Egypt Kuwait Holding Co. Releases Q3 2015 Earnings ...
EGYPT KUWAIT HOLDING COMPANY EARNINGS RELEASE Q3 2015
Egypt Kuwait Holding Co. Releases Q3 2015 Earnings Results Key Highlights of Q3 2015 USD 71.7 mn
USD 13.2 mn
18%
USD 3.0 mn
in Revenues
in Gross Profit
Gross Profit Margin
in Operating Income
4%
USD 16 mn
USD 5.3 mn
USD 5.5 mn
Operating Margin
EBITDA
in Net Income
in Attributable Net Income
23% EBITDA Margin
Key Highlights of 9M 2015 USD 270.3 mn
USD 84.9 mn
31%
USD 50 mn
in Revenues
in Gross Profit
Gross Profit Margin
in Operating Income
18%
USD 83.8 mn
USD 39.7 mn
USD 33.1 mn
Operating Margin
EBITDA
in Net Income
in Attributable Net Income
31% EBITDA Margin
Group Revenue
15 November 2015 | Cairo | Egypt Kuwait Holding Company (EKHO.CA on the Egyptian Exchange and EKHOLDING on the Kuwaiti Exchange), one of the MENA region’s leading investment companies, reported today its consolidated results for the third quarter and first nine months of 2015.
(USD Millions) 376.3 270.3 100.9
71.7
Q3 Q3 2014 2015
9M 9M 2014 2015
The company reported Attributable Net Income of USD 5.5 million in Q3 2015, a 61.9% year-on-year decline, on Consolidated Revenues of USD 71.1 million. Year-to-date, EKH accordingly reports Attributable Net Income of USD 33.1 million in 9M 2015, a 32.6% y-o-y decrease that reflects a basket of factors including low oil prices and exceptionally low utilization rates at fertilizer producer AlexFert due to supply constraints on natural gas in the first nine months of 2015.
Attributable Net Income
Comments from the Chairman, Mr. Moataz Al-Alfi
(USD Millions)
I am increasingly optimistic that we will look back on the first nine months of 2015 as one of the most challenging periods through which EKH has ever passed. A nationwide shortage of natural gas crippled operations at AlexFert, one of our most economically important investments; persistently low oil prices are a new macro reality.
49.0 33.1 14.5
5.5
Q3 Q3 2014 2015
9M 9M 2014 2015
AlexFert, historically a main contributor to our top line, was cut off from natural gas supplies during the third quarter, resulting in a total shutdown of the plant for the quarter and a c. 23% utilization rate for 9M 2015. Against this backdrop, careful attention from management teams at the operational level across our portfolio — including outstanding cash management at NatEnergy, allowed us to maintain profitability, highlighting the skill of our teams, the soundness of EKH’s strategy, and the quality of our diversified portfolio of investments. Moreover, I note that our bottom line performance has been impacted by both the conversion of EGPdenominated revenues into USD for our financial reporting, while the expiration of tax holidays almost entirely offset the benefit of a lower tax rate.
EGYPT KUWAIT HOLDING COMPANY - EARNINGS RELEASE Q3 2014
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EGYPT KUWAIT HOLDING COMPANY EARNINGS RELEASE Q3 2015
Why, then, am I optimistic, albeit very cautiously so? As I write this, AlexFert reports it that has received its full contracted daily allocation of natural gas since 1 November 2015. That follows the government of Egypt’s announcement that it has brought into service a floating storage and regasification unit (FSRU) to directly feed the national grid, with natural gas earmarked solely for industrial use. We remain in dialogue with state authorities and are guardedly optimistic that if supplies continue uninterrupted through year’s end, we may have an adequate planning horizon into next year. Against this backdrop, we will continue to search for opportunities to diversify and deepen our exposure to potentially high-growth sectors while ensuring the efficient allocation of capital and resources. We have, in this respect, c. USD 185 million in cash on hand to support this drive to create or unlock shareholder value. The unlocking of current value will come in part through the buyout of minority shareholders. Having recently concluded the acquisition of an additional 18% stake in NatGas (bringing our current holding to 75%), we will also capture value from our current portfolio through both process and operational improvements. As an investment company, we are also mindful of significant opportunities for both add-on investments and greenfield opportunities that would have significant impacts on the company’s medium-term profitability and long-term returns. As we do so, our emphasis will be on exposure to sectors that offer smoother earnings curves and better earnings visibility. At the same time, we remain optimistic about the outlook for the nation’s energy sector, where subsidy reform and the government’s drive to encourage exploration have made clear the case for continued investment in this industry. Similarly, the state’s drive to double the number of gridconnected households may provide an impetus to pursue both upstream and downstream opportunities, both within and in addition to our existing portfolio. Ultimately, I am confident that EKH’s ability to define a clear investment thesis, execute compelling transactions, and manage investments with strong company-level teams in place will allow us to capture new opportunities heading into 2016, particularly with asset prices now appearing more reasonable.
Fertilizers & Petrochemicals
45% of Group Revenues in Q3 2015
Revenues (USD Millions) 187.5 120.1
42.6
Fertilizers & Petrochemicals in USD mn unless otherwise indicated
32.4
Q3 Q3 2014 2015
EKH has investments in two operational companies in the Fertilizers & Petrochemicals Segment: Alexandria Fertilizers Company (AlexFert) and Sprea Misr for Production of Chemicals & Plastics Company. A third investment, the Egyptian Hydrocarbon Corporation (EHC,) is a mining-grade ammonium nitrate manufacturing startup scheduled to begin operations later this year. The company’s Fertilizers & Petrochemicals investments encompass products ranging from urea, ammonium nitrate, and melamine, to formaldehyde and liquid and powder glue. With more than 10 years of nitrogen fertilizer operational expertise, EKH has targeted investments with access to key export markets including the United States and Europe, diverse products across several industries, and strong cash-flow generating businesses.
