reports
- Enas Salama
Qalaa Holdings: Favorable operational performance eaten up by higher i...
CCAP released 1Q23 results, posting an 84% YoY decline in net profit to record EGP73 million in 1Q23 compared to EGP469 million in 1Q22 restated net profit (previously reported net losses of EGP584.1 million during 1Q22). Results were operationally strong and very healthy, where EBIT surged by 202% to record EGP8.2 billion, showing a strong profitability surge, but bottom line was challenged by the rise in interest expense, taxes, and a surge in minority interest (driven by ERC’s surge in pro...
- Enas Salama
Qalaa Holdings: 4Q22 | Strong top-line performance eroded by finance c...
CCAP posted EGP2,284 million in consolidated net loss during FY22, compared to EGP2,276 million in net loss during FY21. Excluding FX losses, CCAP recorded a consolidated net profit of EGP2,457 million during FY22. Consolidated revenues increased by 113% YoY to EGP97,909 million during FY22, up from EGP45,908 million during FY21. ERC represented 76% of CCAP’s total consolidated revenues during FY22, while TAQA Arabia contributed 11% of total revenues, followed by the cement segment with 5% an...
- Enas Salama
Qalaa Holdings: CCAP management meeting takeaways
DURING OUR CALL WITH QALAA’S MANAGEMENT, THEY STRESSED ON FOUR MAIN POINTS: 1. All the company’s business segments are doing great in terms of operational performance. All of the segments are strategically planned to benefit from the current economic situation in Egypt through focusing on export oriented and import substitute industries which are benefiting from currency depreciation, as well as industries which will benefit from higher fuel prices due to subsidy lifting and higher global pr...
- Omar Attia
Qalaa Holdings: 3Q21 – despite revenue surge, losses are maintained; M...
FINANCIAL INDICATORS SURGE YOY ON WEAK BASE EFFECT; BOTTOM-LINE REMAINS IN THE RED Qalaa Holdings reported 3Q21 consolidated financial results posting a net loss post minority of EGP441 million, versus 2Q21’s net loss of EGP402 million and 3Q20’s net loss of EGP444 million. 3Q21 revenue came in at EGP12,797 million (+26%QoQ, 46%YoY). Gross profit came in at EGP1,615 million (+27%QoQ, +185%YoY) implying a GPM of 12.6%. while consolidated EBITDA hit EGP1,196 million (+63%QoQ, +586%YoY), implyin...
- Omar Attia
Qalaa Holdings: 2Q21 – A gradual improvement
TOPLINE RECOVERS FROM 1Q SLUMP, MARGINS IMPROVE, LOSSES NARROW Qalaa Holdings reported 2Q21 results, recording net loss post minority at EGP402 million vs net loss of EGP479 million in 1Q21 and EGP712 million in 2Q20. Revenue hit EGP10,178 million (+27% QoQ, +37% YoY). The expansion in topline was supported by the resumption of production at ERC after the facility had been hit with operational difficulties and production stoppage in 1Q21 alongside strong performance from its other energy arm,...
- Marina William
- Martina Bernaba
- Merna Arafat
- Omar Attia
- Zeyad Ahmed
Egypt: Commodity and material prices update – 2Q21
In this report we assess the average material prices for 2Q21 and depict the impact of pricing trends on the financial performance of the relevant listed equities in Egypt. Prices of raw materials in the food and beverages sector continued to normalize in 2Q21, except for prices of SMP and WMP. Accordingly, we expect a gradual recovery of margins to appear in the 3Q21 results of JUFO, EFID, DOMT and OLFIas price increases kick in and with seasonality of revenues. Most companies have an invent...
ABUK ABU QIR FERTILIZERS & CHEMICAL INDUSTRIES
CCAP CITADEL CAPITAL SAE
EKHO EGYPT KUWAIT HOLDING CO
AUTO GB AUTO
EFID EDITA FOOD INDUSTRIES
JUFO JUHAYNA FOOD INDUSTRIES CO.
OLFI OBOUR LAND FOR FOOD INDUSTRIES
DOMT ARABIAN FOOD INDUSTRIES CO DOMTY
ORWE ORIENTAL WEAVERS GROUP
MFPC MISR FERTILIZERS PRODUCTION CO SAE
SKPC SIDI KERIR PETROCHEMICALS CO
- Omar Attia
Qalaa Holdings: 1Q21 – Recovery in oil markets not enough to curb loss...
