well as the
Echo Scan CGU in 2023. This is primarily due to the company’s negative free cash flow and EBITDA.
13. Goodwill and intangible assets with indefinite lives (note 3.2-i)
Goodwill acquired through business combinations and intangible assets with indefinite lives are allocated to the
Group’s CGUs as follows:
Al Makhbariyoun Al Arab Group (“Biolab”)
Goodwill
Brand name
Alborg Laboratory Company (“Al-Borg”)
Goodwill
Brand name
Al Mokhtabar Company for Medical Labs (“Al-Mokhtabar”)
Goodwill
Brand name
Echo-Scan
Goodwill*
Balance at 31 December
2023
EGP’000
90,872
39,684
130,556
497,275
142,066
639,341
699,102
221,319
920,421
2022
EGP’000
72,783
31,785
104,568
497,275
142,066
639,341
699,102
221,319
920,421
-
-
1,690,318
16,290
16,290
1,680,620
* The Group has recorded an impairment in relation to Echo-Scan in Nigeria as a result of its history of recording losses at a cash flow and EBITDA level. The
value in use was considered lower than the realisable value of the assets the Group had and therefore this was used as the recoverable amount, as the value in use
could not be guaranteed to be positive given the history of making losses. The realisable value was largely based on the value of PPE and totalled EGP 43,283k
compared to a carrying value of the CGU of EGP 61,253k. Therefore, goodwill of EGP 11,265k has been fully impaired with an additional impairment of EGP
6,705k recorded on PPE.
Assumptions used in value in use calculations and sensitivity to changes in assumptions
IDH worked with Alpha Capital, management’s expert, to prepare an impairment assessment of the Group’s
CGUs. The assessment was carried out based on business plans provided by IDH.
168 IDH 2023 Annual Report
2023 Annual Report IDH 169
Financial Statements These plans have been prepared based on criteria set out below:
2023
Bio Lab
Al-Mokhtabar
Al-Borg
Average annual patient growth rate from
2024 -2028
Average annual price per test growth rate
from 2024 -2028
Annual revenue growth rate from 2024
-2028
Average gross margin from 2024 -2028
Terminal value growth rate from 1
January 2028
Discount rate
5%
5%
10%
41%
3%
17%
8%
11%
16%
44%
5%
25%
5%
11%
17%
37%
5%
25%
Bio Lab
Al-Mokhtabar
Al-Borg
Echo-Scan
2022
Average annual patient growth rate
from 2023 -2027
Average annual price per test growth
rate from 2023 -2027
Annual revenue growth rate from
2023 -2027
Average gross margin from
2023 -2027
Terminal value growth rate from
1 January 2027
Discount rate
5%
0%
3%
46%
3%
19%
8%
6%
13%
51%
5%
25%
8%
7%
13%
45%
5%
25%
21%
5%
33%
81%
4%
28%
Management have compared the recoverable amount of CGUs to the carrying value of CGUs. The recoverable
amount is the higher of value in use and fair value less costs of disposal. In the exercise performed and the assump-
tions noted above the value in use was noted to be higher than the fair value less costs of disposal. The exception to
this was Echo-Scan where the realisable value was greater than the value in use as noted above and therefore the
recoverable amount was based on realisable value.
During 2023, excluding Echo-Scan, management has conducted a business plan projection with the support of
a management expert (Alpha Capital), with the assumptions above used to calculate the net present value of
future cashflows to determine recoverable amount. The projected cash flows from 2024- 2028 have been based
on detailed forecasts prepared by management for each CGU and a terminal value thereafter. Management have
used experience and historical trends achieved to determine the key growth rate and margin assumptions set out
above. The terminal value growth rate applied is not considered to exceed the average growth rate for the industry
and geographic locations of the CGUs that had a recoverable amount based on value in use.
As a sensitivity analysis, Management considered a change in the discount rates of 2% increase to reflect addi-
tional risk that could reasonably be foreseen in the marketplaces in which the Group operates. This did not result
in an impairment under any of the CGUs that had a recoverable amount based on value in use.
Management has also considered a change in the terminal growth rate by 1% decrease to reflect additional risk,
This did not result in an impairment under any of the CGUs that had a recoverable amount based on value in use.
