Back to the complete issue
Thursday, 1 October 2020

Qalaa losses deepen in 2Q2020 despite strong ERC revenues

EARNINGS WATCH- Qalaa Holdings reported a net loss of EGP 712.1 mn in 2Q2020 compared to EGP 224.5 mn in the same period last year, according to the company's earnings release (pdf), on the back of low fuel prices and the covid-19 pandemic. The losses were driven primarily by the Egyptian Refining Company (ERC) “on account of covid-19 and overall soft oil markets with consequent pressure on heavy fuel oil and diesel spreads,” the company said. This comes despite Qalaa more than doubling its quarterly revenues to EGP 7.4 bn from EGP 3.5 bn in 2Q2019.

Top line growth was driven by the ERC, which brought in EGP 4 bn during the quarter. ERC began operations at its Mostorod petrochemical complex last year and inaugurated the facility earlier this week. Removing the ERC from the equation, Qalaa’s revenue would have fallen 4% on 2Q2019. “Whilst our top-line witnessed significant growth on account of the ERC’s maiden contribution, our revenue excluding the refinery’s share recorded only a marginal 4% decline which, in management’s view, is a commendable achievement given the unprecedented global challenges,” Chairman Ahmed Heikal said. “This was supported by the breadth of our diversified portfolio and ability to unlock value from strategic sectors.”

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2022 Enterprise Ventures LLC.

Enterprise is available without charge thanks to the generous support of HSBC Egypt (tax ID: 204-901-715), the leading corporate and retail lender in Egypt; EFG Hermes (tax ID: 200-178-385), the leading financial services corporation in frontier emerging markets; SODIC (tax ID: 212-168-002), a leading Egyptian real estate developer; SomaBay (tax ID: 204-903-300), our Red Sea holiday partner; Infinity (tax ID: 474-939-359), the ultimate way to power cities, industries, and homes directly from nature right here in Egypt; CIRA (tax ID: 200-069-608), the leading providers of K-12 and higher level education in Egypt; Orascom Construction (tax ID: 229-988-806), the leading construction and engineering company building infrastructure in Egypt and abroad; Moharram & Partners (tax ID: 616-112-459), the leading public policy and government affairs partner; Palm Hills Developments (tax ID: 432-737-014), a leading developer of commercial and residential properties; Mashreq (tax ID: 204-898-862), the MENA region’s leading homegrown personal and digital bank; Industrial Development Group (IDG) (tax ID:266-965-253), the leading builder of industrial parks in Egypt; Hassan Allam Properties (tax ID:  553-096-567), one of Egypt’s most prominent and leading builders; and Saleh, Barsoum & Abdel Aziz (tax ID: 220-002-827), the leading audit, tax and accounting firm in Egypt.