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Dalia Khorshid’s Beltone Financial Holding turned profitable in 9M 2023 after three years ofconsecutive losses,logging EGP 86 mn in net income compared to a net loss of EGP 140 mn in the same period a year ago, the company’s earnings release (pdf) showed yesterday. Beltone turned in EGP 957 mn in operating revenue for the first nine months of this year, up more than 270% on the same period of 2022.
Why this matters: It is the first full earnings release Beltone has issued since CEO Dalia Khorshid was brought in post-acquisition by the UAE’s Chimera Capital to turn the business around after the company had struggled with profitability and strategy for several years. The turnaround has included a full new management team, a full book of new policies and procedures, a record rights issue to recapitalize the business, and its transformation into a data-driven organization.
NBFI growth fuels record operating revenues: The company’s top-line performance was mainly led by a strong performance in its non-banking financial institutions arm, where operating revenues surged 680% y-o-y to EGP 478 mn. The investment banking unit delivered operating revenues of EGP 198 mn in 9M 2023. The sharp improvement in profitability is notable for having come in a much higher interest-rate environment in 2023 that helped drive interest expenses up more than 2.5x. And in a recognition that a business sometimes needs to spend money to make money, salary costs increased with an investment in new teams to lead and staff business units that existed before Khorshid was appointed as well as new units launched after she and her team took over.
A solid 3Q: The company’s bottom line was profitable on a three-month basis, reporting EGP 232 mn in net income for 3Q 2023 compared to an EGP 34 mn loss in the same period last year. Operating revenue for the period increased 742% y-o-y to EGP 637 mn.
BACKGROUND- Abu Dhabi-based investment firm Chimera acquired a majority stake in Beltone in October of last year. It overhauled the company’s team of senior executives and embarked on a company-wide restructuring following Chimera’s appointment of Dalia Khorshid as the group’s CEO. Beltone closed a huge EGP 10 bn capital increase in July.