This recoverable amount is then compared to the carrying value of the asset as recorded in the books and records
of IDH plc. The WACC has been used considering the risks of each CGU. These risks include country risk, currency
risk as well as the beta factor relating to the CGU and how it performs relative to the market.
The headroom/(impairment) between carrying value and recoverable amount is as follows:
Almokhtabar
Alborg
Al Makhbariyoun Al Arab
Echo Scan
Company
Recoverable
amount
CGU carrying
value
Headroom/
(Impairment)
EGP’000
3,449,092
2,215,534
1,071,711
43,283
EGP’000
1,649,728
1,600,213
654,342
61,253
EGP’000
1,799,364
615,321
417,369
(17,970)
14.
Financial asset at fair value through profit and loss
Non-current equity investments
Current equity investments
Balance at 31 December
2023
EGP’000
-
25,157
25,157
2022
EGP’000
18,064
-
18,064
*On August 17, 2017, Al Makhbariyoun 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 December 31, 2023,
was 8.25%.
• On April 8, 2019, Al Mokhabariyoun Al Arab (Biolab) has signed a Shareholder Agreement with JSC Mega Lab
and JSC Georgia Healthcare Group (CHG), whereas, BioLab Shall have a put option, exercisable within 12
months immediately after the expiration of five (5) year period from the signing date, which allows BioLab stake
to be bought out by CHG at a price of the equity value of BioLab Shares/total stake (being USD 400,000.00) plus
15% annual IRR (including preceding 5 Financial years). After the expiration of above 12 months from the date
of the put option period expiration, which allows CHG to purchase Biolab’s all shares at a price of equity value
of Biolab’s stake (having value of USD 400,000) plus higher of 20% annual IRR or 6X EV/EBITDA (of the financial
year immediately preceding the call option exercise date). In case the Management Agreement or the Purchase
Agreement and/or the SLA is terminated/cancelled within 6 months period from the date of such termination/
cancellation, CHG shall have a call option, which allows the CHG to purchase Biolab’s all Shares at a price of
the equity value of BioLab’s stake in JSC Mega Lab (having value of USD 400,000.00) plus 205 annual IRR. If JCI
accreditation is not obtained, immediately after the expiration of the additional 12 months period of the CHG
shall have a call option (the Accreditation Call option), exercisable within 6 months period, which allows CHG
to purchase BioLab’s all Shares at a price of the equity value of BioLab’s stake in JSC Mega Lab (having value of
USD 400,000) plus 20% annual IRR.
170 IDH 2023 Annual Report
2023 Annual Report IDH 171
Financial Statements
15.
Inventories
Chemicals and operating supplies
2023
EGP’000
374,650
374,650
2022
EGP’000
265,459
265,459
During 2023, EGP 875,296 K (2022: EGP 703,693K) was recognised as an expense for inventories, this was recognised
in cost of sales. The major balance of the raw material is represented in the Kits, slow-moving items of those Kits are
immaterial. It is noted that day’s inventory outstanding (based on the average of opening and closing inventory)
stands as 133 days at 31 Dec 2023.
The COVID-19 pandemic had a significant impact on inventory, leading to impairment in 2023. Specifically, there
was an impairment of kit materials related to COVID-19, resulting in an amount of EGP 17,372K. This is a notable
increase compared to the previous year when no impairment was recorded. Additionally, there was an impairment
of inventory in the Sudan region, totalling EGP 1,529K, also showing an increase from the previous year’s absence of
impairment. the specific challenges faced in the Sudan region.
16.
Trade and other receivables
Trade receivables – net
Prepayments
Due from related parties note (26)
Other receivables
Accrued revenue
2023
EGP’000
569,738
42,185
5,037
108,521
1,754
727,235
2022
EGP’000
395,220
34,081
5,930
106,363
2,293
543,887
As at 31 December 2023, the expected credit loss related to trade and other receivables was EGP 191,580K (2022:
EGP 145,586K). Below show the movements in the provision for impairment of trade and other receivables:
At 1 January
Charge for the year
Exchange differences
At 31 December
2023
EGP’000
145,586
51,255
(5,261)
191,580
2022
EGP’000
109,768
29,914
5,904
145,586
The Group allocates each exposure to a credit risk grade based on data that is determined to be predictive of the risk
of loss (historical customer’s collection, Customers’ contracts conditions) and applying experienced credit judge-
ment. Credit risk grades are defined using qualitative and quantitative factors that are indicative of the risk of default.
