Integrated Diagnostics Holdings PLC
LSE:IDHC
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Integrated Diagnostics Holdings PLC
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Hello and welcome to the IDH Q1 2020 conference call. My name is Brika, and I'll be today's call operator. [Operator Instructions] And I would like to hand over to our host to begin. So Hatem Alaa, please go ahead. Your line is now open.
Hello, everyone. This is Hatem Alaa from EFG Hermes. And welcome to IDH First Quarter 2020 Results Conference Call. I'm pleased to have on the call today from the company, Dr. Hend El Sherbini, CEO; Tarek Hemida, CFO; and Sherif El-Ghamrawi, Investor Relations Director. I'll now hand over the call to Dr. Hend for a presentation, and then we'll open the floor for Q&A. Dr. Hend, please go ahead.
Thank you, Hatem. Good afternoon, ladies and gentlemen, and thank you for joining our analyst call for the first quarter of 2020. I'm Dr. Hend El Sherbini, Chief Executive Officer of IDH. With me today are Omar Bedewy, our CFO; and our new Director of Investor Relations, Ms. Nancy Fahmy.I will begin to present -- today's presentation with the situation and update on COVID-19 and its impact on our operations to date and then provide some insights on management strategy going forward. After which Omar will run you through our region and consolidated financial performance before opening the floor to your questions. Overall, IDH held its ground during the challenging operating environment that characterized the end of the quarter. With the implementation of varying degrees of lockdowns and curfews across our geographies, beginning mid-March, the group revenue declined only 3% when normalized for the 100 Million Healthy Lives Campaign in the first quarter of 2019. The top line contraction was almost entirely driven by Egypt. Starting late March, the government enforced nationwide curfew, leading to reduced operating hours and consistently lowered like-for-like volumes. Overall, Egypt recorded a 4% decline in revenue when excluding the campaign's effect on the comparable series. This downward trend continued through May. However, as consumers increasingly adapted to the new norm, and given the inelastic demand of our services, we are now witnessing a gradual rebound in volume.Meanwhile, in Jordan, IDH has been conducting COVID-19 testing since the onset of the outbreak and this helped alleviate the impact of severe long-term measures that left 17 out of 19 branches closed in late March. Overall, Jordan delivered a strong 9% growth in revenue in the first quarter of 2020 and operations have now recovered from the lockdown with all of the Biolab branches having reopened during first week of May. In Sudan, the group branches remained operational through the first quarter of the year, although at reduced hours during the second half of March. Nonetheless, Sudan recorded a combination of higher volumes that improved pricing, leading to a 50% growth in local currency revenue in quarter 1. I must note, however, the situation in Sudan has since changed with the rollout stricter lockdown measures. In May, all but 5 branches were closed, with open ones operating for shorter hours during the day. As of date, 6 branches are reopened, and we expect more to follow as the government eases restrictions and essential business like IDH are allowed to fully reopen. Finally, in Nigeria, newly installed geology equipment drove a threefold increase in test volumes during the quarter. This more than outweighed the limited impact of a lockdown imposed in the final days of March. So overall, the revenue grew by 51% in local currency terms. While cost-cutting initiatives saw EBITDA losses narrow significantly, indicating that Nigeria is on the right track. While our branches in Nigeria remained operational during the lockdown, volumes in April have been impacted as people adhere to shelters in place orders. This, however, has eased into a curfew starting in May, and we are witnessing a gradual rebound in volumes in this fundamentally strong market. So across our geographies, we completed to implement measures outlined in our crisis management plan as communicated in our full year results announcement. Our response aims to mitigate the risk posed by the pandemic over the focus on several key pillars. First, strengthening our health and safety protocols; second, ensuring smooth operations and business continuity while maintaining efficient stakeholder communication; third, assessing business strength and financial opinions. And finally, running stress tests to better ascertain the financial impact on IDH. As regards to health and safety, a key focus is ensuring adequate supplies of protective equipment for all our frontline staff. Additionally, we are implementing physical distancing measures and providing lenient sick leaves and work from home policies where possible to limit the risk of infection. On the business continuity front, we are monitoring our kits and raw material use on a daily basis. And as of date, our average kits -- testing kits stock covers our needs until September 2020. Most importantly, we are ensuring