Integrated Diagnostics Holdings PLC
LSE:IDHC
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Integrated Diagnostics Holdings PLC
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Hello, everyone. This is Hatem Alaa from EFG Hermes, and welcome to Integrated Diagnostics Holdings' First Quarter 2022 Results Conference Call.
I'm pleased to have on the call today from IDH, Dr. Hend El Sherbini, the company's CEO; Omar Bedewy, CFO; and Nancy Fahmy, Investor Relations Director.
We'll start by a presentation from management, and then we'll open the floor for Q&A. [Operator Instructions] Dr. Hend, Please go ahead.
Thank you, Hatem. Good afternoon, ladies and gentlemen, and thank you for joining our first quarter of 2022 analyst call. I'm Dr. Hend El Sherbini, Chief Executive Officer of IDH. And with me today are Omar Bedewy, our CFO; and Nancy Fahmy, our Director of Investor Relations.
I will begin today's presentation with a quick review of the key financial and operational highlights for the first 3 months of the year, and will then discuss key strategic developments across our geographies. I will conclude my presentation by outlining our strategy for the remainder of 2022 and provide some guidance for our business performance in the coming quarters.
I will then hand the call over to Omar, who will run you through our consolidated financials in more details, and we'll end the call with your questions.
Ladies and gentlemen, I am very happy with IDH start to 2022 which saw us deliver an impressive set of results and set the pace for another successful year. During the first 3 months of the year, we continued to drive steady growth in our conventional business which is now growing at a healthy pace, in line with our long-term targets.
In parallel, we continued to honor our promise to our communities and effectively catered to the needs of COVID-19 patients in both Egypt and Jordan, as both countries tackled a new wave of infection during January and February.
Looking at our results in more detail. During the quarter, we recorded net sales of excess of EGP 1.1 billion, largely unchanged from last year's first quarter. The remarkable performance was primarily supported by the steady growth of our conventional business, which offset a decline in COVID-19 related revenues during the period.
In fact, during the quarter, our conventional net sales expanded a solid 8% versus last year, supported by a 5% increase in conventional test performance. Here, it is worth highlighting that growth in conventional tests performed for the quarter reached out pre-pandemic averages, further evidence of the full recovery in demand for our core services from the lows recorded in 2020.
In parallel, we continue to attract a growing number of patients to our network, and in the first quarter of the year, we served 12% more patients than in the comparable 3 months of last year. Solid growth in our conventional business outweighed an 11% year-on-year decline in COVID-19 related revenue. The drop which saw the service make just a 43% contribution to total net sales, working primarily -- which came primarily on the back of a fall in the average price per COVID-19 related test versus last year.
Meanwhile, on the volume front, we recorded a marginal 2% year-on-year fall in total COVID-19 related test performance. Demand for the service varied greatly throughout the quarter. In both Egypt and Jordan, patient demand remained high in January and February, owing to a new wave of infection in Egypt and the strict mandatory testing protocols in place for international passengers in Jordan.
As we moved into March, demand declined significantly across both countries as the infection rates declined, and industry testing protocols were lifted. It's worth noting that across both geographies, infection rates and demands for testing have remained low during April and May, in line with trends witnessed across many countries around the world.
Further down the income statement, despite year-on-year contraction in gross EBITDA and net profits, in absolute terms, we were able to deliver solid margins across the board. More specifically, gross profit and EBITDA margins on net sales for the 3-month period recorded 48% and 42%, respectively, both standing in line with the group's historical averages.
Meanwhile, net profit margin on net sales recorded a strong 28%, well above our pre-COVID averages, and just 2 percentage points below last year's figures.
We are also delighted to announce that during our Annual General Meeting held yesterday in London, shareholders approved the distribution of a record-breaking dividend of GBP 1.3 billion in aggregate, in respect of the financial year ended 31st of December, 2021.
As of yesterday's dollar to pound exchange rate, this is equivalent to $69.8 million, representing a substantial increase from last year's $29.1 million dividend. Our ability to reward shareholders even in the midst of such difficult times, demonstrates our business' strong cash-generating abilities and our unwavering confidence in its future growth potential, and the solid fundamentals of our industry.
