Qalaa reports revenue growth of 22% year-on-year in 1Q17 to EGP 2.1 billion on the back of improved operational performance at energy and mining platforms; Egypt’s new macroeconomic environment continues to reflect positively on Qalaa’s subsidiaries, with the diversity of its portfolio allowing it to reap the rewards across its platform industries

EBITDA climbs 16% year-on-year to EGP 165.7 million in 1Q17, while bottom-line losses record EGP 383.5 driven primarily by discontinued operations.

Qalaa Holdings, a leader in energy and infrastructure (CCAP.CA on the Egyptian Exchange, formerly Citadel Capital), released today its consolidated financial results for the quarter ended 31 March 2017, reporting a 22% y-o-y increase in revenues to EGP 2,114.6 million. Net loss after minority interest for the period posted EGP 383.5 million, with bottom-line profitability weighed down by losses at the company’s discontinued operations, namely Africa Railways and Designopolis, amounting to EGP 225.6 million in 1Q17. Setting aside losses from discontinued operations in 1Q17 and 1Q16, Qalaa’s bottom-line profitability would have shown a marked improvement year-on-year.

Revenue growth in 1Q17 was supported by the new macroeconomic environment in Egypt, with the government’s reform program — energy subsidy phase-out and the float of the Egyptian Pound — reflecting positively on Qalaa’s various platform companies. At TAQA Arabia, revenues climbed 42% y-o-y driven by higher fuel prices and government-set margins on sales of refined products by TAQA’s marketing arm. Higher energy prices have also allowed ASCOM to pass-on price increases for its quarrying services, with the mining platform posting a 51% y-o-y increase in revenues in 1Q17. Meanwhile at the other end of the spectrum, the partial lifting of energy subsidies is driving demand for Tawazon’s biomass and Refuse Derived Fuel (RDF), with revenues from the alternative energy play posting an almost three-fold (178%) increase in 1Q17.

“Half way into the year, Qalaa continues to reap the rewards of Egypt’s new macroeconomic environment, with subsidiaries across its portfolio capturing pent up demand and capitalizing on their increased competitiveness,” said Qalaa Holdings Chairman and Founder Ahmed Heikal. “Growth across industry platforms, primarily at our energy and mining plays, continues to drive Qalaa’s top-line performance with double-digit acceleration at the close of the first quarter of the year.”

“The diversity of our portfolio has positioned us to benefit from the much awaited phase-out of energy subsidies at both sides of the equation. While TAQA Arabia is seeing growth driven by higher fuel and electricity prices, our solid waste management platform Tawazon and river transport subsidiary Nile Logistics are capturing gains driven by increased demand for energy and transportation efficiencies,” Heikal added. “Meanwhile, our exporters and import substitute platforms operating under ASCOM Mining are delivering growth as their products gain price-competitiveness following the float of the Egyptian Pound.”

At the EBITDA level, Qalaa recorded a 16% y-o-y increase in 1Q17 to EGP 165.7 million; again supported by strong performances at the company’s energy and mining subsidiaries. Management notes that EBITDA would have recorded stronger growth in 1Q17 had it not been for a slowdown at the ASEC Holding, with production disruptions at both Al-Takamol and Zahana Cement weighing down the sector’s EBITDA and consequently Qalaa’s consolidated results.

Qalaa recorded impairments of EGP 17.2 million in 1Q17, while provisions for the quarter amounted to EGP 39.5 million, up 52% y-o-y. Provisions were driven-up by EGP 17.2 million booked at TAQA Arabia in relation to doubtful receivables for the company’s clients in the Nabq (Sharm El Sheikh) touristic zone. Additionally, provisions of EGP 20.1 million were recorded by ASEC Holding.

Discontinued operations continued to book losses in 1Q17, posting EGP 225.6 million during the quarter compared to EGP 95.5 million in the same period last year. Higher losses were primarily driven by weak performance at Africa Railways, with the railway operator recording a loss of EGP 209.5 million in 1Q17. Meanwhile Mena Home’s Designopolis contributed EGP 16 million to losses from discontinued operations in 1Q17.

Net loss after minority interest came in at EGP 383.5 million in 1Q17, compared to the EGP 281.7 million booked in the same period last year.

“We continue to push forward with our strategy of restructuring our business at both the holding and platform company levels,” said Qalaa Holdings Co-Founder and Managing Director Hisham El-Khazindar. “While our energy, transportation and mining plays are already finding solid footings within the new economic realities, we are also pushing ahead with restructuring efforts at other platforms including our agrifoods subsidiary Dina Farms. New management and processes are already bearing fruit with increased operational efficiencies and an upward trend in Dina Farms’ bottom-line profitability,” El-Khazindar added.

“Management’s ultimate goal is to continue streamlining and reshaping our investments in a manner that allows us to maximize value from the prevailing macro trends. Our efforts are already bearing fruit with core platforms delivering a steady improvement in financial and operational results, and with Qalaa on a steady course to deliver sustainable profitability at the consolidated level by 2018,” El-Khazindar concluded.

Qalaa Holdings’ full business review for 1Q2017 and the financial statements on which it is based are now available for download on


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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

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