Operating profit jumps 105% to 750.0 million pounds
Citadel Capital Company (CCAP.CA), a leading company in energy and infrastructure investments, announced its consolidated financial results for the fiscal period ending on June 30, 2021, with consolidated revenues amounting to approximately EGP 10.2 billion during the second quarter of 2021, which is Annual growth of 37%.
In the event that the results of the Egyptian Refining Company are excluded, Citadel’s revenues rise at an annual rate of 21% to approximately EGP 4.2 billion during the second quarter of 2021. The Citadel has incurred net losses of EGP 401.5 million during the second quarter of 2021, compared to net losses of EGP 712.1 million during the same period of the previous year.
The revenue growth, after excluding the results of the Egyptian Refining Company, is due to an annual increase in the revenues of an Arab energy company by 27% to reach 2.2 billion pounds during the second quarter of 2021 thanks to the growth in the volume of natural gas and electricity distribution activities during the same period in light of the recovery in the market.
Also contributing to this growth was the increase in the revenues of the National Printing Company at an annual rate of 35%, thanks to the positive returns of operating the new advanced factory in its subsidiary Al-Badar. In addition, the revenues of Al-Watania Printing Company increased during the second quarter of this year thanks to the improvement in sales of export activities and the success of the pricing policy adopted by its subsidiary Uniboard.
In this context, Dr. Ahmed Heikal, Founder and Chairman of Citadel Capital, expressed his pride in the financial and operational performance during the second quarter of 2021 as a testimony to the soundness of vision and the ability to formulate and implement effective strategies to drive growth and improve operational efficiency even during the most difficult challenges.
Subsidiary investments succeeded in overcoming the repercussions of the (Covid-19) crisis in the markets in which the company operates and made maximum use of the signs of recovery witnessed in the markets in conjunction with the gradual easing of restrictions imposed on the movement of commercial activities, and this is reflected in the growth of consolidated revenues at an annual rate of 37% during the quarter. The second of 2021, despite the suspension of production activity at the Egyptian Refining Company to carry out the scheduled maintenance work during the reporting period, as this comes in light of the strong performance of the various subsidiaries as well as the initiatives implemented by the management to improve operational efficiency at the level of all Citadel investments.
Heikal added that TAQA Arabia benefited from the improvement in market conditions and the increase in demand for its services by increasing the number of residential facilities that were connected to the natural gas network, as well as the expansion of electrical energy distribution activities, as well as benefiting from the launch and operation of the new transformer substation in the industrial zone of 6th of October City.
Moreover, the company continued its expansion in the compressed natural gas market, as it doubled the number of CNG catering stations to 23 stations during the first half of 2021, and aims to bring the number of natural gas catering stations to 42 stations by the end of this year, while continuing its leadership in connecting Residential installations in the natural gas network.
The company has recently witnessed the launch of the new water sector, in which the management is confident in its ability to maximize investment returns in the future and consolidate the company’s position in water treatment applications.
Heikal pointed to the increase in the volume of export activities at the National Printing Company and Ascom during the first half of 2021, thanks to the success of each of them in benefiting from the state of recovery in export markets while easing precautionary restrictions on port activities.
Against this background, Qalaa’s revenues from export activities amounted to $22.7 million during the second quarter of 2021, while the group’s revenue from sales in foreign currencies in the local market amounted to $392.5 million during the same period.
In a related context, Dina Farms achieved a strong performance thanks to the improvements implemented by the management and the operation of the juice production line, while the performance of the ASEC Holding Group improved supported by the strong results recorded by the Integration Cement Factory as a result of the increase in cement selling prices in Sudan during the same period.
Heikal explained that the true value of Citadel Capital’s assets is not accurately reflected in the financial statements due to the adoption of international accounting standards that record assets at their historical value and then calculate the impact of impairment costs only without revaluing the assets to reflect their increase in value.
Heikal pointed out that the Egyptian Refining Company’s revenues grew at an annual rate of 52% during the second quarter of 2021, despite stopping production activity for a period of 22 days to conduct planned maintenance work during the second quarter of the year, which reflects the improvement in market conditions on the one hand, as well as the improvement in the profit margin from activities Refining, which still represents half of its levels before the (Covid-19) crisis, and therefore the management expects the continuation of this improvement and the maximization of the profit margin in conjunction with the improvement of market conditions.
The Egyptian Refining Company resumed work at full capacity during the second quarter of this year, and the company achieved an operating profit before tax, interest, depreciation and amortization of 295.8 million pounds during the second quarter of 2021, up from 6.1 million pounds during the same period of the previous year, in light of the remarkable improvement The refining profit margin, however, is still around half of its pre-Covid-19 levels.
It is worth noting that all the technical management work of the Egyptian Refining Company is carried out by the Egyptian Company for Projects Operation and Maintenance (EPROM), which is wholly owned by the Egyptian General Petroleum Corporation.
In the event that the results of the Egyptian Refining Company are excluded, the recurring operating profit before tax, interest, depreciation and amortization will rise at an annual rate of 26% to reach 454.2 million pounds during the second quarter of 2021, supported by the growth in operating profits of Taqa Arabia, Dina Farms Company, Ascom and ASEC Holding Group.
For his part, Hisham El-Khazindar, co-founder and managing director of Citadel Capital, explained that Citadel Capital witnessed recurring EBITDA growth (with the exception of the Egyptian Refining Company) thanks to the effective initiatives taken by the management to enhance the operational efficiency of all affiliated investments, review selling prices and focus on reducing measures expenses, as well as strenuous efforts to restructure subsidiaries; This reduced the negative impact of increased global freight costs and a slowdown in the commodity cycle.
This also comes in light of the continued strong contribution of an Arab energy company, especially the electricity sector, after the operation of the transformer sub-station in the industrial zone in the 6th of October City, in addition to the growth of operating profits before tax, interest, depreciation and amortization (EBITDA) of the ASEC Holding Group at an annual rate of 58% to record 92.8 million EGP during the second quarter of 2021, thanks to the successful restructuring measures implemented by the management.
The National Printing Company and Ascom also witnessed an increase in export sales and domestic sales, which contributed significantly to supporting the profitability of the castle during the same period.
Al-Khazindar stressed that the administration will intensify its efforts to conclude new debt restructuring agreements at the level of Citadel Capital and the Egyptian Refining Company.
Finally, Al-Khazindar renewed the management’s commitment to continue implementing strict measures and procedures to preserve the health and safety of the approximately 17,500 employees that make up the team, who are the real capital of the company and the main driver of its success in all the markets in which Citadel operates.
The administration also looks forward to ending the current year with positive results in conjunction with the continued recovery in the markets and the waning of the negative impact of the (Covid-19) crisis.