9M 9M 2014 2015
Revenues Gross Profit Margin EBITDA Margin Net Profit Net Profit Margin Net Profit attributable to EKH
EGYPT KUWAIT HOLDING COMPANY - EARNINGS RELEASE Q3 2014
Q3 2014 42.6
9M 2014 187.9
Q3 2015 32.4
9M 2015 120.1
15%
34%
3%
14.%
0.41%
28%
11%
20%
(4.6)
25.9
1.7
5.0
-11%
14%
5%
4%
0.9
18.0
4.1
9.9
2
EGYPT KUWAIT HOLDING COMPANY EARNINGS RELEASE Q3 2015
Total Fertilizer Sales (Tons) 375,780
120,102 59,480
Q3 2014
32,356
Q3 2015
9M 2014
9M 2015
The Fertilizer & Petrochemical segment continued to be weighed down by limited capacity utilization at AlexFert — c. 14% during Q3 2015 — on the back of the nationwide shortage in the natural gas supply. The effect is clearly reflected on the segment’s performance, with revenues in Q3 2015 easing 24% y-o-y to USD 32.4 million from USD 42.6 million in the same period last year. On a nine-month basis, revenues stood at USD 120.1 million, down 36% compared to the USD 187.9 million in 9M 2014. Attributable Net Income for Q3 2015 surged to USD 4.1 million from USD 0.9 million during the same period the previous year on the back of growth at Sprea Misr that offset the slump at AlexFert. Sprea continues to outperform management expectations, reporting revenues of USD 74.8 million in 9M 2015, a 2% y-o-y increase. Starting in 2015, Sprea saw its tax holiday expire, with the company incurring some USD 5.1 million in income taxes during 9M 2015 compared to only USD 1.6 million in the same period last year. Sprea nevertheless posted a 28% y-o-y increase in its bottom line, which reached USD 5.5 million, underscoring the company’s sound strategy and strong management team. Sprea continues to exercise a beneficial pricing strategy and pursue increased market share given the barriers to entry to the methanol-based product market. With imports constrained by the ongoing foreign-exchange shortage, Sprea’s placement as an import-substitution play and low international prices for its key raw material leave management optimistic that it will maintain margins going forward. Furthermore, the company exports almost 30% of its production, giving it a natural (if partial) hedge against currency volatility. Building on the success of this plant, Sprea has expanded into the wood sheets business, manufactured with Formica sheets and imported wood. This final product is higher up the value chain and will command strong margins. Sprea is also exploring organic growth options for this business, with plans to add a third production line that will bring capacity to 3 million sheets per annum, up from the current 2 million sheets per annum. Furthermore, the launch of the sulfonated naphthalene formaldehyde (SNF) production is on track to begin in Q1 2016. SNF is a key additive for ready-mix cement, allowing ready-mix to dry faster and smoother. The product is not currently produced in Egypt, and given the relatively low CAPEX required to start operations, Sprea will be positioned as a cost-effective local supplier ready to capitalize on the growth of the cement and real estate industries and the drive for import substitution at the national level. Meanwhile, the national shortage of natural gas had a particularly pronounced impact on AlexFert in Q3 2015, forcing a complete shutdown of the factory as supplies to the facility came to a total halt. Supplies have returned in full since the beginning of November, allowing AlexFert to operate at full capacity for the first time this year. This comes just in time for AlexFert to supply the market for peak planting season of the nation’s winter crops. Moreover, an earmark for exports post the satisfaction of AlexFert’s domestic quota would position the company to benefit from any potential devaluation of the Egyptian pound.
57% of Group Revenues in Q3 2015
Revenues (USD Millions) 162.5 127.3
53.4
Q3 2014
41.2
Q3 2015
9M 2014
Energy & Energy-Related Egypt Kuwait Holding has investments in three companies in the Energy and Energy-Related Segment: NatEnergy, Tri-Ocean Energy (TOE), and the Egyptian Tanker Company (ETC). EKH builds and operates gas distribution networks in Egypt through its 100%-owned subsidiary NatEnergy, which covers a wide spectrum of activities, including the transportation of natural gas to power stations and the independent production of power. The company’s energy investments also cover oil and gas exploration and production through TOE — which enjoys access to a significant reserve potential spread across Egypt and South Sudan — and local and global marine transport of crude oil and petroleum products through ETC. Tri-Ocean recently finalized an acquisition that sees it enter into the upstream gas sector as a developer and operator for the first time.
9M 2015
EGYPT KUWAIT HOLDING COMPANY - EARNINGS RELEASE Q3 2014
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EGYPT KUWAIT HOLDING COMPANY EARNINGS RELEASE Q3 2015
Fertilizers & Petrochemicals in USD mn unless otherwise indicated
Q3 2014 53.4
9M 2014 162.5
Q3 2015 41.2
Gross Profit Margin
62%
48%
29%
38%
EBITDA Margin
58%
48%
26%
31%
Revenues
Net Profit Net Profit Margin Net Profit attributable to EKH
9M 2015 127.3
10.5
22.6
7.3
17.2
20%
14%
18%
14%
14.8
26.2
7.3
15.6
In the third quarter of 2015, the Energy & Energy-Related segment reported a 23% decrease in revenues over Q3 2014. For 9M 2015, the segment posted revenues of USD 127.3 million, down 22% y-o-y. This came on the back of lower oil prices worldwide, which are down more than 50% y-o-y. Nonetheless, the segment maintained healthy margins, reflecting the company’s resilience against the headwinds that hit our operations. NatEnergy, the segment’s energy distribution play, witnessed significant improvement y-o-y largely due to operational efficiencies. The company recorded revenues and bottom-line growth of 27% and 227%, respectively. NatEnergy is targeting growth of its household client base from the current 1 million customers to 1.5-1.6 million customers as it looks to capitalize on the state-backed drive to connect more homes to the natural gas grid. Key here is a very favorable payable-receivable cycle whereby NatEnergy is able to generate interest income on customer payments collected on behalf of the state prior to remittance of the same. Efficient cash management in this respect has allowed NatEnergy to increase by c. 5x its net interest income, making cash management a key hallmark of the business. Meanwhile, Kahraba continued to deliver an impressive performance, having recorded a 359% increase in attributable net income. Kahraba is on track to add generation capacity in increments (beginning with 8 MW in Q2 2016) that will bring it to 94 MW in 2017. Management has secured the necessary approvals, land, and gas supply contracts. Looking ahead, management is very optimistic about the electricity business in Egypt, the only sector in the country with a clear five-year pricing plan. Kahraba is very open to expansion opportunities higher up the generation chain, particularly if opportunities to lock in gas supplies directly from the private sector were to present themselves. Management again notes that Kahraba is now a profit-making business.
Diversified
-3%
Egypt Kuwait Holding’s Diversified segment includes a wide array of strategic investments, from cement production, telecommunications, and infrastructure, to cooling systems and insurance. In line with the company’s strategy to invest in local businesses with large and defensible market positions, EKH owns c. 30% of the Building Materials Industries Company (BMIC) in Egypt, a country home to the largest cement market in Africa, with total consumption of c. 50 mtpa. Other group assets in the sector include Delta Insurance, Al-Shorouk for Melamine and Resins, Globe Telecommunications, Gas Chill, and Bawabet Al Kuwait Holding Company.
of Group Revenues in Q3 2015
Revenues (USD Millions) 26.2 4.9
Q3 Q3 -1.2 2014 2015
7.5
9M 9M 2014 2015
The widening year-on-year of the net loss contributed by the Diversified segment came as performance at cement producer BMIC slipped on the back of deteriorating market conditions, while the market effect had a pronounced impact on portfolios of publicly traded securities held by various portfolio companies in the segment. Management notes, however, that while the segment’s contribution to EKH’s bottom line stood at a Net Attributable Loss of USD 5.6 million in Q3 2015, the contribution on a full-year basis should be positive on the back of dividend income recorded in the first and second quarters of the year.