prudent cash management and continuously monitoring our short-term liquidity position. So our business remains strongly cash generative, and we are focused on prudent cash management with post discipline and a reduction of non-critical use of cash. IDH is also leveraging government initiatives to support cash flows, such as the payment of the 2019 corporate taxes over 3 installments. Out of an abundance of caution, we also have taken some provisions to account for the potential elongation of payment cycle. However, as of date, we have not yet witnessed any impairment in receivables. In the coming months, our focus will remain on minimizing the impact of COVID-19 as we navigate through this unprecedented global crisis. As such, the group has put on hold any expansion plans during Q2, including Al-Borg Scan. This follows our earlier decision to postpone our dividend recommendation for 2019, while we are certain this financial impact on our business and to maintain the healthy cash balance during this period. Overall, IDH's strong liquidity position and under leveraged balance sheet places us in a very resilient position. As regards to outlook management's view is that the outbreak is our largest market of Egypt could peak within the coming weeks. After which, a pickup towards 2019 levels could begin during the second half of the year. In the meantime, we have ramped up our house call service and our offering is for fee for patients who are unable to visit our branches during these critical times. And so the service contribution to our top line now has doubled since March 2020. Beyond the crisis, we remain optimistic as regards to our business long-term outlook, where our markets enjoy strong growth drivers that are unaffected by current events. And this includes supporting macroeconomic and industry trends, strong market positions of our brands, and effective business model and growth strategies that can deliver long-term value to our shareholders. With that, I will conclude my remarks for today and pass the call over to Omar.
Thank you, Dr. Hend. And afternoon, ladies and gentlemen. I will start with an overview of the impact of COVID-19 on our performance by region. And then provide you with an update on IDH financial results for the first quarter of 2020.Let me start with Egypt, our main geography. Egypt performance for the month of March dragged down the geography results for the quarter with revenue recording a 10% decline in Q1. The curfew and restrictions imposed during the second half of March have led to around 30% year-on-year decrease in March revenues. Excluding the campaign effect from 2019 numbers, Egypt's revenues for the quarter would record a 4% decrease year-on-year. Overall, Egypt contributed around 85% to the consolidated top line figure in Q1 2020 versus 86% in Q1 2019.Meanwhile, during Q1 2020 IDH operation across all other regions delivered a combined 18% year-on-year growth, excluding the ForEx effect. This translated to about 2% increase in EGP terms due to the appreciation of the Egyptian pound throughout 2019 and the beginning of 2020.Regional growth was led by Jordan, which contributed more than 11.5% to IDH consolidated top line, followed by Sudan and Nigeria contributing around 2% each. In Jordan, the impact of the branch closures on top line was partially alleviated as Biolab conducted COVID-19 testing. Overall, Biolab performed [ 4,100 ] COVID-19 tests, which generated JOD 223,000 in revenue or around 9% of Jordan's total sales for the quarter. The number of conducted COVID tests more than doubled during April and May, noting that the price per test is capped by the Jordanian Ministry of Health at JOD 55. In Nigeria, the operations benefited from the new state-of-the-art geology equipment installed during the second half of 2019 and our operation there delivered a strong 51% year-on-year revenue growth in local currency, while volumes tripled, indicating that our Nigerian operation is moving in the right direction. As of date, as Dr. Hend just said, all our branches are fully operational, except in Sudan, where only 6 out of 21 branches are up and running. Moving to our financial performance during Q1. Overall, our top line figure reached EGP 500 million with an 8% year-on-year decline. The lower revenues attributable to 2 main reasons: first, the COVID-19 effect during the month of March; second, the high base effect in 2019 related to the 100 Million Healthy Campaign. Should we exclude the campaign from the comparable figures, our consolidated revenues would have recorded a decline of only 3%. On a segment basis, IDH revenue mix was split between walk-ins and contract with a 45:55 ratios. We served 1.6 million patients and performed a total of 6 million tests, with a decline of 28% compared to last year. If we do factor out the campaign effect on volumes in 2019, then the decrease of the number of tests narrows to 10%. Average revenue per test was around EGP 82 an increase of 6% compared to last year and 8% if we do exclude the campaign effect. It should be noted that revenue per test in Egypt grew by 29% in Q1 and 10% when we exclude the campaign effect. Our performance