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May 23, 2023

Today’s Top News & Analysis

AstraZeneca to invest USD100mn in Egypt
AMOC and Kima to be added to the IPO program
EXPA Q1 2023: Double-digit growth despite provisions and FX losses
MCQE Q1 2023: Higher revenues on higher cement prices
ValU partners up with Partment

MACRO

AstraZeneca to invest USD100mn in Egypt

AstraZeneca will invest over USD100mn in Egypt, while it plans to increase its production capacity by 50%. In addition, AstraZeneca plans to increase the use of local products from 50-60% to 80%. (Enterprise)

AMOC and Kima to be added to the IPO program

The Egyptian government may offer an additional stake in Alexandria Mineral Oils Co. [AMOC] to the IPO program. Meanwhile, Emiratis are interested in investing in the Egyptian Chemical Industries (Kima) [EGCH]. (Al-Mal)

Corporate

EXPA Q1 2023: Double-digit growth despite provisions and FX losses

Export Development Bank of Egypt [EXPA] announced Q1 2023 results. Here are our main takeaways:

· Net income increased by 74% y/y to EGP502mn on the back of a stellar 104% y/y growth in net interest income (NII) to EGP1.1bn and a 230% y/y growth in net fees and commissions to EGP336mn.

· NII growth did not fully filter through to net income due to:

(1) A significant increase in provisions to EGP167mn against EGP0.384mn last year.

(2) A 45% y/y increase in administrative expenses to EGP545mn.

(3) Other operating expenses of EGP81mn due to FX losses against other operating income of EGP84mn last year.

· On the balance sheet side, EXPA managed to grow its loan book by 17.5% ytd to EGP52.6bn with an NPL of 3.3% and a coverage ratio of 109%.

· Deposits grew by 10% ytd to EGP80bn, bringing GLDR to 66%.

· ROAE is finally up to 21%, but CAR declined to 13.95%.

EXPA is currently traded at an annualized P/E of 3.6x and a P/BV of 0.7x. (Bank disclosure)

MCQE Q1 2023: Higher revenues on higher cement prices

Misr Cement Qena [MCQE] Q1 2023 results show net income of EGP65.7mn compared to EGP59.6mn in Q1 2022 (+10% y/y) with the following highlights:

· Revenues grew by +35.5% y/y to EGP906.4mn on a higher average blended selling price of EGP1,487/ton (+56% y/y), despite the decrease in sales volume to 573,000 ton (-12%y/y) of cement compared to Q1 2022.

· Export volumes decreased to 18,000 tons (-67% y/y) impacted by the political situation in Sudan.

· GPM decreased to 22% compared to 23% in Q1 2022 (-1pp y/y) due to higher cost of fuels and energy.

· Ready mix concrete sales amounted to EGP97mn compared to EGP68mn (+43% y/y) due to selling 82K cubic meters of concrete during Q1 2023 (+5% y/y). Meanwhile, ready mix concrete segment had a GPM of 7% compared to a GLM of -1% in Q1 2022. (Company disclosure)

ValU partners up with Partment

ValU, the consumer finance arm of EFG Hermes Holding [HRHO], announced signing a partnership agreement with Partment, a digital platform startup that provides property management services and was founded last year, allowing Partment customers to benefit from ValU's payment plans. (Economy Plus)