Looking at our geographies in more detail across both Egypt and Jordan, our convention business continued to grow steadily, with net sales expanding 8% and 4% year-on-year respectively. In Egypt, this was supported by a solid drives in conventional tests performed, as we continue to leverage our growing footprint and visibility, and expanded service offering to capture a leading share of demand.
This enabled us to successfully offset a fall in COVID-19 related revenues, which came largely on the back of lower prices for the service.
Meanwhile, in Jordan, COVID-19 related revenues continued growing, coming in 20% above last year's figure, in part boosted by our multiple revenue sharing agreement to perform PCR testing for international passengers.
Combined with the steady growth of our conventional offering in the country, this so Biolab reported a solid increase in net sales, contributing to a record share of consolidated net sales for the quarter.
In Nigeria, Echo-Lab top line continued to report year-on-year growth. We were particularly happy to note the growing demand for Echo-Lab's radiology offering, with both MRI and CT exams reporting rising patient interest.
Finally, in Sudan, the sharp devaluation of the Sudanese pound in February 2021 continued to impact our residents. However, thanks to management efforts to raise prices in pace with inflation, revenue in local currency terms expanded 149% year-on-year.
During the quarter, in an effort to further optimize our Sudanese operations, we have to shut down 2 underperforming branches, taking the number of operational branches in the country to 17. It is also worth mentioning that despite the challenging operating environment and heightened uncertainty faced in the country, operations across all other branches are continuing without major interruptions.
Before handling the call to Omar -- handing the call to Omar, I would like to take this opportunity to highlight some of the key developments I'm most looking forward to -- for the coming months, update you on how we are effectively mitigating the current challenges faced, and discuss our updated guidance for the year.
We had entered 2022 with a clear and ambitious strategy aimed at driving new, sustainable growth across our operations and guarantee continued value creation as we transition in a post COVID-19 reality.
At the 3-months mark, I'm very pleased with the progress made across all fronts, in particular in both Egypt and Jordan. Across both countries, our focus is shifting towards capitalizing on the post COVID-19 rebound in conventional testing, while actively working to maintain the new relationships we were able to establish during the pandemic, thanks to our COVID-9-dedicated offering.
To deliver on this, we have recently launched a new, dedicated loyalty program, rolled out multiple marketing campaigns, and began making more effective use of the large pool of patient data at our disposal to provide increasingly tailored services and boost cross-selling.
We're also looking to leverage our popular house call service to continue driving growth across both markets. The service, which generated 18% of our total net sales for the quarter, was ramped up significantly over the past 2 years in response to heightened demand, and continues to represent an important driver for future growth of IDH.
Our house call service's convenient offering represents an increasingly attractive alternative for patients, looking to access our services from the comfort of their homes. This is not only enabling us to sell more test per patient than our -- at our -- than at our traditional branches, but has also seen us penetrate new segments of the population and develop long-term relationships with a broader patient base. At the same time, we are expanding our branch network, having rolled out an additional 20 branches in Egypt during the first 3 months of the year.
It's also important to highlight the continued success of our radiology venture, Al-Borg Scan, which recorded an 89% year-on-year increase in revenues during the first quarter of the year. The venture success has been the direct result of new branch rollouts over the past year. More specifically, between September 2021 and March 2022, we inaugurated 3 new branches, taking the total to 5. We plan to roll out an additional 2 in the coming months to capitalize on the service growing popularity.
Elsewhere across our footprint, we are diligently working to turn Echo-Lab EBITDA positive later in 2022, despite the current challenges we are facing related to FX and rising fuel prices. We're also looking forward to receiving the remaining regulatory approvals to finalize our partnership with IDC in Pakistan.
Looking ahead, we remain committed to delivering exceptional value to our patients, shareholders and wider communities, and drive solid growth across our business. We are without a doubt faced with difficult operating conditions stemming from the economic spillovers of the pandemic, the ongoing Russia-Ukraine war, coupled with rising inflation and the recent devaluation of the Egyptian pound.
Despite this, we are confident that our proven track record in navigating similar turbulent times and the strong mitigation frameworks we have in place, provide abundant protection across our operations.
Here, it is worth highlighting, thanks to our proactive inventory buildup and sourcing strategy. We are facing no issues in securing raw material, and continue to bold sufficient inventories to cover 3 months of operations in line with our standard operating policies. Moreover, our stock until the 30th of June, 2022, has been secured at pre-devaluation rates, helping us limit the impact of higher prices on our cost base.
