Integrated Diagnostics Holdings plc (IDHC) Earnings Call Transcript & Summary

Ladies and gentlemen, this is Omar Aboulmagd from Renaissance Capital. I would like to welcome you all to IDH's 3Q '20 results conference call. From management, we have Dr. Hend El Sherbini, the company's CEO; Omar Bedewy, CFO; and Nancy Fahmy, IR Director. We will start the call with comments from management on results, which will then be followed by a Q&A session. [Operator Instructions] I would now like to hand over the call to Dr. Hend. Please go ahead.

Thank you, Omar. Good afternoon, ladies and gentlemen, and thank you for joining our analyst call for the third quarter of 2020. I'm Dr. Hend El Sherbini, Chief Executive Officer of IDH. With me today are Omar Bedewy, our CFO; and Nancy Fahmy Menssen, Director of Investor Relations. I will begin today's call with an overview of the group's performance and key developments during the last quarter. After which, I'm running through our region and consolidated financials before opening the floor to your questions. Ladies and gentlemen, I'm delighted of the group's results in the third quarter of the year, which have shown a strong [indiscernible] base recovery across all [indiscernible]. During the quarter, we recorded impressive top and bottom line year-on-year growth, with revenue and net profit up 23% and 39%, respectively. This was supported by the gradual lifting of restrictive measures related to COVID-19, combined with our continued ability to adapt our service offering. Our performance in the third quarter helped lessen the impact of unprecedented global crisis in the first half of the year, with our year-to-date results also displaying a year-on-year expansion. In our home market of Egypt, we continue to ramp up our house calls services and began offering PCR testing for COVID-19, further expanding our roster of COVID-19 and [indiscernible] test. This helped us build on the upward momentum witnessed in June and supported the group's third quarter performance. Our Egyptian operations recorded a 21% year-on-year revenue expansion. Egypt's performance was also supported by robust contributions coming from Al-Borg Scan, which now operates out of 2 branches, having kicked off operations of the second branch in February of this year. Over the last 5 months, our radiology venture reported an impressive 76% year-on-year rise in patients served and 62% year-on-year surge in revenue. Meanwhile, in Nigeria, our operations turned EBITDA positive for the first time during the first quarter of the year, following the surge in sales for the period as we continue to capitalize on the increased brand awareness and demand for Echo-Lab's high-quality services. EBITDA for the quarter was supported by our cost control efforts and certain optimization strategy in the [indiscernible], which has seen the group focused increasingly on pushing its radiology and pathology services. Overall, year-to-date patient numbers in Nigeria have increased 24%, driving a 39% revenue growth in local currency. This is especially impressive in light of the COVID-19-related disruptions experienced earlier this year, including a complete lockdown and limited traffic and people [indiscernible] in place orders. In Jordan, where Biolab continues to be at the forefront of PCR testing for COVID-19, we reported strong demand for both PCR testing and for all services in general. Similarly, in the third quarter of 2020, our Jordanian operations recorded a 47% year-on-year revenue expansion in Jordanian terms -- in Jordanian dinar term. This has driven a 21% year-on-year revenue expansion in local currency terms on a year-to-date basis, with PCR testing making up nearly 1/4 of the country's top line. Finally, in Sudan, the lifting of government-imposed restrictive measures during the quarter. So all 21 of our ventures allowed to reopen in mid July. According [indiscernible] terms expanded 8% year-on-year in the third quarter of 2020. I'm also pleased to report that the exceptional top line growth for the quarter, combined with our sustained cost discipline, saw IDH gross profitability expand to 53% for the third quarter and to 50% on a year-to-date basis. On the EBITDA level, strong gross profitability has drive an EBITDA margin expansion to 48% for the third quarter. On a 9-month basis, despite the group's continuing to book increased SG&A outlays and higher cautionary provisions due to COVID-19, EBITDA margin also expanded versus last year to reach 43% for the period. Overall, I'm optimistic with regards to our business outlook going forward. In Egypt, we have resumed our branch rollout plan for the year and added 9 new branches throughout the third quarter. We're also working towards obtaining the American College of Radiology accreditation for Al-Borg Scan's branches and plan to roll out the venture's third branch in the first quarter of 2021. Regionally, in Jordan, despite the imposition of a new lifetime curfew in October, we have witnessed no impact on our operations and expect continued growth in the coming months. In Nigeria, we aim to build on the current momentum to deliver further improvement in profitability. We will also continue to focus on implementing our value-building phase as we work to strengthen Echo-Lab's market position. Finally, in Sudan, while high inflation and weak Sudanese pound continue to pose challenges for the group, the lifting of sanctions has opened up [indiscernible] growth opportunities for our operations. With the country now open to international suppliers, the group will be able to [indiscernible] and in turn improve its operational efficiency and profitability. While there is no clear visibility on the magnitude of a second wave of COVID-19 infection in our countries of operation, nonetheless, I'm confident that the group has the adequate safety and business continuity safeguards in place to weather possible disruptions to operations, while guaranteeing the safety of our staff and patients. With IDH now offering PCR testing for COVID-19 in both Egypt and Jordan, we are well positioned to have local authorities contain a possible second wave. We've also further improved our inventory management to ensure an ample supply of kits at all time and hold against potential supply chain disruption. On the collection front, we continue to enjoy a solid relationship with insurers and management, expect collection cycles to normalize going forward. Overall, our group maintains a strong financial position with a liquid balance sheet, thanks to a strong cash generation profile and over EGP 465 million in cash balance. The group's confidence in the fundamental strength and sustainability of its financial position has seen IDH distribute $28 million in dividends since September of this year. And this is an important accomplishment, especially in light of the difficulties faced globally during 2020. Heading into the final weeks of the year, we expect the robust recovery witnessed in the third quarter to carry through to the end of 2020. This gives management confidence that despite the unprecedented challenges presented by the global pandemic, IDH will still be able to deliver full year top line growth in 2020 with an EBITDA margin in excess of 40%. With that, I will conclude my remarks for today and pass the call over to Omar. Thank you.

