EARNINGS WATCH- CIB profits fall 9% in 1Q2020: CIB’s net profits fell 9% y-o-y to EGP 2.4 bn during the first quarter of 2020 as the country’s largest private-sector bank took larger provisions in the first quarter “to ensure the Bank’s continued solid financial position remains intact amidst current uncertainties,” it said its quarterly earnings release (pdf). Revenue growth remained strong during the first three months of the year, rising 15% to EGP 6.4 bn, driven primarily by expansion of its net interest income. “CIB upheld firm and robust top line growth that came amidst the growing threat of covid-19, and as management took all measures to protect the bank’s employees, customers, community, country and all other stakeholders,” the bank said.

Uncertainty ahead: “The outlook remains ambiguous [for the remainder of the fiscal year], with no concrete indications as to when the global economy will start picking up,” management said. Management said CIB absorbed the blow from covid-19 in no small part thanks to its longstanding investment in digital transformation and big data, powering the bank’s expansion of its digital channels in recent months, enabling large-scale work from home for staff. The push will also help support profitability, make “more informed pricing decisions” and help with risk modeling.

Qalaa Holdings’ revenues rose 11% y-o-y in FY2019 to EGP 14.9 bn, the investment company said in its full-year earnings release (pdf). The revenue growth came on the back of expansion at TAQA Arabia, the company’s energy platform, which booked a y-o-y growth of 31% in 2019. Dina Farms and Nile Logistics also showed improved performance throughout the year. Qalaa Holdings booked a consolidated net loss after minority interest of EGP 1.1 bn in 2019 against a net profit of EGP 1.3 bn in the previous years.

Qalaa has prepared for some of its activities to come under pressure in 2020 due to the economic fallout and volatility brought on by the covid-19 outbreak. This includes its flagship greenfield Egyptian Refining Company — which began operating at 100% capacity in 2019 — as oil prices have been pushed to record lows. The firm also expects pressure on its cement and mining activities as demand is subdued and local construction activity slows. On the flipside, other subsidiaries are expected to show greater resilience, including Dina Farms and National Printing. In spite of the difficulties brought on by the pandemic, Qalaa Chairman Ahmed Heikal said he is “pleased to report that Qalaa continues to employ its full workforce and has not resorted to any layoffs.”

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