Going forward, we will continue to leverage our long-lasting relationships with test kit providers to secure additional stock at competitive prices, shielding our business from the impacts of rising inflation and the Egyptian pound devaluation.
In recent weeks, following the expected slowdown related to the holy month of Ramadan and the Eid holiday, we have witnessed a steady acceleration of patient traffic across our branch network. We expect this rapid normalization of patient flow to support a further acceleration of growth at our conventional business, further boosting our optimism for the remainder of 2022.
In light of this, we are revising upward our full year guidance, with the company now on track to deliver conventional revenue, year-on-year growth of at least 18% to 20%. These revised estimates which assume no additional contribution from our COVID-19 related offering, further highlight our confidence in the business potential going forward.
I will now hand over the call to Omar, who will dive deeper into our results, after which, we'll open the floor to your questions. Thank you.
Thank you, Dr. Hend. Good afternoon --
Omar, we can hear you.
Thank you, Doctor.
You are breaking.
Hi, can you hear me now?
Now I can hear you, yes.
Okay. Good afternoon, ladies and gentlemen. During today's presentation, I'll shed light on the company's financial results for the first quarter of 2022, our forecast for the full year and some updates on IDC transaction.
As we did in Q4 2021, we opted to present an alternative performance measures for Biolab revenue sharing agreement in Queen Alia and Aqaba Port. As you might remember from Q4 results, Biolab receives the full revenue for each test performed and pays a proportion to QAIA and Aqaba Port as concession fees to operate in the facilities. And as per the IFRS 15, Biolab is considered the principle in this relationship and records the full amount received as revenue.
The difference between the 2 treatments is EGP 63 million, and under IFRS, it is recorded on both top line and COGS. So not to inflate those 2 figures, we choose to present it in a net format and called it net sales, noting that this adjustment has no impact whatsoever on gross profit, EBITDA and net profit absolute numbers. And from our point of view, it gives a better indication of the company's performance.
Lastly, it's worth mentioning that on the 1st of March, the Jordanian government decided to stop mandatory PCR testing at the ports.
Let's jump now to Q1 results. IDH posted a net sales figure of EGP 1.1 billion, which is more or less at par with the same period last year, out of which conventional tests generated EGP 640 million with an average growth of 8% compared to Q1 2021 and 24% above the pre-COVID era of 2019.
COVID test generated EGP 477 million with an 11% decrease compared to Q1 last year. And raw materials as percentage of revenues jumped from 19% to 23%, which pushed down the contribution margin by around 4%. And this -- the main reason behind this is the continuous reduction of the COVID test price, especially PCRs, throughout the previous period.
COVID test average price during Q1 this year reached EGP 750, down from EGP 1,500 during Q1 last year. This price reduction as well as the main reason behind the decrease in the average -- in the blended average revenue per test during Q1 compared to Q1 last year.
And I would like to highlight as well that despite the recent turbulence in the supply chain markets all over the world, we have succeeded to maintain conventional test margin at the 80% level -- 83% level, which is in line with the same margin of Q1 last year.
It's important to note that conventional revenues is ramping up quickly and its contribution to net sales reached 57% in Q1 2022 compared to 53% during the same period last year. And as you can see from the graphs, in Egypt, conventional sales grew from EGP 507 million in Q1 last year, moving to EGP 513 million in Q4 and reaching EGP 549 million in Q1, 2022.
And since this slide addresses the contribution margin, there is a couple of notes that I want to add about raw material before moving on. First, the current inventory level cover -- covers our needs till the end of August.
Second, despite the recent devaluation of the Egyptian pound, we have managed to secure kits with the same pre-deval prices, keeping our margins stable for Q2 as well. We expect to witness some increases in our raw material prices during Q3, which will be in the vicinity of 12% to 14% on an annual basis, which might reduce our contribution margin by 1% for the whole year.
Moving now to gross profit. So gross profit reached EGP 532 million of the 40% margin compared to 57% last year. So besides the decrease in the contribution margin by around 4%, which we have showed in the previous slide, we have witnessed an increase in wages and salaries, driven by the temporary employees associated with Biolab contracts with QAIA, King Hussein and Aqaba Ports, along with the annual merit increases across the group and the salaries associated with the opening of new branches.