Expected credit loss assessment is based on the following:
1. The customer list was divided into 9 sectors,
2. Each sector was divided according to customers aging,
3. Each sector was studied according to the historical events of each sector. According to the study conducted,
the expected default rate was derived from each of the aforementioned period,
4. General economic conditions.
The results of the quarterly assessment will increase/decrease the percentage allocated to each period. Balances
overdue by at least one year are fully provided for. On a quarterly basis, IDH revises its forward-looking estimates
and the general economic conditions to assess the expected credit loss.
Impairment of trade and notes receivables
The requirement for impairment of trade receivables is made through monitoring the debts aging and reviewing
customer’s credit position and their ability to make payment as they fall due. An impairment is recorded against
receivables for the irrecoverable amount estimated by management. At the year end, the provision for impairment
of trade receivables was EGP 183,070K (31 December 2022: EGP 136,981K). This is lower than the amount of EGP
191,580k (31 December 2022: EGP 145,586k) as that amount also includes provision on other receivables.
A reasonable possible change of 100 basis points in the expected credit loss at the reporting date would have
increased (decreased) profit or loss by the amount of EGP 7,528K. This analysis assumes that all other variables
remain constant.
The following table provides information about the exposure to expected credit loss (ECL) for trade receivables
from individual customers for the nine segments at:
31-Dec-23
Current (not past due)
1–30 days past due
31–60 days past due
61–90 days past due
91–120 days past due
121–150 days past due
More than 150 days past due
31-Dec-22
Current (not past due)
1–30 days past due
31–60 days past due
61–90 days past due
91–120 days past due
121–150 days past due
More than 150 days past due
Weighted
average loss
rate
EGP’000
2.42%
6.41%
8.13%
13.53%
14.56%
16.47%
71.48%
Gross
carrying
amount
EGP’000
227,746
115,230
95,834
49,489
35,089
24,383
Loss
allowance
EGP’000
(5,507)
(7,389)
(7,790)
(6,694)
(5,109)
(4,017)
205,037
(146,564)
Weighted
average loss
rate
EGP’000
1.11%
4.06%
4.55%
13.61%
18.12%
27.81%
88.00%
Gross
carrying
amount
EGP’000
174,249
85,072
65,470
32,563
25,868
19,275
129,704
Loss
allowance
EGP’000
(1,927)
(3,451)
(2,982)
(4,433)
(4,688)
(5,360)
(114,140)
As at 31 December, the ageing analysis of trade receivables is as follows:
2023
2022
EGP’000
Total
569,738
395,220
EGP’000
< 30 days
330,080
253,943
EGP’000
30-60 days
88,044
62,488
EGP’000
61-90 days
42,795
28,130
EGP’000
> 90 days
108,819
50,659
172 IDH 2023 Annual Report
2023 Annual Report IDH 173
Financial Statements
17.
Cash and cash equivalents
Cash at banks and on hand
Treasury bills (less than 3 months)
Term deposits (less than 3 months)
2023
EGP’000
412,561
21,461
240,231
674,253
2022
EGP’000
399,957
185,513
63,042
648,512
Cash at banks earns interest at floating rates based on daily bank deposit rates. Short-term deposits and trea-
sury bills are made for varying periods of between one day and three 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, EGP 210,000k (2022: EGP 20,000k) relates to amounts held in Egypt with a weighted average rate of
16.40% (2022: 11.93%), EGP 20,103k (2022: EGP 34,777k) relates to amounts held in Jordan with a weighted aver-
age rate of 5.00% (2022: 4.50%) and EGP 10,128k (2022: EGP: 8,265k) relates to amounts held in Nigeria with a
weighted average rate of 5.6% (2022:7%). Treasury bills are denominated in EGP and earn interest at a weighted
average rate of 24.95% (2022: 15.76%) per annum.
18.