during the period was also supported by the ramp-up of operation of Al-Borg Scan. The radiology venture performed, our radiology venture performed around 8,000 tests and generated revenue of more than EGP 4 million, which is up 40% compared to last year. And it's important to note as well that the second branch started its operational activity in February 2020. Moving to our gross profit margin. Our gross profit margin reached 49%, which is more or less the same as last year, thanks to the raw material -- our raw material expenses of revenues would decrease. Our EBITDA decreased 14% to EGP 203 million compared to EGP 236 million last year, and our margin stood at 41% compared to 43% last year.The contraction was mainly attributed to higher SG&A expenses related to the new corporate headquarter with an amount of EGP 2.2 million and a bad debt provision of EGP 10 million. So the said provision are in anticipation of elongated payment cycle with COVID-19, given the increase in expected credit losses. However, to date, we did not yet incurred any receivables.On the regional level, despite the COVID-19 outbreak hitting during the month of March, Sudan and Jordan both succeeded to deliver an EBITDA growth in their local currencies, as Jordan EBITDA was up 8% year-on-year, while Sudan recorded a strong 66% increase in local currency.In Nigeria, EBITDA losses narrowed significantly by 60%, thanks to the cost-cutting initiatives, along with the increase in its top line figure by 51%. In Egypt, our EBITDA declined by 17% year-on-year, driven by the combined effect of both lower revenues and higher SG&A related to the new headquarter, along with EGP 10 million recorded as bad debt provisions. Our net profit declined 17% to of EGP 102 million with a 21% margin versus 23% last year. And finally, on our balance sheet position, our working capital witnessed an increase compared to year-end 2019, driven by a higher cash balance by around 18% as well as a higher inventory coverage as management mitigates risk of potential supply disruptions. And it's important to highlight that our current inventory balance is sufficient to cover our operations for the next 3.5 months. On the receivable side, our DSO witnessed an increase of around 7 days reflecting lower collection during the month of March. And at the end of Q1 2020, our -- we maintained a consolidated cash balance of EGP 745 million, with a net cash of EGP 563 million, which reflects our strong liquidity position. With that, I conclude my remarks and open the floor to questions. Thank you.
[Operator Instructions] The first question comes from Florian Gueritte from LGM.
Can you please just share the light on the raw material discounts from suppliers. I mean who were the suppliers? And what is the reason behind that?
We received a significant discount during Q1 from a couple of our main suppliers, which pushed down the raw material as a percentage of revenues. However, going forward, we do expect that it will normalize at the 16% of revenues deficit.
But is it a volume linked discount? I mean why would they give you a discount for this quarter? Is it just a correction for previous prices?
No. It's not a correction. It's due to the -- I think it was a volume discount related to previous [ dividends ].
Nothing linked to the current COVID situation or any of the current...
No, no, it has nothing to do because we received it during the first 2 months of the year. Hello, if you can take the next question, please?
The next question comes from Julie Simmonds from Panmure Gordon.
A couple of questions. [Technical Difficulty]
Julie, we're not able to hear your line. Could you please speak up or ensure you're not muted?
Can you hear me now? Hello?
Yes, we can hear you.
Okay. Excellent. Just wondering on the bad debt provision, what that relates to, whether that's the contract side of the business or whether that affects the walk-in patient side?
Of course, it's related to the contract, walk-in -- the walk-ins, they pay in cash. So it's the credit part of the contract. So as you know, some of the contract there is a payment in cash because there is the deductible part. So it's the credit part of the company. It's around 40%.
Okay. Lovely. And just in terms of the sort of talking about patients coming back as you sort of get past the peak of the pandemic. Are you getting any feel for the patients coming in now, whether they're adding additional tests or a test volume per patient, fairly similar to what you were seeing previously? I mean has there been any change in that so far?
Can you repeat this, please?
Are there any change in the volumes -- the sort of the volume of tests per patient that you're seeing with the patients that are coming back in now? I mean are those sort of -- is there a sort of change in what types of tests there of for now they're coming in that you can see. I was wondering whether there's any sort of backlog effect that you're beginning to see already.
So we're see -- I think that's your question. I just heard that you're asking about people who are coming right now for testing. Are those coming for COVID-19 or for other tests? Is this the question?
