Qalaa Holdings released its consolidated financial results for the quarter that ended on 30 June 2019, recording an 8% year over year (y-o-y) climb in revenues to EGP 3.49bn.
Qalaa Holdings is a company that works in energy, cement, agrifoods, transportation and logistics, mining, and printing and packaging.
The rise was driven by a solid high performance at the energy distribution company TAQA Arabia, where gas and power distribution volumes grew rapidly, compressed natural gas (CNG) demand rose, and a steady increase in utilization rates at TAQA Solar’s power plant. The power plant delivered a revenue growth of 33% y-o-y. On a six-month basis, Qalaa Holdings saw revenues grow 11% y-o-y to reach EGP 6.93bn in the first half of 2019 (1H19).
The energy segment remained the largest contributor to Qalaa’s consolidated revenue at 55%, followed by cement with a 15% contribution, and packaging and printing at 13% in the second quarter of 2019 (2Q19).
“With the Egyptian Refining Company (ERC)- Qalaa’s subsidiary egyptian refining company- on the cusp of its first fully operational quarter, Qalaa is on the threshold of a new chapter in its journey as a leader in energy and infrastructure,” said Hisham El-Khazindar, co-Founder and managing director of Qalaa Holdings.
“We are confident that the strategic vision that has led us to this moment will continue to bear fruit for the group’s results, which are underpinned by solid fundamentals across our business segments. We see this robustness providing a solid hedge against changes in our external environment,” he adds.
To this end, Qalaa continues to implement efforts aimed at streamlining and repositioning their portfolio where they believe such a need exists, with an eye to generating profitable top line expansion across sectors.
“Heading into the final quarter of the year, we see Qalaa’s investments across its business segments and its portfolio delivering gradual improvement in the company’s consolidated profitability over the coming period,” El-Khazindar concluded.
ERC has sold about 370 tonnes of sulphur and 35,000 tonnes of pet-coke directly to the market at the end of August 2019.
As of 31 August 2019, ERC withdrew USD 2.72bn from its facility, totaling USD 2.89bn with about USD 163m balance, to use in the coming month, mostly to repay debt interest during construction (IDC).
Moreover, TAQA Gas aims to reach 20 operational stations by 2022. In parallel, management is also assessing potential projects which would see the company tap into the mobile CNG market.
During the quarter, the company also carried on negotiations with the Urban Development Authority to connect new cities within its concession areas, as well as with new industrial players. A number of new contracts have been signed during 2Q2019.
Furthermore, solid waste management company Enignerring Tasks Group (ENTAG), remains in negotiations to expand the company’s pipeline with a numper of prospective cleints in the UAE and the wider Gulf countries. Additions to the company’s backlog are expected to materialize by year-end 2019.
Arab Swiss Engineering Company (ASEC) has recently finalized negotiations for two international contracts and is in advanced stages of negotiations for another three. These contracts are expected to grow the company’s top line and enhance its profitability over the coming period.
With regards to the company’s financial situation in Sudan, there is growing contribution by industrial and agricultural provider Nile Logistics with the launch of its grain storage warehouse, as well as a larger contribution from TAQA’s solar arm.
Excluding contributions from ERC, Qalaa expects consolidated earnings before interest, tax, depreciation and amortization (EBITDA) to expand at a rate between 25% and 35% by fiscal year 2021.
Qalaa Holding’s Nile Barges in Sudan focused on the transportation of food products under the supervision of the World Food Programme. It currently operates using one pusher, with a second currently undergoing refurbishment and expected to commence operation by the end of January 2020.