Financial assets at amortised cost
Term deposits (more than 3 months)
Treasury bills (more than 3 months)
2023
EGP’000
49,244
111,854
161,098
2022
EGP’000
60,200
107,204
167,404
The maturity date of the fixed term deposit and treasury bills is between 3–12 months. Treasury bills are denominated
in EGP and earn interest at an effective rate of 25.34% (2022: 14.09%) per annum. Of the above Term deposits, EGP
17,126k (2022: EGP 6,626k) relates to amounts held in Egypt with a weighted average rate of 5.17% (2022: 5.19%) and
EGP 32,118k (2022: EGP 53,574k) relates to amounts held in Jordan with a weighted average rate of 5.38% (2022: 4.24%)
Share capital and reserves
19.
The Company’s ordinary share capital is $150,000,000 equivalent to EGP 1,072,500,000.
All shares are authorised and fully paid and have a par value $0.25.
Capital reserve
The capital reserve was created when the Group’s previous parent company, Integrated Diagnostics Holdings LLC –
IDH (Caymans) arranged its own acquisition by Integrated Diagnostics Holdings PLC, a new legal parent. The balances
arising represent the difference between the value of the equity structure of the previous and new parent companies..
Legal reserves
Legal reserve was formed based on the legal requirements of the Egyptian law governing the Egyptian subsidiar-
ies. According to the Egyptian subsidiaries’ article of association 5% (at least) of the annual net profit is set aside to
from a legal reserve. The transfer to legal reserve ceases once this reserve reaches 50% of the entity’s issued capital.
If the reserve falls below the defined level, then the entity is required to resume forming it by setting aside 5% of
the annual net profits until it reaches 50% of the issued share capital.
Put option reserve
Through acquisitions made within the Group, put option arrangements have been entered into to purchase the
remaining equity interests in subsidiaries from the vendors at a subsequent date. At acquisition date an initial
put option liability is recognised and a corresponding entry recognised within the put option reserve. After initial
recognition the accounting policy for put options is to recognise all changes in the carrying value of the liability
within put option reserve. When the put option is exercised by the vendors the amount recognised within the
reserve will be reversed.
Translation reserve
The foreign currency translation reserve is used to record exchange differences arising from the translation of the
financial statements of foreign subsidiaries.
20. Distributions made and proposed
Cash dividends on ordinary shares declared and paid:
Nil per qualifying ordinary share (2022: US$ 0.116)
After the balance sheet date, the following dividends were proposed by
the directors (the dividends have not been provided for):
2023
EGP’000
-
-
-
-
2022
EGP’000
1,304,805
1,304,805
-
-
In issue at beginning of the year
In issue at the end of the year
31-Dec-23
600,000,000
31-Dec-22
600,000,000
600,000,000
600,000 ,000
21.
Provisions
The table below shows the number of shares held by Hena Holdings Limited and Actis IDH BV as well as how
many shares are then held which are floating and not held by companies that do not have individuals on the board
of the Group.
Ordinary share capital Name
Hena Holdings Limited
Actis IDH B V
Free floating
Number of
shares
162,445,383
126,000,000
311,554,617
600,000,000
Ordinary
shares
% of
contribution
27.07%
21.00%
51.93%
Ordinary
shares
Par
value
40,611,346
31,500,000
77,888,654
100%
150,000,000
At 1 January 2023
Provision made during the year
Provision used during the year
Provision reversed during the year
Effect of translation currency
At 31 December 2023
Current
Non- Current
Provision
for Egyptian
Government
Training Fund
for employees
Provision for
end Of Service
EGP’000
-
331
-
-
1
332
-
332
EGP’000
-
11,865
-
-
-
11,865
-
11,865
Provision for
legal claims
EGP’000
3,519
3,496
(771)
(683)
-
5,561
-
5,561
Total
EGP’000
3,519
15,692
(771)
(683)
1
17,758
-
17,758
174 IDH 2023 Annual Report
2023 Annual Report IDH 175
Financial Statements Provision
for Egyptian
Government
Training Fund
for employees
Provision for
end Of Service
EGP’000
-
-
-
-
-
-
-
EGP’000
-
-
-
-
-
-
-
Provision for
legal claims
EGP’000
4,088
3,950
(3,997)
(522)
3,519
-
3,519
Total
EGP’000
4,088
3,950
(3,997)
(522)
3,519
-
3,519
At 1 January 2022
Provision made during the year
Provision used during the year
Provision reversed during the year
At 31 December 2022
Current
Non- Current
Egyptian Government Training Fund for employees
According to Article 134 of the Labor Law for Vocational Guidance and Training issued by the Egyptian govern-
ment in 2003, Al-Borg, Almokhtabar and Integrated Medical Analysis Company shall comply with the require-
ments stipulated in this law to provide 1% of net profits each year in the training fund.
