Qalaa’s consolidated revenue rose by 75% y-o-y to EGP 37.6 billion in 3Q24 on the back of solid performances across all subsidiaries; while excluding ERC, consolidated revenue rose by 72% y-o-y to EGP 3.5 billion. Meanwhile, recurring EBITDA stood at EGP 4.8 billion in 3Q24, a 53% y-o-y increase driven by broad-based expansion across all subsidiaries. Meanwhile, Qalaa’s net income stood at EGP 114.5 million.
- ERC continued to operate above its rated capacity, yet refining margins remain pressured due to the cyclical nature of the business.
- ERC’s receivables from EGPC stood at USD 131.0 million as of 31 December 2024, and the company has successfully finalized its senior and subordinated debt restructuring as of 20 December 2024.
- On that front, the company has paid a total of USD 233.6 million to senior lenders.
- Following the completion of this restructuring at the end of 4Q2024, ERC’s current net senior debt amounts to USD 363.0 million, of which USD 160.0 million is covered by the company’s debt service reserve account.
- This repayment sees ERC remain on track to fully settle its senior debt by 4Q25, after which the company may start distributing dividends.
- The company also paid a total of USD 33.3 million in fees and default interest related to the debt restructuring process.
- Furthermore, a total of USD 48.1 million was paid to subordinated lenders as per the restructuring agreement. The company’s subordinated debt currently stands at USD 751.0 million, with an expected repayment completion by 2030.
- Qalaa’s portfolio companies have continued to demonstrate their strength and resilience across the board, with all our business segments reporting revenue growth during the quarter. Additionally, all portfolio companies apart from ASEC Holding recorded a net profit during the quarter.
- ERC’s USD-denominated revenue, as well as the company’s net profit, expanded strongly year-on-year despite the decline in refining margins witnessed during the period, mainly driven by the devaluation of the EGP against the USD.
- The continued recovery of Al-Takamol Cement’s performance, which witnessed solid year-on-year growth for the second quarter in a row, supported the performance of the Group’s cement segment during the quarter. Qalaa’s position as an import substitute and export player across our mining business continued to strengthen the Group’s consolidated results
- Dina Farms Holding continued to deliver solid results across the board following improved operations across all business segments at Dina Farms, as well as the recovery of gross margins at ICDP.
- ASCOM’s strong results came largely on the back of the solid performances of ASCOM’s two largest USD-denominated revenue generators, ACCM and GlassRock in EGP terms, and was further augmented by the EGP devaluation.
- CCTO’s transportation and logistics business delivered strong top-and bottom-line results, largely driven by the solid performances of the coal storage and stevedoring services at NRPMC, coupled with strong results at the USD-denominated Nile Barges.
- TAQA Arabia’s EBITDA and bottom-line growth for the period came mostly on the back of strong performances at TAQA Gas and TAQA Power. Additionally, increases in fuel and lube prices and volumes at TAQA Petroleum further supported growth.
- The Group continues focusing on growing its exports and leveraging the cost advantage available to local manufacturers, with Group export proceeds reaching c.USD 17.6 million. Meanwhile, local foreign currency revenue recorded c.USD 759.5 million during the quarter.
- Qalaa continues to work with the relevant regulatory authorities towards finalizing the process that enables the capitalization of QHRI’s debt. We expect this process to be finalized before the end of 2Q25.
- Qalaa’s strategy will continue to focus on the following elements:
- Qalaa will continue driving growth through small incremental investments in its subsidiaries, expanding cashflows, and thereby reducing its debt to cashflow ratios. Management is confident this strategy will continue to deliver the desired results.
- Qalaa is currently studying several new medium-sized, export-oriented, and predominantly green investments with high local value-added components, to be executed through its subsidiaries.
- Qalaa’s focus remains on growing its exports and leveraging the cost advantage of local manufacturers.
