TransfOrmaTive invesTmenTs ADDRESSING GLOBAL CHALLENGES
Transformative Investments Addressing Global Challenges
2013 Fact Sheet
Message from the Chairman
Message from the Chairman
Dear Stakeholders, As I write this brief note EKH is on the verge of a significant and tangible transformation that has already been well received by the market. The positive sentiment on the part of the investor community in response to these changes signals to us that we are on the right track. We have emerged from three years of political turmoil as a company that has had its business model put to the test in the most challenging markets and still fared well. While it is still too early to be celebrating a recovery in our home market of Egypt, we can at the very least be heartened by the fact that we are starting to see major operational achievements across our portfolio. To hedge against the geopolitical risk of our region, management has taken steps to look into investments that make economic sense in more stable markets. The first of these investments is a greenfield nitrogen fertilizers plant in the U.S. Our decision to move into the U.S. fertilizer market was based on identifying the right opportunity; a market with an abundance of raw materials coupled with a huge deficit in fertilizers. As we head into 2014 we find ourselves with a solid balance sheet, good control over our finance expense and a strong cash position. Our core revenues (excluding our low-margin petroleum trading business) in 2013 have increased to USD 500 million from USD 467 million in 2012.
In the fertilizers and petrochemicals segment, most players in the Egyptian market have suffered from the limited availability of natural gas. Despite the constraints we still managed to maintain our efficiency, enhance our product mix and run our operations. Our efforts to maximize synergies with our investments in the petrochemicals industry have been largely successful. Sprea Misr and its subsidiary, Plastichem have enhanced efficiency and improved EBITDA margins which now exceed 25-26%, up from c. 20% last year. Both companies are moving towards becoming export-oriented businesses with 40% of sales now coming from abroad. In May 2013 Tri Ocean, our oil & gas exploration and production company, resumed production at its South Sudanese concessions and first oil was exported by the end of June 2013. The Egyptian Hydrocarbons Company (EHC) is nearly complete and operations are scheduled to begin in the second half of 2014. Our cement business is moving in the right direction with BMIC, our 1.8 MTPA greenfield cement plant in Assiut, Upper Egypt which reached its full production capacity at the end of 2013. The stateof-the-art plant is designed to make use of multiple sources of power including coal. The Egyptian government’s recent decision to allow cement plants to import coal as part of their energy mix will be a plus for the business going forward. Finally, I would like to take this opportunity to thank our board as well as each and every member of the EKH team. Your professionalism and commitment have made this company into the well-respected institution that it has become. Today, more than ever, we are committed to remaining accountable to our investors and upholding their interests above all else. This year management has taken proactive steps to open up the company and introduce higher levels of transparency in order to foster better channels of communication as we move towards new markets and new opportunities in the years to come.
Moataz Al-Alfi Chairman of the Board
EKH at a glance
EKH at a Glance
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. Estab-
lished 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.
18
5,000+
investments in strategic sectors ranging from hydrocarbons, fertilizers and petrochemicals to cement production and insurance
professionals, specialized in a wide range of fields
c.USD
2.2 billion
c.USD
paid-in capital
total assets
USD
770 million
total equity book value
USD
5 billion
(2004-13) cumulative revenue of more than USD 5 billion
210 million
16.2% average return on equity over the past five years, delivering consistent value to shareholders
c.USD
962 million
(2004-13) cumulative attributable net income of c.USD 962 million
2013 Financial Highlights
2013 Financial Highlights “As we head into 2014 we find ourselves with a solid balance sheet, good control over our finance expense and a strong cash position.”
USD
2,161million
USD
core revenue (excluding petroleum trading business)
total assets
11.2%
USD
return on equity
Total Revenue*
500 million 85 million
net profit after minority interest
Net Profit After Minority Interest
(USD Millions)
Total Assets (USD Millions) 2,287.6
(USD Millions) 458.1
466.8
500.2
439.1
145.3
2,160.5
149.5
130.3
1,857.8 1,673.3
1,750.0
321.5 83.2
‘09 ‘10
‘11
‘12
‘13
‘09
‘10
‘11
‘12
84.9
‘13
‘09
‘10
‘11
‘12
* The figures have been restated to reflect core operations, excluding the petroleum trading business.
