EFG Hermes has announced its financial results for the third quarter (Q3) of 2020. The company’s net profit after tax and minority interest recorded EGP 422m, with an 18% year-on-year (YoY) growth.
Revenues for the quarter came in at EGP 1.4bn, up 21% YoY. Revenues were buoyed by strong performance from EFG Hermes’ buy-side platform on the back of strong revenues at the Private Equity division on realized incentive fees of EGP 349m following the exit from Vortex Solar. NBFIs contributed EGP 335m to the Group’s top-line, an increase of 12% YoY, while Capital Markets & Treasury operations continued to benefit from the recovery of regional capital markets and subsequent revaluation of seed capital and investments, with revenues up 22% YoY to EGP 372m for the division.
“Despite global economic challenges pressuring all markets, quarter after quarter we continue to see our product diversification and geographic expansion strategy bearing fruit,” said EFG Hermes CEO Karim Awad. “As we continue to navigate the impacts of the COVID-19 pandemic across our operations, I’m proud to report that we have continued to lead markets across our footprint and demonstrated the strength of our operations for the quarter.”
He added, “On the Private Equity front, realized incentive fees of EGP 349m from the strategic exit from our managing stake in Vortex Solar significantly contributed to the Group’s performance for the period. Our NBFI platform also continues to bring in stellar results in a quarter that saw valU awarded a license from the FRA, thus bringing the entirety of the Group’s operations under regulatory oversight. valU recorded its highest ever bookings since launch while the Firm’s leasing business closed the quarter with 54% more bookings YoY. Our Brokerage business commanded leading market shares across our areas of operation and our Investment Banking division successfully concluded six equity, M&A and debt transactions worth an aggregate $193m, displaying our growing ability to execute across a wider product spectrum and in extremely challenging conditions.”
The 1537% YoY surge in Private Equity revenues offset an 11% YoY decline in Asset Management revenues, which recorded EGP 65m, and lower sell-side performance. A lacklustre environment across the region saw the Group’s sell-side revenues decline to EGP 281m in Q3 of 2020. Brokerage revenues fell by 24% YoY to EGP 243m.
Revenues from NBFIs increased 12% to EGP 335m, primarily driven by valU’s stellar performance, which saw a top-line increase of 410% YoY to EGP 27m. Tanmeyah’s top-line reached EGP 261m in Q3 of 2020, an uptick of 3% YoY.
Additionally, the Group’s factoring operations reaped the rewards of cross-selling due to its recent merger with leasing, under EFG Hermes Corp Solutions, and generated a four-fold YoY revenue increase to EGP 8m in Q3 of 2020. Meanwhile, leasing revenues came in flat YoY at EGP 39m.