Qalaa Holdings, a leader in energy and infrastructure (CCAP.CA on the Egyptian Exchange), released today its consolidated financial results for the three- and nine-month periods ending 30 September 2024. During the quarter, Qalaa achieved a revenue of EGP 37.6 billion, a 75% y-o-y increase, mainly driven by ERC’s USD-denominated revenue, and further boosted by broad-based growth across the Group’s subsidiaries. On the profitability front, the Group’s EBITDA reached EGP 4.8 billion, a 53% y-o-y rise on the back of EBITDA growth across all subsidiaries. However, the Group’s bottom-line contracted by 94% y-o-y to EGP 114.5 million during the quarter largely due to a one-off gain associated with the sale of APM in 3Q23.
“I am proud of Qalaa’s strong results during the past quarter, as we once again successfully demonstrated the Group’s strength and resilience in the face of challenging operating conditions,” said Qalaa Holdings Chairman and Founder Ahmed Heikal. “During the quarter, Qalaa achieved a revenue of EGP 37.6 billion, a 75% y-o-y increase. Top-line growth was mainly driven by the solid performance of the Egyptian Refining Company, and further boosted by comprehensive growth across all subsidiaries. Similarly, EBITDA expanded by 53% y-o-y to EGP 4.8 billion during the quarter, fueled by broad-based growth across all subsidiaries. Additionally, I am pleased to report that Qalaa recorded a net income of EGP 114.5 million in 3Q24, a significant improvement from the net loss of EGP 1.4 billion reported during second quarter of the year. Our solid operational and bottom-line results are a testament to the Group’s strength and resilience, they also reflect the success of our meticulous growth-oriented strategies.”
ERC’s 3Q24 EBITDA stood at EGP 4.3 billion, a year-on-year increase of 48%. Enhanced operating profitability during the quarter came largely on the back of the EGP devaluation. ASEC Holdings recorded an EBITDA of EGP 22.7 million during the quarter, a significant year-on-year expansion from the negative EBITDA of EGP 19.2 million reported in 3Q23, driven by strong operating profitability across most subsidiaries.
Dina Farms Holding Company’s EBITDA expanded by 81% y-o-y to EGP 195.1 million during the quarter, driven by improved margins across the board. ASCOM achieved an EBITDA of EGP 136.9 million, a 44% y-o-y increase supported by strong operating profitability at ACCM and ASCOM Mining.
EBITDA at CCTO’s transportation and logistics business rose by 151% y-o-y to EGP 134.2 million, largely driven by the solid increases in coal storage and stevedoring revenues at NRPMC, coupled with the expansion in Nile Barge’s USD-denominated EBITDA. Finally, TAQA Arabia’s EBITDA expanded by 35% y-o-y to EGP 571.1 million in 3Q24. EBITDA growth for the period came mostly on the back of strong performances at TAQA Gas and TAQA Power. Additionally, increases in fuel and lube prices and volumes at TAQA Petroleum further supported growth. TAQA Arabia is accounted for as an investment in associate using the equity method and revenues are not included in Qalaa’s consolidated revenues.
In 9M24, a figure of EGP 720.9 million was recorded as other interest expense on Qalaa’s income statement. This balance represents the interest calculated on the total debt amount at the previous interest rate under the original loan agreement, which will continue to accrue until the settlement/restructuring agreements with the Egyptian banks and AIB are concluded, at which time the entirety of this accrued expense will be waived.
Qalaa recorded a consolidated net profit after minority interest of EGP 114.5 million in 3Q24, down 94% y-o-y. The year-on-year decline in net income was largely due to the recording of a one-off gain associated with the sale of APM in 3Q23.
Notwithstanding the above, all of Qalaa’s subsidiaries apart from ASEC Holding recorded net profits during the quarter. ERC recorded a net profit of EGP 173.3 million during the quarter, compared to a net loss of EGP 362.5 million reported in 3Q23, mainly driven by the EGP devaluation. ASEC Holding’s net loss contracted to EGP 191.3 million in 3Q24 from the EGP 556.5 million recorded during the same period last year. Bottom-line results were mainly a consequence of increased depreciation expenses at Al Takamol Cement due to the application of a hyperinflationary accounting methodology to the company’s assets.