‘13
Investment Portfolio
Investment Portfolio Segments EKH is a hands-on investor seeking majority stakes and management control of its investments. Fertilizers and Petrochemicals Segment Egypt Kuwait Holding has investments in three companies in the Fertilizer and Petrochemicals Segment: Alexandria Fertilizers Company (AlexFert), Sprea Misr for Production of Chemicals & Plastics Company and the Egyptian Hydrocarbon Corporation (EHC). With more than 10 years of nitrogen fertilizer operational expertise, EKH has targeted investments with access to key export markets in the U.S. and Europe, diverse products across several industries, and strong cash flow generating businesses.
2013 Operational Highlights • AlexFert’s recent expansion in ammonium sulphate commenced commercial operations in mid-2013 • AlexFert accounted for c.42% of EKH’s 2013 EBITDA • Launch of first phase of the expansion plan at Sprea Misr with the formica sheet and powder glue plants beginning production in July 2013 • Expansion into the U.S. with a greenfield nitrogen fertilizer plant
Energy and Energy-Related Segment Egypt Kuwait Holding’s investments in the Energy and Energy-Related Segment include 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, and the company’s energy investments also cover oil and gas exploration and production through TOE, as well as local and global marine transport of crude oil and petroleum products through ETC.
2013 Operational Highlights • USD 1.5 billion trading revenues for Tri-Ocean Energy • TOE resumed production at its South Sudanese concessions and first oil was exported by the end of June 2013 • Divestiture of Shabakat, the EPC contractor for downstream natural gas
Diversified Segment EKH’s diversified segment includes a wide array of strategic investments, from cement production, telecommunications and infrastructure to cooling systems and insurance.
2013 Operational Highlights • Building Materials Industries Company (BMIC) reached full production capacity • Divestiture of Nile Takaful
Fertilizers and Petrochemicals Segment Alexandria Fertilizers Company (AlexFert)
Sprea Misr
egyptian hydrocarbon corporation
Energy and Energy-Related Segment Tri-Ocean Energy
Natenergy
Egyptian Tanker Company
Diversified Segment Building Materials Industries Company
Delta Globe Bawabet Gas Chill Insurance Technologies al Kuwait Holding Company
بوابة الكويت القابضة Bawabet Al Kuwait Holding Company
Tel.: +202 3336 3300 | Fax: +202 3335 8989 14, Hassan Mohamed El Razzaz Street, Agouza, Giza, Egypt E-mail: [email protected] http://www.ekholding.com/
Al-Shorouk for Melamine and Resins (Al-Sharif)
2013 Fact Sheet
Message from the Chairman
Message from the Chairman
Dear Stakeholders, As I write this brief note EKH is on the verge of a significant and tangible transformation that has already been well received by the market. The positive sentiment on the part of the investor community in response to these changes signals to us that we are on the right track. We have emerged from three years of political turmoil as a company that has had its business model put to the test in the most challenging markets and still fared well. While it is still too early to be celebrating a recovery in our home market of Egypt, we can at the very least be heartened by the fact that we are starting to see major operational achievements across our portfolio. To hedge against the geopolitical risk of our region, management has taken steps to look into investments that make economic sense in more stable markets. The first of these investments is a greenfield nitrogen fertilizers plant in the U.S. Our decision to move into the U.S. fertilizer market was based on identifying the right opportunity; a market with an abundance of raw materials coupled with a huge deficit in fertilizers. As we head into 2014 we find ourselves with a solid balance sheet, good control over our finance expense and a strong cash position. Our core revenues (excluding our low-margin petroleum trading business) in 2013 have increased to USD 500 million from USD 467 million in 2012.
In the fertilizers and petrochemicals segment, most players in the Egyptian market have suffered from the limited availability of natural gas. Despite the constraints we still managed to maintain our efficiency, enhance our product mix and run our operations. Our efforts to maximize synergies with our investments in the petrochemicals industry have been largely successful. Sprea Misr and its subsidiary, Plastichem have enhanced efficiency and improved EBITDA margins which now exceed 25-26%, up from c. 20% last year. Both companies are moving towards becoming export-oriented businesses with 40% of sales now coming from abroad. In May 2013 Tri Ocean, our oil & gas exploration and production company, resumed production at its South Sudanese concessions and first oil was exported by the end of June 2013. The Egyptian Hydrocarbons Company (EHC) is nearly complete and operations are scheduled to begin in the second half of 2014. Our cement business is moving in the right direction with BMIC, our 1.8 MTPA greenfield cement plant in Assiut, Upper Egypt which reached its full production capacity at the end of 2013. The stateof-the-art plant is designed to make use of multiple sources of power including coal. The Egyptian government’s recent decision to allow cement plants to import coal as part of their energy mix will be a plus for the business going forward. Finally, I would like to take this opportunity to thank our board as well as each and every member of the EKH team. Your professionalism and commitment have made this company into the well-respected institution that it has become. Today, more than ever, we are committed to remaining accountable to our investors and upholding their interests above all else. This year management has taken proactive steps to open up the company and introduce higher levels of transparency in order to foster better channels of communication as we move towards new markets and new opportunities in the years to come.