There are some additional costs associated with Biolab ports' contracts recorded in the other expenses line, such as swabbing, service cost and transportation. Other expenses include as well an uptick in repair and maintenance to adhere to the higher health and safety standards.
Next slide. This slide shows a bridge all the way from net sales to EBITDA during Q1 this year and its comparative figures for last year, where we record an EBITDA figure of EGP 468 million was 42% margin, which is in line with our pre-Corona margin level.
If we compare the margin with the same period last year, we will find a decrease of around 11%, 8% of which was trickled down from the gross profit margin in addition to the increase in market spending related to Al-Borg Scan campaign and New Year promotional items, along with other admin expenses related to audit fees and the upgrade of our call center.
This slide illustrates a bridge from EBITDA to the consolidated net profit, where the bottom line reached EGP 314 million with a margin of 28%. We have succeeded to generate an interest income of EGP 45 million, which is more than double of loss year figure, thanks to our strong cash balance and the cash allocation to T-bills. The allocation to T-bills has positively affected the effective tax rate, reaching 33% compared to 35% during the same period last year.
During Q1 2022, interest expense reached EGP 33 million compared to EGP 21 million in Q1 last year. The reason behind the increase is mainly attributable to the interest expenses on new leased equipment, along with the bank charges associated with credit card payment mainly in Jordan.
Moving to Al-Borg Scan. We are currently operating 5 branches, covering Cairo from East to West. 2 of those branches were opened during Q4, 2021, and one opened in Q1 this year. As you can see, the monthly ramp-up is quite solid as we add new branches and as the brand equity of Al-Borg Scan get stronger.
Al-Borg Scan top line increased by almost 90% on a year-on-year basis with more than 30,000 cases conducted during the year with a 94% increase compared to Q1, 2021. By the end of this year, Al-Borg Scan contribution to the consolidated top line is expected to reach around 2.5% to 3% from its current level of 1.5%. To-date, the Al-Borg's Scan investment cost reached EGP 294 million with around EGP 85 million financed through a medium-term loan, and we plan -- we're planning to open at least 2 additional branches during H2 this year.
As for our operation in Nigeria, in Nigerian naira, the top line witnessed a double-digit growth of around 23%, thanks to the growth in MRI and CT tests. The growth came despite the closure of 2 loss-making branches in Q4, 2021, which we plan to replace with 2 new branches which are expected to open within Q3 this year with a total investment cost of NGN 100 million.
We have faced some bumps on the cost level, driven by the significant increase in inflation, along with soaring diesel prices, which put downward pressure on the margins. We anticipate that margin will normalize as we move -- moving forward, once the economy stabilizes.
As for the balance sheet, during the year 2021, IDH CapEx during the first quarter of this year reached EGP 122 million, representing about 11% of net sales. If we exclude the translation effect resulted from the devaluation of the Egyptian pound, CapEx as a percentage of net sales would have reached 6%, which is in line with our normal guidance.
IDH consolidated cash balance stood at EGP 2.7 billion, and net cash balance reached EGP 1.7 billion after considering the medium-term loan balances from AUBE and CIB, together amounting to EGP 102 million, along with the other liabilities related to equipment lease and IFRS 16. I would like to highlight as well that the CIB loan was fully repaid in April this year.
As previously communicated, we will distribute EGP 1.3 billion to our shareholders, and the final dividend amount in U.S. dollar will be at a rate of around $18.66.
Our receivable days reached 115 days with a slight increase compared to year-end 2021, which is mainly due to Biolab agreements with various airlines characterized by a relatively higher credit period.
On the inventory level, management decided to accumulate inventory in order to overcome any delays resulting from the global supply chain issue. That's why the inventory days increased from 61 days at year-end last year to 87 days at the end of Q1, 2022.
On the payable side, DPO reached 107 days as at the 31st of March from 93 days as at 31st of December 2021. The increase was mainly related to lower COVID-related kits consumption, coupled with the negotiation of extended payment terms with the group test kits suppliers.
I would like to reiterate what Dr. Hend has mentioned. We're seeing an encouraging trend in conventional testing ramping up, as pandemic seems to have been drawing to a close. We're now guiding for at least 18% to 20% conventional revenue growth over 2021 levels, which is higher than previous periods and previous guidance.