Thank you, Hend. Good afternoon, ladies and gentlemen. During my presentation today, I will first run through the key financial and operational highlights for the third quarter of the year as it best represents how our operation recovered following the period of restrictions imposed during the second quarter of 2020. Then I'll switch over to discuss our year-to-date performance in brief. After that, I will open the floor to your questions. As Dr. Hend already highlighted, the third quarter of the year saw IDH recording exceptional top and bottom line growth, making it one of our strongest quarters on record. In the third quarter, consolidated revenues expanded 23% year-on-year to reach EGP 720 million. Our top line growth was fueled by COVID-related tests, representing around 21% of IDH consolidated revenue during Q3. On the volume front, number of tests inched up by 1%, coupled with an increase of 21% in revenue per test, which led to the strong increase in the top line. From a geographical point of view, we witnessed a robust recovery across all countries operation as the restricted measures were lifted and all our branches returned to normal working hours. I will start with Egypt, our main region, which recorded a 21% year-on-year rise in revenue for the quarter. The top line growth will continue to be supported by our house call service, which contributed 21% of revenue and our COVID-19-related offering, which made up 20% of the top line figure during [indiscernible]. Our Egyptian operations also showed an impressive Q-on-Q recovery for its revenues growing by 58% as the restrictions related to COVID-19 were fully lifted and traffic began to normalize. Accordingly, in Egypt, we recorded a 42% Q-on-Q increase in patients served and a 46% rise in tests performed. Moving to our radiology venture in Egypt, Al-Borg Scan is continuing to ramp up its operations with its contribution to the company's revenues is rising. As in the third quarter, Al-Borg Scan's top line expanded 52% compared to Q2. In Jordan, the strong demand for PCR testing for COVID-19, which Biolab has been offering since the start of the crisis, helped drive a 47% year-on-year increase in patients served during the third quarter. This, in turn, saw revenue in local currency terms increase 47% year-on-year in Q3, with PCR testing making up nearly 1/3 of the company's top line figure during the quarter. In Nigeria, we witnessed a 58% year-on-year surge in revenues in local currency terms during Q3. This, in turn, helped support the company's EBITDA, which turned positive for the first time in the 3 months to the end of September. In Sudan, year-on-year basis, the third quarter recorded revenue growth in local currency terms of 8% versus a 61% contraction recorded in the second quarter of the year. In terms of profitability, the strong growth in consolidated top line for the quarter supported a 30% year-on-year expansion in gross profits. And the group succeeded to record a solid gross profit margin of 53% versus 50% in the same 3 months a year ago. Similarly, EBITDA for the quarter reached an all-time high of EGP 343 million, expanding by an impressive 40% year-on-year with a 48% EBITDA margin on the back of IDH's strong gross profitability, along with a slight decrease in SG&A expense. Revenue growth trickled down to our bottom line, which expanded 39% with an associated margin of 28% versus 25% during the same quarter last year. Switching over to the year-to-date, I'm pleased to report that our 9-month results also displayed a year-on-year growth, supported by our third quarter performance. I would say that this is a remarkable achievement considering the unprecedented difficulties faced during the second quarter of 2020. It is also important to note that figures from the comparable period includes contributions from the 100 Million healthy lives Campaign. IDH top line expanded 1% to reach EGP 1.7 million for the 9-month period ended September 2020. Excluding the campaign, IDH would record 4% year-on-year expansion in revenue. It is worth mentioning that COVID-related tests conducted in Egypt and Jordan together contributed around 14% of the consolidated top line figures for the first 9 months of the year. patient churn and tests performed for the period continued to lag behind last year figures, weighed down by the decline [indiscernible] through the second quarter of 2020. However, we continue to offset the decline in volumes to better pricing and test mix, with an average revenue per test reaching EGP 89, with an increase of around 25% year-on-year or 15% when excluding the campaign. At the EBITDA level, we recorded a 4% year-on-year expansion with an associated margin of 43% compared to 42% in the same period last year. EBITDA growth came despite establishing cautionary provision of EGP 35 million to a elongated collection items booked during the 9 months. On this front, it is worthy to note that in the quarter just ended, we booked an additional EGP 7 million in provisions compared to EGP 28 million booked in the first half of the year, which indicates an improvement in the collection. Net profit was 4% year-on-year to EGP 375 million for the 9-month period, with a net profit margin of 22%, in line with last year money. Meanwhile, total cash balance reached EGP 465 million as at 30 September 2020, from EGP 631 million at year-end 2019, which reflects the distribution of $28 million in dividends paid in September this year. Finally, the group reported a net cash amounting to EGP 304 million compared to EGP 447 million at year-end 2019. As for our guidance for year-end, we believe our full year numbers will surpass the initial guidance we gave the last quarter to land between EGP 2.3 billion to EGP 2.4 billion, with an EBITDA margin exceeding the 40% mark. With that, I will conclude my remarks and open the floor to questions.