EGYPT KUWAIT HOLDING COMPANY - EARNINGS RELEASE Q3 2014
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EGYPT KUWAIT HOLDING COMPANY EARNINGS RELEASE Q3 2015
Recent Corporate Developments Acquisition of an additional 18% stake in NatGas As part of EKH’s strategy to unlock shareholder value in the existing portfolio, management is targeting the acquisition of minority shareholder stakes in growing businesses. The company has accordingly concluded the acquisition of an additional 18% stake in NatGas, bringing EKH’s total ownership to 75%. EK Holding Finalizes USD 12.2 million Capital Increase The Listing Committee of the Egyptian Stock Exchange approved the company’s recently concluded USD 12.2 million capital increase via issuing new shares. The company’s issued and paid in capital has accordingly risen to USD 256.1 million through the issuance of 48.7 million new shares, the total number of shares increased by c. 5% to 1,042 million shares. The new shares will be priced at USD 0.25 and are funded by the company’s 2014 retained earnings. Proceeds from the capital increase will be used to finance the company’s Employee Stock Ownership Program (ESOP) approved in September 2014. Developing Leaders Program In a nod to the fundamental importance of people to our businesses, our Human Resources Department has put into place a Developing Leaders Program for EKH and our subsidiaries that will better allow management to identify top performers and help them grow their careers with the Group. This program is a key step in our institutionalization drive, as we have simultaneously implemented a number of employee-relations initiatives and training programs.
Outlook Management believes that lower oil prices are likely to persist for the remainder of 2015 and into 2016. However, with the recent uptick in natural gas production at ONS, and given that price adjustments could materialize in line with the new terms negotiated between the government and gas players ENI and Edison, Tri-Ocean’s natural gas operations could see a major turnaround and help offset the downturn in oil. Management will, however, continue to monitor the state’s pricing structure for natural gas producers before undertaking new investments. Management considers it unlikely that urea prices will rise in the near future; however, the outlook for this segment is reasonably secure — provided that gas remains available at the rates experienced in the early days of Q4 2015 — as the allowable price for sales on the domestic market, while low, are quite close to international prices. In the meantime, management is confident that as Egypt’s economy continues to grow, the company’s performance will continue to reflect the benefits of diversification. Downside risks remain the prospect of a significant devaluation of the Egyptian pound and a continued lack of clarity on monetary policy.
EGYPT KUWAIT HOLDING COMPANY - EARNINGS RELEASE Q3 2014
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EGYPT KUWAIT HOLDING COMPANY EARNINGS RELEASE Q3 2015
About EK Holding Egypt Kuwait Holding Company (EKHO.CA on the Egyptian Exchange and EKHOLDING on the Kuwaiti Exchange) is one of the MENA region’s leading investment companies with a diversified portfolio of investments that spans the region in sectors that include fertilizers and petrochemicals, energy, cement production, insurance, information technology, transport, and infrastructure. Established in 1997 by a consortium of prominent Kuwaiti and Egyptian businessmen including our former Chairman, the late Nasser Al-Kharafi, the company has flourished during the past decade as the countries of the Arab world began to liberalize their economies and open doors for private sector investments in strategic sectors that had once been off limits.
INVESTOR RELATIONS CONTACT For further information, please contact:
STOCK SYMBOL EKHO.CA
Haitham M. Abdel Moneim Egypt Kuwait Holding, Co. Senior Investor Relations Manager [email protected]
CAPITAL Issued and Paid-In Capital: USD 256.11 mn Number of Shares: 1.02 billion shares Par Value: USD 0.25 per share
14 Hassan Mohamed El-Razzaz St. (Previously Nawal St.) Dokki, Giza Tel (Direct) : +20 2 333-633-00
Forward-Looking Statements Statements contained in this document that are not historical facts are based on current expectations, estimates, projections, opinions and beliefs of Egypt Kuwait Holding Company (EKH). Such statements involve known and unknown risks, uncertainties and other factors; undue reliance should not be placed thereon. Certain information contained herein constitutes “targets” or “forward-looking statements,” which can be identified by the use of forward-looking terminology such as “may,” “will,” “seek,” “should,” “expect,” “anticipate,” “project,” “estimate,” “intend,” “continue” or “believe” or the negatives thereof or other variations thereon or comparable terminology. Actual events or results or the actual performance of EKH may differ materially from those reflected or contemplated in such targets or forward-looking statements. The performance of EKH is subject to risks and uncertainties.
EGYPT KUWAIT HOLDING COMPANY - EARNINGS RELEASE Q3 2014
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EGYPT KUWAIT HOLDING COMPANY EARNINGS RELEASE Q3 2015
Summary Income Statement Q3 2015
Q3 2014
9M 2015
9M 2014
41 194 014
53 355 278
127 290 427
162 511 793
57%
53%
47%
43%
COGS
29 152 024
20 093 535
79 243 072
83 750 425
Gross Profit
12 041 990
33 261 743
48 047 355
78 761 369
29%
62%
38%
48%
32 355 514
42 632 727
120 101 842
187 523 197
45%
42%
44%
50%
31 411 876
36 354 276
103 395 294
124 331 207
943 637
6 278 451
16 706 548
63 191 990
3%
15%
14%
34%
(1 860 626)
4 932 249
22 873 077
26 227 310
-3%
5%
8%
7%
(2 106 439)
2 067 562
2 716 933
6 770 568
245 813
2 864 687
20 156 144
19 456 742
-13%
58%
88%
74%
Total Revenues
71 688 902
100 920 254
270 265 346
376 262 300
COGS
58 457 462
58 515 373
185 355 299
214 852 199
Gross Profit
13 231 440
42 404 881
84 910 047
161 410 101
18%
42%
31%
43%
(in US $) Energy & Energy Related Revenues % Contribution
% Margin Fertilizers & Petrochemicals Revenues % Contribution COGS Gross Profit % Margin Diversified Revenues % Contribution COGS Gross Profit % Margin
% Margin Selling Expenses
930 720
2 552 169
5 488 481
8 779 573
G&A
9 263 395
19 291 410
33 520 654
49 526 900
Net Provisions
( 14 861)
10 085 587
(4 139 024)
10 330 798
1 224
2 861 042
46 607
3 014 879
3 050 962
20 334 776
49 993 329
102 478 054
4%
20%
18%
27%
Interest Net
(1 078 335)
(5 188 753)
(4 941 499)
(15 610 838)
FX Gain / Loss
( 457 567)
( 730 071)
(1 076 248)
( 876 951)
6 140
( 126 232)
43 927
59 844
-
(12 720 103)
-
(12 720 103)
Other Income
( 412 737)
895 701
514 664
1 062 581
Net Income before Tax
Other Expenses Operating Income % Margin
Capital Gain Negative Goodwill
1 108 463
15 185 421
44 534 173
87 112 690
Income Tax
521 794
848 993
10 087 816
14 970 232
Differed Tax
(4 679 763)
129 785
(5 281 970)
1 499 160
Net Income from Continued Operations
5 266 432
14 206 643
39 728 327
70 643 298
Gain (Loss) from Discontinued Operations