End Of Service
As per Article 88 of the Labor Law in Saudi Arabia, in the event of the termination of an employee’s service, the
company is required to settle the wages owed within one week. Conversely, if the employee terminates the con-
tract, the company is obligated to fulfil their rights within two weeks.
Legal claims provision
The amount comprises the gross provision in respect of legal claims brought against the Group. Management’s
opinion, after taking appropriate legal advice, is that the outcome of these legal claims will not give rise to any
significant loss beyond the amounts provided as at 31 December 2023.
22.
Trade and other payables
Trade payables
Accrued expenses
Due to related parties note (26)
Other payables
Deferred revenue
Accrued finance cost
23.
Put option liability
Current put option - Al Makhbariyoun Al Arab
Current put option - Eagle Eye-Echo scan
Non-current put option - Eagle Eye-Echo scan
Non-current put option - Medical Health Development
2023
EGP’000
271,741
178,499
5,962
112,750
59,918
8,891
637,761
2023
EGP’000
301,383
12,413
313,796
2023
EGP’000
-
42,786
42,786
2022
EGP’000
269,782
241,060
25,058
98,204
60,948
6,043
701,095
2022
EGP’000
439,695
-
439,695
2022
EGP’000
51,000
-
51,000
Put option - Al Makhbariyoun Al Arab Group
The accounting policy for put options after initial recognition is to recognise all changes in the carrying value of
the put liability within equity.
Through the historical acquisitions of Al Makhbariyoun Al Arab the Group entered into separate put option
arrangements to purchase the remaining equity interests from the vendors at a subsequent date. At acquisition a
put option liability has been recognised for the net present value for the exercise price of the option.
The options is calculated at seven times EBITDA of the last 12 months – Net Debt and exercisable in whole from
the fifth anniversary of completion of the original purchase agreement, which fell due in June 2016. The vendor
has not exercised this right at 31 December 2023. It is important to note that the put option liability is treated as
current as it could be exercised at any time by the NCI. However, based on discussions and ongoing business
relationship, there is no expectation that this will happen in next 21 months. The option has no expiry date.
Put option - Eagle Eye-Echo scan
IFC has the option to put its shares according to definitive agreements signed on 15 January 2018 between Dynasty
Group Holdings Limited and International Finance Corporation (IFC) related to the Eagle Eye-Echo Scan Limited
transaction, IFC has the option to put it is shares to Dynasty Group Holdings Limited in year 2024. The put option
price will be calculated on the basis of the fair market value determined by an independent valuer.
According to the International Private Equity and Venture Capital Valuation Guidelines, there are multiple ways
to calculate the put option including Discounted Cash Flow, Multiples, Net assets. Multiple valuation was applied
and EGP 12 million was calculated as the valuation as at 31 December 2023 (2022; EGP 51m). In line with appli-
cable accounting standards with IAS 32 the entity has recognised a liability for the present value of the exercise
price of the option price.
Put option - Medical Health Development
Based on the agreement made on October 27th, 2022, between Business Flower Holding LLC, Integrated Diag-
nostics 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.
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.
requesting the dissolution and liquidation of the Company.
The company has not yet commenced its operations, the group has recognized a put option as a liability in the
non-current assets. This put option represents a 49% share of non-controlling interest in the total equity, amount-
ing to EGP 43 million. The valuation was determined as of December 31, 2023. Following the IAS 32 accounting
standard, the entity has recorded a liability for the present value of the exercise price of the option.
176 IDH 2023 Annual Report
2023 Annual Report IDH 177
Financial Statements
24. Borrowings
The terms and conditions of outstanding loans are as follows:
Nominal interest rate
Maturity
CBE corridor rate*+1% 26 January 2027
3 March 2024
26-May 2024
Secured 5%
Secured 19%
AUB – BANK
AUB – BANK
Bank: Sterling BANK
Currency
EGP
EGP
NGN
Amount held as:
Current liability
Non- current liability
31 Dec 23
94,451
13,121
3,573
31 Dec 22
116,426
-
-
111,145
116,426
43,680
67,465
22,675
93,751
111,145
116,426
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 radiol-
ogy segment. As at 31 December 2023 only EGP 124.9M had been drawn down from the total facility available with
EGP 30.4M had been repaid. Loan withdrawal availability period was extended till July 2023 and 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 equivalents) divided by total
financial payments.
