Qalaa is pushing forward with its strategy with 2016 marking the peak of its transformation. Divestment and deleveraging remain on track and management is taking decisive steps to turn to profitability as it prepares for the start of production at ERC.
Qalaa Holdings, an African leader in energy and infrastructure (CCAP.CA on the Egyptian Exchange, formerly Citadel Capital), released today its consolidated financial results for the quarter ending 31 March 2016, reporting a net loss after minority interest of EGP 242.7 million on revenues of EGP 1,731.8 million. Total revenues saw a 20% increase y-o-y in 1Q16 compared to the adjusted EGP 1,441.0 million recorded in 1Q15. Comparative 1Q15 figures have been adjusted to reflect the divestment of ASEC Minya, ASEC Ready Mix, Misr Qena Cement, Rashidi El-Mizan, Tanmeya & Mashreq, eliminating the figures of divested companies. Additionally, ASCOM’s 1Q16 results were added to Qalaa’s 1Q15 figures, owing to ASCOM’s income statement consolidation starting 3Q15, to allow for a more accurate comparison of year-on-year results.
Top-line growth was driven primarily by operational improvement at ASEC Cement’s Sudan subsidiary Al-Takamol and Qalaa’s energy generation and distribution platform, TAQA Arabia.
“At the mid-way point in 2016, we are laser focused on our core energy units, Egyptian Refining Company and TAQA Arabia, and will continue to press forward with our divestment program,” said Qalaa Holdings Chairman and Founder Ahmed Heikal. “On that front, ERC — Egypt’s largest in-progress private-sector megaproject — is more than 85% complete and we expect to sell the first on-spec product in 2017 as planned, with the first full operational year expected to hike Qalaa’s consolidated EBITDA in 2018.”
EBITDA for the period stood at EGP 143.2 million, remaining somewhat flat compared to 1Q15 adjusted figure owing to higher SG&A expenses booked during the quarter.
During 1Q16, Qalaa continued to deliver on its divestment and deleveraging strategy having concluded the sale of Misr Glass Manufacturing (MGM) as well as microfinance player Tanmeyah. On the deleveraging front, during the period between 1Q15 and 1Q16 Qalaa Holdings deconsolidated EGP 1.3 billion of debt through disposals and repaid an additional EGP 1.1 billion, both of which play into the reduction of financial and operational risk.
“This year marks a critical point for Qalaa and the peak of our transformation strategy. Management is taking concrete steps and decisions in a clear direction that will stabilize the company’s profitability, releasing insolvent investments and enabling us to better direct our focus towards key value-adding projects with promising futures, all within the framework of a difficult economic context,” said Qalaa Holdings Co-founder and Managing Director Hisham El-Khazindar. “Our divestment strategy has seen the company generate net gains from the sale of investments, deconsolidate and repay a total of over EGP 2.4 billion in debt since the beginning of FY2015 to date, and clean up our books in preparation for the start of ERC’s production.”
Net Loss after Minority Interest stood at EGP 242.7 million in 1Q16, compared to the 1Q15 loss of EGP 119.1 million. Results were weighed down in part by non-cash charges, including consolidated FX losses of EGP 45 million on the back of the 14% devaluation of the EGP against the USD, as well as discontinued operations totaling EGP 94 million.
Qalaa Holdings’ full business review for 1Q2016 and the financial statements on which it is based are now available for download on ir.qalaaholdings.com.
Previous Qalaa Holdings press releases on this subject and others may be viewed online from your computer, tablet or mobile device at qalaaholdings.com/newsroom
Qalaa Holdings (CCAP.CA on the Egyptian Stock Exchange) is an African leader in infrastructure and industry. Formerly known as Citadel Capital, Qalaa Holdings controls subsidiaries in industries including Energy, Cement, Transportation & Logistics, and Mining. To learn more, please visit qalaaholdings.com.
Statements contained in this News Release that are not historical facts are based on current expectations, estimates, projections, opinions and beliefs of Qalaa Holdings. Such statements involve known and unknown risks, uncertainties and other factors, and undue reliance should not be placed thereon. Certain information contained herein constitutes “targets” or “forward-looking statements,” which can be identified by the use of forward-looking terminology such as “may,” “will,” “seek,” “should,” “expect,” “anticipate,” “project,” “estimate,” “intend,” “continue” or “believe” or the negatives thereof or other variations thereon or comparable terminology. Actual events or results or the actual performance of Citadel Capital may differ materially from those reflected or contemplated in such targets or forward-looking statements. The performance of Qalaa Holdings is subject to risks and uncertainties.
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