And despite the recent challenges, we as IDH, we're working hard on delivering positive EBITDA for our Nigerian venture, as we will soon open 2 additional branches which we expect to fuel up Echo-Lab top line.
I'd like to add as well that the vision related to additional PCR test is a bit obscure. So we're not factoring it in our estimation for the year, especially with the additional reduction in pricing, along with the ease of regulations in all countries.
Before I conclude, I would like to talk a bit about IDC transaction in Pakistan, as we have received several calls from concerned investors asking about the political issues that happened there over the past couple of months. And I'll address the concern from a macro and a micro perspective.
From the macro level, we're fully aware of the political issues in Pakistan, and we're closely monitoring the situation there. And we do have bi-weekly calls with management and Pakistani officials. Things seem to be calming down. And by the way, the country is kind of used to this kind of impasse. At the end of the day, Pakistan is a big country with lucrative and exceptional growth.
Most importantly, on the company-specific level, over the past 12 months, IDC has consistently delivered growth on both the top line and the EBITDA levels, and has been able to surpass previous currency depreciation with its above average market growth, driven by the continuous increase of its market share, along with its ability to pass on cost to end customers, in addition to the management ability on reducing costs, given its special relationship with the suppliers.
I would like to stress and assure you that the final valuation is based on EBITDA multiple in PKR terms, which is translated to U.S. dollar at the spot rate at the time of closing, which is based on a preset color with the [ sale ].
Noting that at closing, a true-up exercise will be conducted by the due diligence team on latest account, to determine the closing consideration. We are really looking forward to finalizing and closing this transaction at the soonest, once we have the approval of the State Bank of Pakistan.
The floor is open to your questions.
[Operator Instructions] We'll take the first question from the line of Belal Sabbah from Jadwa.
I have 2 questions actually. I'll start with the first one. Could you give us a bit of feedback on the growth in revenue per conventional test? I see the growth year-over-year was 2% and I was expecting to see a 5% to 10% range increase, in line with your annual increase in pricing. So if you could just highlight, has there been the usual increase or am I reading the number incorrectly?
Yes. You're asking about the conventional testing growth? Yes, it amounted to 2%. But as we mentioned previously, we have increased our prices with the customary 10% walk-in and the 5% to 7% corporate increases. So that has as communicated before has been the case. However, if you look at the patient segmentation for this quarter in specific, you'll find that the growth has been skewed more to the corporate segment rather than the walk-in segment. And that's why you see it -- you see the price increase or the revenue per test increase lower than the blend.
And you mentioned that starting from the third quarter, we would start to see the impact of the devaluation and having to source testing kits at the new FX rates essentially. Could we expect that at that time, you could go for another round of increasing prices, maybe in line with the devaluation of the pound?
So, correct, we have seen -- we will see some sort of increases in -- starting Q3 this year of around 12% to 14% on a year-on-year basis, which will affect our contribution margin for the whole year by 1%. Having said that, we do not expect any price increase. We will not do any price increase throughout this year.
We'll take the next question from the line of [indiscernible]
Just a couple of questions. I actually sent them on the chat, but I'm not sure if they were received. Yesterday at the Annual General Meeting, there was a couple of special resolutions that were passed, specifically to allot 120 million shares of the company on a non-preemptive basis and to purchase 60 million shares of the company. I'm not sure if I'm reading that right. Can you please explain and just provide some clarity on that?
Sure. Thank you, [indiscernible]. These are standard resolutions that we have always included in our AGM resolution. So if you look at our AGM resolution since the time of our listing back in 2015, these are kind of standard resolutions that are always put there concerning equity issuance or buyback issuance. It's all being standard just to take shareholder approval for. However, it does not necessitate or it does not mean that we are pursuing an equity increase in the short term, for instance. It's just a standard resolution. And if the company ever opts to have a special equity issuance, it has to call for an extraordinary general assembly meeting. So these are the standard. It doesn't mean that we're pursuing something in the short term.
So if I understand, it's a just in case, just in case you want to issue in, just in case...
Just in case. Exactly. In simple terms, they were just in case. It's been put there every year, and they expire at the end of the year. So that's why they need to be renewed at every AGM of every year.
