Qalaa Holdings, an African leader in energy and infrastructure (formerly Citadel Capital), has posted a first-quarter net loss of E£242.7 million ($27.33 million), wider than E£112.2 million pound loss last year.

Announcing the results for the quarter ending March 31, 2016, Qalaa said its total revenues saw a 20 per cent increase y-o-y in the first quarter compared to the adjusted E£1.4 billion recorded last year.

Comparative 1Q15 figures have been adjusted to reflect the divestment of Asec Minya, Asec Ready Mix, Misr Qena Cement, Rashidi El Mizan, Tanmeya & Mashreq, eliminating the figures of divested companies.

Additionally,  Ascom's 1Q16 results were added to Qalaa’s 1Q15 figures, owing to its income statement consolidation starting 3Q15, to allow for a more accurate comparison of year-on-year results.

Top-line growth was driven primarily by operational improvement at ASEC Cement’s Sudan subsidiary Al-Takamol and Qalaa’s energy generation and distribution platform, Taqa Arabia.

“At the mid-way point in 2016, we are laser focused on our core energy units, Egyptian Refining Company and Taqa Arabia, and will continue to press forward with our divestment program,” said Qalaa Holdings chairman and founder Ahmed Heikal.

“On that front, ERC - Egypt’s largest in-progress private-sector megaproject - is more than 85 per cent complete and we expect to sell the first on-spec product in 2017 as planned, with the first full operational year expected to hike Qalaa’s consolidated Ebitda in 2018,” he stated.

Ebitda for the period stood at E£143.2 million, remaining somewhat flat compared to 1Q15 adjusted figure owing to higher SG&A expenses booked during the quarter.

During 1Q16, Qalaa continued to deliver on its divestment and deleveraging strategy having concluded the sale of Misr Glass Manufacturing (MGM) as well as microfinance player Tanmeyah.

On the deleveraging front, during the period between the first quarter of 2015 to this year Qalaa deconsolidated E£1.3 billion of debt through disposals and repaid an additional E£1.1 billion, both of which play into the reduction of financial and operational risk.

“This year marks a critical point for Qalaa and the peak of our transformation strategy. Management is taking concrete steps and decisions in a clear direction that will stabilize the company’s profitability, releasing insolvent investments and enabling us to better direct our focus towards key value-adding projects with promising futures, all within the framework of a difficult economic context,” said co-founder and managing director Hisham El Khazindar.

“Our divestment strategy has seen the company generate net gains from the sale of investments, deconsolidate and repay a total of over EGP 2.4 billion in debt since the beginning of FY2015 to date, and clean up our books in preparation for the start of ERC’s production,” he added.

According to him, the net loss after minority interest stood at E£242.7 million compared to the E£119.1 million loss last year.

Results were weighed down in part by non-cash charges, including consolidated FX losses of EGP 45 million on the back of the 14 per cent devaluation of the EGP against the USD, as well as discontinued operations totaling E£94 million.-TradeArabia News Service