Qalaa Holdings, a leader in energy and infrastructure, reported consolidated revenue of EGP 27.7bn in the second quarter of 2023, up 2% from the same period last year. The increase was primarily driven by ERC, the company’s refining arm.
Recurring EBITDA, however, dropped significantly to EGP 4.5bn, down from EGP 9bn in Q2 2022. The decline reflected a sharp decline in ERC’s refining margins, which averaged $1.86m per day in Q2 2023, compared to $5.36m per day in Q2 2022.
“Qalaa has been resilient despite highly challenging macroeconomic conditions, and I am pleased with the Group’s results over the past quarter in the face of a difficult operating environment,” said Qalaa Holdings’ Chairman and Founder Ahmed Heikal.
Heikal noted that the global economy is facing a number of challenges, including high levels of debt, rising inflation, and tightening monetary conditions. He also cited the ongoing war in Ukraine and its impact on energy prices as a major concern.
Despite these challenges, Heikal said he is confident about Qalaa’s outlook. He pointed to the company’s strong portfolio of assets and its focus on growth-oriented strategies.
“We are confident that Egypt’s recent inclusion in the BRICS bloc of developing nations will provide a long-term boost to the country’s economy,” Heikal said.
Qalaa’s performance in the second quarter was supported by its energy segment, with TAQA Arabia reporting strong top-line growth driven by a robust performance at TAQA Gas. ERC managed to deliver steady year-on-year results despite refining margins declining significantly during the quarter.
Hisham El-Khazindar, Qalaa Holdings’ Co-Founder and Managing Director, said the company is particularly pleased with the increase in connection revenue and CNG volume sold at TAQA Gas.
“While margins have since improved, the planned shutdown that took place in July for an overhaul of the plant will weigh on ERC’s results in Q3 2023,” El-Khazindar said.
Overall, Qalaa’s results for the second quarter were mixed. The company’s revenue grew, but its profitability declined due to a sharp drop in refining margins. Despite the challenges, Qalaa’s management remains confident about the company’s outlook.