It was more just a question of whether the volume of tests that you were seeing from those patients, whether there was any change, I suppose, in terms of the patients that are coming now as to whether they are having tests you would expect or whether there's been any change because of the pandemic? Because I know you're not doing COVID-19 testing as such? Yes, are you?
Yes. Yes. There is a change because people are coming now, are doing the test is, are indicative of COVID-19. So we're not doing the PCR testing. However, people are coming in to do the CBC, the CRP, BSR, some of the tests, the D-dimer and ferritin. Some of the tests that's -- when they elevated their indicative together with the symptoms that people may have the infection.
Interesting. Presumably, you'd expect that to continue as people realize there are alternative ways of looking to see if they have sort of disease, yes.
I think this trend will continue. As long as we have the infection in place and as long as the cases, and then we'll see the return to the [ powerful enormous ] strength with our prior patients coming back, all the patients who have withhold testing because of what's going on, coming back and doing the testing again. But right now, in this area -- in this era where we have a lot of COVID infection, we're seeing the tests that are related to the COVID-19 testing picking up.
Question comes from Karim Abadir from FIM Partners.
I have 2 questions. The first question is, what are the additional costs that are associated with the house calls services that you're now offering for free? And then my second question relates to the loss of volume in Q1. So if you can give us a bit more details, how much of that loss of volume is attributed to the COVID-related curfews that were imposed and shorter hours? I know you mentioned 30% drop in March. But can you just give us a bit more details on that?
Okay. So first of all -- there is no, of course, associated with the house call, but the house call service was for around EGP 30 per house call. So which was eliminated, okay? So this is #1. What was the other question?
So can you give us a bit more color on the 30% drop in revenues in Egypt in March? How much of that drop was related to COVID-related curfews, I guess, that have been imposed? And then the 30% drop, is that ex campaign? Are you excluding the campaign sales in March 2019?
All right. So let me give you a hint about what happened during the March. First, we witnessed a decrease in Egypt, starting the 13th of March, there was some sort of very bad weather that happened at that time, and everything was closed. And then starting the 25th of March, we had a complete lockdown in Egypt.So the impact itself started from the 14th of March. During the first couple of months in addition to the first 10, 12 days of March, everything was going fine. The 30%, yes, the 30% includes the 100 Million Campaign effect. And if we remove the 100 Campaign from the calculation, then the 30% would decrease to around 25%. Yes. More solid. More so.
Can you give us any indication on the growth that you were seeing, I guess, in the first 2 weeks and the first 10 days of March? Or at least, January, February, just so we have an idea of how things were?
During the first 2 months of the year in Egypt, we had a growth, including the campaign of around 5% in revenue.
Okay. Okay, perfect. And then I guess just last question is how are volumes now? Or how far away are you from a normalized level? Or I guess, from 2019 levels? Are you there or still in the recovery phase?
Now as we -- let me first give you the impact of the 2 -- the first 2 months without the campaign, the growth. The first 2 months without the campaign was more than 13%. And now as we speak, we do have a complete recovery and numbers are picking up significantly.
Sorry, can you repeat that, the 13%? What is that?
This is the 13%, if the performance in Egypt for the first 2 months, excluding the campaign.
Of Q2?
Of -- the first 2 months of the year.
So what was the 5%? Okay.
This is including the campaign. So if we do exclude the campaign from 2019 numbers, then the performance towards the growth rate for the first 2 months is 5%, excluding the campaign is 13%.
Okay, perfect.
And we're -- as we do speak, especially after the peak holidays, we witnessed a significant increase in our numbers in terms of volume and revenues.
We now have Jonathan Milan from Waha Capital.
Just to follow up on the gentleman's question. When you mentioned 5% in Jan, Feb, excluding the impact of the campaign, but you also say that walk-ins up 16%. I mean is the corporate segment weakening severely? That's the first question. And the second question is, if you say March is down 30% -- 25% adjusting for 100 Million Lives and only half of it was impacted. I mean does this -- would this translate into at least 50% drop in April and May in terms of volumes because of COVID? And so far, I know only 2, 3 days have passed in June, but are you seeing a strong recovery?
