Qalaa Holdings, a leader in energy and infrastructure, has reported revenues of EGP9.3 billion ($522 million) for 2017, up 22 per cent y-o-y on the back of strong growth from its energy subsidiaries, Taqa Arabia and Tawazon, as well as Ascom, its platform in the mining sector.

Qalaa (formerly Citadel Capital) booked a net loss of EGP4.7 billion in FY2017, driven primarily by EGP4.3 billion in impairments booked during the year, which management expects to be the final round of significant impairments, as well as by EGP434.1 million in losses from discontinued operations.

“Qalaa’s full-year results reflect the ongoing transformation across our portfolio companies, with several platforms gearing-up for a new growth phase,” said Qalaa Holdings chairman and founder Ahmed Heikal.

“Solid operational performance saw us deliver a 22 per cent increase in our top-line to EGP9.3 billion as energy, mining, cement and transportation plays continued to capitalize on the prevailing economic trends and turn new market dynamics into growth opportunities and avenues to create shareholder value.”

“We’re also pleased to announce that Qalaa has reached a restructuring agreement for the Egyptian Refining Company with all stakeholders, including lenders, co-shareholders, and contractors to ensure timely project completion. Qalaa is currently exploring options to potentially increase its indirect ownership stake in this mega project, which will not only transform our company but is also a strategic asset for the Egyptian economy,” Heikal added.

Qalaa recorded substantial growth at the EBITDA level to reach EGP769.1 in FY17, up 56 per cent y-o-y, with growth being driven by Qalaa’s mining, cement and agrifoods sectors. Meanwhile, major impairments during FY17 included EGP3.2 billion booked for Africa Railways (RVR), which also added EGP224.0 million in losses from discontinued operations. Management expects this to be the final round of significant impairments.

On a quarterly basis, revenues grew by 2 per cent y-o-y to EGP2.5 billion in 4Q17 while impairments and interest expenses weighed down on Qalaa’s bottom-line, resulting in a net loss of EGP1.3 billion in 4Q17.

“Thanks to a courageous reform program, Egyptian businesses are benefiting from newly found competitiveness and Qalaa’s platforms are now ideally positioned to deliver returns and capitalize on new market dynamics,” said Qalaa Holdings co-founder and managing director Hisham El-Khazindar.

“These favourable developments that have validated our investment thesis and are affecting all our portfolio companies, along with ERC’s start of production which is earmarked for 2019, leave us confident that 2017 was an inflection point for Qalaa and that 2018 and beyond will witness further improvement in our financial results leading to a positive bottom-line in 2019.

“We also continue to push forward with our portfolio restructuring strategy, whether through asset sales or initial public offerings, having exited our investment in garment manufacturer DICE through an IPO on the Egyptian Exchange, divested from ASEC Djelfa, and most recently, signed an SPA to exit Designopolis Mall through the sale of our stake in Bonyan in 2Q18,” El-Khazindar concluded. – TradeArabia News Service