STRONG SUBSIDIARIES’ PERFORMANCE OVERSHADOWED BY ERC Qalaa Holdings reported 1Q21 results, recording net loss post minority at EGP479 million vs net loss of EGP405 million in 1Q20. Revenue declined to EGP8,000 million (-15% QoQ, -23% YoY). QH’s decline in topline was mainly on the back of operational difficulties that plagued ERC during 1Q21 which resulted in a 29-day stoppage and a further 20 days of production slowdown. However, excluding the refinery’s results, Qalaa would have recorded a ...
- Omar Attia
Qalaa Holdings: 4Q20 – Healthy 2020 topline growth overshadowed by bot...
ERC PROVES TO BE THORN IN QH’S SIDE Qalaa Holdings reported 4Q20 consolidated results, recording net loss post minority of EGP992 million versus net loss post minority of EGP444 million in 3Q20, which brings the full year loss amount to EGP2,533 million versus a loss of EGP1,1136 in FY19. On the other hand, 4Q20 revenue came in at EGP9,435 (+8%QoQ, +153%YoY), which brings total QH topline for FY20 to EGP35,973 million (+148%); which was in line with our estimates of EGP35,529 million. The str...
- Marina William
- Martina Bernaba
- Merna Arafat
- Omar Attia
- Zeyad Ahmed
Egypt Commodity and Material Prices: Sector outlook and trends – Q1 21...
We present the 1Q21 material prices that are relevant to the petrochemical, consumer and industrial & materials sectors. In our 12-page report, we depict the impact of such changes on the financial performance of listed equities in Egypt. We also present the quarterly breakdown of each sector. Most companies have inventory of raw material that covers somewhere around 2-3 months. The increase in raw material costs is slowing down in 2Q21. Accordingly, we expect the pressure on margins to appe...
ESRS EL EZZ STEEL REBARS
ABUK ABU QIR FERTILIZERS & CHEMICAL INDUSTRIES
EGCH EGYPTIAN CHEMICAL INDUSTRIES
EGAL EGYPT ALUMINIUM CO.
CCAP CITADEL CAPITAL SAE
EFID EDITA FOOD INDUSTRIES
JUFO JUHAYNA FOOD INDUSTRIES CO.
OLFI OBOUR LAND FOR FOOD INDUSTRIES
DOMT ARABIAN FOOD INDUSTRIES CO DOMTY
MFPC MISR FERTILIZERS PRODUCTION CO SAE
SKPC SIDI KERIR PETROCHEMICALS CO
- Omar Attia
Qalaa Holdings: Management webinar key takeaways
A BIRD’S EYE-VIEW ON FY2020 Given the pandemic’s adverse ramifications on businesses worldwide, Qalaa Holdings were not left unscathed by the brute force of widespread economic shutdowns and tumbling markets. However, management was adamant that despite the hurdles faced, FY2020 was a year of positive growth on the company’s multiple lines of business which were evident in solid growth on the topline and EBITDA levels. As the latter witnessed a healthy 9M2020 YoY growth of 15% (Excluding ERC)...
- Omar Attia
Qalaa Holdings: 3Q20 – Robust topline growth, bottom line remains in t...
ERC CONTINUES TO LEAD TOPLINE CONTRIBUTION Qalaa Holdings reported 3Q20 consolidated results, recording net loss post minority of EGP450 million versus net loss post minority of EGP705 million in 2Q20, a 36% QoQ decline in losses, which was broadly inline with our net loss estimates of EGP432 million. Revenue hit EGP8,760 million (+18%% QoQ, +123% YoY). ERC continued to constitute the lion’s share over CCAP’S topline as its contribution grew from 53% in 2Q20, to 61% in 3Q20. Given ERC’s conti...
- Omar Attia
Qalaa Holdings: Q2 20 top line shrinks; bottom line remains in the red
ERC leads top line contribution Qalaa Holdings reported 2Q20 consolidated results, recording net loss post minority of EGP712 million versus net loss of EGP405 million in 1Q20, a 76% QoQ increase in losses. Revenue plummeted to EGP7,426 million (-29%% QoQ, +105% YoY) broadly in line with our estimates of EGP7,494 million. The main contributor to Qalaa’s topline was ERC as it unsurprisingly constituted c.53%. of total revenues. Excluding ERC, CCAP’s topline would have declined by 67% on a quar...