[Operator Instructions] Okay. We have a question from Andrew.

It was just a question on Egypt. I see that the house call service is sort of running at 20% of revenue for the 9-month period. I was wondering, do you think there's been a structural change in what people want in Egypt? And do you think that's house call service piece reverts back? Or do you think this is -- the market has changed for good? And are you in the right place to serve that opportunity if the market has changed?

It's a very good question. I think there is a change that happened in the market maybe because of the COVID and because people were unable to -- or were afraid, if not unable, but they were afraid to go to clinics and labs to do testing. So they preferred to have somebody coming at home collecting samples. And we also, at IDH, we had an initiative that we made during March. We started it in March where we offer the house calls for free so that the service itself or the phlebotomists going to people. For example, this was [indiscernible] but there's also people experience the service, so people who did not experience house calls began to try it, encouraged by being it's free and for the convenience and also given the COVID crisis was on. So I think this is going to be a trend in the market. And I think IDH being present everywhere in Egypt, and having a large number of phlebotomists working all over Egypt collecting samples. This will definitely help in the increase in house calls in IDH.

We have our second question from Karim.

This is Karim Abadir from FIM partners. I'm pretty sure you answered my question, but the line was a bit choppy, so I couldn't hear the full answer. So can you please repeat what was the contribution of PCR and COVID-related tests in Egypt for the third quarter? And then just a follow-on of that, are the COVID tests more profitable than the other tests you administer, and by what magnitude?

Thanks, Karim, for the question. The contribution margin of COVID-related testing is more or less the same as the other tests. So there is no difference between the two. The COVID-related tests in Q3 in Egypt were around 20% of Egypt revenue. So you want the PCR? PCR revenue -- okay, hold on. PCR is around 40% -- 42% of Egypt revenue.

Sorry. So PCR is 42% of the Egypt revenue in the third quarter?

Yes. No, no, no. Okay. Sorry. So Egypt COVID-related revenues.

Yes, are 42% of total revenues in Egypt.

No, no, no. So okay, so PCR is -- so we do have 2 kinds of -- we have 2 buckets here. So we have PCR, COVID-related tests, okay? So the PCR alone contributes 42% of all COVID-related tests in Egypt.