“Cash operating profit”: Operating profit after tax, interest expense, depreciation and amortization, is calcu-
lated 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 interest expense and fees and dividends
distributions.
3. The current ratios shall not be less than 1.
“Current ratios”: Current assets divided current liabilities.
*As at 31 December 2023 corridor rate 20.25% (2022: 17.25%)
AL- Borg company didn’t breach any covenants for MTL agreements.
IDH opted to reduce its exposure to foreign currency risk by agreeing with General Electric (GE) for the early
repayment of its dollar obligation. The Group agreed to settle this balance early for USD 3.55 million, payable in
EGP, equivalent to EGP 110 million and made this repayment in March 2023.
To finance the settlement, IDH utilized a bridge loan facility, with half of the amount (EGP 55 million) being
funded internally and the other half (EGP 55 million) provided by a loan from Ahly United Bank – Egypt, this credit
facility was fully repaid in two instalments of EGP 28.5M in May and a final instalment of EGP 26.5M in June 2023.
Financial obligations
25.
The Group leases property and equipment. Property leases include branches, warehouse, parking and adminis-
tration buildings. The leases typically run for average period from 5-10 years, with an option to renew the lease
after that date. Lease payments are renegotiated with renovation after the end of the lease term to reflect market
rentals. For certain leases, the Group is restricted from entering into any sub-lease arrangements. The property
leases were entered into as combined leases of land and buildings.
Adding to remaining agreement signed in 2015, to service the Group’s state-of-the-art Mega Lab. The agreement
periods are 5 and 8 years which is deemed to reflect the useful life of the equipment. If the minimum annual
commitment payments are met over the agreement period ownership of the equipment supplied will legally
transfer to the IDH. The finance asset and liability has been recognised at an amount equal to the fair value of
the underlying equipment. This is based on the current cost price of the equipment supplied provided by the
suppliers of the agreement. The averaged implicit interest rate of finance obligation has been estimated to be
10.3%. The equipment is being depreciated based on units of production method as this most closely reflects the
consumption of the benefits from the equipment.
Information about the agreements for which the Group is lessee is presented below.
a)
Right-of-use assets
Balance at 1 January
Addition for the year
Depreciation charge for the year
Terminated Contracts
Exchange differences
Balance at 31 December
Buildings
2023
EGP’000
622,975
157,482
(134,033)
(5,170)
41,771
683,025
Buildings
2022
EGP’000
462,432
214,846
(103,099)
(13,564)
62,360
622,975
Other Financial obligations
b)
Future minimum financial obligation payments under leases and sales purchase contracts, together with the pres-
ent value of the net minimum lease payments are, as follows:
*Financial liability– laboratory equipment
*Lease liabilities building
2023
EGP’000
240,015
828,039
2022
EGP’000
335,470
727,426
1,068,054
1,062,896
178 IDH 2023 Annual Report
2023 Annual Report IDH 179
Financial Statements
The financial obligation liabilities for the laboratory equipment and building are payable as follows:
At 31 December 2023
Less than one year
Between one and five years
More than 5 years
At 31 December 2022
Less than one year
Between one and five years
More than 5 years
Minimum
payments
2023
EGP’000
291,342
1,054,902
166,965
1,513,209
Minimum
payments
2022
EGP’000
285,962
1,030,750
227,715
1,544,427
Interest
2023
EGP’000
114,638
295,586
34,931
445,155
Interest
2022
EGP’000
137,257
314,656
29,618
481,531
Principal
2023
EGP’000
176,704
759,316
132,034
1,068,054
Principal
2022
EGP’000
148,705
716,094
198,097
1,062,896
c)
Amounts other financial obligations recognised in consolidated income statement
Interest on lease liabilities
Expenses related to short-term lease
2023
EGP’000
93,298
10,540
2022
EGP’000
73,393
87,962
Related party transactions disclosures
26.