So let me give you what happened during April and May in Egypt and then move to IDH. So the downward trend continued during the month of April, okay, with a decrease in Egypt top line of around 45%, okay. However, we witnessed a significant improvement during May as this rate dropped to around 20%, despite the reduction in working hours throughout the month of Ramadan, along with the extended Eid holidays. So hence, on an IDH Group level, the top line dropped by around 45% to 49% in April. However, in May, the drop significantly narrowed to 20% during May. So this is the whole picture for Egypt and IDH during April and May.On the corporates and walk-in side. So I just need to alert something that by the end of March 2019 and the beginning of April, management gradually reclassified corporate patients to walk-ins based on some criteria or exit proper criteria, which is cash-paying patients and patients granted a discount of 20% or less and patients with no contractual agreement were removed from corporate and added to walk-ins. So the -- and consequently, the numbers reported in Q1 2019 does not reflect this reclassification. That's why you might witness some significant drop in the revenue generated from the corporate and a significant increase in the number generated from the walk-ins.So to shed some colors for instance -- on that, you witnessed from the reported numbers, a decrease of 23% in the corporate revenues. However, like very much this -- the reported number shows a decrease of 23% for the corporate segment, right, from Q1 to Q1, okay?So this number, excluding the campaign is only 5%, if we adopt the proper definition. And for the walk-in rule, there is an increase of 18% reported. However, this is only as a like-for-like comparison, it's only a decrease of 1%.
Because of COVID?
No. It has nothing to do with COVID. This is related to -- okay, this is -- we just -- suppose if the decrease is related to COVID, yes. But the comparison between 18% increase and 1% decrease is...
Yes, yes, yes. I understand.
And the decrease is totally related to COVID, yes.
Okay. So just to summarize, the total volumes, whether it's working, contractual, or whatever you want to classify, up 5% if we adjust for -- in -- of Jan, Feb if we adjust for 100 Million Lives and pricing up 8%, so revenue would have been up 13%. You mentioned in the presentation, pricing up 8%.
Yes, more or less, yes, for us in Egypt.
We now have Jake Ward from Ashmore.
Just checking that you can hear me on the line okay.
Yes.
Perfect. So I just had 2 questions, just a bit more generally on Egypt. There's been a lot of talk recently around the pickup in the number of new cases over the past week and the ministry have now allowing for private hospitals to start treating patients. I've just wondered, firstly, from what you see in Egypt currently. Are the public hospitals that are treating COVID patients already at full capacity?And secondly, now that the private hospitals can begin treating COVID-19 patients, do you expect to start conducting the PCR test that for now you've not been allowed to conduct?
Yes, yes. I mean we are expecting the ministry to allow us to conduct the COVID-19 testing. However, they haven't done so yet. But yes, you're absolutely true. I mean it's -- they allowed -- they started allowing the private hospitals to treat the patients because they don't have the capacity to treat all patients. So they allowed the private hospitals. And so we are expecting them to also allow us to do the testing. But this hasn't happened yet.
So just the current hospitals, the public hospitals, they are at full capacity from what you say?
Yes, yes.
We now have [ Tim Serbina ] from [ Nitimas Capital ].
I have 3. The first is, as you look at a post-COVID environment, should we assume that there are changes in consumer behavior or your cost structure that would impact our long-term growth and margin assumptions for the business? And the second question is on your M&A pipeline. If you could provide any update or color on that, whether it's geographic or any indications, anything in the pipeline soon?And my last question is on, have you or at the Board level, considered a dual listing, in particular in Egypt to allow Egyptians to participate in what I believe is a great long-term growth story?
So we'll address the last question now. Yes, we currently do consider the dual listing. Regarding M&A, well, we're currently -- we oversee some transaction. However, nothing materialized. And if something is -- if any transaction materializes, then, we -- of course, we will do inform the market. What was your first question regarding the cost structure?
Yes. My question is, do you see -- do you expect any change in consumer behavior or change in your cost structure, perhaps as you have to go out to meet customers instead of them coming in, that would impact our long-term growth and margin assumptions for the business? Or do you think once we're in a post-COVID environment we will return to sort of the growth that we've had historically?
