Today’s Top News & Analysis
Egypt to hold three international oil and gas tenders
Seven 5-star hotels to be offered to investors
Egypt starts EGX roadshow in UAE and KSA today
GALDP to offer 238 acres near Arqeen port
Al Sharif Holdings invests EGP500mn in Shepheard Hotel
Qatari Diar invests EGP1.75bn in City Gate's new phase
Core banking profitability leads CIB's 2022 profits to a new high
FX gains save the day for AMOC’s H1 2022/23 net income
Credit Agricole’s preliminary net income shows strong growth for 2022
ADIB’s 2022 preliminary results come in line with expectations
Elsewedy Electric T&D signed a contract to build electric cars charging stations
MACRO
Egypt to hold three international oil and gas tenders
The Minister of Petroleum & Mineral Resources announced that Egypt will launch three international tenders for the exploration and extraction of oil and gas during 2023. This is part of the country’s ambitious plan to drill in 300 exploratory wells until 2025. He expects Egypt’s international petroleum partners to invest USD1.5bn throughout FY2023-24. Furthermore, Egypt’s petroleum exports grew 41% in 2022 to reach USD18.2bn. (Asharq Business, Al-Borsa)
Seven 5-star hotels to be offered to investors
According to sources, the Holding Company for Tourism & Hotels (HOTAC) will transfer seven 5-star hotels to a new holding company to be offered to private investors, offering up to 30% stakes in the hotels. It's also reported that Cairo Marriott Hotel in Zamalek and Marriott Mena House could be on this list. (Hapi)
Egypt starts EGX roadshow in UAE and KSA today
It has been reported that representatives of the bourse, the Financial Regulatory Authority (FRA) and the Central Bank of Egypt (CBE) are visiting UAE and Saudi Arabia to spur interest in the upcoming potential IPOs. (Al-Mal)
GALDP to offer 238 acres near Arqeen port
The General Authority for Land & Dry Ports (GALDP) intends to offer 238 acres near the port of Arqeen on the Sudanese border, to establish a logistics area next month. This area is to be managed and operated by the private sector, with investments estimated at USD500mn. (Economy Plus)
Al Sharif Holdings invests EGP500mn in Shepheard Hotel
The KSA-based Al Sharif Hospitality & Real Estate (ASH), a subsidiary of Al Sharif Group Holding (ASG) signed a contract with Industrial Construction & Engineering Company (SIAC) to renovate Shepheard Hotel by EGP500mn. ASG is planning to invest a total of EGP1.4bn in the hotel. (Asharq Business)
Qatari Diar invests EGP1.75bn in City Gate's new phase
Through its subsidiary Invest Gate, Qatari Diar signed a contract with Consolidated Contractor Company (CCC) to establish the new phase of City Gate with a total investment of EGP1.75bn. (Al-Borsa)
CORPORATE
Core banking profitability leads CIB's 2022 profits to a new high
Commercial International Bank - Egypt [COMI] announced the financial results of 2022, where:
· The year was exceptional in terms of core banking activities, COMI managed to record net interest income (NII) of EGP30.8bn (+24% y/y), as the NII in Q4 2022 alone broke Q3’s quarterly record and reached EGP9.1bn.
· This transferred through to net income which grew by 20% y/y to EGP16bn, reaching an all-time high on the back of high interest rates. However Q4 showed 10% q/q decrease in net profit to EGP3.9bn on the back of booking much higher provisions in the last quarter.
· Although the bank booked provisions by EGP1.6bn, it’s still 6% lower than last year.
· Effective tax rate of the bank increased from 29% last year to 33% in 2022.
· The bank was also able to decrease its cost-to-income ratio to 20.7% down from 22.4%, reflecting COMI’s high efficiency.
· Due to devaluation, COMI’s CAR decreased to 22.7% down from 30%, however still well above CBE’s threshold of 12.5%.
· The balance sheet showed significant growth, as COMI’s loan book grew by 35% ytd reaching EGP195.5bn, with NPL ratio down to 4.8% and coverage ratio inching up to 229%.
· While deposits increased to EGP530bn (+31% y/y), the GLDR ratio increased to 41.8%.
· Translating the significant increase in NII, COMI’s NIM increased to 6.1% up from 5.7% a year earlier, while ROAE increased to 25% up from 21.9%.
· COMI is now traded at a P/E of 10.5x and a P/BV of 2.5x. (Bank disclosure)
FX gains save the day for AMOC’s H1 2022/23 net income
Alexandria Mineral Oils Co. [AMOC] released their H1 2022/23 consolidated financial statements, revealing the following:
· Net income for H1 2022/23 reached EGP983mn (+146% y/y), driven by higher worldwide prices of petroleum products and FX gains.
· FX gains in Q2 2022/23 recorded EGP237mn, this helped net income for Q2 to reach EGP585mn (+47% q/q).
· H1 results showed improved performance relative to H1 2021/22, revenues recorded EGP10.7bn (+51% y/y) while gross profit reached EGP1.1bn (+87% y/y).
· Meanwhile, Q2 2022/23 revenues took a big hit as they declined 20% q/q to EGP4.8bn, due to a decrease of 114mn in sales volume.
· However, GPM in Q2 improved 1pp q/q to 11% on the back of a stronger decline in COGS
(-21% q/q) than the decline in revenues.· We expect revenues to improve as the price of oil is expected to increase throughout the year. We also predict increased sales volumes as more consumers switch to HSFO instead of LSFO because of the economic woes that are plaguing the world. (Company disclosure)
Credit Agricole’s preliminary net income shows strong growth for 2022
Credit Agricole - Egypt [CIEB] announced strong preliminary financial results for 2022. CIEB’s net income increased 52% y/y to EGP2.4bn (39% higher than our estimates) partially on the back of a 30% y/y increase in net interest income (NII) to EGP3.8bn on controlled cost of funds. The bank also managed to grow its deposits by 25.5% to EGP60bn, while growth in loans came in a bit weaker by 13% to EGP35bn. CIEB is currently traded at a P/E of 5.3x and a P/BV of 1.3x. (Bank disclosure)
ADIB’s 2022 preliminary results come in line with expectations
Abu Dhabi Islamic Bank – Egypt [ADIB] announced the preliminary results for 2022. Figures showed a 54% y/y increase in net income to EGP2.1bn on the back of a 38% increase in net interest income to EGP4.7bn. Both came exactly in line with our estimates of EGP2bn and EGP4.7bn, respectively. Also, ADIB’s balance sheet saw strong growth, as loans increased by 25% to EGP56.8bn and deposits increased by 29% to EGP98bn. The bank is currently traded at a P/E of 5.1x and a P/BV of 1.2x. On a separate note, the bank announced that the second phase of the EGP1bn capital increase was subscribed 47x. (Bank disclosures: 1, 2)
Elsewedy Electric T&D signed a contract to build electric cars charging stations
Elsewedy Electric T&D, a subsidiary of Elsewedy Electric [SWDY] signed a contract with Sha7en EV Solutions to build, operate and service electric vehicles charging stations in the upcoming 3 years. (Al-Mal)
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