The significant transactions with related parties, their nature volumes and balance during the period 31 December
2023 and 2022 are as follows:
Related Party
Nature of transaction
ALborg Scan (S.A.E)*
International Fertility (IVF)**
Expenses paid on
behalf
Expenses paid on
behalf
H.C Security
Provide service
Life Health Care
Provided service
Dr. Amid Abd Elnour
Put option liability
International Finance corporation
(IFC)
International Finance corporation
(IFC)
Integrated Treatment for Kidney
Diseases (S.A.E)
HENA HOLDINGS LTD
ACTIS IDH LIMITED
Business Flowers Holding
Current account
Put option liability
Current account
Rental income
Medical Test analysis
shareholders'
dividends deferral
agreement
shareholders’
dividends deferral
agreement
Put option liability
Nature of
relationship
Affiliate**
Affiliate***
Entity owned by
Company’s board
member
Entity owned by
Company’s CEO
Bio. Lab C.E.O and
shareholder
Bio. Lab C.E.O and
shareholder
Echo-Scan
shareholder
Echo-Scan
shareholder
Entity owned by
Company’s CEO
2023
Transaction
amount of
the year
Amount due
from / (to)
EGP’000
EGP’000
(351)
(1,771)
-
-
6
(93)
855
3,373
138,312
(301,383)
19,542
(466)
38,587
(12,413)
-
1,664
623
217
591
shareholder
(590)
(2,963)
shareholder
(485)
(2,440)
shareholder
-
(42,786)
(357,507)
180 IDH 2023 Annual Report
2023 Annual Report IDH 181
Financial Statements Related Party
Nature of transaction
Nature of
relationship
ALborg Scan (S.A.E)*
International Fertility (IVF)**
Expenses paid on
behalf
Expenses paid on
behalf
Affiliate
Affiliate
H.C Security
Provide service
Life Health Care
Provide service
Dr. Amid Abd Elnour
Put option liability
International Finance corporation
(IFC)
International Finance corporation
(IFC)
Integrated Treatment for Kidney
Diseases (S.A.E)
Current account
Put option liability
Current Account
Rental income
Entity owned by
Company’s board
member
Entity owned by
Company’s CEO
Bio. Lab C.E.O and
shareholder
Bio. Lab C.E.O and
shareholder
Echo-Scan
Shareholder
Echo-Scan
Shareholder
Medical Test analysis
Entity owned by
Company’s CEO
2022
Transaction
amount of
the year
Amount due
from /to
EGP’000
EGP’000
-
4
220
424
351
1,771
(99)
2,518
481,665
(439,695)
(20,008)
(20,008)
(15,963)
(51,000)
12,292
(623)
1,290
116
381
Dr. Hend El Sherbini***
HENA HOLDINGS LTD
ACTIS IDH LIMITED
Total
Loan
arrangement
shareholders’
dividends deferral
agreement
shareholders’
dividends deferral
agreement
CEO**
17,025
-
shareholder
(2,373)
(2,373)
shareholder
(1,955)
(1,955)
(509,823)
* 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).
*** During the year 2022, Dr. Hend (C.E.O) granted a loan to IDH Cayman amounting to USD 750K. and the loan was settled by Al Mokhtabar on behalf of IDH
Cayman for EGP 17m at the prevailing exchange rate of US$/EGP 22.70 . The loan was not interest bearing.
During 2022 Chief Executive Officer Dr. Hend El-Sherbini and her mother, Dr. Moamena Kamel jointly hold the
25.5% of shares held by Hena Holdings Limited, Hena Holdings Limited is a related party and received dividends
of USD 17,745,953 in year 2022.
During the year payments relating to lease obligations of Biolab were made to entities considered to be related
parties due to the interest in them held by Dr Amid Abd Elnour. Payments made during 2023 were JOD 240,991
(EGP 10,392,148) and during 2022 were JOD 241,038 (EGP 6,679,163).
Terms and conditions of transactions with related parties
Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. There have
been no guarantees provided or received for any related party receivables or payables. For the year ended 31
December 2023, the Group has not recorded any impairment of receivables relating to amounts owed by related
parties (2022: nil). This assessment is undertaken each financial year through examining the financial position of
the related party and the market in which the related party operates.
