Good as Gold

May 03, 2023

Today’s Top News & Analysis

Gold prices to be posted on the EGX
Ministry of Petroleum investing USD19bn in 11 petrochemical projects
Ministry of Agriculture releases amounts of corn and soybean
Toyota Tsusho seeks to establish two car factories in the African market
SODIC Q1 2023: Net profits down despite higher revenues
PACHIN bidding war comes to an end

MACRO

Gold prices to be posted on the EGX

Chairman of the Egyptian Exchange (EGX) announced that the EGX and the Financial Regulatory Authority (FRA) are working on posting gold prices on the EGX over the coming period, coinciding with the launch of the recently-approved gold investment fund. Gold prices will be determined by an Egyptian gold refinery that has a significant share of the Egyptian gold market. (Al-Borsa, Mubasher)

Ministry of Petroleum investing USD19bn in 11 petrochemical projects

A report published by the Information & Decision Support Center outlines Egypt’s Ministry of Petroleum & Mineral Resources’ plan to invest USD19bn to implement 11 new petrochemical projects between 2020-2035. These projects are part of the updated national strategy to develop the petrochemical sector and exploit Egypt’s untapped energy resources. We had reported on 26 April 2023 regarding a few of the projects included in the plan; some of the other projects include producing titanium dioxide, algae-based green naphtha, superabsorbent polymer, biodegradable plastic, and green hydrogen. (Al-Borsa)

Ministry of Agriculture releases amounts of corn and soybean

Last week, Egypt’s Ministry of Agriculture released 163,000 tons of corn worth USD59mn and 48,000 tons of soybeans worth USD36mn, in addition to fodder worth USD4mn. (Mubasher)

Toyota Tsusho seeks to establish two car factories in the African market

Toyota Tsusho is seeking to establish two car factories in Africa, one of which could be in Egypt, with a production capacity of 100,000 cars annually/factory. (Economy Plus)

Corporate

SODIC Q1 2023: Net profits down despite higher revenues

SODIC’s [OCDI] Q1 2023 results showed a 17% y/y drop in net profits to EGP187mn despite 25% higher revenues of EGP1.5bn on 70% y/y higher selling, marketing, general, and administrative expenses of EGP422mn and provisions of EGP21.6mn.

Revenues can be broken down into:

· Real estate sales increased by 27% y/y to EGP1.35bn.

· Communities’ management service revenues increased by 11% y/y to EGP109mn.

· Club revenues increased 17% y/y to EGP22.2mn.

· Investment property revenues increased 7% y/y to EGP14.5mn.

Moreover, the main operational highlights during the quarter included:

· Gross contracted sales of EGP2.8bn.

· Cancellations at 21% of gross contracted sales.

· Cash collections of EGP2.1bn.

· 208 units delivered.

Meanwhile, GPM dropped to 37.6% (-3.5pp y/y), affected by the large number of early phase deliveries on SODIC East project. (Company disclosure: 1, 2)

PACHIN bidding war comes to an end

Paints & Chemical Industries’ (PACHIN) [PACH] shareholders responded to National Paints Holding's offer to buy up to 100% of PACHIN at EGP39.8/share, where 19,358,213 shares (80.7% of PACH’s 24mn total shares) accepted the offer. (Company disclosure)