And then my last question is about -- I know you've said this in previous calls, but if you could -- if an update it would be quite [Technical difficulty] consolidating after potentially consolidating IDC, what would be the impact on top line and earnings, if you can give that guidance?
It's very early to comment on the time of consolidation. But yes, but if you remember when we issued the press release regarding that acquisition, we mentioned that this target hovered around 15% of revenue and EBITDA at the time of the disclosure of that. But you know the numbers change on a monthly basis. But roughly, that was the contribution. That was based on LTM basis for both IDC and IDH.
But again, let me assure you, as I mentioned in my remarks, that there is a continuous growth in IDC's top line figure, and especially on the conventional level. So -- and let me give you some updates on the numbers that -- for the 10-month period ending 2022, as you know, the financial year for IDC starts in the 1st of July and end of June. So we -- they have witnessed an increase in the conventional tests by around 36% for the 10-month period ending 2022 compared to the 10-month period in 2021, an increase of around 36%. And for COVID test, it was around 13%. So there is an increase -- continuous increase in their top line.
We will take a question from the chat, from [indiscernible], FIM Partners.
Are you impacted by the recent increase in customs U.S. dollar rate from EGP 17 to 18.64?
Customs -- yes, the dollar rate?
Yes, dollar rate.
So till now, we have -- no, we didn't witness any increase in our raw material prices. And as I said, that our raw material, currently as we speak, covers us till end of August. In addition to that our raw material -- our negotiation with our suppliers kept our prices intact until the end of June this year.
[Operator Instructions] We'll take the next question from the line of [ Neil Cooper ].
Congratulations again on very good operational results, as expected. My concern more is on the capital allocation side. You have said that you have now got the approval for the $69.8 million roughly to paid out. And as I have registered before, I think the money could have been better allocated by buying back the shares at the current price. So have you, for example, done a comparison of -- on a like-for-like basis, of buying Islamabad Diagnostic versus buying Integrated Diagnostic shares, so stripping out COVID and stripping out the debts from the IFC. Have you done that comparison? Has the Board considered that?
I think those are 2 different buckets. This is on a position for future growth for IDH. And this is what we're doing on a daily basis, actually looking for acquisitions in the region for future growth. So I think those are 2 different buckets. Considering a buyback, yes, it is on the table given the current price of the share. But we -- we're not comparing buying back IDH with letting go the position of IDC.
[ Neil ], we think it's -- these 2 are not mutually exclusive. I mean we are considering buyback as we discussed with you yesterday. And at the same time, IDC is a great opportunity for growth for IDH. It's a company that is growing in both radiology and pathology in a very big country, and we think it's a good potential for growth for us.
Please don't misunderstand me. I agree they are not mutually exclusive. I'm not suggesting that you should not do the Islamabad Diagnostic. I think that, that seems a good thing. But I think that it will be illustrative to you and for your Board to understand if you did an apples-to-apples comparison -- and I don't know the full numbers, but I think that actually at the current price, Integrated Diagnostics would be a good buy relative to Islamabad Diagnostic. You were still making an acquisition. It's just in your own check.
Yes.
So I just think the Board should be looking at that and considering that. And clearly, there's less risk in buying your own shares. So I'm not saying you shouldn't do the Islamabad Diagnostic. But what I am saying is the $69 million would have been better allocated to doing that transaction. I mean the Board should have a view that currently presumably, you think the business is undervalued. So -- and before you said liquidity, and I'm not sure what you mean by liquidity.
Yes. That was the concern that we had before, Neil, because we didn't want to dampen the liquidity of the shares because...
But what do you mean by liquidity? Do you mean more shares?
No. When the company, let's say buys out 5% or 10% out of the float of the market, you technically reduce the number of shares available for public, right, or for people to trade...
Sure, but that is not -- sure. I understand that, Nancy, but that is not significant compared -- for example, you've done a share split of 4 to 1. So I just don't -- I don't think that, that liquidity argument holds -- it just doesn't. And fundamentally, if your -- if you think your shares in your business are undervalued and you have the cash, it seems -- to put this another way, the dividend is now EGP 69 million.
Yes.
That is -- will not be sustainable into 2023. So in 2023, you will be telling the market that we are now paying EGP 33 million in dividend or whatever. And the market will see the drop from EGP 69 million, it's just disappointing...