Moataz Al-Alfi Chairman of the Board
EKH at a glance
EKH at a Glance
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. Estab-
lished 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.
18
5,000+
investments in strategic sectors ranging from hydrocarbons, fertilizers and petrochemicals to cement production and insurance
professionals, specialized in a wide range of fields
c.USD
2.2 billion
c.USD
paid-in capital
total assets
USD
770 million
total equity book value
USD
5 billion
(2004-13) cumulative revenue of more than USD 5 billion
210 million
16.2% average return on equity over the past five years, delivering consistent value to shareholders
c.USD
962 million
(2004-13) cumulative attributable net income of c.USD 962 million
2013 Financial Highlights
2013 Financial Highlights “As we head into 2014 we find ourselves with a solid balance sheet, good control over our finance expense and a strong cash position.”
USD
2,161million
USD
core revenue (excluding petroleum trading business)
total assets
11.2%
USD
return on equity
Total Revenue*
500 million 85 million
net profit after minority interest
Net Profit After Minority Interest
(USD Millions)
Total Assets (USD Millions) 2,287.6
(USD Millions) 458.1
466.8
500.2
439.1
145.3
2,160.5
149.5
130.3
1,857.8 1,673.3
1,750.0
321.5 83.2
‘09 ‘10
‘11
‘12
‘13
‘09
‘10
‘11
‘12
84.9
‘13
‘09
‘10
‘11
‘12
* The figures have been restated to reflect core operations, excluding the petroleum trading business.
‘13
Investment Portfolio
Investment Portfolio Segments EKH is a hands-on investor seeking majority stakes and management control of its investments. Fertilizers and Petrochemicals Segment Egypt Kuwait Holding has investments in three companies in the Fertilizer and Petrochemicals Segment: Alexandria Fertilizers Company (AlexFert), Sprea Misr for Production of Chemicals & Plastics Company and the Egyptian Hydrocarbon Corporation (EHC). With more than 10 years of nitrogen fertilizer operational expertise, EKH has targeted investments with access to key export markets in the U.S. and Europe, diverse products across several industries, and strong cash flow generating businesses.
2013 Operational Highlights • AlexFert’s recent expansion in ammonium sulphate commenced commercial operations in mid-2013 • AlexFert accounted for c.42% of EKH’s 2013 EBITDA • Launch of first phase of the expansion plan at Sprea Misr with the formica sheet and powder glue plants beginning production in July 2013 • Expansion into the U.S. with a greenfield nitrogen fertilizer plant
Energy and Energy-Related Segment Egypt Kuwait Holding’s investments in the Energy and Energy-Related Segment include 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, and the company’s energy investments also cover oil and gas exploration and production through TOE, as well as local and global marine transport of crude oil and petroleum products through ETC.
2013 Operational Highlights • USD 1.5 billion trading revenues for Tri-Ocean Energy • TOE resumed production at its South Sudanese concessions and first oil was exported by the end of June 2013 • Divestiture of Shabakat, the EPC contractor for downstream natural gas
Diversified Segment EKH’s diversified segment includes a wide array of strategic investments, from cement production, telecommunications and infrastructure to cooling systems and insurance.
2013 Operational Highlights • Building Materials Industries Company (BMIC) reached full production capacity • Divestiture of Nile Takaful
Fertilizers and Petrochemicals Segment Alexandria Fertilizers Company (AlexFert)
Sprea Misr
egyptian hydrocarbon corporation
Energy and Energy-Related Segment Tri-Ocean Energy
Natenergy
Egyptian Tanker Company
Diversified Segment Building Materials Industries Company
Delta Globe Bawabet Gas Chill Insurance Technologies al Kuwait Holding Company
بوابة الكويت القابضة Bawabet Al Kuwait Holding Company
Tel.: +202 3336 3300 | Fax: +202 3335 8989 14, Hassan Mohamed El Razzaz Street, Agouza, Giza, Egypt E-mail: [email protected] http://www.ekholding.com/
Al-Shorouk for Melamine and Resins (Al-Sharif)
