Porto Group Holdings is eyeing new expansions in different fields as the Egyptian-listed company appoints a new chairperson and managing director to succeed Mansour Amer.
On Thursday, Porto Group’s board of directors approved appointing Mohamed El Mekkawy as the group’s new chairperson and managing director, replacing founder Mansour Amer, who stepped down.
“It is the proper time now for me to step down from Porto Group and leave the management for another trusted person,” Mansour Amer told a press conference at the company’s headquarters on Thursday.
“The company now can go on its own. We have paved its way to be an independent company with a new board,” Amer added.
In October 2015, Amer Group split into two companies, namely Amer Group Holdings, becoming the demerging entity, and Porto Group Holdings as the demerged entity.
Porto Group is capitalised on EGP 455.9m, distributed across EGP 4.5bn shares at EGP 0.10 per share.
The company’s market value hit EGP 1.1bn as of Monday 7 May.
Company’s projects are under way
Speaking about the company’s current projects, Mansour said that most of the developer’s projects are under way, noting that the company has new projects that value EGP 7bn.
“The first stage of our last project, Santorini, in Ain Sokhna is doing very well,” Mansour explained.
Porto Group Holdings signed the contract of establishing the Santorini project in Ain Sokhna last January, with investment costs likely to hit EGP 340m.
The project spreads across 32,500 square metres and comprises 500 touristic residential units.
“Our sales hit EGP 3.2 billion in the last couple of years. We also carried out projects that valued EGP 1.4 billion last year,” Mansour added.
According to Amer, the company’s land bank hit 5 million square metres.
“Our backlog stands at EGP 6 billion by the end of last year.”
Regarding the company projects abroad, Mansour revealed that Porto Agadir in Morocco is about to acquire the license needed to kick off the project.
“We are currently studying many plans to expand locally and abroad.”
Current income is on focus
“We concentrate now on current income to maximise profits for our valued investors,” Mansour explained.
Current income is an investment objective for a moderately conservative portfolio of securities or companies that provide high dividends and annuity payments to satisfy an investor’s steady income requirements.
“We are now in the process of investing in such activities like education, health, and entertainment sectors,” he added.
“These activities could secure a quarterly income in addition to the real estate and hospitality income. This would be a good thing for the investors,” continuing that “our commercial sector is one of these important sectors which could generate regular revenue for our companies.”
Amer noted that the company’s commercial land bank could hit 352,000 square metres in 18 months.
“This would make Porto Group the market’s first commercial developer,” Amer noted.
Porto Group’s current commercial land bank stands at 30,000 square metres.
Securitisation and other debt options
Responding to a question from Daily News Egypt about the possibility to take to the debt market to finance further expansion, Mansour said that the company’s liquidity standing is at very good levels, but he noted that if there was a need to resort to the debt market, they would prefer securitisation and banks’ credit lines.
Securitisation is the process through which an issuer creates a financial instrument by combining other financial assets and then marketing different tiers of the repackaged instruments to investors. This process can encompass any type of financial asset and promotes liquidity in the marketplace.
Porto Group said at the beginning of 2017 that its board of directors gave the go-ahead to complete the studies regarding issuing securitisation up to a maximum of EGP 300m ($38.3m).
Company’s outlook
Speaking about the company’s outlook, Mansour noted that 2017 would be an exceptional year for his company, as it plans to expand in the local and international markets.
“This year we forecast a jump in our sales and net profits compared to last year,” Mansour said.
Porto Group’s consolidated financial statements showed a net profit of EGP 117.54m for the fiscal year 2016.
Consolidated net profit for the period from 30 August 2015 to 31 December 2015 amounted to EGP 37.25m.
Standalone profits declined 58.9% to EGP 39.74m from EGP 96.9m for the corresponding period.
“We have a land bank that could enable our company to achieve EGP 40 billion of sales in the few coming years,” Amer added.
“Any jump in our profit will reflect in our profit distribution policy,” he added.
The company’s board recommended distributing one bonus share for every ten shares in 2016.
In March, the general meeting of Porto Holding approved an increase of the company’s capital by EGP 45.59m, through the distribution of bonus shares at 10%.
During the meeting, it was also decided to transform part of the group’s capital to global depository receipts (GDRs).
Amer expected to get the Egyptian Financial Authority’s go-ahead in two weeks from now.
