Qalaa Holdings, an African leader in energy and infrastructure has posted a net loss after minority interest of EGP287.1 million ($32.4 million) for the second quarter (Q2) of 2016 on revenues of EGP1.799 billion.

Comparative 2015 figures are adjusted to reflect the divestment of ASEC Minya, ASEC Ready Mix, Misr Qena Cement, Rashidi El-Mizan, RIS, Tanmeyah and Mashreq, eliminating the figures of divested companies in addition to figures of investments held for sale starting 1Q16, including Africa Railways, a company statement said.

Additionally, Ascom’s 2016 results were added to Qalaa’s 2015 figures, owing to its income statement consolidation starting 3Q15, for a more accurate comparison of year-on-year results.

Top-line growth during the second quarter of 2016 was largely attributable to an 18 per cent increase in TAQA Arabia revenues and a 13 per cent improvement in ASEC Holding revenues.

“Despite operating in an extremely difficult economic environment, Qalaa’s second quarter results show improvements in revenue almost entirely across the board,” said Qalaa Holdings chairman and founder Ahmed Heikal.

“The top-line improvement reflects both the resilience of our subsidiaries and management’s ability to focus on proven winners following a divestment strategy that has allowed us to focus on our most profitable investments and maintain a forward-looking, long-term vision for the company.”

EBITDA for the quarter stood at EGP92.9 million, down 40 per cent year-on-year from the EGP155.6 million posted in 2Q15. Management, however, is confident that the temporary drop witnessed in 2Q16, owing to operational hiccups at cement subsidiaries primarily Sudan’s Takamol plant, will reverse in the coming quarters as productivity is already improving and hence EBITDA contributions will return to their normal levels.

Qalaa incurred non-cash charges in Q2 totaling EGP315.1 million, up almost eight fold compared to the EGP40.5 million recorded in Q1 2015. These non-cash charges relate to total impairments of EGP255.4 million booked in Q2 as well as FX losses of EGP39.1 million.

Net Loss after Minority Interest stood at EGP287.1 million in Q2 compared to the loss of EGP4.0 million during Q2 2015.

Setting aside the impact of the above mentioned non-cash charges, Qalaa’s bottom line in 2Q16 would have turned slightly in the black to EGP28 million and a loss of EGP138.8 million in 1H16.

“We are well aware of the toll taken on our bottom-line from these non-cash charges and management is working diligently to reduce them and shore-up the company’s financial statements prior to the commencement of operations at ERC,” said Qalaa Holdings co-founder and managing director Hisham El-Khazindar.

“With ERC now 90 per cent complete and almost three months away from pre-commissioning, mechanical completion is expected by the second half of 2017. This coupled with TAQA’s strong growth momentum will position Qalaa for a financial turnaround by the end of next year.”

“Meanwhile, we will continue to implement our strategy of allocating generated cash flow to deleveraging and the reduction of financial risk at the subsidiary level, while proceeds from future asset sales are to be utilized for deleverage at the holding company level,” El-Khazindar added. – TradeArabia News Service