Today’s Top News & Analysis
New players to join United Bank's acquisition
Up to 20% of Helwan Fertilizers will be offered for strategic investors
Newly-discovered Nargis-1 well possesses reserves of 2.5tn cf
Additional fees for oil tankers crossing the Suez Canal
Turkey’s earthquake paralyzes a third of its steel production
MICH’s H1 2022/23: Strong performance, courtesy of EGP devaluation
ISMQ’s H1 2022/23: Strong earnings growth on higher revenues
SAIB’s 2022: Earnings growth saved despite a contracting balance sheet on a stronger USD
Elsewedy Electric and Emirati firm plan to invest USD2.1bn in data centers in Egypt
HRHO undergoes a change in its a shareholder structure
TAQA Arabia to go public in 2023
MACRO
New players to join United Bank's acquisition
As per Budget & Planning Committee's head, KSA-based Al-Rajhi Bank and Riyad Bank are interested to join the acquisition of the United Bank of Egypt. Public Investment Fund (PIF), the sovereign wealth fund of Saudi Arabia, is originally the main player as it had already completed due-diligence to fully acquire the bank for around USD600mn. (Al-Mal)
Up to 20% of Helwan Fertilizers will be offered for strategic investors
According to undisclosed sources, the government is willing to sell up to 20% of Helwan Fertilizers to strategic investors. The sources added that Public Investment Fund (PIF) and Abu Dhabi Developmental Holding Company (ADQ) are eyeing a stake in the company. State-owned Metallurgical Industries Holding, National Investment Bank (NIB) and the Agriculture Ministry are probably the main sellers. (Al-Mal)
Newly-discovered Nargis-1 well possesses reserves of 2.5tn cf
The Minister of Petroleum & Mineral Resources revealed that the reserves of the Nargis-1 natural gas well, discovered on 15 January, could reach 2.5tn cf. Ownership of the well is split between Eni (45%), Chevron (45%), and Egypt’s Tharwa Petroleum Co. (10%). Meanwhile, investments of international oil companies in FY22 were USD5.7bn. The minister expects oil FDI to reach USD8bn in 2023. (Asharq Business)
Additional fees for oil tankers crossing the Suez Canal
The Suez Canal Authority will amend the tolls for oil tankers crossing the canal. Loaded crude oil tankers will pay a surcharge of 25% on their transit dues, while empty oil tankers will pay an additional 15% on their dues. The new fees will start 1 April and can be amended or canceled depending on the marine transportation market. We reported on 12 February that small Atlantic oil tankers had seen their earnings increase 400% w/w, which the Suez Canal Authority is looking to take advantage of. (Zawya)
Turkey’s earthquake paralyzes a third of its steel production
Turkey’s major steel factories in the southern region were affected by the earthquake. More than 10 factories in the cities of Iskenderun and Osmaniye were forced to halt their operations until at least the end of February or mid-March. These factories account for a third of Turkey’s steel production. This is not the only supply disruption; steel mills around the affected area were already sending their machinery to aid in the rescue efforts. Turkey is one of the world’s top 10 steel producers and exporters, so this supply shock will likely lead to higher global steel prices in the near term. We expect Egyptian steel exporters to benefit as a result. (Asharq business)
CORPORATE
MICH’s H1 2022/23: Strong performance, courtesy of EGP devaluation
Misr Chemical Industries Co. [MICH] released H1 2022/23 results, revealing the following:
· Net income of EGP280mn (+191% y/y) on revenues of EGP456mn (+68% y/y), driven by higher worldwide prices of chemical products.
· GPM widened significantly to 70% (+18pp y/y), driven by the EGP devaluation.
· Net income in Q2 2022/23 reached EGP177mn (+41% q/q), attributable to FX gains of EGP24mn (+87% q/q) as revenues improved to EGP258mn (+23% q/q), driven by export revenues of EGP26mn (+44% q/q) on the back of the EGP devaluation. (Company disclosure)
ISMQ’s H1 2022/23: Strong earnings growth on higher revenues
Iron & Steel for Mines & Quarries [ISMQ] announced their financials for H1 2022/23, showing significant growth compared to the previous year. Net profit reached EGP69mn (+162% y/y) on revenues of EGP153mn (+174% y/y), while GPM improved 23pp y/y to 65%. Meanwhile, Q2 2022/23’s results also showed improvements q/q with net profits reaching EGP52mn (+208% q/q) on revenues of EGP94mn (+61% q/q), while GPM increased 19pp q/q to 72%. (Company disclosure)
SAIB’s 2022: Earnings growth saved despite a contracting balance sheet on a stronger USD
Societe Arabe Internationale de Banque [SAIB] announced its preliminary results for 2022, where:
· Net profit increased by 51% y/y to USD30mn despite a humble y/y growth of 8% in net interest income to USD143mn due in part to a lower effective tax rate of 37% in 2022 vs. 59% a year before.
· Due to a stronger USD, the balance sheet (reported in USD) showed a decline in both assets and liabilities, where the loan book fell 22% to USD1.7bn and deposits fell 26% to USD2.9bn.
· The BoD proposed distributing a cash dividend of USD0.7/share, implying a 19% yield and a 37% payout ratio.
Elsewedy Electric and Emirati firm plan to invest USD2.1bn in data centers in Egypt
Elsewedy Electric [SWDY] and Gulf Data Hub signed a MoU to invest USD2.1bn in three data center complexes in Egypt, with each complex having four separate data centers. The aforementioned project would form the African continent’s largest data hub. The project will be built in three phases over 5-7 years. (Enterprise)
HRHO undergoes a change in its a shareholder structure
Tim Collins' Ripplewood has reduced its stake in EFG Hermes Holding [HRHO] from 11.7% to 3.9% through selling its stake to:
1) Chimera Investments, UAE-based, purchased a 2.62% stake or 30.5mn shares worth EGP590.6mn.
2) JS Holding purchases a 5.25% stake or 61.3mn shares in HRHO worth EGP1.2bn (Company disclosure)
TAQA Arabia to go public in 2023
TAQA Arabia intends to float its shares on the EGX during 2023. TAQA Arabia is a 55.9%-owned subsidiary of Qalaa Holdings [CCAP]. TAQA Arabia is also Egypt’s largest private sector energy distribution company with five subsidiaries: TAQA Gas, TAQA Power, TAQA Marketing, TAQA Solar, and TAQA Water. The company is set to invest some EGP32bn through 2027 as it intends to increase its natural gas refueling stations from 61 to 100, among other operations. (Asharq Business)
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