Qalaa reports of 38pc Q3 revenue growth.
The company attributed the earnings to strong growth from energy subsidiaries Taqa Arabia and Tawazon, as well as solid performances at ASEC Holding and Ascom.
On a nine-month basis, Qalaa's top-line recorded EGP 6.87 billion in 2017, up 28.3 per cent y-o-y.
Taqa Arabia continued to benefit from gradual phase-out of energy subsidies and increase in pricing, while solid waste management company Tawazon's results were buoyed by higher demand for alternative fuels. Additionally, Tawazon's newly established Oman-based subsidiary, ENTAG Oman, is delivering solid results having completed works on its first project and with its second award pending government approval.
Qalaa's top-line was also supported by improved performance at ASEC Holding, where a ramp-up in production at Sudan's Al-Takamol Cement along with higher management fees at ASEC Engineering helped drive the cement sector's growth in 3Q17. Additionally, mining platform Ascom continues to reap the rewards of its export competitiveness and the translation of foreign currency proceeds.
"Across our investment portfolio, platform companies are continuously gaining a stronger footing in today's macroeconomic environment, with year-to-date top-line growth delivered at all of Qalaa's subsidiaries," said Qalaa Holdings chairman and founder Ahmed Heikal.
"Our consolidated revenues rose nearly 40 per cent in the third quarter of 2017 and we are working diligently to extract increased operational efficiencies, improve profitability and translate our on-the-ground success into real value for shareholders.
"Our efforts thus far have seen us push forward a growth strategy across our subsidiaries, positioning them for further capitalization on current market dynamics and unlocking their full potential. At Taqa Arabia, we are furthering our reach across the country with three new filling stations added year-to-date and a further six to come online in the near term. Meanwhile, Tawazon's recent venture into Oman is proving successful quarter-on-quarter, with ENTAG Oman making a fast-growing contribution to both revenues and bottom-line," Heikal added.
"We are also building a more comprehensive suite of service offerings by Nile Logistics to strengthen the company's ability to sign and retain new business and fully leverage its competitive advantage."
At the EBITDA level, Qalaa recorded a 182 per cent y-o-y increase to EGP 253.6 million in 3Q17, with growth being largely driven by subsidiaries Tawazon and its Omani operation, ASEC Cement and Ascom.
Qalaa recorded a loss from sale of investment of EGP103.1 million in 3Q17, following Ascom's divestment of its 64.46 per cent stake in Ethiopian mining arm APM Ethiopia to Allied Gold Corp. in July 2017. Meanwhile, losses from discontinued operations narrowed significantly to EGP6.9 million in 3Q17, down from EGP119.0 million in the same period last year.
"Qalaa's push for growth and increased operational efficiency is already bearing fruit and works hand-in-hand with efforts to optimize our portfolio and streamline our investments," said Qalaa Holdings co-founder and managing director Hisham El-Khazindar.
"Profitability down the income statement is gradually improving, with Qalaa delivering gross margin expansion and a nearly threefold year-on-year improvement at the EBITDA level in the third quarter of 2017. We have also significantly narrowed losses from discontinued operations."
"While our bottom-line continues to witness pullback from high interest expenses mostly related to USD-denominated debt booked at the holding level, the effect is short-term, and we anticipate a return to profitability once the Egyptian Refining Company comes online, now 95.7 per cent complete," El-Khazindar added.
Bank interest expense climbed 91 per cent y-o-y to EGP281.6 million in 3Q17, with the float of the Egyptian pound in November 2016 affecting USD-denominated debt booked primarily at the Qalaa Holdings level.
Qalaa recorded a net loss after minority interest of EGP311.7 million in 3Q17 versus a net loss of EGP214.5 million in the same period last year. - TradeArabia News Service
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|Publication:||TradeArabia (Manama, Bahrain)|
|Article Type:||Financial report|
|Date:||Dec 31, 2017|
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