Okay. So out of that 20%, 42% were PCR tests and the others were the other indicative tests that you provide?

Yes.

Okay. And just on the PCR test, can you maybe give us a bit more details on the operations. So you have agreements with airlines to test outbound patients? Does it go further than that? Or is it limited to that?

We have agreements with airlines. Yes. This is number one. And we do have agreements with Pure Health in UAE, where passengers applying for UAE visa get tested in our labs. This is besides the airline as well.

Okay, great. And just my last question is on Nigeria. If you can maybe give us a bit more color on the strategy there. Should we expect more branch openings starting next year? Or are you going to focus on the branches that you have now and kind of increase that utilization there?

At the beginning of our investment there, we set several milestones that we need to bypass to open -- to continue our investment. And one of them is posting a positive EBITDA, in addition to achieving a certain number of tests and a certain number of patients. Currently, thanks to God, we did -- we ticked the first box, which is positive EBITDA. We're waiting for the other boxes to be ticked, and then we will move on with our rollout plan.

We have the next question from Julie Simmonds.

I'm Julie Simmonds from Panmure Gordon. Just a quick question on the margin. They're obviously significantly better during Q3. And I was wondering what was behind that? And how sustainable that is going forward, whether it's some of the cost measures that you put in place in the first half sort of falling -- coming through into Q3, and how sustainable those are into Q4 and into 2021?

The industry or in -- IDH is characterized by high operating leverage, so the more we add to our top line figure, the more the direct cost will be -- or the fixed cost will be diluted. Our fixed cost is around 65% of the total cost. So when we did post an unprecedented top line figure, the fixed cost got diluted and we posted EBITDA -- sorry, good profit margin, I mean, and increasing EBITDA margin. In addition, we need to -- you need to consider as well that Q3 last year, the Nigeria contributed negatively to our EBITDA by around EGP 8 million this -- in Q3 '20 -- during Q3 2020, Nigeria contributed positively by around EGP 500,000 to IDH. It's one of the reasons that we posted good margin. We expect to continue posting this margin during Q4.

We have our next question from Dan Smith from 337 Frontier.

Just a question on the house call business. You said that the -- that was a free service. Was that for the whole quarter? And also, can you talk about what the margins are like in that business in the -- I guess, if it's not free and also when it is free, how does that compare to the rest of the business?

Margin is the same. There is no difference between the margins at the labs or during the house calls. The only thing that we offered for free is the delivery charge. So that's the only difference. So the margin is the same. No difference. And we started this by end of March until the beginning of July. And so currently, we do charge delivery charges for the house call.

When you have a delivery charge, does that -- so does that mean that margins are higher once you include the delivery charge? Or is that just a -- the cost comes out the same?

A bit higher, yes. Yes. So the only cost that we faced, the only charges that we posted on our income statement during the period of having delivery charges is around EGP 6.4 million.

That was the cost for you guys?

That's the cost, yes.

EGP 6.5 million?

Yes.

Okay. Could you also comment on the announcement you made earlier this week on the potential dual listing? Any more color you can provide?

Hello?

Sorry, did you hear my question or no?

Just please repeat it again, please?

Could you comment on the announcement you made earlier this week regarding the potential dual listing in Egypt?

Yes. We're excluding the dual -- doing the dual listing in Egypt. We have contacted the office in Egypt to explore several options of listing. And once we have a concrete time line, we we will post it and give it to you.

And why are you guys looking to do that?

There are several reasons. Of course, we have first to increase -- to overcome the issue of the liquidity in -- on the London Stock Exchange in addition to.

Yes. We believe that the local listing will give us access to wider investor base. As you know, the fact that [indiscernible] local institution in Egypt to invest in our stock prohibits retail investors as well to invest as well. So we believe by dual listing into our current listing will give us access to a wider range of investors. That's in addition, of course, to improving the current liquidity of the stock, which we believe is a hurdle to some investors and hurdle from -- hurdle for them in investing our stock.

If I could just provide some feedback, I would be very cautious with those assumptions. I mean we've rarely seen dual listings work in Egypt and in Africa. And I think you should take into consideration the fact that you potentially will decrease the liquidity of your stock because you'll actually suck liquidity out of London, and then it will be dissipated over 2 exchanges. I mean, I understand there maybe an argument for retail investors in Egypt to be invested. But I would just -- I would -- I'm not sure it's -- I'm sure bankers are very excited about this prospect for you guys. They're good at spinning that. But we can talk off-line, but there's there's many, many instances across Africa and Egypt where dual listing has happened, and it's been a total failure. In fact, it's decreased liquidity.

