Qalaa Holdings 9M15 revenue driven by energy and cement divisions

Qalaa Holdlings reported consolidated revenues of EGP2051.2m in the third quarter of this year, up 19 per cent compared to the same period of 2014. On a nine-month basis, revenues climbed 31 per cent YoY in 9M2015 to EGP6085.5m.

Revenue growth in the 9M2015 was driven by both cement manufacturing arm ASEC Cement and energy distribution business TAQA Arabia. TAQA Arabia (energy distribution) posted a 36 per cent rise in revenues to EGP1713.2m in the period, while ASEC Holding (cement division) saw its top line grow 30 per cent to EGP2,338.6m. Together, the energy and cement divisions contributed some 69 per cent of total revenues in 9M2015.

EBITDA for the third quarter declined nine per cent YoY to EGP214.5m compared to 3Q14, the first decline following its upward progression from 1Q2014 through 2Q2015. The decrease comes on the back of several factors, including Qalaa’s exit from Misr Cement Qena in Egypt (which had been positively contributing to the share of associates account above the EBITDA line), the 3Q15 witnessing two Eid Holidays (Eid El Fitr and Eid El Adha) resulting in less working days during the quarter, and Sudan’s Al-Takamol facing a temporary fuel shortages during 3Q15.

All of these consequently affected cement revenues and EBITDA, with the latter coming in lower by EGP67m QoQ. Factoring out the decline in the cement sector’s contribution, Qalaa’s 3Q2015 EBITDA would stand at EGP280m, up 19 per cent YoY. On a nine months basis, Qalaa posted EBITDA growth of 71 per cent YoY to EGP 779.6m.

On the restructuring front, Qalaa continues to press forward with its strategy of divesting non-core investments across its footprint, with several exits concluded during the nine-month period and more recently in the fourth quarter of 2015. Among these, in 2Q15 Qalaa concluded the sale of its 27.5 per cent stake in Misr Cement Qena, while in 4Q15 the company further reduced its exposure to the cement industry with its business unit ASEC Cement divesting its stakes in subsidiaries ASEC Minya Cement and ASEC Ready Mix.