So the cost of having the household was minimal. So when we put it for free, it also invites people to stay at home and order tests because of what's going on for the COVID-19 but this is not going to impact our margins. However, the trend now in patients, the testing are quite different than before because of the -- now people are asking more about the tests that would bag-in all the COVID infection rather than they're already -- have some current infection of diabetes or [ immunizations or ] -- or about the patients.And I think this would continue until we see a major drop of cases in Egypt. Then we return back to our normal way of business with our current patients and testing for current diseases.
[Technical Difficulty]
Sorry. The question is about the SG&A levels. So I understand that there was a provision for bad debt and some expenses on the new headquarters. And that brought the level of SG&A to 17% of sales in the first quarter of 2020. And from previous years, it's about 13% full year as a percentage of sales.So did you see this level normalizing to the 13% that we've seen in the last few years? Or is it going to stay at these high levels?
Well, this question should be addressed in -- okay. There is -- there are 2 buckets here. First, why it did increase? It did increase because the denominator decreased. So the revenue itself decreased. That's why even if we -- if there is a -- the -- if revenues get back to its normal level then we would see the SG&A percentage of revenues will decrease.However, there are 2 expenses that were new in Q1 2020 in the SG&A. The first one is related to the headquarter expenses. Because we do have -- we do incur more electricity, more expenses related to [ chilled water ], more transportation expense. Those together amounts to EGP 2.2 million during the quarter.In addition to the previously mentioned EGP 10 million provision for doubtful accounts and this can be compared to only EGP 2 million during the first quarter of 2019.If the -- we do -- if there is an improvement in the economic situation during the second half of the year, then there would be no additional provisions for the receivable. I mean, so it will stay around that -- the EGP 10 million consequently, the SG&A as a percentage of revenues will decline to its normal level. Given the increase, of course, given the increase in the top line figure. In addition, it's important to note that we did report the EGP 10 million of -- for provision. Due to the effect of COVID we've witnessed EBITDA was slowed down in the payment of our receivable balance. That's why we -- in an anticipation for more slowdown, we did report this provision, okay?
We now have Sergey Dubin from Harding.
Yes. A couple of questions. The first is just to make sure, I think you noticed in the press release that as of the Q1, there was no -- private labs in Egypt were not performing COVID-related testing, but it's been obviously 2 months since the quarter end. So has there been any movement in terms of the government decision regarding allowing private lab like IDH to start performing these tests? And if so, what kind of -- if you can share some expectations on the volumes and pricing of those? That's the first question. The second has to do with the -- I don't understand the concept of the house calls and how -- is that -- are you basically going and collecting samples from people in their homes? And if so, why won't that lead to higher expenses on portal IDH? And the last question, I know it's still early, but can you share your preliminary expectations for the year? Given what you're seeing currently in May and beginning of June, what are your revenue growth and margin expectations for the year?
So I mean your first question was about the government and the Ministry would allow the testing for COVID-19, is that it?
Yes. That's correct.
Can you hear me?
Yes, I can hear you. I said, that's correct.
So this, I don't know. I mean, till now, they haven't allowed us -- allowed the private sector, the private lab to do the testing for the COVID-19. The CPR testing or the antibody testing for COVID-19. We expect them to change that because they change their strategy and allow the hospital -- the private hospitals to start treating the COVID-19 patients. So we're expecting them to allow the private labs also to do the testing, but they haven't done so yet.Regarding the house calls. So we -- what we do is that because people are nowadays are afraid to go out, afraid to go to hospitals or to go to clinics or to go to see doctors or to go a lab. So then I would say bottom is to patients' houses to collect the samples. And we do this for free, meaning that these are not paid for the house visits, which is around EGP 30. However, they, of course, they pay for the tests. And this actually resulted in more than doubling of the house call revenue. As a percentage of the whole revenue. The third question, you were asking about what we're expecting for the whole year. And it's difficult to really to give you an answer given the asset change which is happening in Egypt, mainly in Egypt and also in other countries. The first lockdown and curfew and with the increased number of COVID patients and the lockdown in Sudan and what's going on in Nigeria and Jordan now is -- things are changing rapidly day after day.And what we're seeing right now is that we're going back to our original figures in terms of revenue compared to last year. But this has only happened for the last week. So we're not -- we cannot really give you a clear guidance for the whole year.If things are controlled that we're going to see probably the same revenue as last year. But this we cannot really guarantee because things are really changing very rapidly.
