TODAY’S TOP NEWS & ANALYSIS
Additional fees to support tourism
CIB issues new CD's in GCC currencies
EFID's 2022 results: Strong net profits with flat margins
SUGR's 2022 preliminary results: Strong net profits despite weak performance in Q4
EXPA 2022: ROE is finally back to double digits territory
CANA 2022: Strong balance sheet growth with high profitability
Egytrans' 2022: 152% increase in bottom line profits
ATQA 2022: 134% y/y growth in net profits
MACRO
Additional fees to support tourism
Reportedly, the Egyptian government will charge hotels a 1% of their room rates to be paid to the Tourism Ministry, with a minimum of EGP5 - 50 per night. Whereas, cafes and restaurants will pay fixed fees of EGP4,000 - 5,000 per year. (Enterprise)
CORPORATE
CIB issues new CD's in GCC currencies
Commercial International Bank [COMI] has reportedly issued new three-years CD's in Saudi Riyal, Emirati Dirham, and Qatari Riyal with a monthly yield of 5.25%. (Economy plus)
EFID's 2022 results: Strong net profits with flat margins
Edita Food Industries [EFID] reported a 69% y/y growth in Q4 2022 net profits to EGP329mn (+15% q/q), on higher revenues of EGP2.5bn (+64% y/y) with a 25% q/q growth. Cakes segment contributed by 51% to total revenues at EGP1.3bn (+97% y/y) and (+26% q/q). The revenue growth was driven by both higher selling prices and sales volumes, coming as follows:
· Blended sales volumes grew at 34.6% y/y to 1.1bn packs, (+16.6% q/q).
· Blended average prices grew at 21.5% y/y to EGP2.32/pack, (+7.4% q/q).
On the other side, margins came in flat despite the high costs:
· Gross profit margin recorded 33.7% with -0.1pp both y/y and q/q.
· EBITDA margin recorded 19.0% (+0.1pp y/y), (-2.9pp q/q). (Company disclosure)
SUGR's 2022 preliminary results: Strong net profits despite weak performance in Q4
Delta Sugar [SUGR] reported preliminary 2022 net profits of EGP850mn vs. EGP385mn last year, on higher gross profit of EGP1.0bn with a margin of 28% (+12pp y/y). Meanwhile, revenues came in at EGP3.8bn (+16% y/y).
Despite the strong net profits in 2022, SUGR's performance in Q4 2022 came as follows:
· Net profits decreased by 40% q/q to EGP115mn.
· Revenues grew slightly to EGP636mn (+2% q/q).
· Gross profit margin slipped to 1% (-28pp q/q). (Company disclosure)
EXPA 2022: ROE is finally back to double digits territory
Export Development Bank of Egypt [EXPA] has announced extraordinary standalone results for 2022. Net income surged 145% y/y to EGP1.2bn on the back of:
1) 66% y/y leap in net interest income to EGP3bn, which is a new record for EXPA.
2) Huge decrease in effective tax rate from 45% to 37% given most interest income came from loans.
3) 46% y/y higher net fees and commissions income to EGP519mn and 50% y/y higher trading income of EGP351mn.
· This increase in net income came despite a 32% y/y increase in booked provisions to EGP350mn, pushing the bank’s CoR up by 13 bps to 0.86%
· EXPA’s loan book increased by 23% ytd to EGP45bn, fueled by corporate loans in local currency, which caused the bank’s GLDR to increase to 62%
· The NPL ratio upped a bit to 3.6% with a slightly lower coverage ratio of 106%
· While deposits grew by 13% ytd to EGP73bn due to foreign currency deposits’ revaluation
· NIM expanded by 80 bps to 4.49%, and the ROAE is finally back to double digits recording 15% in 2022
· BoD has proposed distributing stock dividends worth EGP840mn (i.e. 84mn shares at par value of EGP10/share). However, the bonus share ratio for this proposal is yet to be determined after registering the last capital increase and the previous stock dividends.
· The bank is currently traded at a P/E of 5.5x and a P/BV of 0.7x (Bank disclosures: 1,2)
CANA 2022: Strong balance sheet growth with high profitability
Suez Canal Bank [CANA] has announced the full standalone results for 2022 where the net income increased 72% y/y to EGP1bn. This was mainly on the back of:
1) A 24% y/y increase in net interest income to EGP1.9bn.
2) An 8x higher gains on investments to EGP961mn.
3) Significantly lower effective tax rate of 36% against 42% last year.
This came despite a 7x y/y higher booked provisions of EGP244mn to safe guard the 28% ytd growth in loans to EGP30bn. While deposits grew by 30% ytd to EGP65.8bn. ROE also increased to 18.9% in 2022 reflecting the record earnings. The bank is currently trading at a P/E of 3.5x and a P/BV of 0.7x. (Bank disclosure)
Egytrans' 2022: 152% increase in bottom line profits
Egytrans [ETRS] 2022 net income came at EGP46.1mn (+152% y/y) on revenues of EGP400.1mn (+36.3% y/y). The increase in revenues is attributable to:
· A 76.6% y/y increase in logistics revenues, reaching EGP105.7mn, and
· 65.2% y/y increase in free zone area revenues, reaching EGP128.1mn.
· Interest income increased 15 times y/y, reaching EGP38mn. (Company disclosure)
ATQA 2022: 134% y/y growth in net profits
Misr National Steel (Ataqa) [ATQA] released its 2022 financial results, posting net profits of EGP235mn (+134% y/y) on revenues of EGP2.5bn (+5% y/y). The company’s significant net profit increase was driven by its performance in Q4 2022. Net profits reached EGP119mn (+315% q/q) on revenues of EGP490mn (-25% q/q) as a result of recording an EGP125mn (+197% q/q) gain from the net change in the fair value of financial investments. (Company disclosure)
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