Qalaa Holdings continues to achieve strong growth and improve its financial performance in the second quarter of 2024

Qalaa Holdings, a leading African investment company specializing in energy and infrastructure, showcased strong performance in the second quarter of 2024. Consolidated revenues surged by 64% year-on-year (y-o-y), reaching EGP 38.2 billion, supported by broad-based growth across its subsidiaries, particularly the Egyptian Refining Company (ERC). Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) also recorded a 43% y-o-y growth, hitting EGP 5.6 billion, signaling the company’s operational strength and resilience amidst challenging global conditions.

Key Financial and Operational Highlights

 Revenue Growth

Qalaa’s consolidated revenue growth was driven by both USD-denominated earnings from ERC and improved performance across most subsidiaries, including ASEC Holding, Dina Farms, and TAQA Arabia.

Qalaa Holdings
Qalaa Holdings

Profitability Trends

While overall EBITDA rose sharply, excluding ERC, EBITDA saw an impressive 195% y-o-y increase. However, net losses expanded to EGP 1.4 billion, attributed to non-operational expenses such as revaluation costs of Allied Corp and TAQA Arabia shares and legal fees linked to restructuring.

Qalaa Holdings
Qalaa Holdings

Subsidiary Performance

ERC’s EBITDA rose 29% y-o-y, fueled by a weaker Egyptian pound, though refining margins remained cyclically pressured. Dina Farms achieved a remarkable 154% y-o-y growth in EBITDA, attributed to enhanced operational efficiency. ASEC Holding delivered an 860% increase in EBITDA, highlighting its turnaround in operational profitability.

TAQA Arabia saw a 37% rise in EBITDA, benefiting from strong contributions by TAQA Gas and TAQA Power.

Qalaa Holdings
Qalaa Holdings

Strategic Focus and Debt Restructuring

Qalaa continued its financial restructuring initiatives, achieving significant milestones ERC disbursed USD 269.3 million in senior debt repayments by June 2024, remaining on track to fully settle these obligations by the fourth quarter of 2025.

Qalaa finalized its senior debt purchase through QHRI, which will reflect on its books until the planned capital increase before June 2025. The company also reinforced its growth strategy, focusing on incremental investments insubsidiaries, new export-oriented green projects, and expanding local manufacturing to capitalize on competitive cost advantages.

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Outlook: Resilience Amid Challenges

Despite a challenging macroeconomic environment marked by high inflation, rising interest rates, and global uncertainties, Qalaa remains confident in its growth trajectory. The company’s diversified portfolio and operational agility position it to navigate currency fluctuations, support import substitution, and explore emerging investment opportunities.

Conclusion

Qalaa Holdings’ second-quarter performance underscores its robust strategy, adaptability, and commitment to long-term value creation. The significant achievements in debt restructuring and the promising performance of key subsidiaries highlight the company’s resilience in delivering growth across challenging markets.

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