No, but the payout has been the same, Neil. Like I mean, if you look at the payout -- it's like dividend at the end of the day is subject to 2 things. It's the payout ratio, which has been actually very steady about at 89% to 90%, so -- and depends on the operation. So everybody knows that 2021 was a record-breaking year, and that's why it encouraged us to pay our shareholders an extraordinary dividend in line with this performance. But our payout has been always the same, like 89% to 90%.
I understand on the payout ratio, but it's not being described as a special dividend. And you say everybody knows that this has happened, and the share price hasn't materially reflecting that. So again, that would be an opportunity to buy back your shares.
Yes. But we can always debate how share price performs, right? Like we're really in a difficult times, right, like with war breaking out at the beginning of the year, with FX issues, with inflation. So that all adds to the challenges and pressured the stock, which is very common, and we've seen it in all indices and all stocks around the world.
So it's just a very specific time that I think all equity markets are suffering from. But as you rightfully mentioned, we are considering a buyback. As you see, we take shareholder approval in every annual general assembly meeting. So the approval is there. And as Omar noted, it is on the table. We are internally considering it, of course, and studying all the circumstances related to it. Does that address your question, [ Neil ]?
No, it doesn't. I hear what you're saying, but fundamentally, if the market is not recognizing the value of the business, regardless, but you've made the decision before -- regardless if the market is not recognizing the value, then I think the Board should be looking at buying back your own shares. And I think that, in turn, that actually would help your -- the perception in the market.
Yes, this is something we -- no, we have confirmed that the Board is looking into buybacks. So this has been confirmed from our side. The market part is debatable. I mean, just go on Bloomberg and check what happened in all equity markets. It's been a very, very difficult...
Sure. I'm familiar. I'm aware of that. But that's why I suggest you could do the comparison with Islamabad Diagnostic, but you haven't done that comparison. So you're making a decision when you've done -- you haven't...
By the way, [ Neil ]...
Go on.
But just to tell you that, as Omar noted, also the IDC transaction is -- also the final price is final to a closure at the time of transaction. We still have 4 months. So it's all -- every -- all the parts that we're talking about are moving parts. We're just doing what's best for the company, best for shareholders.
Best for company is knowing what the best thing is. If you are buying on -- stripping out COVID, stripping out the debt from IFC on a comparable basis, if you are buying, let's say, Islamabad at 7x earnings, I don't know if that's true or not. And you could buy Integrated Diagnostics at the same amount. Yes to the Islamabad Diagnostic, but also to your own acquisition. It sounds like you haven't done the numbers, and it sounds like the Board, therefore, hasn't properly considered it.
[ Neil ] let me tell you something. Distributing the $69 million is not a hurdle for us to buy back shares. So again, I think you have a perception that we'll be distributing $69 million for shareholders, which might take us back from buying back shares. The answer is no.
Okay.
Is that okay? Fine.
Okay. I'm fine. I hadn't appreciated that. That is -- okay, fine.
Yes. Did this answer your question?
It remains to be seen.
Okay, fine. Good. So let's see what happens.
We'll take the next question from the chat.
[indiscernible] is asking, can you please elaborate on the price increase in the walk-in and corporate segments going forward in terms of percentage increase, it's magnitude and if the price increases are going to impact the conventional testing volume?
Sorry, just to make sure we got the question right. You're asking about our strategy and price increases going forward for walk-in and corporates, right?
Yes. The question is, I think you mentioned that this year, you're not going to do any more. So I think every year, what's the strategy for walk-in or corporate?
Yes, the strategy has not -- the strategy has been the same for the past few years, and it's going to remain going forward. That we increased prices for walk-in patients in line with the current inflation level. So it's usually a price increase backed by inflation usually. It has been typically around the 10% mark. And for corporate, it has been typically between the 5% to 7% mark, of course, depending on the corporates and how big they are and our relationship with them.
[Operator Instructions] There seem to be no more questions at this stage. I'll hand it over to management for any concluding remarks.
Thank you, Hatem. I guess since there are no further questions that concludes our call. Thank you all for participating, and we're always happy to get any queries over phone or over e-mail. Thank you all. Bye-bye.
Thank you, everyone. This concludes today's call. Have a good rest of the day.