Dina Farms Holding Company’s bottom-line expanded by 115% y-o-y to EGP 24.1 million in 3Q24 on the back of improved operations across all business segments at Dina Farms, as well as the recovery of gross margins at ICDP. In 3Q24, ASCOM recorded a net income of EGP 163.9 million, down 93% y-o-y due to the one-off gain associated with the sale of APM that took place during 3Q23.
CCTO’s transportation and logistics business delivered a net income of EGP 29.2 million during the quarter, a 356% y-o-y increase. The rise in bottom-line profitability was mainly due to the increase in Nile Barge’s USD-denominated net income. Finally, TAQA Arabia’s net profit grew by 8% y-o-y to EGP 213.5 million in 3Q24. Bottom-line growth for the quarter was primarily driven by a strong performance at TAQA Gas. Positive contributions from foreign currency-linked power generation prices and the implementation of new photovoltaic projects under TAQA Power, in addition to increases in fuel and lube prices and volumes at TAQA Petroleum, further supported growth.
“On the subsidiary level, our portfolio companies have continued to showcase their ability to navigate challenging conditions across the board, with all our business segments reporting revenue growth during the quarter. On that front, all of our portfolio companies continued to demonstrate Qalaa’s carefully executed growth-oriented strategies, which are supported by a portfolio structure that is constructed to deal with devaluation pressures, and bolstered by an increased focus on local manufacturing and import substitution. As a result, our subsidiaries are able to successfully capitalize on the current dynamic macroeconomic landscape,” Heikal continued.
“Qalaa’s resilient performance during the quarter comes as the domestic economy continues to face a challenging period, with elevated interest and inflation rates weighing on consumer spending levels, as well as businesses’ ability to obtain financing. Furthermore, the difficulties faced at home are being further exacerbated by current state of global macroeconomic uncertainty, as well as the armed conflicts taking place around us. Despite this, Qalaa remains well-positioned to overcome these challenges, thanks to our resilience, flexibility, and efficiency, which are ingrained into the core of our DNA. Moreover, and in spite of the ongoing challenges, Egypt continues to be an attractive investment destination for both local and regional players, and I remain confident in the country’s long-term economic outlook,” Heikal stated.
“Looking ahead, we will continue pushing forward with our growth strategies across our diverse platforms over the coming months. Despite the challenging market conditions, I am confident that the Group’s outlook remains bright, and going forward we will continue making small, incremental investments with the aim of continuously enhancing the Group’s overall investments portfolio,” Heikal noted.
“Finally, I would like to reiterate that the true value of Qalaa’s performing assets is masked due to holding them at their historical cost and, in some cases, adjusting for impairments, while not taking into consideration any revaluation adjustments,” Heikal concluded.
“I am pleased with the impressive results achieved by Qalaa during the third quarter of the year,” said Hisham El-Khazindar, Qalaa Holdings Co-Founder and Managing Director. “During the quarter, our results continued to be heavily driven by ERC’s USD-denominated revenue, which expanded strongly year-on-year despite the decline in refining margins witnessed during the period. Meanwhile, our agriculture and logistics segments continued to deliver solid top- and bottom-line results, largely driven by their robust investment fundamentals. In parallel, the continued recovery of Al-Takamol Cement’s performance, which witnessed solid year-on-year growth for the second quarter in a row, supported the performance of the Group’s cement segment during the quarter. Finally, Qalaa’s position as an import substitute and export player across our mining business continued to strengthen the Group’s consolidated results, providing valuable USD proceeds during a period of significant exchange rate fluctuations.”
“After successfully finalizing our Senior Debt Settlement/Restructuring process, as well as the foreign senior debt purchase by QHRI over the past period, I am pleased to announce that as of 20 December 2024, ERC has successfully finalized its senior and subordinated debt restructuring. On that front, ERC remains on track to fully settle its senior debt by 4Q25, after which the company may start distributing dividends, and we remain committed to reducing Qalaa’s risk levels and maintaining a healthy financial position going forward,” added El-Khazindar.
“Our performance for the third quarter of the year is a demonstration of our ability to push ahead during difficult times, and I am looking forward to another quarter of growth and strong results across our operations and markets,” He concluded .