- Omar Attia
Qalaa Holdings: Losses persist as ERC’s consolidation is offset by t...
ERC consolidation adds to losses Qalaa Holdings reported 1Q20 results, recording net loss post minority at EGP405 million vs net loss of EGP155 in 1Q19, a 162% YoY increase in losses. Revenue surged to EGP10,408 million (+175% QoQ, +191% YoY). QH’s surge in topline was driven by ERC’s long-awaited consolidation, which happened as of January 1st. The refinery has been recognized as an operational asset that is running at 100% capacity utilization. However, ERC recorded net losses of EGP1,400 ...
- Myss Semeida
Qalaa Holdings: High hopes crashing down; downgrade FV to EGP1.25; mai...
Downgrade FV to EGP1.25/share; Maintain Equalweight We downgrade our FV of Qalaa Holdings from EGP2.70/share to EGP1.25/share, as we slash our estimates for ERC in light of the recent turmoil in the oil market. We revise down our valuation of the refinery from EGP2.21/share to EGP0.38/share, to reflect 1) a cut in oil price forecasts, 2) narrower diesel-high sulfur fuel oil (HSFO) spreads, and 3) yet another delay in Qalaa’s consolidation of ERC, which has been pushed to March, from January i....
- Myss Semeida
ERC is here; cut FV to EGP2.70, maintain Equalweight
We downgrade our FV for Qalaa Holdings to EGP2.70/share (from EGP3.29/share). We have updated our model of ERC to reflect: 1) a diluted stake of 13.14%, versus 16.50% initially, 2) lower consensus forecasts for Brent, and 3) recent market developments related to IMO 2020. As for TAQA, we have incorporated Qalaa’s reduced stake of 55.9%, down from 60.9%, and the hike in debt. Despite the negative developments, we remain Equalweight on Qalaa Holdings as we believe ERC is set to have an astoundi....
Ford Equity International Rating and Forecast Report
Ford Equity International Research Reports cover 60 countries with over 30,000 stocks traded on international exchanges. A proprietary quantitative system compares each company to its peers on proven measures of business value, growth characteristics, and investor behavior. Ford's three recommendation ratings buy, hold and sell, represent each stock’s return potential relative to its own country market.. The rating reports which are generated each week, include the fundamental details behind...
- Rita Guindy
Cash-strapped; reiterate Neutral at 16% lower TP
USD-debt a value trap. Re-pricing QH’s USD1.9bn debt (c85% of 2Q16 consolidated debt) and USD-capex needs reduces our 12-month TP by 16% to EGP1.05/share due to a weaker-than-previously-expected EGP. The higher debt burden was partly offset by our expectation of higher cash flows at Taqa Marketing (on higher fuel prices) and revaluation of USD-assets, mainly the Egyptian Refinery Company (ERC). We do not foresee planned asset sales as significant enough to change our call on the stock, but they ...
- Rita Guindy
Resume at Neutral; target price of EGP1.25/share
Leverage caps upside. USD-parent debt is a drag, reducing our SoTP valuation by EGP1.57/share (or c50%) based on our forward USD:EGP rate estimate. QH has no capex plans and instead intends to focus on ERC’s launch and asset sales to de-lever. We would revisit our rating if QH has a better cash flow profile, the source of which is limited to any major asset sale, in our view. But pending divestitures appear more challenging (Algerian cement assets and E. Africa railway concession) and meanwhile,...
- Alia El Mehelmy
Restricting equity research coverage
CI Capital is effective today restricting equity research coverage on Qalaa Holdings. Restriction of coverage entails that our analyst(s) will no longer be giving any forwardlooking statements or views on the stock until further notice. Our last published rating on Qalaa Holdings was Overweight and target price was EGP4.90 per share.
- Alia El Mehelmy
Quest for value
The tables have turned for Qalaa Holdings (QH)—top-down, Egypt started reforming energy subsidies, the premise for its core investments. Bottom-up, transformation is in progress with QH closing an EGP3.64bn capital increase, raising its ownership in holdings via a series of swaps, in addition to delivering on its strategy to exit non-core holdings. We expect 2016 EBITDA to stand 2.5x higher than 2014e, driven by full operations at its strategically located 2mn tpa Egyptian cement plant, due for ...
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