Qalaa Holdings announced, on Thursday, its consolidated financial results for the second quarter (2Q) of 2020, recording total revenue of EGP 7.4bn.
On a six-month basis, Qalaa’s revenues increased 148% y-o-y and reached EGP 17.8bn in the first half (1H) of 2020.
Qalaa’s top-line growth in 2Q 2020 was driven by Egyptian Refining Company’s (ERC) contribution of EGP 4bn during the period, constituting c.53% of Qalaa’s consolidated top-line.
Qalaa’s ERC was officially inaugurated by President Abdel Fattah Al-Sisi on 27 September 2020, a testament to the project’s strategic importance for Egypt’s economy and energy security. The megaproject provides a local alternative to imports, helping to meet the increase in consumption in the local market, and integrates economic, social, and environmental returns that are fully in accordance with Egypt’s Vision 2030.
“In September 2020, we had the honor to host President Abdel Fattah Al-Sisi for ERC’s official inauguration. I would like to take this opportunity to once more thank the President for his continued support and the economic reform program which has played a key role in attracting investment in the project,” said Qalaa Holdings Chairperson and Founder Ahmed Heikal.
Excluding ERC’s contribution, Qalaa’s revenue would record a 4% y-o-y decline, a marginal decrease considering the global challenges posed by COVID-19. The resilient performance was supported by ASEC Cement’s Al Takamol plant in Sudan which benefited from recovering cement markets and an optimized pricing strategy. Performance was also supported by Nile Logistics which recorded a 7% y-o-y top-line increase in 2Q 2020 on the back of improved operational performance at its grain storage and container depot facilities despite the impacts of COVID-19.
“Despite the full brunt of COVID-19 peaking during the second quarter of the year, a combination of resilience and operational efficiency across our subsidiaries allowed us to minimize the impact on our performance,” said Heikal. “Whilst our top-line witnessed significant growth on account of ERC’s maiden contribution of EGP 4.0bn, our revenue excluding the refinery’s share recorded only a marginal 4% decline which, in management’s view, is a commendable achievement given the unprecedent global challenges. This was supported by the breadth of our diversified portfolio and ability to unlock value from strategic sectors.”
“Qalaa’s performance was anchored by a recovering cement market in Sudan and an optimized pricing strategy by Al Takamol, which played a key role in offsetting the impacts of Egypt’s underperforming cement market. At Nile Logistics, growth came on the back of rising volumes at our grain storage warehouse despite COVID-19 related delays in shipments, testament to the market’s strategic importance, as well as continued smooth operations at our container depot,” added Heikal.
“Qalaa has delivered on several milestones across our subsidiaries that will drive future growth as well as provide further support to mitigate the impacts of COVID-19” said Hisham El-Khazindar, Qalaa Holdings’ Co-Founder and Managing Director. “We have successfully connected Nile Logistics’ container depot and a mine site at ACCM to the national grid, which will optimize these subsidiaries’ cost structure, allow them to reap the benefits of consistent energy as opposed to the previous reliance on diesel generators and reduce their carbon footprint. At National Printing, the company has concluded the relocation of its new state-of-the-art corrugated sheets/boxes plant and we are confident that it will expand the company’s offering and diversify its product range as well as position National Printing to penetrate new markets. Finally, at TAQA Arabia, we expect operations at its Sixth of October industrial zone substation to commence by the end of 2020 and we continue to push forward with the rollout of new CNG and fuel marketing stations.”
