Qalaa Holdings reports growing revenues but remains in the red in 2022: Investment firm Qalaa Holdings’ saw its revenues more than double y-o-y to EGP 97.7 bn in 2022 — but still booked a net loss after minority interest of EGP 2.3 bn in 2022, on par with the previous year, according to its earningsrelease(pdf). The strong topline performance — including record refining margins at subsidiary Egyptian Refining Company (ERC) — was offset by the depreciation of the EGP, which caused the company EGP 4.7 bn in FX losses, Qalaa said.

On a quarterly basis: Qalaa returned to the red in 4Q after booking its first two profitable quarters since 2018 in 2Q and 3Q. The company’s net loss after minority interest nearly doubled y-o-y to EGP 2.1 bn in the last quarter, while revenues jumped 90% y-o-y to EGP 28.3 bn.

In detail: ERC’s revenues surged 162% to EGP 74.7 bn in 2022, accounting for more than 76% of the firm’s topline for the year. Higher refined petroleum product prices and increased operations efficiency saw gross refining margins more than triple to an average of USD 4.5 mn per day in 2022. Energy subsidiary Taqa Arabia’s revenue grew 18% y-o-y to EGP 10.7 bn on the back of rising energy demand across all the company’s business lines.

What they said: “I am exceedingly proud of Qalaa’s topline performance during the past year, which demonstrated the group’s resilience and ability to continue delivering solid results despite the difficult underlying macroeconomic conditions,” said Qalaa Chairman Ahmed Heikal. “All our business segments have recorded solid performances throughout the past year, having successfully managed to capitalize on elevated oil prices, an increased focus on local manufacturing and import substitution, and a portfolio structure that provides a strong shield against devaluation pressures.”

RISING RATES BOOST CIB EARNINGS-

Leading private-sector bank CIB reported a 43% increase in net income in 1Q 2023 as higher interest rates boosted revenues, according to its latest earnings release (pdf). The lender reported a bottom line of EGP 6.1 bn for the January-March period, up from EGP 4.2 bn in 1Q 2022. The growth was supported by sharply higher net interest income, which jumped 62% y-o-y to EGP 10.9 bn during the quarter, lifting total revenues to EGP 12.0 bn, up 54% y-o-y.

Remember: Interest rates have surged over the past year as the central bank tries to shore up the economy from the inflationary impact of multiple currency devaluations. Central bank rates are now 1000 bps higher than they were last March.

Deposits and loans rose: The bank’s gross loan portfolio rose 10% to EGP 244 bn during the quarter while higher EGP deposits fueled 8% growth in the bank’s total deposits, which reached EGP 574 bn.

A promising 2023 ahead: “Despite the ambiguity witnessed on a global, regional and local scale, CIB’s performance is nothing short of exemplary,” the bank’s management said, adding that the net income and revenue growth helped “set the stage for what promised to be a very strong 2023.”

ODE PROFITS DOWN ON FX LOSSES-

Orascom Development Egypt’s (ODE) net income dropped 17% y-o-y to EGP 384 mn during 1Q 2023 on the back of EGP 477.7 mn in FX losses due to the EGP devaluation, according to the company’s latest earnings release (pdf). Revenues increased 53% y-o-y to EGP 3 bn during the quarter.

Net real estate sales increased by 36% y-o-y to EGP 2.7 bn, marking the highest 1Q sales figure in the company’s history. The company’s El Gouna development drove the growth with EGP 1.15 bn, followed by O West in West Cairo (EGP 1.1 bn), and Makadi Height (EGP 490.3 mn).

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