Qalaa Holdings topline recovers from 1Q slump, margins improve, losses narrow

Shaimaa Raafat
3 Min Read


Qalaa Holdings reported 2Q21 results, recording net loss post minority at EGP 402m in the second quarter of 2021 (2Q21) vs net loss of EGP 479m in 1Q21 and EGP 712m in 2Q20. 


Revenue hit EGP 10.178bn, increasing by 27% quarter over quarter (q-o-q) and 37% year-over-year (y-o-y). The expansion in topline was supported by the resumption of production at ERC after the facility had been hit with operational difficulties and production stoppage in 1Q21 alongside a strong performance from its other energy arm, TAQA Arabia.

Despite a 22-day production stoppage at ERC, the refinery recorded revenue of EGP 6.014bn, increasing by 46% q-o-q, and by+52% y-o-y, with sequential revenue growth driven by several factors.

Namely, the volume growth as volumes recovered to record 717,000 tons vs 1Q21’s 607k tons and price growth as recovery in oil markets supported the expansion of Diesel-HFO spreads which averaged $185/ton. 


Management also reported that ERC’s gross refining margin recorded $1.5m, which is still significantly below pre-covid levels.


TAQA Arabia’s 2Q21 revenue came in at EGP2.185bn, increasing by 7% q-o-q and 27% y-o-y. 


The strong y-o-y growth was backed by strong performance across all divisions as its gas arm recorded revenue of EGP 452m marking a 7% increase q-o-q and 25% y-o-y. This was driven total gas household connections grew to hit 38,000 connections vs 33,000 in 2Q20, as well as the fact that the total gas distributed grew to 1.9 bcm vs 2Q20’s 1.6bcm.


Moreover, CNG stations increasing to 23 from 10 in 2Q20, and the cumulative industrial clients increased to 280 from 251 in 2Q20.



TAQA’s power arm recorded revenue of EGP443m driven by a 48% YoY increase in electricity generation.


Al Ahly Pharos research expects further topline expansion for 3Q21 alongside narrowing losses. This would be primarily driven by ERC as the refinery resumes full capacity utilization in tandem with the continued recovery in oil prices, which entails healthier Diesel-HFO spreads as the two factors would prompt further margin expansion. 


However, the burden of significant interest and depreciation expenses are expected to wipe out those gains. Management continues to report that debt restructuring negotiations with senior lenders are taking place, with a solid breakthrough still yet to materialize.

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