2 801
-
2 801
-
Net Income
5 269 233
14 206 643
39 731 128
70 643 298
Non-Controlling Interest
( 269 656)
( 327 355)
6 670 386
21 627 568
Attributable Net Income
5 538 889
14 533 998
33 060 742
49 015 730
EGYPT KUWAIT HOLDING COMPANY - EARNINGS RELEASE Q3 2014
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EGYPT KUWAIT HOLDING COMPANY EARNINGS RELEASE Q3 2015
Summary Balance Sheet (in US$)
9M 2015
FY 2014
Fixed Assets (Net) & Projects under Construction
281 707 552
295 679 021
E&P Assets
260 922 191
225 234 044
Investments in Associates
155 075 747
134 474 361
Investments Available for Sale
119 808 092
140 048 833
Other long-term Assets
107 149 644
129 035 543
Total Long-Term Assets
924 663 226
924 471 802
Cash
309 088 106
372 644 967
Investments for Trading
190 379 280
204 722 147
Total Receivables & Other Debtors
246 081 909
187 003 900
Inventory & Work in Progress
77 226 714
80 879 873
-
1 250 000
Due from EGPC
12 833 866
18 965 439
Investments in Treasury Bills
8 429 469
-
844 039 344
865 466 326
Assets held for Sale
Total Current Assets Total Assets
1 768 702 570
1 789 938 128
Bank Overdraft and STL
253 363 442
216 975 326
Due to Suppliers and Sub-Contractors
74 367 705
58 491 313
Due to EGPC
54 195 571
39 950 261
Provisions
11 084 654
19 094 123
Debtors and Other Credit Balances
216 580 503
186 760 891
Total Current Liabilities
609 591 875
521 271 914
Long-Term Loans
147 219 155
199 975 146
Other Long-Term Liabilities
853 491
1 008 832
Due to EGPC
2 325 322
8 813 029
Provisions
4 070 700
4 070 000
Deferred Tax Liability
30 105 471
35 735 129
Total Long-Term Liabilities
184 573 449
249 602 136
Paid-in Capital
256 110 292
243 914 564
Reserves
188 292 291
188 292 291
Fair Value Reserve
(168 041 907)
(143 723 798)
Retained Earnings
413 784 152
439 460 910
Translation Adjustments
(46 880 778)
(43 719 971)
Treasury Stocks
(7 121 774)
(7 121 774)
Parent's Shareholders' Equity
636 142 276
677 102 222
Non-Controlling Interest
338 394 970
341 961 856
Total Shareholders' Equity
974 537 246
1 019 064 078
Total SHE + Total Liabilities
1 768 702 570
1 789 938 128
EGYPT KUWAIT HOLDING COMPANY - EARNINGS RELEASE Q3 2014
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EGYPT KUWAIT HOLDING COMPANY EARNINGS RELEASE Q3 2015
Summary Cash Flows 9M 2015
9M 2014
net profit for the year before income tax adjustments for:
44 534 173
86 879 182
depreciation & amortization of property, plant and equipment and other non-tangible assets
21 968 537
22 173 276
exploration & development assets depletion
11 841 792
17 355 974
company's share of profits of associates
(2 957 132)
(4 876 775)
(888 128)
(3 063 046)
(in us $) cash flows from operating activities
unrealized gain on held for trading investments financing expenses
17 527 035
21 659 266
interest income
(12 585 536)
(6 048 429)
gain on investment for sale investments
(4 713 291)
-
(43 927)
(59 844)
(4 178 446)
(11 000 000)
39 422
21 358 231
capital gain provisions no longer required provisions other than depreciation impairment gain on debtors and other debit balances
(96 443)
-
impairment loss on debtors and other debit balances
143 050
114 879
impairment loss on property plant and equipment
-
2 900 000
gain on bargain purchase
-
(12 720 103)
2 800 70 593 906
233 506 134 906 117
change in held for trading investments
15 230 995
163 636 175
change in trade & notes receivable
(1 432 341)
106 222 549
change in debtors & other debit balances
(45 990 050)
(42 176 159)
gain on disposal of discounted operations operating profit before changes in assets & liabilities available from operating activities
change in inventories
1 637 723
271 894
change in work in progress
(650 788)
(37 580)
change in suppliers & subcontractors
19 769 477
(52 948 088)
change in creditors & other credit balances
18 844 668
(11 117 506)
change in Egyptian general petroleum corporation
7 757 613
28 921 921
change in blocked deposits change in derivative financial instruments provisions used
(42 527 806)
(36)
-
(87 500)
(514 687)
(389 639)
-
(109 090 909)
interest & financing expenses paid
(16 793 135)
(23 157 979)
change in working capital for divested subsidiary
(4 898 417)
-
net cash available from (used in) operating activities
21 027 158
212 615 260
blocked cash
cash flows from investing activities proceeds from assets held for trade
1 250 000
-
interest income received
12 060 479
5 439 458
payments for acquisition of fixed assets & projects under construction
(8 861 880)
(22 141 759)
payments for acquisition of exploration & development assets
(47 566 425)
(4 031 446)
proceeds from sale of fixed assets proceeds from egyptian general petroleum corporation proceeds from sale of available-for-sale investments
14 118
1 328 159
6 543 707
13 174 444
10 758 072
7 963 192
payments for acquisition of available -for- sale investments
(14 354 197)
(18 522 262)
payments for acquisition of investments in associates
(18 379 135)
-
-
(62 067 914)
payments for acquisition of investments in subsidiaries (net of cash acquired) dividends received form associates
-
705 999
payments for investments in treasury bills more than three months
(5 936 962)
-
proceeds from discounted operations (net of cash) net cash used in investing activities
4 577 650 (59 894 573)
(78 152 129)
cash flows from financing activities proceeds for increase in paid-in capital account
-
109 090 909
repayment of long-term loans & bank facilities
(99 612 423)
(96 016 330)
proceeds from long-term loans & bank facilities
60 879 556
119 399 133
proceeds from short-term loans & bank facilities
49 010 533
4 504 162
repayment of short-term loans & bank facilities
(6 043 315)
(32 362 855)
proceeds from bank overdraft
(23 525 725)
(92 400 134)
payments for minority interests purchase
(15 315 675)
-
minority interests
(3 792 937)
(50 541 384)
dividends paid
(37 672 544)
(16 838 383)
net cash used in financing activities
(76 072 530)
(55 164 882)
foreign currency translation differences
8 424 287
3 996 951
(106 515 658)
83 295 200
cash and cash equivalents at beginning of the year
372 320 771
190 735 319
cash and cash equivalents at end of the year
265 805 113
274 030 519
net change in cash and cash equivalents during the year
EGYPT KUWAIT HOLDING COMPANY - EARNINGS RELEASE Q3 2014
9
Egypt Kuwait Holding Co. Releases Q3 2015 Earnings Results Key Highlights of Q3 2015 USD 71.7 mn
USD 13.2 mn
18%
USD 3.0 mn
in Revenues
in Gross Profit
Gross Profit Margin
in Operating Income
4%
USD 16 mn
USD 5.3 mn
USD 5.5 mn
Operating Margin
EBITDA
in Net Income
in Attributable Net Income
23% EBITDA Margin
Key Highlights of 9M 2015 USD 270.3 mn
USD 84.9 mn
31%
USD 50 mn
in Revenues
in Gross Profit
Gross Profit Margin
in Operating Income
18%
USD 83.8 mn
USD 39.7 mn
USD 33.1 mn
Operating Margin
EBITDA
in Net Income
in Attributable Net Income
31% EBITDA Margin
Group Revenue
15 November 2015 | Cairo | Egypt Kuwait Holding Company (EKHO.CA on the Egyptian Exchange and EKHOLDING on the Kuwaiti Exchange), one of the MENA region’s leading investment companies, reported today its consolidated results for the third quarter and first nine months of 2015.