Sure. So let's discuss that off-line, but thank you for the feedback, and we'll definitely discuss it off-line. But currently, there is nothing concrete on the plans at all. All the options are on the table. And the aim is doing it with the most successful technique. We're definitely exploring everything and the aim, we wanted to be successful for all the parties. So that's definitely the priority at the moment.

I understand. I think you guys are on the right track for liquidity. Keep running your business the way that you are and investors will come to that stock.

Sure. Thank you.

We have our next question from [indiscernible]

Congratulations on the strong set of results in 3Q. Could you please give us a sense of -- you mentioned earlier that 20% of Egypt revenue was COVID-related testing. I'm just trying to get a sense of what's happening with the non-COVID-related tests. Could you give us a sense of what's happening there in terms of consumer behavior? I presume, given the restrictions, those came more substantially, but post restrictions being eased, how is the consumer behaving there? Are you seeing a recovery in those patient numbers and the recovery in people testing. If you could give us a sense of that, please? That's my first question.

Yes. We're -- compared to last year, the number of patients and the number of tests is more or less in line. So yes, there is a recovery, but the market recovered again. And Q-on-Q, of course, there is a strong recovery, as previously mentioned, more than 60%. So compared to last year's line and compared to Q2, there is a significant jump.

This is in the non-COVID-related test.

Yes.

Okay. And then in terms of your margins, you mentioned that you expect to maintain these robust margins. But reading the earnings release, there is mention of one-off discount that you receive from suppliers. So I mean, you guys achieved an EBITDA margin of 48% in 3Q. I'm not sure what the quantum of the discount was, but normalizing that, how would you guide us as to margins going into 2021 and beyond? Is 47% realistic? Or do we expect that to come back down sort of to the 40% to 42% level?

The discount that we received was in -- mainly in Q1 and partially in Q2 of the year. So the margin will be [indiscernible] which is higher compared to Q2 and Q1. And raw material as a percentage of revenues will be kept at the level of 16%, 17%.

At this point, we have no further questions. [Operator Instructions] Okay. We do have 2 questions. The first one from Brad, your line is now open.

Two questions from me. One, if -- do you think that you will be one of the companies who will be distributing the vaccines for COVID-19 in Egypt? The second question is around Al-Borg Scan. When you look at a fully ramped up Al-Borg Scan branch, how does that compare in terms of revenue and earnings to a traditional diagnostics branch? Is it is the same size? Or is it multiples of the size?

So regarding the vaccine, previously, we were -- we participated in the vaccine delivery for patients for influenza vaccine. It was done through our facilities all over the country. However, with the new vaccine, we have no information regarding the new vaccine. So we -- I mean, we haven't received the new vaccine in Egypt, obviously. So we will be looking at participating in the vaccine administration, if it's allowed by the government. Regarding Al-Borg Scan. Can you repeat your question, please?

How big will a typical Al-Borg Scan branch be in comparison to one of your diagnostics branches?

You cannot compare the radiology to pathology. This is an asset-light business. And actually, those are collection centers. And the other one is -- does have heavy equipment, like MRI, CT, PET/CT and the investment cost is -- for the radiology branch is significantly higher compared to this. So it cannot [indiscernible] the pathology with radiology. But in terms of revenue [indiscernible] so the edge of the [indiscernible] base for the full year is around EGP 16 million to EGP 17 million compared to a pathology branch and -- which range between EGP 2 million to EGP 3 million. Next.

So we have our next question from [ Karim Cigre ].

I just had a question on provisions. I was just wondering if you could give us any more detail on -- if this is related to certain corporate clients or the percent of contract clients not paying? And then the second question is just on competitor activity. What are your competitors doing? Are any sort of weakened in this environment? And how should we think about sort of branch expansion as things normalize?

So in terms of provision, as you know, we do apply the IFRS 9, and which put a provision irrespective of -- even if the client pays or not. And what we we've seen over the past 4 and [indiscernible] months is that some of the clients, especially related to government in Egypt, where their payment were a bit delayed. So that's why we opted to be in our vision during the first half. However, over the past 2, 3 months, we witnessed an improvement in collection. That's why we -- the provision that -- during Q3 was way less than we did establish during H1. And the more there is an improvement in collection, we might release some of those provisions.