IDH opts to pay approximately 1% of the net after-tax profit of the subsidiaries Al Borg and Al Mokhtabar to the
Moamena Kamel Foundation for Training and Skill Development. Established in 2006 by Dr. Moamena Kamel, a
Professor of Pathology at Cairo University and founder of IDH subsidiary Al-Mokhtabar Labs and mother to the
CEO Dr. Hend El Sherbini. The Foundation allocates this sum to organisations and groups in need of assistance.
The foundation deploys an integrated program and vision for the communities it helps that include economic,
social, and healthcare development initiatives. In 2023 EGP 6,631 K (2022: EGP 8,934 K) was paid to the founda-
tion by the IDH Group in relation to profits earned for companies Al Borg and Al Mokhtabar in the prior year.
Compensation of key management personnel of the Group
Key management people can be defined as the people who have the authority and responsibility for planning,
directing, and controlling some of the activities of the Company, directly or indirectly.
The amounts disclosed in the table are the amounts recognised as an expense during the reporting period related
to key management personnel.
Short-term employee benefits
Total compensation paid to key management personnel
2023
EGP’000
68,621
68,621
2022
EGP’000
48,078
48,078
Reconciliation of movements of liabilities to cash flows arising from
27.
financing activities
EGP’000
Balance at 1 January 2023
Proceeds from loans and borrowings
Repayment of borrowings
Payment of liabilities
Interest paid
Exchange differences
Total changes from financing cash flows
New agreements signed in the period
Terminated contracts during the year
Interest expense
Total liability-related other changes
Balance at 31 December 2023
EGP’000
Balance at 1 January 2022
Proceeds from loans and borrowings
Repayment of borrowings
Payment of liabilities
Interest paid
Exchange differences
Total changes from financing cash flows
New agreements signed in the period
Terminated contracts during the year
Interest expense
Total liability-related other changes
Balance at 31 December 2022
Other loans,
borrowings and
accrued interest
127,420
71,630
(76,911)
-
(19,612)
-
(24,893)
-
-
22,912
22,912
125,439
Other loans,
borrowings and
accrued interest
105,694
40,081
(21,721)
-
(24,513)
-
(6,153)
-
-
27,879
27,879
127,420
Other
financial
obligation
1,062,896
-
-
(239,132)
(118,777)
62,391
(295,518)
187,581
(5,682)
118,777
300,676
1,068,054
Other
financial
obligation
760,674
-
-
(100,841)
(94,795)
122,376
(73,260)
293,946
(13,259)
94,795
375,482
1,062,896
182 IDH 2023 Annual Report
2023 Annual Report IDH 183
Financial Statements
28.
Current tax liabilities
Debit withholding Tax (Deduct by customers from sales invoices)
Income Tax
Credit withholding Tax (Deduct from vendors invoices)
Other
2023
EGP’000
(10,412)
87,835
8,762
17,324
103,509
2022
EGP’000
(26,166)
162,773
7,719
8,529
152,855
29.
Post Balance Sheet Events
• In January 2024 Al Borg repaid EGP 13.4m of due borrowings.
• On 1 February 2024, interest rates were hiked a further 200 basis points to 21.75%. Significant improvements
in the country’s economic situation and outlook were recorded starting in late February and early March 2024,
following the signing of a historic USD 35 billion agreement between the Egyptian government and Abu Dhabi’s
sovereign wealth fund, ADQ, granting the latter development rights to Ras El Hekma on Egypt’s North Coast.
Following the announcement, the black-market rate decreased significantly settling in the low 50 to the US
Dollar range. This is expected to be just the first in a series of announcements and initiatives aimed at attracting
FX and investments back into the country.
• On 6 March 2024, the Central Bank devalued the Egyptian Pound, settling at nearly EGP 49.5 to the US Dollar at
official bank rates, compared to the EGP 30.85 which had remained nearly unchanged for the past year. Follow-
ing the decision, the Central Bank increased interest rates by another 600 basis points, reaching 27.75%.
• On the heels of the devaluation, Egypt and the International Monetary Fund (IMF) finalized an agreement,
securing an expanded loan package of USD 8 billion. At the same time, in 2024 the Egyptian government is
looking to raise over USD 6 billion from its privatization program through the sale of stakes in government
and military-owned businesses to private local and foreign investors. Combined, these are set to cover Egypt’s
short-term financing needs for the coming three to four years.
184 IDH 2023 Annual Report
Financial Statements