(USD Millions) 376.3 270.3 100.9
71.7
Q3 Q3 2014 2015
9M 9M 2014 2015
The company reported Attributable Net Income of USD 5.5 million in Q3 2015, a 61.9% year-on-year decline, on Consolidated Revenues of USD 71.1 million. Year-to-date, EKH accordingly reports Attributable Net Income of USD 33.1 million in 9M 2015, a 32.6% y-o-y decrease that reflects a basket of factors including low oil prices and exceptionally low utilization rates at fertilizer producer AlexFert due to supply constraints on natural gas in the first nine months of 2015.
Attributable Net Income
Comments from the Chairman, Mr. Moataz Al-Alfi
(USD Millions)
I am increasingly optimistic that we will look back on the first nine months of 2015 as one of the most challenging periods through which EKH has ever passed. A nationwide shortage of natural gas crippled operations at AlexFert, one of our most economically important investments; persistently low oil prices are a new macro reality.
49.0 33.1 14.5
5.5
Q3 Q3 2014 2015
9M 9M 2014 2015
AlexFert, historically a main contributor to our top line, was cut off from natural gas supplies during the third quarter, resulting in a total shutdown of the plant for the quarter and a c. 23% utilization rate for 9M 2015. Against this backdrop, careful attention from management teams at the operational level across our portfolio — including outstanding cash management at NatEnergy, allowed us to maintain profitability, highlighting the skill of our teams, the soundness of EKH’s strategy, and the quality of our diversified portfolio of investments. Moreover, I note that our bottom line performance has been impacted by both the conversion of EGPdenominated revenues into USD for our financial reporting, while the expiration of tax holidays almost entirely offset the benefit of a lower tax rate.
EGYPT KUWAIT HOLDING COMPANY - EARNINGS RELEASE Q3 2014
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EGYPT KUWAIT HOLDING COMPANY EARNINGS RELEASE Q3 2015
Why, then, am I optimistic, albeit very cautiously so? As I write this, AlexFert reports it that has received its full contracted daily allocation of natural gas since 1 November 2015. That follows the government of Egypt’s announcement that it has brought into service a floating storage and regasification unit (FSRU) to directly feed the national grid, with natural gas earmarked solely for industrial use. We remain in dialogue with state authorities and are guardedly optimistic that if supplies continue uninterrupted through year’s end, we may have an adequate planning horizon into next year. Against this backdrop, we will continue to search for opportunities to diversify and deepen our exposure to potentially high-growth sectors while ensuring the efficient allocation of capital and resources. We have, in this respect, c. USD 185 million in cash on hand to support this drive to create or unlock shareholder value. The unlocking of current value will come in part through the buyout of minority shareholders. Having recently concluded the acquisition of an additional 18% stake in NatGas (bringing our current holding to 75%), we will also capture value from our current portfolio through both process and operational improvements. As an investment company, we are also mindful of significant opportunities for both add-on investments and greenfield opportunities that would have significant impacts on the company’s medium-term profitability and long-term returns. As we do so, our emphasis will be on exposure to sectors that offer smoother earnings curves and better earnings visibility. At the same time, we remain optimistic about the outlook for the nation’s energy sector, where subsidy reform and the government’s drive to encourage exploration have made clear the case for continued investment in this industry. Similarly, the state’s drive to double the number of gridconnected households may provide an impetus to pursue both upstream and downstream opportunities, both within and in addition to our existing portfolio. Ultimately, I am confident that EKH’s ability to define a clear investment thesis, execute compelling transactions, and manage investments with strong company-level teams in place will allow us to capture new opportunities heading into 2016, particularly with asset prices now appearing more reasonable.
Fertilizers & Petrochemicals
45% of Group Revenues in Q3 2015
Revenues (USD Millions) 187.5 120.1
42.6
Fertilizers & Petrochemicals in USD mn unless otherwise indicated
32.4
Q3 Q3 2014 2015
EKH has investments in two operational companies in the Fertilizers & Petrochemicals Segment: Alexandria Fertilizers Company (AlexFert) and Sprea Misr for Production of Chemicals & Plastics Company. A third investment, the Egyptian Hydrocarbon Corporation (EHC,) is a mining-grade ammonium nitrate manufacturing startup scheduled to begin operations later this year. The company’s Fertilizers & Petrochemicals investments encompass products ranging from urea, ammonium nitrate, and melamine, to formaldehyde and liquid and powder glue. With more than 10 years of nitrogen fertilizer operational expertise, EKH has targeted investments with access to key export markets including the United States and Europe, diverse products across several industries, and strong cash-flow generating businesses.