So your next -- your second question was on competition, right? Terence?

Yes, that's right.

Yes. So in general, competition is not foreign in this business. As you know, it's quite a large market, quite underpenetrated. The growth is humongous with an ailing public sector offering, which makes it always attractive for competition to enter it. So it's not foreign. But as you can see, we are still growing. We're still the market leaders as we speak. We have the largest branch network. And we -- even in this environment, we are sustaining our top line EBITDA, bottom line growth and eventually distributing dividends as well. So the competitive landscape, I wouldn't say has changed much. It has been always like that, and this is something that we have been always facing in our business. Does that answer your question?

Yes. The last part of it, just as things normalize, what is the branch expansion target will be, sort of what it was pre-COVID? Or is there any change in sort of how you think [indiscernible] expansion?

Yes. The branch rollout plans are the same. Like we're still targeting to open between 20 to 25 branches here. As always mentioned, the country is growing, the infrastructure is growing. Egypt and Cairo itself is expanding heavily to the east and to the west. So this creates more opportunities to grow and to cater for the increasing demand in the market. So yes, our rollout plans is still [indiscernible].

We have our next question from [indiscernible]

Can you hear me?

Yes.

Okay. Great. I wanted to understand better the economics of the home testing. I struggle to understand how you end up with similar margins when the pricing is similar, the cost variance is higher and you probably lose a bit of this scalability you have in the lab. So can you elaborate a bit on that?

So [indiscernible] a small example, there is a fact, a test that -- we sell it for EGP 100 than in the lab. So the same test is sold for EGP 100 during the home visit. The only that we -- the difference between the home visit that the patient going to the lab is there is some sort of delivery charges where the phlebotomist goes to the patient and takes the samples. That's the only difference. So at the end of the day, the contribution margin or the margin itself for this test is the same because we sell it for the same price, and the cost of [indiscernible] is the [same], so there is no. The only [indiscernible] the difference is the extra charge that you do [indiscernible] that the [indiscernible] pay for [indiscernible] his test at home, which is minimal.

Sorry, the line was not great. You mentioned that the cost of delivery was handled by the patient? I thought it was free of charge.

It was free of charge from late March to the 1st of July. This is a promotion that we did to encourage patients to stay home. Starting the 1st of July, we resumed charging patients with the delivery charge, which is minimal, again.

We have our next question from [indiscernible]

Can you hear me?

Yes, we can hear you.

Okay. My question has been answered already. It's just that I didn't hear the answer very well. It's about the EBITDA margin. So we've seen improvements in the third quarter and then for the 9 months, it's at about 32.5% or 33% -- 43%, sorry. So the question was, is it sustainable? And what is the target going forward, but I didn't hear the answer, the line was cutting off. Can you please repeat that?

Yes. So the answer, yes, it is sustainable. And the answer as well included that our business is high in operating leverage, our fixed cost contribution to total cost is high. So as long as we do post high revenues, then those fixed cost gets diluted. This is number one. And number 2, during Q3 2019 and actually during the whole year 2019, Nigeria itself contributed negatively to our EBITDA. So -- and currently, Nigeria contributed, yes, very slight positive contribution around EGP 500,000 compared to Q3 2019, which was high around on EGP 8 million negative. Go ahead.

What is the new guidance for an EBITDA margin level? Will it be -- we used to have a 40% margin. And is it now 42%?

40%-plus.

42%-plus.

We have no further questions at this point. [Operator Instructions] Okay. We have one more question from [indiscernible]

I just want to know, Q4 will almost -- and half of it passed already. Can we have an update on how things is improving? And as I know that, yes, there is no permission for private labs to do the PCR. Is there any change? Can you give me an update on that front, please?

So regarding your first question, Q4 is more in line with Q3. This is regarding the first question. The second question, up to my knowledge that there was -- private labs were not precluded from doing the test itself.

Sorry, Omar.

There is no rule that precludes private labs of doing tests. Consequently, we're doing it.

So as I remember that in Q2 or until the first half of the year, you were only doing PCR test for the airlines. So now, anyone can come to your lab and have a PCR test?

Yes. So in Jordan, we've been doing the testing since the start.

Yes. I'm talking about Egypt.

