Today’s Top News & Analysis
Egyptian Ministry of Agriculture releases amounts of corn and soybeans
Upper Egypt Flour Mills Q2 2022/23: A strong quarter on higher revenues
EFIC 2022: Strong y/y growth, yet weaker Q4 margins
SKPC 2022: Ethylene and local polyethylene sales steal the show
Arab Aluminum preliminary 2022: Local sales maintain growth
Intesa Sanpaolo may fully acquire ALEXBANK
CBE approves ABC Bank's acquisition of BLOM Bank
MACRO
Egyptian Ministry of Agriculture releases amounts of corn and soybeans
Last week, the Egyptian Ministry of Agriculture released 81,000 tons of corn worth USD29mn and 34,000 tons of soybeans worth USD26mn, in addition to fodder worth USD4mn. (Al-Borsa)
CORPORATE
Upper Egypt Flour Mills Q2 2022/23: A strong quarter on higher revenues
Upper Egypt Flour Mills [UEFM] reported a consolidated Q2 2022/23 consolidated net profit of EGP45mn (+65% y/y) as:
· Revenues rose to EGP576mn (+56% y/y).
· Gross profit margin was almost flat at 14.7% (+0.3pp y/y).
· SG&A-to-revenues ratio improved to 6.5% (-1.2pp y/y). (Company disclosure)
EFIC 2022: Strong y/y growth, yet weaker Q4 margins
Egyptian Financial & Industrial Co. [EFIC] announced its full 2022 consolidated financials, where:
y/y:
• Net income increased by 148% to EGP755mn, partially on the back of 33% y/y higher sales of EGP3.6bn on higher prices, which led GPM to increase by 5pp to 35%.
• Net financing income recorded EGP86mn vs. net financing expense of EGP66mn a year before, mostly realized in Q4 2022.
• Other operating income increased by 138% y/y to EGP20mn on a one-off sale of waste.
q/q:
• Q4 2022 was relatively weak, as GPM dropped to 22% vs. 29% in Q3 2022, mainly due to COGS (+21% q/q) outpacing sales (+11% q/q), which could possibly be attributable to lower selling prices or higher raw materials costs (e.g. Sulphur).
• Despite a lower GPM, net income rose 31% q/q to EGP145mn in Q4 2022 on higher net financing income and other operating income.
EFIC’s ROE has increased to 36% against 19% a year before. Its BoD has proposed distributing a cash dividend of EGP3/Share, implying a 45% payout ratio and a 7% yield. (Company disclosures: 1, 2)
SKPC 2022: Ethylene and local polyethylene sales steal the show
Sidi Kerir Petrochemicals Co. (Sidpec) [SKPC] released its 2022 results, posting net profits of EGP1.2bn (+131% y/y) on higher revenues of EGP8.6bn (+69% y/y) with a 24% GPM (+3pp y/y), mainly attributed to:
• Higher local polyethylene revenues of EGP3.8bn (+108% y/y) on the back of selling 126,000 tons (+54,000 tons y/y) at higher selling prices.
• Significantly higher ethylene revenues of EGP835mn (+184% y/y) as a result of selling 36,000 tons (+18,000 tons y/y) at higher selling prices.
• Secondary product (Butene-1, Ethane, Naphtha, etc.) revenues reached EGP1.3bn (+215% y/y) as a result of higher prices and greater sales volume.
SKPC showed exceptional Q4 2022 results, posting net profits of EGP493mn (+78% q/q) on higher revenues of EGP2.8bn (+49% q/q) with a 31% GPM (+7pp q/q), mainly attributed to:
• Recording an FX loss of only EGP0.8mn vs. EGP34mn the previous quarter.
• Earning an interest income of EGP40mn (+90% q/q).
• Higher polyethylene export revenues of EGP672mn (+52% q/q) as a result of the EGP devaluation.
• Higher ethylene revenues of EGP245mn (+20% q/q), driven by higher selling prices. (Company disclosure)
Arab Aluminum preliminary 2022: Local sales maintain growth
Arab Aluminum’s [ALUM] preliminary results for 2022 showed sales almost flat y/y (-1%) at EGP370mn on 21% lower exports. However, GPM increased to 13.5% vs. 12.9% a year before on lower cost. Net income increased 10% y/y to EGP23mn on other income of EGP4.9mn (+218% y/y) and a lower effective tax rate of 20% vs. 27% a year before. Meanwhile, BoD has proposed distributing a cash dividend of EGP1.75/share, implying a 43% payout ratio and a 2.7% yield. (Company disclosure)
Intesa Sanpaolo may fully acquire ALEXBANK
Intesa Sanpaolo Group, the Italian international bank, is reportedly negotiating to acquire the remaining 20% of Bank of Alexandria (ALEXBANK) owned by the Egyptian government to turn it into a fully-owned subsidiary. The deal value is yet to be disclosed. (Hapi)
CBE approves ABC Bank's acquisition of BLOM Bank
In an official gazette, the Central Bank of Egypt (CBE) announced approving the full acquisition of BLOM Bank by Arab Banking Corporation (ABC). In August 2021, ABC Bank acquired 99.5% of BLOM Bank for USD425mn, which according to ABC Bank increased its market share 3x. (Economy plus)
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