9M 9M 2014 2015
Revenues Gross Profit Margin EBITDA Margin Net Profit Net Profit Margin Net Profit attributable to EKH
EGYPT KUWAIT HOLDING COMPANY - EARNINGS RELEASE Q3 2014
Q3 2014 42.6
9M 2014 187.9
Q3 2015 32.4
9M 2015 120.1
15%
34%
3%
14.%
0.41%
28%
11%
20%
(4.6)
25.9
1.7
5.0
-11%
14%
5%
4%
0.9
18.0
4.1
9.9
2
EGYPT KUWAIT HOLDING COMPANY EARNINGS RELEASE Q3 2015
Total Fertilizer Sales (Tons) 375,780
120,102 59,480
Q3 2014
32,356
Q3 2015
9M 2014
9M 2015
The Fertilizer & Petrochemical segment continued to be weighed down by limited capacity utilization at AlexFert — c. 14% during Q3 2015 — on the back of the nationwide shortage in the natural gas supply. The effect is clearly reflected on the segment’s performance, with revenues in Q3 2015 easing 24% y-o-y to USD 32.4 million from USD 42.6 million in the same period last year. On a nine-month basis, revenues stood at USD 120.1 million, down 36% compared to the USD 187.9 million in 9M 2014. Attributable Net Income for Q3 2015 surged to USD 4.1 million from USD 0.9 million during the same period the previous year on the back of growth at Sprea Misr that offset the slump at AlexFert. Sprea continues to outperform management expectations, reporting revenues of USD 74.8 million in 9M 2015, a 2% y-o-y increase. Starting in 2015, Sprea saw its tax holiday expire, with the company incurring some USD 5.1 million in income taxes during 9M 2015 compared to only USD 1.6 million in the same period last year. Sprea nevertheless posted a 28% y-o-y increase in its bottom line, which reached USD 5.5 million, underscoring the company’s sound strategy and strong management team. Sprea continues to exercise a beneficial pricing strategy and pursue increased market share given the barriers to entry to the methanol-based product market. With imports constrained by the ongoing foreign-exchange shortage, Sprea’s placement as an import-substitution play and low international prices for its key raw material leave management optimistic that it will maintain margins going forward. Furthermore, the company exports almost 30% of its production, giving it a natural (if partial) hedge against currency volatility. Building on the success of this plant, Sprea has expanded into the wood sheets business, manufactured with Formica sheets and imported wood. This final product is higher up the value chain and will command strong margins. Sprea is also exploring organic growth options for this business, with plans to add a third production line that will bring capacity to 3 million sheets per annum, up from the current 2 million sheets per annum. Furthermore, the launch of the sulfonated naphthalene formaldehyde (SNF) production is on track to begin in Q1 2016. SNF is a key additive for ready-mix cement, allowing ready-mix to dry faster and smoother. The product is not currently produced in Egypt, and given the relatively low CAPEX required to start operations, Sprea will be positioned as a cost-effective local supplier ready to capitalize on the growth of the cement and real estate industries and the drive for import substitution at the national level. Meanwhile, the national shortage of natural gas had a particularly pronounced impact on AlexFert in Q3 2015, forcing a complete shutdown of the factory as supplies to the facility came to a total halt. Supplies have returned in full since the beginning of November, allowing AlexFert to operate at full capacity for the first time this year. This comes just in time for AlexFert to supply the market for peak planting season of the nation’s winter crops. Moreover, an earmark for exports post the satisfaction of AlexFert’s domestic quota would position the company to benefit from any potential devaluation of the Egyptian pound.
57% of Group Revenues in Q3 2015
Revenues (USD Millions) 162.5 127.3
53.4
Q3 2014
41.2
Q3 2015
9M 2014
Energy & Energy-Related Egypt Kuwait Holding has investments in three companies in the Energy and Energy-Related Segment: NatEnergy, Tri-Ocean Energy (TOE), and the Egyptian Tanker Company (ETC). EKH builds and operates gas distribution networks in Egypt through its 100%-owned subsidiary NatEnergy, which covers a wide spectrum of activities, including the transportation of natural gas to power stations and the independent production of power. The company’s energy investments also cover oil and gas exploration and production through TOE — which enjoys access to a significant reserve potential spread across Egypt and South Sudan — and local and global marine transport of crude oil and petroleum products through ETC. Tri-Ocean recently finalized an acquisition that sees it enter into the upstream gas sector as a developer and operator for the first time.
9M 2015
EGYPT KUWAIT HOLDING COMPANY - EARNINGS RELEASE Q3 2014
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EGYPT KUWAIT HOLDING COMPANY EARNINGS RELEASE Q3 2015
Fertilizers & Petrochemicals in USD mn unless otherwise indicated
Q3 2014 53.4
9M 2014 162.5
Q3 2015 41.2
Gross Profit Margin
62%
48%
29%
38%
EBITDA Margin
58%
48%
26%
31%
Revenues
Net Profit Net Profit Margin Net Profit attributable to EKH
9M 2015 127.3
10.5
22.6
7.3
17.2
20%
14%
18%
14%
14.8
26.2
7.3
15.6
In the third quarter of 2015, the Energy & Energy-Related segment reported a 23% decrease in revenues over Q3 2014. For 9M 2015, the segment posted revenues of USD 127.3 million, down 22% y-o-y. This came on the back of lower oil prices worldwide, which are down more than 50% y-o-y. Nonetheless, the segment maintained healthy margins, reflecting the company’s resilience against the headwinds that hit our operations. NatEnergy, the segment’s energy distribution play, witnessed significant improvement y-o-y largely due to operational efficiencies. The company recorded revenues and bottom-line growth of 27% and 227%, respectively. NatEnergy is targeting growth of its household client base from the current 1 million customers to 1.5-1.6 million customers as it looks to capitalize on the state-backed drive to connect more homes to the natural gas grid. Key here is a very favorable payable-receivable cycle whereby NatEnergy is able to generate interest income on customer payments collected on behalf of the state prior to remittance of the same. Efficient cash management in this respect has allowed NatEnergy to increase by c. 5x its net interest income, making cash management a key hallmark of the business. Meanwhile, Kahraba continued to deliver an impressive performance, having recorded a 359% increase in attributable net income. Kahraba is on track to add generation capacity in increments (beginning with 8 MW in Q2 2016) that will bring it to 94 MW in 2017. Management has secured the necessary approvals, land, and gas supply contracts. Looking ahead, management is very optimistic about the electricity business in Egypt, the only sector in the country with a clear five-year pricing plan. Kahraba is very open to expansion opportunities higher up the generation chain, particularly if opportunities to lock in gas supplies directly from the private sector were to present themselves. Management again notes that Kahraba is now a profit-making business.
Diversified
-3%
Egypt Kuwait Holding’s Diversified segment includes a wide array of strategic investments, from cement production, telecommunications, and infrastructure, to cooling systems and insurance. In line with the company’s strategy to invest in local businesses with large and defensible market positions, EKH owns c. 30% of the Building Materials Industries Company (BMIC) in Egypt, a country home to the largest cement market in Africa, with total consumption of c. 50 mtpa. Other group assets in the sector include Delta Insurance, Al-Shorouk for Melamine and Resins, Globe Telecommunications, Gas Chill, and Bawabet Al Kuwait Holding Company.
of Group Revenues in Q3 2015
Revenues (USD Millions) 26.2 4.9
Q3 Q3 -1.2 2014 2015
7.5
9M 9M 2014 2015
The widening year-on-year of the net loss contributed by the Diversified segment came as performance at cement producer BMIC slipped on the back of deteriorating market conditions, while the market effect had a pronounced impact on portfolios of publicly traded securities held by various portfolio companies in the segment. Management notes, however, that while the segment’s contribution to EKH’s bottom line stood at a Net Attributable Loss of USD 5.6 million in Q3 2015, the contribution on a full-year basis should be positive on the back of dividend income recorded in the first and second quarters of the year.