In Egypt, at the beginning, the ministry was the only place which did the test, the PCR testing. And then with the increased number of patients and increased number of people wanting to do the PCR, especially the travelers. We started doing the PCR testing. We started having contracts with airlines and companies like Pure Health for people traveling to the Emirates and to [indiscernible] so on. We started doing PCR for those travelers. And the ministry actually left it open for the private sector and for the ministry -- and for the -- I mean, for the -- also for hospitals to do the testing and for the different entities to do the testing. So it's not only the Ministry of Health was doing the testing now.

We do not have any further questions at this point. Okay, we do have one more question from [Ali Al Nasir]

I just wanted to follow-up on the previous question. Can you just confirm on the PCR testing in Egypt. Is all of the revenue from PCR testing in Egypt coming from your agreements with airlines and Pure Health? Or are you starting to do business outside of that in the PCR testing world?

So in Egypt, our -- we -- the revenue generated from PCR is our around -- ranging from 50 -- EGP 55 million to EGP 60 million, half of it is related to Pure Health.

Got it. And Omer the other half would be related to airlines? Or is that how I should look at it?

Both, airline, walk-in [indiscernible].

Okay. So you're now -- and you're basically now able, if I'm in Egypt now, if I'm in Cairo, I can go into the lab, walk in and ask for a PCR test, and you would be able to provide that for me?

100%.

Okay. Got it. Okay. I think the question before me was asking whether that's now allowed by the Ministry of Health. I think Dr. Hend explained that they've left it open.

Correct.

Okay. Got it. Got it. Okay. Cool. And while I'm on the call that maybe I'll just ask one more question related to -- somebody asked about competition, but we've been hearing a lot more. I don't know if it's noise or real, from, I think, a company called Speed Medical. I'm not asking if you can comment on them in particular. But can you just comment on whether you've seen an increase in competitive intensity offers in the market, people competing for the corporate clients that you have historically had a larger share? And if you see anything changing there? So I know Nancy had a bit of a question -- an answer to that question, but maybe more specific, if you've seen anything that you feel is worth highlighting?

Ali, thank you for your question. Yes, as we mentioned, nothing in particular. Competition is not foreign to this business. I mean, if you walk down the street of Cairo, for instance, you'll find tons of labs in the market, tons of signs, tons of already existing players long, long time ago. And that has been the market since we -- since the early days of our operations. So as mentioned, competition is not foreign. It has been fierce actually over the past years. It has been very fierce on the ground, even with already existing players, nonetheless a new entrant. But I mean the already existing players have been there a long time ago, and we have been posting very solid results in the midst of this. And I think even the very recent set of results to show how we are facing even pandemics, new trends in the market, everything, we're still standing solid. So I wouldn't see there's something in particular at the moment.

Okay. Great. Sorry. That's helpful. And last one is just on just COVID in general. If we look hopefully by next year, hopefully, it's not as much of an issue. When COVID testing runs off, is it fair to say that -- because you mentioned things like 20% of your revenue in Egypt is COVID-related in Q3 2020. If I look at Q3 2021, does that mean that, that part of the business goes away? How do you replace that business? Do you expect that if COVID effect runs off, that your margins and revenues come down? Or do you expect that you will continue to sustain the growth rates?

Okay. So there are 2 buckets here. The first one is that, as previously mentioned, the margin of the COVID tests is the same or are the same as the regular test. So margins will not be affected if we do not conduct the PCR tests. This is number one. And I think it's -- currently, it's hard to tell how it will go. However, we will get back to -- get back to normal and we will witness our normal growth that we did witness over the last 3 years, which is 15% to 20% increase in our top line figure. So this is our mode since actually 2016, 2015.

Yes. That makes sense. It might be that this year is a high base, but -- yes. No, well noted, Omar.

Okay. At this point, we have no further questions. I'll hand over the call to management for closing remarks. Yes, please go ahead.

Well, thank you very much, everybody, for dialing in on our call. As Dr. Hend and Omar mentioned earlier, we're very pleased with the results of this quarter. And judging from what we're seeing so far after in the past few weeks of the fourth quarter, we are certain that this is likely to sustain. So we're very pleased. Thank you very much for dialing in. And please, if you have any questions, we're around, please don't hesitate to send us any questions over the e-mail. Thank you okay.

Okay. Thank you very much, Dr. Hend. Thank you, Omar. Thank you, Nancy, and thank you, everyone else, for dialing in.