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Thursday, 16 August 2018

Earnings Watch: SODIC, EFG Hermes, Cleopatra, B Investments, Domty, Raya, GTH, Oriental Weavers

EARNINGS WATCH- SODIC reported 10% y-o-y growth in its bottom line to EGP 375 mn in 1H2018 with a strong net profit margin of 36%, the company said in its earnings release (pdf). Revenues for the six-month period came in at EGP 1.05 bn, compared to EGP 1.17 bn in the same period last year, while net contracted sales grew 25% y-o-y to EGP 2.5 bn in the first half of the year. SODIC also successfully delivered 358 units during the period, including the first units at its North Coast development Caesar. On the quarterly level, SODIC’s net profit grew 23% y-o-y to EGP 161 mn in 2Q2018, on revenues that were 15% higher y-o-y at EGP 538 mn. The company expects to sustain its strong performance for what remains of the year, with “client deposits as of the end of the quarter [standing at] EGP 17 bn providing strong revenue visibility.”

EFG Hermes reports net profit after tax and minority interest to EGP 200 mn in 2Q2018 on flat revenues of EGP 1.0 bn. Excluding a one-off gain from the sale of Credit Libanais, net profit for the quarter would be up 18% y-o-y, with revenues that are 28% higher y-o-y, supported by growth in the non-banking financial segment, EFG said in its earnings release (pdf). The firm’s new non-bank financial platform — which contributed 21% to the Group’s bottom line — nearly doubled its revenues during the quarter to EGP 253 mn, thanks largely to microfinance provider Tanmeyah increasing its profitability nearly 3x.

OUTLOOK: Expect steady performance in face of market headwinds in 2H2018: EFG Hermes chief Karim Awad noted: “Our results for the second quarter of the year demonstrate how the firm’s diversification and geographic expansion strategy allows us to post strong results amid challenging market conditions,” saying in a statement accompanying the earnings release that “heading into the second half of the year, we expect operations at our new, on-the-ground presence in Nigeria to commence, and the launch of EFG Hermes Factoring to be announced as we push forward with our diversification and expansion strategy. EFG Hermes’ growing product portfolio, geographic presence and execution capabilities will continue to serve as the bulwark against market headwinds.”

Cleopatra Hospitals Group posted a 153% y-o-y increase in consolidated net profit in 1H2018 to EGP 133.4 mn, according to the company’s earnings release (pdf). Revenues came in at EGP 637.8 mn, up 29% y-o-y as the number of cases served grew 10% compared to last year despite a slow second quarter and the partial closure of one the Group’s hospitals for renovation. “The quarter just ended saw us make significant strides in the way of infrastructure upgrades across our assets as well as the continued enhancement of our service,” said Group CEO Ahmed Ezzeldin said, explaining that that has helped the company “extract more value from core operations” and expand its margins.

OUTLOOK: The second half of the year should see CLHO press ahead with expansion plans while also working to improve its infrastructure and push for more operational efficiency, according to Ezzeldin. In the pipeline is the launch of a new polyclinic in 4Q2018, work on a brownfield hospital in Beni Suef, completing blueprints for the expansion of Al Shorouk Hospital, and acquiring a fifth hospital in West Cairo — a transaction that the company has “signed binding documentation and [is] awaiting regulatory approvals to conclude.”

Meanwhile, private equity firm B Investments reported a net profit after tax of EGP 112.1 mn for 1H2018, up from EGP 92.6 mn in the same period last year. Revenues for the period climbed 32% y-o-y to EGP 135 mn, from EGP 103 mn in 1H2017,” according to the company’s earnings release (pdf), mainly on the back of an “active investment strategy which contributed to the strong performance of our portfolio companies,” said Chairman Hazem Barakat.

Also yesterday:

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