Report
Mohammad Kamal
EUR 29.18 For Business Accounts Only

SCEM EY FY 16A results review: Weakness at the EPS level


  • Sinai Cement reports 98% y/y growth in Q4 revenues fuelled by 46% and 36% increase in volumes and average selling prices respectively, vs. a comparatively weak base in Q4 15A when intensified competition among producers resulted in a drop in retail prices. Nevertheless, net earnings disappoint (loss of EGP 8m) on FX charges of EGP 22m coupled with growing finance costs (+19x to 136% of EBIT vs. 6% in Q4 15A).
  • We remain bearish on the Egyptian cement industry as the proliferation in direct costs (EGP deval, increase in coal prices and subsidy cuts) results in lower margins in the medium term.


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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