Report
Mohammad Kamal
EUR 29.66 For Business Accounts Only

ARCC EY Q1 17A results: Earnings rise 75% off a weak base, despite early signs of margin erosion due to FX-linked cost growth. Maintain Buy


  • Arabian Cement Egypt sees Q1 top line growth of 24% y/y on a 17% strengthening in implied retail cement prices, coupled with 6% growth in volumes
  • COGS rise 46% y/y delivering a sharp​ 1,218bps GPM compression vs. Q1 16A, primarily due to ballooning fuel costs, post-deval
  • We maintain our Buy rating on ARCC in place as the stock trades at average 72% and 52% discounts to replacement cost (on EV/ton) and local peers (FY 17-18e P/E) respectively


Provider
Arqaam Capital
Arqaam Capital

Established in 2007, Arqaam Capital is a specialist emerging markets investment bank, bringing regional and international product offerings to the emerging markets. Arqaam Capital combines international best practice with expertise in the markets in which we operate. Our primary role is to provide financial intermediation and create investment opportunities for frontier and emerging markets investors looking to invest in their own markets and abroad, as well as international investors seeking opportunities in target frontier and emerging markets. Arqaam Capital is headquartered in the Dubai International Financial Centre (DIFC), with additional offices in Libya, Lebanon, Egypt, and South Africa. 

Arqaam Capital's research platform provides the largest coverage footprint of MENA equities and one of the largest on the African continent with a total of 300 stocks under coverage. Arqaam Capital is ranked as one of the leading research providers in the region - a reflection of its broad coverage universe, its in-depth and high quality research, as well the compelling investment ideas that the team generates. The analysts closely analyze their sectors and issue in-depth company and sector research while the strategy team connects the micro with the macro, focusing on index analysis, macroeconomics and strategy research. 

Analysts
Mohammad Kamal

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