EGYPT KUWAIT HOLDING COMPANY - EARNINGS RELEASE Q3 2014
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EGYPT KUWAIT HOLDING COMPANY EARNINGS RELEASE Q3 2015
Recent Corporate Developments Acquisition of an additional 18% stake in NatGas As part of EKH’s strategy to unlock shareholder value in the existing portfolio, management is targeting the acquisition of minority shareholder stakes in growing businesses. The company has accordingly concluded the acquisition of an additional 18% stake in NatGas, bringing EKH’s total ownership to 75%. EK Holding Finalizes USD 12.2 million Capital Increase The Listing Committee of the Egyptian Stock Exchange approved the company’s recently concluded USD 12.2 million capital increase via issuing new shares. The company’s issued and paid in capital has accordingly risen to USD 256.1 million through the issuance of 48.7 million new shares, the total number of shares increased by c. 5% to 1,042 million shares. The new shares will be priced at USD 0.25 and are funded by the company’s 2014 retained earnings. Proceeds from the capital increase will be used to finance the company’s Employee Stock Ownership Program (ESOP) approved in September 2014. Developing Leaders Program In a nod to the fundamental importance of people to our businesses, our Human Resources Department has put into place a Developing Leaders Program for EKH and our subsidiaries that will better allow management to identify top performers and help them grow their careers with the Group. This program is a key step in our institutionalization drive, as we have simultaneously implemented a number of employee-relations initiatives and training programs.
Outlook Management believes that lower oil prices are likely to persist for the remainder of 2015 and into 2016. However, with the recent uptick in natural gas production at ONS, and given that price adjustments could materialize in line with the new terms negotiated between the government and gas players ENI and Edison, Tri-Ocean’s natural gas operations could see a major turnaround and help offset the downturn in oil. Management will, however, continue to monitor the state’s pricing structure for natural gas producers before undertaking new investments. Management considers it unlikely that urea prices will rise in the near future; however, the outlook for this segment is reasonably secure — provided that gas remains available at the rates experienced in the early days of Q4 2015 — as the allowable price for sales on the domestic market, while low, are quite close to international prices. In the meantime, management is confident that as Egypt’s economy continues to grow, the company’s performance will continue to reflect the benefits of diversification. Downside risks remain the prospect of a significant devaluation of the Egyptian pound and a continued lack of clarity on monetary policy.
EGYPT KUWAIT HOLDING COMPANY - EARNINGS RELEASE Q3 2014
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EGYPT KUWAIT HOLDING COMPANY EARNINGS RELEASE Q3 2015
About EK Holding Egypt Kuwait Holding Company (EKHO.CA on the Egyptian Exchange and EKHOLDING on the Kuwaiti Exchange) is one of the MENA region’s leading investment companies with a diversified portfolio of investments that spans the region in sectors that include fertilizers and petrochemicals, energy, cement production, insurance, information technology, transport, and infrastructure. Established in 1997 by a consortium of prominent Kuwaiti and Egyptian businessmen including our former Chairman, the late Nasser Al-Kharafi, the company has flourished during the past decade as the countries of the Arab world began to liberalize their economies and open doors for private sector investments in strategic sectors that had once been off limits.
INVESTOR RELATIONS CONTACT For further information, please contact:
STOCK SYMBOL EKHO.CA
Haitham M. Abdel Moneim Egypt Kuwait Holding, Co. Senior Investor Relations Manager [email protected]
CAPITAL Issued and Paid-In Capital: USD 256.11 mn Number of Shares: 1.02 billion shares Par Value: USD 0.25 per share
14 Hassan Mohamed El-Razzaz St. (Previously Nawal St.) Dokki, Giza Tel (Direct) : +20 2 333-633-00
Forward-Looking Statements Statements contained in this document that are not historical facts are based on current expectations, estimates, projections, opinions and beliefs of Egypt Kuwait Holding Company (EKH). Such statements involve known and unknown risks, uncertainties and other factors; undue reliance should not be placed thereon. Certain information contained herein constitutes “targets” or “forward-looking statements,” which can be identified by the use of forward-looking terminology such as “may,” “will,” “seek,” “should,” “expect,” “anticipate,” “project,” “estimate,” “intend,” “continue” or “believe” or the negatives thereof or other variations thereon or comparable terminology. Actual events or results or the actual performance of EKH may differ materially from those reflected or contemplated in such targets or forward-looking statements. The performance of EKH is subject to risks and uncertainties.
EGYPT KUWAIT HOLDING COMPANY - EARNINGS RELEASE Q3 2014
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EGYPT KUWAIT HOLDING COMPANY EARNINGS RELEASE Q3 2015
Summary Income Statement Q3 2015
Q3 2014
9M 2015
9M 2014
41 194 014
53 355 278
127 290 427
162 511 793
57%
53%
47%
43%
COGS
29 152 024
20 093 535
79 243 072
83 750 425
Gross Profit
12 041 990
33 261 743
48 047 355
78 761 369
29%
62%
38%
48%
32 355 514
42 632 727
120 101 842
187 523 197
45%
42%
44%
50%
31 411 876
36 354 276
103 395 294
124 331 207
943 637
6 278 451
16 706 548
63 191 990
3%
15%
14%
34%
(1 860 626)
4 932 249
22 873 077
26 227 310
-3%
5%
8%
7%
(2 106 439)
2 067 562
2 716 933
6 770 568
245 813
2 864 687
20 156 144
19 456 742
-13%
58%
88%
74%
Total Revenues
71 688 902
100 920 254
270 265 346
376 262 300
COGS
58 457 462
58 515 373
185 355 299
214 852 199
Gross Profit
13 231 440
42 404 881
84 910 047
161 410 101
18%
42%
31%
43%
(in US $) Energy & Energy Related Revenues % Contribution
% Margin Fertilizers & Petrochemicals Revenues % Contribution COGS Gross Profit % Margin Diversified Revenues % Contribution COGS Gross Profit % Margin
% Margin Selling Expenses
930 720
2 552 169
5 488 481
8 779 573
G&A
9 263 395
19 291 410
33 520 654
49 526 900
Net Provisions
( 14 861)
10 085 587
(4 139 024)
10 330 798
1 224
2 861 042
46 607
3 014 879
3 050 962
20 334 776
49 993 329
102 478 054
4%
20%
18%
27%
Interest Net
(1 078 335)
(5 188 753)
(4 941 499)
(15 610 838)
FX Gain / Loss
( 457 567)
( 730 071)
(1 076 248)
( 876 951)
6 140
( 126 232)