Okay. And just to clarify, so you said for the house calls, the patient pays additional EGP 30 for IDH staff to go and collect the sample from their home. Is that right? So that cost is usual for you, then it covers your cost, that fee that you charge that covers your cost. So there's no margin impact?
Yes, it covers the cost. There's no margin in the EGP 30, it's very minimal.
Okay. And do you find that most patients that take up this service are the ones that you classified as walk-ins? Or is that corporate contracts that insurance pays for that? Or is it something that they pay out of their pocket?
Actually both. So walk-ins and corporate.
We now have [ Rudolf Dreyer ] from [ Gray Harrow ].
Most of my questions have been answered. I just have one final question and that regards your 2019 dividend.As you've been holding back on that, which we agree was a good decision. I just wanted to get a sense from you whether you are seriously considering not paying that dividend and actually using that capital for something accretive from a capital allocation point of view, be that buybacks, M&A, or something along those lines? Be interested in your thoughts on that.
As previously mentioned, any decision regarding dividends or accretion is postponed till the September till we do have a clear vision about what's going on.So currently, as we mentioned, we don't have a very clear vision about what will happen during the next couple of months. So I think we will be in a much better position during September, and then we would inform the market, what we will do whether dividend or not.
We now have a follow-up question from Karim Abadir from FIM Partners.
Just 2 questions. Just on the home visits, my understanding was that the house visits are being offered complementary by you guys. So you aren't now receiving that EGP 30 anymore. And then my second question is, in Egypt, what would the cost for a COVID test be? And would you guys be allowed to charge a margin over that cost? Or will it be a public service?
Regarding your first question, yes, it offers complementary. It's for free. The house visit itself, so the house visit was an additional EGP 30 on the bill, now it's for free. So this is number one. Number two, of course, there will be -- if we do conduct the COVID-19 tests, there will be a margin, of course.
And how much is the test?
Which one?
The COVID. If you would be a...
There are lots of tests. Whether it's PCR, whether it's rapid test, whether -- there are lots and lots of tests. Currently the government offers the test for more than EGP 2,000 for the PCR test. So if we do conduct it, then there would be a margin here.
We have no further questions registered. [Operator Instructions] We now have a question from Deepak Tolani from 7Summits.
Just a quick question. You mentioned that earlier in the call, in Jordan, the COVID test, is that capped at JOD 55? Was it the number that I caught?
Yes, correct. It's JOD 55, and it's capped by the Jordanian Ministry of Health.
We now have a question from Michel Said from CI Capital.
I just had a follow-up question on the consumer behavior. So have you witnessed any contract change with your clients, any sort of increase in test on the list for corporates? Any expectations you might be having following the end of the COVID-19 that might increase your number of tests per patient, for example?
Yes. So you're asking about the consumer behavior post COVID-19, if we're expecting any change in that?
Yes. But more on the corporate side, the deal you have already with the insurance companies or the bigger entity, either they are requiring now more tests to be done for their employees or for others. So it might be positive for you once the COVID thing is over.
So in the corporate side, we're only seeing an increase in the tests that are related to the COVID-19. This is what we're seeing, yes.
Yes. And correct me if I wrong, you mentioned that this is something you expect to sustain going forward?
As long as there are cases in the country and as long as this pandemic hasn't ended, then we expect to see more of the COVID-19 testing, yes.
And is there any change in the test mix we can expect, which might impact your revenue per test [indiscernible] [ down already ]?
I mean if government also allows to do COVID testing, then we're definitely going to see higher -- more expensive tests and -- because these are more expensive tests, of course, with higher margin.
And excluding the government test, if we just were talking about the tests related to the COVID-19, which you are conduct -- so is this higher pricing than the average that you have?
So ones that we are conducting now, you mean?
Yes.[Audio Gap]
[Operator Instructions] We have had no further questions registered. So I will hand back over to you. Please standby whilst we try and reconnect today's speaker. We now have Hatem back online. Hatem, your line is now open.
Yes. If we don't have any further questions in the queue, I think we can wrap up the call. Thank you, everyone, for dialing in, and thank you for the opportunity, Omar and Nancy, for the call.
Thank you. Thank you very much.
Thank you.
Ladies and gentlemen, this does conclude today's call. Thank you again for joining. You may now disconnect your lines and have a lovely day.