Arab Moltaqa Investments Company (AMIC) aims to double its investment portfolio over the next two years by entering new sectors, such as education, real estate, and logistics, which have strong investment opportunities.
Managing Director of AMIC Khaled Abou Heif said the company’s managed assets amounted to about EGP 3.5bn at the end of September 2019, according to the consolidated financial statements, compared to EGP 3.3bn at the end of 2018, a growth of 6% in nine months.
The company’s accumulated earnings and profits increased to EGP 66m in the first nine months of 2019, compared to EGP 55m in the same period of 2018, the growth is due to the increase in activity revenues.
AMIC will focus on projects that generate periodic returns in a manner that fits the profitability and investment period targets, while maximising shareholders’ returns and creating value added for these investments.
Abu Haif added that the company always relied on its own resources in financing investments, and is currently studying some investment opportunities with high growth potentials in the education sector, especially pre-university education. However, the possibility of investment in the education sector is clearly linked to the legal framework of foreign firms’ contribution in such projects.
Moreover, AMIC aims to maximise its real estate portfolio, which includes an administrative building in the Smart Village, leased by Valeo, with an annual return of EGP 34m andan annual increase of 10%.
Additionally, the company owns a plot of land in Almazah, Heliopolis, and it is currently studying all possible options to benefit from the land in light of recent development projects in the district. It is expected that AMIC will decide on the land’s suitable use this year.
The company’s latest investment was Perfect Spinning, a company specialised and dedicated to the production of recycled “open End” yarn from fabric cutting waste produced by the textile industry. AMIC owns 46% of Perfect Spinning shares.
Recycling textile is a major factor in reducing carbon emissions and producing different types and colours of yarns that are eco-friendly. The company’s factory is located in 4th Industrial Zone, Sadat City. The total land area owned by the company is 14,500 sqm, and the building area is 10,500 sqm. Perfect Spinning’s production capacity is 12 tonnes/day, and the company targets 15 tonnes/day and 5,500 tonnes/year.
Another AMIC investment is Gomla International Trading. The company produces affordable fashion clothes using recycled yarn. Gomla’s products suit the local market and their prices are about 40% less than competing products. It comes in line with the state’s policy to support local production and reduce imports. Gomla brings its inputs of yarn from Perfect spinning for its high quality and low cost. AMIC owns 43% of Gomla shares.
Abu Haif said AMIC has shares in other companies in different sectors, including A.T. Lease (68.4%), United Company for Investments and Real Estate Development (94%), Arab Engineering Industries (55.87%), Al Rabie Poultry (38.3%), FMCG Trading & Distribution (32.13%), Al Yosr Water Desalination and Purification (47.87%), and Misr Arab for Broiler Production (15%).
As for the company’s exit strategy, Abu Haif pointed out that AMIC’s investment cycle ranged between 5-7 years. He explained that exiting from the company’s investments would be through offering on the Egyptian Exchange (EGX), referring to the successful offering of A.T. Lease.
Offering a company on EGX should achieve three elements; achieving profits in financial statements, seizing a good market share and achieving sustainability, and developing institutions.
On a different note, Abiu Haif said the company does not aim to launch investment funds at the present time, although they reflect a strong model of governance, and separation of ownership and management.
He indicated that the capital increase aims to finance the existing projects of the company, and that the dividend distribution takes place in case of exiting from investments.
Noteworthy, the company’s extraordinary general assembly agreed last March to increase the issued capital from EGP 247m to EGP 300m, distributed over 5m shares with a nominal value of EGP 10 per share.
Finally, Abu Haif stresses the need to look into the current downturn of the Egyptian money market because it acts as a reflection of the economy, pointing out that the market will not be well-organised until it relies on its accurate mechanisms.