43 927
59 844
-
(12 720 103)
-
(12 720 103)
Other Income
( 412 737)
895 701
514 664
1 062 581
Net Income before Tax
Other Expenses Operating Income % Margin
Capital Gain Negative Goodwill
1 108 463
15 185 421
44 534 173
87 112 690
Income Tax
521 794
848 993
10 087 816
14 970 232
Differed Tax
(4 679 763)
129 785
(5 281 970)
1 499 160
Net Income from Continued Operations
5 266 432
14 206 643
39 728 327
70 643 298
Gain (Loss) from Discontinued Operations
2 801
-
2 801
-
Net Income
5 269 233
14 206 643
39 731 128
70 643 298
Non-Controlling Interest
( 269 656)
( 327 355)
6 670 386
21 627 568
Attributable Net Income
5 538 889
14 533 998
33 060 742
49 015 730
EGYPT KUWAIT HOLDING COMPANY - EARNINGS RELEASE Q3 2014
7
EGYPT KUWAIT HOLDING COMPANY EARNINGS RELEASE Q3 2015
Summary Balance Sheet (in US$)
9M 2015
FY 2014
Fixed Assets (Net) & Projects under Construction
281 707 552
295 679 021
E&P Assets
260 922 191
225 234 044
Investments in Associates
155 075 747
134 474 361
Investments Available for Sale
119 808 092
140 048 833
Other long-term Assets
107 149 644
129 035 543
Total Long-Term Assets
924 663 226
924 471 802
Cash
309 088 106
372 644 967
Investments for Trading
190 379 280
204 722 147
Total Receivables & Other Debtors
246 081 909
187 003 900
Inventory & Work in Progress
77 226 714
80 879 873
-
1 250 000
Due from EGPC
12 833 866
18 965 439
Investments in Treasury Bills
8 429 469
-
844 039 344
865 466 326
Assets held for Sale
Total Current Assets Total Assets
1 768 702 570
1 789 938 128
Bank Overdraft and STL
253 363 442
216 975 326
Due to Suppliers and Sub-Contractors
74 367 705
58 491 313
Due to EGPC
54 195 571
39 950 261
Provisions
11 084 654
19 094 123
Debtors and Other Credit Balances
216 580 503
186 760 891
Total Current Liabilities
609 591 875
521 271 914
Long-Term Loans
147 219 155
199 975 146
Other Long-Term Liabilities
853 491
1 008 832
Due to EGPC
2 325 322
8 813 029
Provisions
4 070 700
4 070 000
Deferred Tax Liability
30 105 471
35 735 129
Total Long-Term Liabilities
184 573 449
249 602 136
Paid-in Capital
256 110 292
243 914 564
Reserves
188 292 291
188 292 291
Fair Value Reserve
(168 041 907)
(143 723 798)
Retained Earnings
413 784 152
439 460 910
Translation Adjustments
(46 880 778)
(43 719 971)
Treasury Stocks
(7 121 774)
(7 121 774)
Parent's Shareholders' Equity
636 142 276
677 102 222
Non-Controlling Interest
338 394 970
341 961 856
Total Shareholders' Equity
974 537 246
1 019 064 078
Total SHE + Total Liabilities
1 768 702 570
1 789 938 128
EGYPT KUWAIT HOLDING COMPANY - EARNINGS RELEASE Q3 2014
8
EGYPT KUWAIT HOLDING COMPANY EARNINGS RELEASE Q3 2015
Summary Cash Flows 9M 2015
9M 2014
net profit for the year before income tax adjustments for:
44 534 173
86 879 182
depreciation & amortization of property, plant and equipment and other non-tangible assets
21 968 537
22 173 276
exploration & development assets depletion
11 841 792
17 355 974
company's share of profits of associates
(2 957 132)
(4 876 775)
(888 128)
(3 063 046)
(in us $) cash flows from operating activities
unrealized gain on held for trading investments financing expenses
17 527 035
21 659 266
interest income
(12 585 536)
(6 048 429)
gain on investment for sale investments
(4 713 291)
-
(43 927)
(59 844)
(4 178 446)
(11 000 000)
39 422
21 358 231
capital gain provisions no longer required provisions other than depreciation impairment gain on debtors and other debit balances
(96 443)
-
impairment loss on debtors and other debit balances
143 050
114 879
impairment loss on property plant and equipment
-
2 900 000
gain on bargain purchase
-
(12 720 103)
2 800 70 593 906
233 506 134 906 117
change in held for trading investments
15 230 995
163 636 175
change in trade & notes receivable
(1 432 341)
106 222 549
change in debtors & other debit balances
(45 990 050)
(42 176 159)
gain on disposal of discounted operations operating profit before changes in assets & liabilities available from operating activities
change in inventories
1 637 723
271 894
change in work in progress
(650 788)
(37 580)
change in suppliers & subcontractors
19 769 477
(52 948 088)
change in creditors & other credit balances
18 844 668
(11 117 506)
change in Egyptian general petroleum corporation
7 757 613
28 921 921
change in blocked deposits change in derivative financial instruments provisions used
(42 527 806)
(36)
-
(87 500)
(514 687)
(389 639)
-
(109 090 909)
interest & financing expenses paid
(16 793 135)
(23 157 979)
change in working capital for divested subsidiary
(4 898 417)
-
net cash available from (used in) operating activities
21 027 158
212 615 260
blocked cash
cash flows from investing activities proceeds from assets held for trade
1 250 000
-
interest income received
12 060 479
5 439 458
payments for acquisition of fixed assets & projects under construction
(8 861 880)
(22 141 759)
payments for acquisition of exploration & development assets
(47 566 425)
(4 031 446)
proceeds from sale of fixed assets proceeds from egyptian general petroleum corporation proceeds from sale of available-for-sale investments
14 118
1 328 159
6 543 707
13 174 444
10 758 072
7 963 192
payments for acquisition of available -for- sale investments
(14 354 197)
(18 522 262)
payments for acquisition of investments in associates
(18 379 135)
-
-
(62 067 914)
payments for acquisition of investments in subsidiaries (net of cash acquired) dividends received form associates
-
705 999
payments for investments in treasury bills more than three months
(5 936 962)
-
proceeds from discounted operations (net of cash) net cash used in investing activities
4 577 650 (59 894 573)
(78 152 129)
cash flows from financing activities proceeds for increase in paid-in capital account
-
109 090 909
repayment of long-term loans & bank facilities
(99 612 423)
(96 016 330)
proceeds from long-term loans & bank facilities
60 879 556
119 399 133
proceeds from short-term loans & bank facilities
49 010 533
4 504 162
repayment of short-term loans & bank facilities
(6 043 315)
(32 362 855)
proceeds from bank overdraft
(23 525 725)
(92 400 134)
payments for minority interests purchase
(15 315 675)
-
minority interests
(3 792 937)
(50 541 384)
dividends paid
(37 672 544)
(16 838 383)
net cash used in financing activities
(76 072 530)
(55 164 882)
foreign currency translation differences
8 424 287
3 996 951
(106 515 658)
83 295 200
cash and cash equivalents at beginning of the year
372 320 771
190 735 319
cash and cash equivalents at end of the year
265 805 113
274 030 519
net change in cash and cash equivalents during the year
EGYPT KUWAIT HOLDING COMPANY - EARNINGS RELEASE Q3 2014
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