Ibnsina Pharma (EGX: ISPH) reported net profit after minority interest of EGP 511,299,061 for the six months to 30 June 2026, up 31.5% from EGP 388,807,358 a year earlier, on gross revenues of EGP 43.2 billion. The distributor released its audited results in Cairo on 12 August 2026.

Net revenue rose 18.4% to EGP 41,492,005,562 from EGP 35,045,259,048. Gross profit was EGP 3,332,749,479, up 9.3%, and the gross profit margin fell to 8.0% from 8.7%. In the second quarter alone net revenue rose 16.6% to EGP 20,991,071,720 and net profit after minority rose 23.4% to EGP 255,363,070.

Costs ate the operating line

The profit growth did not come from operations. EBITDA fell 3.1% to EGP 1,737,883,491 from EGP 1,794,192,706, and the EBITDA margin narrowed to 4.2% from 5.1%. Operating expenses rose 32.4% to EGP 1,494,151,628, lifting the cost to sales ratio to 3.6% from 3.2%. The company attributes that increase to salary adjustments made in response to inflationary pressures and to compliance with social insurance and minimum wage laws, and describes it as a one-time hike that is not expected to recur next year.

What replaced operating leverage was cheaper debt. Interest expense for the half was EGP 1 billion, down 23% from EGP 1.3 billion, which the company links to interest rate cuts implemented during 2025 and the 1% reduction announced in February 2026. The interest expense to sales ratio fell to 2.4% from 3.7%. The debt ratio was 22.8%, down from the peak of 26.2% reached in the second quarter of 2025 after the drug repricing process. Trailing twelve month net debt to EBITDA was 2.15x against 2.21x, and net debt to equity was 2.62x against 3.0x. The company says the monetisation of assets worth EGP 1.2 billion in 2025 was an important pillar of the deleveraging.

Working capital moved the other way. The cash conversion cycle lengthened to 15.2 days from 13.5 days, with inventory days at 42.9 against 38.3, receivables at 94.5 against 90.0 and payables at 122.2 against 114.8. Ibnsina says it raised inventory deliberately as a mitigation plan amid heightened Middle East tensions that could affect the flow of imported items and raw materials.

Market position and the operating base

Citing IQVIA, the company put Egypt’s total pharmaceutical market at EGP 214 billion in the first half against 187 billion a year earlier, growth of 14.4%, with average selling prices up 18.7% and units sold down 3.6% to 1,700 million. Its own total market share was 29.1%, a figure adjusted to include the Ezaby Group after IQVIA began classifying that group as a distributor when it buys from Ibnsina to supply its branches. In non-pharmaceutical products sold in pharmacies the company says IQVIA reports put it first with a 33% share.

Retail pharmacies generated 53.0% of gross revenue at EGP 22.9 billion, up 25.1%. Wholesale contributed 27.9% at EGP 12 billion, up 0.7%. Tenders and private hospitals rose 29.5% to EGP 7.9 billion, and third party logistics and other activities rose 89.4% to EGP 336.6 million. Non-pharma distribution reached EGP 3.3 billion against EGP 1.9 billion, growth of 66%.

Ibnsina served 52,736 clients from 72 sites, with revenue per site up 18.4% to EGP 576.3 million. The delivery fleet stood at 1,154 vehicles against 1,024, and headcount rose to 10,081 from 9,528 after the addition of 823 staff. Capital expenditure was EGP 579 million against EGP 120 million a year earlier, of which EGP 430 million went to distribution centres, EGP 58.5 million to technology projects, EGP 57.6 million to vehicles and EGP 23.5 million to upgrades. Warehouse capacity is being scaled from 88k pallet positions in 2025 to 157k by year-end 2026.

Analysis: a profit line rebuilt below the operating line

The 31.5% profit increase and the 3.1% EBITDA decline describe the same business. Everything between them is financing and cost structure, not trading. Revenue grew 18.4%, gross profit grew 9.3%, operating expenses grew 32.4%, and the gap was closed by an interest bill that fell 23%. That is a rate-cycle result: on the figures disclosed, the same operating performance carried alongside a flat interest bill would produce a different bottom line.

The margin story is a mix story and the company says so. Gross margin fell from 8.7% to 8.0% because of a higher contribution from hospitals and non-pharma segments, where products are not eligible for the fixed retail margin. Those are the two fastest growing lines, at 29.5% and 66% respectively. So growth in those segments reduces the reported group gross margin, because the fixed retail margin on pharmacy sales is the highest margin the company discloses. Management guidance for 2026 gross margin is 8.2%, above the 8.0% just reported.

Comparison with the first quarter sharpens the picture rather than confirming it. At 31 March 2026 the debt ratio was 16.6% and trailing twelve month net debt to EBITDA was 1.4x; at 30 June both are higher, at 22.8% and 2.15x. First quarter net profit was EGP 255,936,082, essentially the same as the EGP 255,363,070 booked in the second quarter, so the half year growth rate is not accelerating. The first quarter also carried positive operating cash flow of EGP 477 million, a line the half year release does not repeat.

What the disclosure does not establish is the durability of the interest saving or the size of the warehouse programme’s cost. Capital expenditure has already risen from EGP 120 million to EGP 579 million year on year, most of it on distribution centres, and the pallet capacity target nearly doubles by year end. Neither the release nor the market data explains how the two new subsidiaries approved by the board, one for non-pharmaceutical distribution and trade and one for medical promotion, consulting, marketing and advertising, will be capitalised. Those are the items to look for in the third quarter release.

Company background

Ibnsina Pharma trades as ISPH.CA on the Egyptian Exchange in the health care and pharmaceuticals sector, with 1,008,000,000 listed shares, a par value of 0.25 EGP per share and issued and paid-up capital of 252,000,000 EGP. It was listed on 8 / 11 / 2017. The business was established in 2001 as Ibnsina Laborex Pharma by Egyptian investors with the French Eurapharma Group; Egyptian partners acquired 100% of the shares in 2006, and the European Bank for Reconstruction and Development took a 21% stake in 2015 before the initial public offering.