Bottom-line losses recorded EGP 287.1 million in 2Q16 and turns slightly in the black to EGP 28 million after factoring-out non-cash charges booked in the second quarter of 2016, reflecting the success of Qalaa’s divestment strategy
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 second quarter of 2016, reporting a net loss after minority interest of EGP 287.1 million (1H16: EGP 529.8 million) on revenues of EGP 1,799.0 million (1H16: EGP 3,530.8 million). Comparative 2015 figures are adjusted to reflect the divestment of ASEC Minya, ASEC Ready Mix, Misr Qena Cement, Rashidi El-Mizan, RIS, Tanmeyah and Mashreq, eliminating the figures of divested companies in addition to figures of investments held for sale starting 1Q16, including Africa Railways. Additionally, ASCOM’s 2016 results were added to Qalaa’s 2015 figures, owing to ASCOM’s income statement consolidation starting 3Q15, for a more accurate comparison of year-on-year results.
Top-line growth during the second quarter of 2016 was largely attributable to an 18% increase in TAQA Arabia revenues and a 13% improvement in ASEC Holding revenues.
“Despite operating in an extremely difficult economic environment, Qalaa’s second quarter results show improvements in revenue almost entirely across the board,” said Qalaa Holdings Chairman and Founder Ahmed Heikal. “The top-line improvement reflects both the resilience of our subsidiaries and management’s ability to focus on proven winners following a divestment strategy that has allowed us to focus on our most profitable investments and maintain a forward-looking, long-term vision for the company.”
EBITDA for the quarter stood at EGP 92.9 million, down 40% year-on-year from the EGP 155.6 million posted in 2Q15. Management, however, is confident that the temporary drop witnessed in 2Q16, owing to operational hiccups at cement subsidiaries primarily Sudan’s Takamol plant, will reverse in the coming quarters as productivity is already improving and hence EBITDA contributions will return to their normal levels.
Qalaa incurred non-cash charges in 2Q16 totaling EGP 315.1 million (1H16: EGP 391.0 million), up almost eight fold compared to the EGP 40.5 million recorded in 2Q15 (1H15: EGP 86.1 million). These non-cash charges relate to total impairments of EGP 255.4 million booked in 2Q16 (1H16: EGP 260.4 million) as well as FX losses of EGP 39.1 million (1H16: EGP 84.1 million).
Net Loss after Minority Interest stood at EGP 287.1 million in 2Q16 (1H16: EGP 529.8 million), compared to the 2Q15 loss of EGP 4.0 million (1H15: EGP 123.1 million). Setting aside the impact of the above mentioned non-cash charges, Qalaa’s bottom line in 2Q16 would have turned slightly in the black to EGP 28 million and a loss of EGP 138.8 million in 1H16.
“We are well aware of the toll taken on our bottom-line from these non-cash charges and management is working diligently to reduce them and shore-up the company’s financial statements prior to the commencement of operations at ERC,” said Qalaa Holdings Co-founder and Managing Director Hisham El-Khazindar. “With ERC now 90% complete and almost three months away from pre-commissioning, mechanical completion is expected by the second half of 2017. This coupled with TAQA’s strong growth momentum will position Qalaa for a financial turnaround by the end of next year.”
“Meanwhile, we will continue to implement our strategy of allocating generated cash flow to deleveraging and the reduction of financial risk at the subsidiary level, while proceeds from future asset sales are to be utilized for deleverage at the holding company level,” El-Khazindar added.
Qalaa Holdings’ full business review for 2Q2016 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.
For more information, please contact:
Ms. Ghada Hammouda
CMO & Head of Marketing Communications
Tel: +20 2 2791-4439
Fax: +20 22 791-4448
Mobile: +20 106 662-0002