The company recorded revenues of EGP 1,792.9 million in the third quarter of 2016 with the largest contributions coming from the energy (45%) and cement (32%) sectors
Qalaa Holdings, an African leader in energy and infrastructure (CCAP.CA on the Egyptian Exchange, formerly Citadel Capital), released today its consolidated financial results for the third quarter of 2016, reporting revenues of EGP 1,792.9 million (9M16: EGP 5,323.7 million) in the third quarter of 2016 with the largest contributions coming from the energy (45%) and cement (32%) sectors. The company also reported a consolidated net loss after minority interest of EGP 207.6 million (9M16: EGP 737.4 million). The 21% year-on-year improvement in revenues was largely attributable to a 25% increase in TAQA Arabia revenues and 27% increase in ASEC Holding revenues.
Comparative 2015 figures are adjusted to reflect the divestment of ASEC Minya, ASEC Ready Mix, Misr Qena Cement, Rashidi El-Mizan, RIS, Tanmeyah and Mashreq, eliminating the figures of divested companies in addition to figures of investments held for sale starting 1Q16, including Africa Railways. Additionally, ASCOM’s 2016 results were added to Qalaa’s 2015 figures, owing to ASCOM’s income statement consolidation starting 3Q15, for a more accurate comparison of year-on-year results.
“Qalaa’s performance during the third quarter continues to reflect the resilience of its subsidiaries in the face of an increasingly challenging operating environment,” said Qalaa Holdings Chairman and Founder Ahmed Heikal. “Our top-line improvement in 3Q16 was driven primarily by our energy and cement assets, exemplifying the prudence of our strategy to shed non-profitable investments while focusing on our proven winners.”
“Like all businesses operating in Egypt, Qalaa and its portfolio companies will be affected by the recent economic policies rolled out by the Egyptian government. With the long-awaited float of the pound now behind us and as the government continues to make headway in cutting back energy subsidies, we are increasingly optimistic about the direction the economy is headed today,” Heikal added. “We see these critical steps unlocking significant opportunities across the industries in which we operate.”
The float of the pound is set to directly benefit Qalaa’s energy subsidiaries, primarily at the Egyptian Refining Company (ERC), where its USD-denominated revenues – once operational – will lead to a surge in Qalaa’s consolidated financials denominated in EGP. ERC is Qalaa’s US$ 3.7 billion Greenfield petroleum refinery in the Greater Cairo area which has reached overall completion progress of 91% as of September 2016 with all of the heavy/major equipment installed at the construction site.
Energy distribution subsidiary TAQA Arabia will also capitalize on fuel subsidy cuts with higher prices at the pumps pushing margins for the company’s marketing arm. Meanwhile, Qalaa’s mining platforms, ACCM and Glassrock, will benefit from the float as both companies export the bulk of their production, and Nile Logistics will become a more economical alternative for road transport of goods as trucking rates are expected to rise significantly on the back of higher fuel costs.
EBITDA for the quarter came in 32% lower with EGP 85.7 million, down from EGP 125.9 million in 3Q15, on the back of cost increases across the board, a result of the significant devaluation of the EGP and the prevailing inflationary environment drawing raw material and feedstock prices up for Qalaa’s subsidiaries.
The company is implementing cost-cutting strategies and working towards managing foreign currency risk at both the subsidiary and Qalaa Holdings levels.
FX gains came in at EGP 19.9 million in 3Q16, a reversal of last year’s loss of EGP 5.1 million.
Discontinued operations recorded losses of EGP 101.3 million in 3Q16, 83% of which are related to Africa Railways. Net Loss after Minority Interest stood at EGP 207.6 million in 3Q16 (9M16: EGP 737.4 million), compared to the 3Q15 loss of EGP 135.7 million (9M15: EGP 258.8 million).
“Our primary focus over the coming period will be to manage our foreign currency risk particularly with regard to our USD-denominated debt at the Qalaa Holdings level,” said Qalaa Holdings Co-founder and Managing Director Hisham El-Khazindar. “In that regard, Qalaa will continue to push forward with its divestment strategy, with a focus on exiting assets that would generate USD-denominated proceeds to be channeled towards debt repayment at both the holding and platform levels,” El-Khazindar added.
Qalaa Holdings’ full business review for 3Q2016 and the financial statements on which it is based are now available for download on ir.qalaaholdings.com.
Previous Qalaa Holdings press releases on this subject and others may be viewed online from your computer, tablet or mobile device at qalaaholdings.com/newsroom
Qalaa Holdings (CCAP.CA on the Egyptian Stock Exchange) is an African leader in energy and infrastructure. Formerly known as Citadel Capital, Qalaa Holdings controls subsidiaries in industries including Energy, Cement, Transportation & Logistics, and Mining. To learn more, please visit qalaaholdings.com.
Statements contained in this News Release that are not historical facts are based on current expectations, estimates, projections, opinions and beliefs of Qalaa Holdings. Such statements involve known and unknown risks, uncertainties and other factors, and undue reliance should not be placed thereon. Certain information contained herein constitutes “targets” or “forward-looking statements,” which can be identified by the use of forward-looking terminology such as “may,” “will,” “seek,” “should,” “expect,” “anticipate,” “project,” “estimate,” “intend,” “continue” or “believe” or the negatives thereof or other variations thereon or comparable terminology. Actual events or results or the actual performance of Qalaa Holdings may differ materially from those reflected or contemplated in such targets or forward-looking statements. The performance of Qalaa Holdings is subject to risks and uncertainties.
For more information, please contact:
Ms. Ghada Hammouda
CMO & Head of Marketing Communications
Tel: +20 2 2791-4439
Fax: +20 22 791-4448
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