Abu Qir Fertilizers plans to get a loan of $80-100m that will be arranged by the National Bank of Kuwait – Egypt (NBK), to finance expansion in production capacity from 1,925 tonnes per day to 2,370 tonnes per day of urea granular, sources told Daily News Egypt.
The PDP studies and the initial engineering designs of the expansion have been completed, and the invitation to bid has been issued to EPC contractors.
The company explained that the new project to produce 1 million tonnes/year of methanol and 400,000 tonnes/year of ammonia (first phase), will be established in the Suez Canal Economic Zone in Ain Sokhna, at an investment cost of about $1.6bn. The complex is owned by Abu Qir Fertilizers (35%), Helwan Fertilizers Company (35%) and Al Ahly Capital Holding (30%).
The complex was established on an area of 2 million sqm. Al Ahly Capital Holding was assigned as a financial advisor to arrange the necessary financing for the project, which is planned to be financed by 70% debt and 30% equity. In parallel, the economic and market feasibility study for the project is being updated in light of local and global updates. Currently, the PMC contract is being finalized.
Abu Qir reported a gross profit of EGP 10.628bn in fiscal year (FY) 2021/22, up by 1.72x year-over-year (y-o-y) versus FY 2020/21 supported by strong revenue despite higher COGS to yield a gross profit margin of 65% versus the 44% recorded in previous year.
The increase in total SG&A expense was driven by growth in export expenses as well as increased periodical increments, depreciation and other miscellaneous expenses.
EBITDA rose by 2.22x y-o-y to EGP 7.593bn versus EGP 2.357bn recorded for the same period last year.
Abu Qir’s EBITDA increased to EGP 10.027bn, and EBITDA margin recorded 61% for FY2021/22 compared to 39% recorded in FY 2020/21.
Abed Ezz El Regal, Chairperson and CEO, commented on FY2021/22 Results: “Abu Qir Fertilizers was able to end FY2021/22 with strong performance and outstanding financial results. The company was able to provide the necessary liquidity to maintain the continuity of operation of plants, their maintenance, and the implementation of planned periodic turnaround as well as the implementation of its ambitious plan to move forward in investment projects that will achieve a return on investment for our shareholders. Our focus this year was to be fully prepared for the digital future in all of the company’s activities, as the digital project contract was designed with SAP International, to apply an integrated digital system at Abu Qir Fertilizer.”
He added: “The ERP system is integrated with the information management system in which the company’s activities is managed through a smart digital system that integrates all the data of different sectors of production, project management, maintenance, HSE, quality, finance, warehouses, procurement and marketing, which leads to speed and accuracy of decision-making based on data and immediate information, which positively affects the efficiency of operations and performance indicators.”