Qalaa Holdings records net profit of EGP 486.9 mn in 2Q2018
EARNINGS WATCH- Qalaa Holdings recorded a net profit of EGP 486.9 mn in 2Q2018, compared to a net loss of EGP 2.756 bn in the same period last year, according to the company’s earnings release (pdf). Qalaa’s revenues rose 39% y-o-y in 2Q2018 to EGP 3.1 bn “on the back of growth in its energy division and the consolidation of National Printing, which started in 1Q2018.” The company’s restructuring efforts also saw it begin the deconsolidation of operational liabilities from its Africa Railways platform. “I am very pleased with our company’s performance in the second quarter and first half of 2018. Our core energy and infrastructure subsidiaries continue to deliver operational growth as they capitalize on favorable market dynamics,” said Chairman and Founder Ahmed Heikal.
Looking ahead: “As we bring our company closer to the cusp of sustainable operational profitability, we are actively gearing up for the next growth phase across our subsidiaries,” said Co-Founder and Managing Director Hisham El Khazindar. The company’s USD 4 bn Egyptian Refining Company is 98% complete and commissioning is slated to begin before the end of the year, and Qalaa has previously been reported to be in talks to increase its stake in ERC by subscribing to a capital increase.
2018 is “seen as a turnaround period” for Qalaa, which has been in the red for a few years despite its stock surging 139% this year, Filipe Pacheco and Tamim Elyan write for Bloomberg. Qalaa, “the best-performing stock in Egypt this year, might be about to reward investors even more as [its] turnaround plan moves forward” and the company continues to restructure its portfolio and cut its consolidated debts. Key to the turnaround: The Egyptian Refining Company, due to come into production early next year.