Today’s Trading Playbook
KEY THEMES
Telecom Egypt [ETEL] has posted Q1 2022 results. ETEL saw its bottom line dropping to EGP1.4bn (-36% y/y) despite satisfying double-digit top line growth. During the quarter, ETEL achieved total revenues of EGP9.4bn, higher 12% y/y. Growth in revenues came in light of higher data revenue (+22% y/y) and higher cable and voice revenues. However, margin came under slight pressure, as EBITDA achieved amounted to EGP3.6bn (+11% y/y), implying an EBITDA margin of 38% (52bps y/y). Despite the growth in EBITDA, net earnings slippage came as ETEL indicated weaker performance by Vodafone Egypt [VODE] due to a FX loss of EGP222mn along with impacts related to the accounting of employee profit share, besides spectrum amortization, leading to higher than usual results last year and lower than usual results this year. We note that ETEL is currently traded at TTM P/E of only 3.5x. ETEL is one of the 15 stocks we had picked in our STANDPoint 2022 strategy outlook published on 30 January 2022. We have an Overweight rating for the name, with our 12MPT of EGP28.1/share (ETR +81%).
Now, on to the top news and analysis for the day.
Top News & Analysis
MACRO NEWS
A meeting between President Abdel Fattah El Sisi and Polish President Andrzej Duda in Cairo yesterday ended without an announcement on a partnership to ship Ukrainian wheat to Egypt. (Enterprise)
State-owned National Bank of Egypt (NBE) and Banque Misr will allegedly no longer be selling the high yield 18% p.a. CDs introduced last March 2022. Instead, a new CD product will be offered with a 14% annual yield for four years. (Enterprise)
CORPORATE NEWS
e Finacne [EFIH] has posted its Q1 2022 results, where consolidated revenues rose by 20.7% y/y to record EGP559.5mn
Suez Industrial Development Company, a subsidiary of Orascom Construction [ORAS], signed an agreement with three Indian investors to build three new factories in SIDC's Industrial Park in Sokhna.
FG Hermes Holding [HRHO] is currently working on two IPO’s in Saudi Arabia, with one of them in the healthcare sector, while the other is within the retail sector. (Enterprise)
El-Shams Housing & Development [ELSH] released unaudited financial results for Q1 2022, which resulted in declining net profits of EGP17.4mn (-64.6% y/y) vs. EGP49.3mn in the same period last year
Beltone Financial Holding [BTFH] announced net earnings of EGP4mn (+0.83% y/y).
Edita Food Industries [EFID] finalized a deal with TotalEnergies to receive fuel cards for its fleet trucks. (Company disclosure)
Lafarge cement aims to achieve 8.6mn tons of sales this year compared to 6.2mn last year. (Al-Borsa)