Qalaa's Total Revenues climb 31% y-o-y in 9M15 and EBITDA rises an impressive 71% to EGP 780 million

Qalaa Holdings (CCAP on the Egyptian Exchange, formerly Citadel Capital) released today its consolidated financial results for the quarter ending 30 September 2015, reporting revenues of EGP 2,051.2 million, up 19% compared to the same quarter last year. On a nine-month basis, revenues climbed 31% y-o-y in 9M2015 to EGP 6,085.5 million.

09 December 2015
Qalaa continues to press forward with its strategy of risk reduction, deleveraging and asset divestment programs that will give more weight to ongoing operations and fundamentally re-shape its financials going forward
Qalaa Holdings (CCAP on the Egyptian Exchange, formerly Citadel Capital) released today its consolidated financial results for the quarter ending 30 September 2015, reporting revenues of EGP 2,051.2 million, up 19% compared to the same quarter last year. On a nine-month basis, revenues climbed 31% y-o-y in 9M2015 to EGP 6,085.5 million.

Revenue growth in the 9M2015 was driven by both cement manufacturing arm ASEC Cement and energy distribution business TAQA Arabia. TAQA Arabia posted a 36% rise in revenues to EGP 1,713.2 million in the period, while ASEC Holding saw its top line grow 30% to 2,338.6 million. Together, the energy and cement divisions contributed some 69% of total revenues in 9M2015. Qalaa also began the full consolidation of ASCOM in 3Q2015, with latter contributing EGP 162 million to Qalaa's top-line.

EBITDA for the third quarter declined 9% y-o-y to EGP 214.5 million compared to 3Q2014, 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 -- which had been positively contributing to the share of associates account above the EBITDA line; 3Q2015 witnessing two Eid Holidays -- Eid El Fitr and Eid El Adha -- leading to less working days during the quarter; and Sudan's Al-Takamol facing temporary fuel shortages during 3Q2015, all of which have consequently affected cement revenues and EBITDA, with the latter coming in lower by EGP 67 million q-o-q. Factoring out the decline in the cement sector's contribution, Qalaa's 3Q2015 EBITDA would stand at EGP 280 million, up 19% y-o-y. On a nine months basis, Qalaa posted EBITDA growth of 71% y-o-y to EGP 779.6 million.

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. In 2Q2015 Qalaa concluded the sale of its 27.5% stake in Misr Cement Qena, while in 4Q2015 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. Meanwhile, the company's Agrifoods business unit Gozour has signed sale and purchase agreements (SPAs) for the sale of 100% of confectioner Rashidi El-Mizan as well as for the divestment of RIS assets in Sudan and El-Misrieen in Egypt. Finally, business unit Mashreq has signed an agreement with the General Authority of the Suez Canal Economic Zone for the transfer of a concession contract.

 "We are pressing ahead with plans to divest assets that will allow us to deleverage and devote maximum attention to high-growth businesses in sectors that are vital to the development of our region such as refining, energy distribution and transportation & logistics," said Qalaa Holdings Chairman and Founder Ahmed Heikal. "We remain firmly committed to growing our investments in ERC -- Egypt's largest in-progress private-sector megaproject due to begin production in 2017 -- and TAQA Arabia which is pursuing exciting new opportunities in gas distribution, electricity generation and renewable energy alike.  In parallel we are also looking for opportunities to unlock shareholder value at subsidiaries including ASCOM and Rift Valley Railways that have strong growth outlooks," he added. 

"The sale of ASEC Cement's Egyptian assets alongside other transactions will fundamentally re-shape Qalaa's financials, giving more weight on both our income statement and balance sheet to ongoing operations at our energy and mining units and setting the stage for the transformative impact of ERC," said Qalaa Holdings Co-Founder and Managing Director Hisham El-Khazindar. "The near-full impact of the substantial deleveraging that accompanies these transactions will be felt in our 4Q2015 and 1Q2016 financials."

The company reported a net loss after tax and minority interest of EGP 125.5 million in the third quarter of 2015, a two-fold increase compared to 3Q2014's loss of EGP 59.5 million. The widening of losses y-o-y owes primarily to an increase in bank interest expense by EGP 30 million related to ASCOM's consolidation, as well as an increase of EGP 27 million in booked provisions related to ARESCO and ASEC Automation. On a nine month basis, however, bottom-line losses narrowed by 31% to EGP 322.4 million compared to 9M2014 figure of EGP 470.1 million. It is worth noting that during 9M2015 the company booked charges totaling EGP 120.5 million in discontinued operations, c.EGP 74 million are related to Agrifoods business units that have either been exited in the fourth quarter or are earmarked for sale.

Meanwhile, total debt levels excluding ERC and RVR declined to EGP 6.63 billion on the back of continued deleveraging, with debt reduction to further accelerate in FY15 -- by c. EGP 1.2 billion -- post the sale of ASEC Minya and Rashidi El-Mizan. ERC's total debt climbed to EGP 8.8 billion as at 30 September, 2015, on the back of draw downs totaling EGP 2.07 billion during the third quarter of 2015. Construction at ERC is well underway with 76% progress as of November 2015 and with on-spec production to commence by the second half of 2017. 

Management reiterates its commitment to its current strategy, which has focused on deleveraging at the holding and platform company levels; acquiring additional stakes in key platform companies and selective investments within existing platform companies.

Key elements of Qalaa Holdings' strategy in FY15 include:

Deleveraging at the holding and platform company levels

Acquisition of additional stakes in key platform companies

Selective investments within existing platform companies

Share Buybacks: Management is mindful of the opportunity to create value through share buybacks, and intends to use the proceeds from exits post deleveraging to acquire Qalaa shares for so long as these trade at a significant discount to their fair market value.

The aforementioned elements are to be financed through sale of assets where Qalaa is in advanced stages of divestments, including Misr Glass Manufacturing, Dina Farms Op Co, and ASEC Cement's operations in Algeria (Zahana Cement & Djelfa). The company reiterates its stance that further divestments will be executed if needed.

Qalaa Holdings' full business review for 3Q/9M2015 and the financial statements on which it is based are now available for download on


Previous Qalaa Holdings press releases on this subject and others may be viewed online from your computer, tablet or mobile device at

Qalaa Holdings (CCAP.CA on the Egyptian Stock Exchange) is an African leader in infrastructure and industry. Formerly known as Citadel Capital, Qalaa Holdings controls subsidiaries in industries including Energy, Cement, Transportation & Logistics, and Mining. To learn more, please visit

Forward-Looking Statements

Statements contained in this News Release that are not historical facts are based on current expectations, estimates, projections, opinions and beliefs of Qalaa Holdings. Such statements involve known and unknown risks, uncertainties and other factors, and undue reliance should not be placed thereon. Certain information contained herein constitutes "targets" or "forward-looking statements," which can be identified by the use of forward-looking terminology such as "may," "will," "seek," "should," "expect," "anticipate," "project," "estimate," "intend," "continue" or "believe" or the negatives thereof or other variations thereon or comparable terminology. Actual events or results or the actual performance of Citadel Capital may differ materially from those reflected or contemplated in such targets or forward-looking statements. The performance of Qalaa Holdings is subject to risks and uncertainties.


Araxi Keoshgerian
SAHARA Communications
Senior Account Manager
Mob: 0504957461

For more information, please contact:
Ms. Ghada Hammouda
CMO & Head of Marketing Communications
Qalaa Holdings
Tel: +20 2 2791-4439
Fax: +20 22 791-4448
Mobile: +20 106 662-0002
Twitter: @qalaaholdings

© Press Release 2015

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