A good start to the year for Qalaa Holdings: Qalaa Holdings saw its net income after minority interest jump to EGP 7.2 bn up from the EGP 73 mn recorded during the same period last year, according to the company’s latest earnings release (pdf). Qalaa’s revenues recorded a 45% y-o-y jump in the same period to EGP 37.6 bn, “mainly driven by [Egyptian Refining Company’s] USD-denominated revenue, and was further boosted by broad-based growth across most subsidiaries.”

Driving the growth: This significant rise in the company’s net income was primarily attributed to a EGP 9.7 bn gain associated with the Financial Holdings International (FHI) settlement — during the quarter, Qalaa settled a bulk of its liabilities and those of its subsidiaries owed to FHI.

Remember: Qalaa is on a mission to try and reduce its debt levels, with the company’s consolidated debt standing at EGP 111.2 bn at the end of the first quarter. Of the company’s total consolidated debt, 72.5% is related to its Egyptian Refining Company (ERC) — a multi-bn USD greenfield refinery in Mostorod funded by debt that Qalaa has since struggled to pay off despite its businesses achieving good returns.

Onward looking: “While the domestic economy continues to go through a challenging period, where the difficulties faced at home are further exacerbated by the current state of global macroeconomic uncertainty as well as the armed conflicts taking place around us, Qalaa remains well-positioned to overcome these challenges, thanks to our resilience, flexibility, and efficiency, which are ingrained into the core of our DNA,” Qalaa founder and chairman Ahmed Heikal said.

Qalaa’s efforts to settle its debts ramped up in 2Q: The company's next quarterly earnings release will reflect it settling EGP 3.3 bn worth of debt with a group of local banks in exchange for a 17.7% stake in its Taqa Energy subsidiary. Also reflected, will be Qalaa’s USD 28 mn debt buyback program that’s part of a wider plan to retire some USD 430 mn in foreign-currency debt.

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