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Wednesday, 18 August 2021

Earnings Watch: EFG Hermes, Palm Hills

EARNINGS WATCH – EFG Hermes’ net income rose 24% in 2Q2021, driven by growth in its non-bank lending subsidiaries and a solid performance in its investment banking arm, according to the firm’s earnings release (pdf). The financial services corporation reported earnings of EGP 406 mn during the three-month period, up from EGP 328 mn in the same period last year on the back of strong top-line growth.

Revenues for the quarter rose 20% to EGP 1.6 bn, underpinned by a 62% rise in non-banking financial services revenues, which totalled EGP 483 mn. Sell-side revenues rose 69% to EGP 493 mn, helped by an uptick in advisory fees and transactions which almost tripled income from its investment banking arm. On the buy-side, revenues shrugged off a dip in private equity income to rise 70%, helped by strong revenues from asset management which more than doubled to EGP 142 mn.

Despite its positive performance for the quarter, the group remains cautious for the rest of the year: “Heading into the second half of the year, we remain cognizant of the potential for a new wave of covid-19-related challenges and geopolitical headwinds which impact the pace of economic recovery across global markets,” group CEO Karim Awad said.

Palm Hills Developments saw its bottom line grow 41% to EGP 278.2 mn in 2Q2021, compared to EGP 197.4 mn in the same period last year, according to the real estate company’s earnings release (pdf). Revenues more than doubled to more than EGP 2 bn during the April-June period, helped by a jump in new residential and commercial sales, which rose 63% to EGP 4.3 bn.

By our math, PHD sold 920 units during the quarter, more than double the 401 in 2Q2020 and up from 488 sold during 1Q2021. The 1H2021 growth was mainly supported by new sales witnessed in West Cairo (mainly Badya and the Crown), which rose 54% to EGP 3.2 bn and accounted for 42% of the overall sales. This is followed by Sahel, Alexandria, and Ain Sokhna, which brought in EGP 3.1 bn and accounted for 40% of the company’s sales. The company made EGP 1.4 bn in revenues from units in East Cairo.

Looking forward, the company will finalize several financing agreements before the end of this year “in the form of on and off-balance sheet financing including the securitization of receivables, syndications with banks,” as well as the company’s first long-term sukuk issuance worth EGP 5.5 bn, said Executive Chairman Yasseen Mansour.


IDH subsidiary to run PCR tests in Amman’s airport: Biolab, a Jordanian subsidiary of the EGX- and LSE-listed Egyptian healthcare group Integrated Diagnostics Holdings, will operate PCR testing stations at Amman’s Queen Alia International Airport, the company said in a statement (pdf) this morning.

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.