Qalaa Holdings reports a strong 27% year-on-year growth in consolidated revenues to EGP 45.8bln in FY2021

Qalaa Holdings, a leader in energy and infrastructure (CCAP.CA on the Egyptian Exchange, formerly Citadel Capital), released today its consolidated financial results for the year ended 31 December 2021. The Group recorded a 27% y-o-y increase in revenues to EGP 45.8 billion in FY21, demonstrating Qalaa’s resilience and robust growth strategies across its subsidiaries. Furthermore, improved refining margins at ERC along with a turnaround in market conditions and global surge in commodity prices, benefitted the Group’s consolidated performance during the year. At Qalaa’s bottom-line, the Group booked a net loss of EGP 2.3 billion in FY21 compared to a net loss of EGP 2.6 billion last year.

Excluding ERC, Qalaa’s revenues grew by 20% y-o-y to EGP 17.3 billion in FY21, primarily driven by improved performances at TAQA Arabia and National Printing. TAQA Arabia’s revenue grew 15% y-o-y during the year to EGP 9.1 billion, reflecting improved market conditions. The year saw higher power distribution volumes by TAQA Power, CNG station expansions at TAQA Gas as well as increased fuel and lubes revenues at TAQA Marketing.

National Printing delivered a 46% y-o-y top line increase in FY21 as it reaped the rewards of its new El Baddar state-of-the-art facility. Additionally, improved export volumes and an optimized pricing strategy at Uniboard reflected positively on National Printing’s results during the year.

Meanwhile, Dina Farms’ revenues reached EGP 835.0 million in FY21, up 17% y-o-y, as facility enhancement projects continued to yield improved operations across its segments. Finally, ASCOM delivered 14% y-o-y top-line growth in FY21 supported by rising prices and increased export volumes at ACCM.

I am exceptionally proud of Qalaa’s top line performance during the year, which demonstrates the Group’s resilience and agility in responding to shifting macroeconomic dynamics, said Qalaa Holdings’ Chairman and Founder Ahmed Heikal. “The Group delivered an impressive 27% year-on-year top line growth amidst an uncertain operating environment, thanks to our robust investment and growth strategies coupled with operational efficiency tactics that yielded positive results across Qalaa’s businesses.”

Almost halfway into the new year, our portfolio companies are better equipped to face and adapt to the seismic shifts in the global economy and a rapidly changing operating environment. The world today is at a crossroad as the tide shifts from an era of globalization to a new trend of increasing protectionism and a political warming toward deglobalization. Heading into this new phase, we are witnessing substantial global inflationary pressures and we expect this trend to persist for multiple quarters. Consequently, central banks around the world are quickly tapering quantitative easing and passing through interest rate hikes following several years of record low interest rates. This has put pressure on currencies and debt levels in emerging markets. Nonetheless, I am confident in Qalaa’s ability to navigate these waters especially as inflationary pressures shift pricing power to producers across all sectors, and as local manufacturing gains more support. Additionally, our platforms with a high percentage of local inputs and resources or high volumes of export sales will benefit from a strong competitive advantage in this environment,” said Heikal.

“In the coming year, we will continue to push forward our growth strategies across our platforms, with a focus on making incremental investments in our existing companies whilst remaining vigilant regarding potential acquisition opportunities. An area of particular interest will be to expand TAQA Arabia’s renewable energy business. As the world diligently tackles climate change, the transition to renewable energy will not be immediate and will entail a lengthy period of improving existing fossil fuel efficiencies, increasingly shifting to natural gas, before ultimately relying more heavily on solar and renewable energy sources; all phases that TAQA is ideally positioned to capitalize on.”

Furthermore, we expect the next period to continue to be dominated by resource constraints and supply chain shortages exacerbated by geopolitics. On that front, I reiterate Qalaa’s ability to successfully navigate these pressures, particularly at a time when the broader Egyptian economy is on the right path toward local expansion in its production, agriculture and services sectors. The next phase in Egypt will be punctuated by very strong encouragement from the government for the private sector, and we stand ready to capitalize on that support and play our role as a leading homegrown infrastructure and industrial investor.

In addition, I would like to note that the improved yield and refining margins at ERC have continued in 1Q22 and well into 2Q22.”

Finally, I wish to highlight that in preparing our Group’s consolidated financial statements and in adherence to our auditors’ view, we have booked increasing provisions and impairments during the year. However, management believes that said provisions and impairments do not reflect the anticipated future performance of these companies. I would also like to reiterate that the true value of Qalaa’s performing assets is masked due to the adoption of international accounting standards, which account for assets at their historical cost and adjust for impairments, while not taking into consideration any revaluation adjustments,” Heikal added.

Qalaa’s recurring EBTIDA increased 178% to EGP 4.1 billion in FY21 compared to EGP 1.5 billion in FY20 on the back of improved refining margins and zero shutdown days reflecting positively on ERC’s performance during the year. Excluding ERC, Qalaa recorded a recurring EBITDA increase of 13% y-o-y to EGP 1.8 billion in FY21, driven by improved profitability across the majority of the Group’s subsidiaries.

Qalaa’s different platforms leveraged prevalent macroeconomic trends along with management’s prudent strategies to deliver stellar performances during the year,” said Hisham El-Khazindar, Qalaa Holdings’ Co-Founder and Managing Director. “At TAQA Arabia, we continued to capitalize on increasing demand for cleaner energy with growing CNG expansions and a strengthening position in the solar and renewable market. Meanwhile at Dina Farms, a beacon of local agriculture and food production, we are reaping the benefits from extensive facility enhancements and demonstrating the potential of Egypt’s local agricultural and food processing sectors. Finally, at our export-driven platforms, including ASCOM and National Printing, we continued to leverage our local cost advantage and grow export volumes, once again demonstrating the merits of developing world-class local production capabilities.

In terms of profitability, Qalaa’s recurring EBITDA excluding ERC recorded a 13% y-o-y increase to 1,840.8 million in FY21, driven by improved operational efficiency, better pricing, cost-cutting strategies and restructuring efforts across our platform companies. Most notably, Qalaa’s EBITDA performance was primarily driven by contributions from TAQA Arabia as it benefitted from CNG expansions and new industrial connections at TAQA Gas, in addition to an increase in household and industrial clients at TAQA Power. EBITDA performance was also supported by solid results at ASCOM on the back of higher export volumes and an increase in the average price per ton. Finally, despite increasing raw material prices at National Printing’s El Baddar, EBITDA performance significantly improved as we reaped the rewards of its new state-of-art facility,” El-Khazindar added.

Meanwhile, ERC recorded a strong year driven by a recovery in refined petroleum product prices and an increasing gross refining margin, which supported the company’s profitability and contributed c.EGP 2.3 billion to consolidated EBITDA in FY21, up from a loss of EGP 141.4 million in FY20. It is important to note that ERC has never defaulted on any interest payment, and in 2021 the company successfully paid USD 50.1 million and USD 99.3 million in total principal and interest payments, respectively. I also note that ERC’s debt restructuring, along with that of Qalaa Holdings, remain a priority.”

Our performance in 2021 is a true testament to the strength of Qalaa Holdings and its ability to develop into a stronger and leaner organization in the face of an operating environment filled with uncertainty. Looking ahead, we will continue to adapt and grow our portfolio to deliver stronger results across our diverse operations and markets.” concluded El-Khazindar.

Qalaa Holdings’ full business review for FY 2021 and the financial statements on which it is based are now available for download on