Egypt’s Qalaa Holdings (formerly Citadel Capital), a leader in energy and infrastructure, has posted 40 per cent year-on-year (y-o-y) revenue growth in 3Q18 to EGP3,278.7 million ($208 million) on the back of strong results from its energy subsidiary, Taqa Arabia, and the consolidation of National Printing.

EBITDA for the third quarter also posted a 43 per cent y-o-y increase to EGP305.6 million driven by its energy division and National Printing. The group delivered a net profit of EGP126.4 million in 3Q18 versus a loss of EGP311.8 million in 3Q17.

On a nine-month basis, Qalaa recorded a 46 per cent y-o-y increase in revenues to EGP9,396.1 million, while its EBITDA reported a 70 per cent y-o-y increase to EGP943.0 million in 9M18. The Group reported a net profit of EGP426.6 million in 9M18 compared to a net loss of EGP3,470.3 million recorded in the same period of last year.

“Qalaa delivered a solid operational performance during the third quarter of 2018, building on the positive growth trajectory since the beginning of the year,” said Qalaa Holdings chairman and founder Ahmed Heikal.

“The Group’s top line and EBITDA witnessed 40 per cent and 43 per cent year-on-year growth, respectively, while the partial deconsolidation of Africa Railways debt and a provision reversal helped drive bottom-line profitability for the quarter, with Qalaa’s net profit recording EGP126.4 million in 3Q18.”

During the third quarter, following a further deconsolidation of Africa Railways’ operational liabilities in both Kenya and Uganda, Qalaa booked a gain on sale on investment of EGP252.6 million, with the Group expecting another one-off non-cash gain in the coming months once a sale or liquidation takes place.

Additionally, Qalaa booked EGP202.7 million as a provision reversal in 3Q18 related to one of its share swap deals, which entailed a payment linked to Qalaa’s share price. As the company’s share price has steadily improved during the quarter and at the close of September 2018, the provision expensed has decreased and hence the recorded gain in 3Q18.

“We are seeing increased contribution from our mining platform Ascom and the recent consolidation of National Printing has added significant upside to both our top-line and EBITDA,” said Hisham El-Khazindar, Qalaa Holdings’ co-founder and managing director.

“Our growth strategy will see us work to extract higher value from both companies as well as from our transportation and logistics arm which boasts potential growth owing to increasingly favourable market dynamics. We have also streamlined our portfolio and pushed through exits from discontinued operations that today no longer weigh on our bottom-line.”

The group’s EBITDA growth for the third quarter of the year was driven by strong performances across Qalaa’s portfolio, including Taqa Arabia, Ascm, Dina Farms, Takamol, and ASEC Engineering. Additionally, the consolidation of National Printing also helped drive consolidated EBITDA growth, contributing EGP74.7 million to 3Q18 EBITDA.

“Qalaa is actively working to deliver on its previously communicated growth strategy, driving operational expansion across its portfolio. At Taqa Arabia, we’re expanding our geographic reach having added two new filling stations during the quarter. At our energy generation and distribution platforms, we are deriving higher value from a growing client base. Our expansion drive is part of a growth strategy that will see us deploy over EGP8 billion in small incremental investments over the coming three years, including our ventures in solar energy and expansions across all current businesses. Meanwhile, our transformational Egyptian Refining Company project is now 98.8 per cent complete,” added Heikal.

“In the upcoming year, the group will continue to focus on growing its key subsidiaries, while completing the disposal of our remaining non-core businesses. Solid growth trajectories across Qalaa’s divisions, multiple operational improvements throughout 2018, the imminent start of production at ERC and completing the clean-up of the group’s financials leave us confident that the coming quarters will gradually bring Qalaa back to operational profitability and allow us to create new value for our shareholders,” El-Khazindar concluded. – TradeArabia News Service