17/11/2024
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17/11/2024
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Loay Jassim Al-Kharafi
KUWAIT CITY, November 17: Today, Egypt Kuwait Holding Company (EKH) announced its consolidated financial results for the period ending 30 September 2024, prepared in accordance with Egyptian Accounting Standards for the first nine months of 2024, EKH recorded revenues of USD 475 million, maintaining profitability levels throughout the period. Net profit was USD 139 million, with a net profit margin of 29%, while net income attributable to EKH shareholders reached USD 124 million.
In the third quarter of 2024, EKH reported revenues of USD 154 million, a 20% quarter-on-quarter growth, driven primarily by the Energy and Energy-Related segment. Net profit was USD 39 million in the third quarter of the year, with net income attributable to EKH shareholders totaling USD 34 million for the same period.
Commenting on the Group's performance during the first nine months of 2024, Loay Jassim Al-Kharafi, Chairman of EKH, stated that the results underscore the resilience of EKH's investment model and the strength of its operational capabilities. He added that this performance reflects EKH's success in delivering sustainable value to shareholders and advancing its growth trajectory, as the Group maintained strong profitability levels despite economic challenges.
Al-Kharafi noted that management observed signs of revenue recovery on a quarterly basis, attributed to positive factors including gradual price recovery, cost management strategies, and the positive impact of recent investments. These factors have contributed to strong profit margins across EKH’s portfolio, reinforcing confidence in the strength and sustainability of the Group's business model.
He further highlighted that EKH has started reaping the benefits of its recent investment expansions in the energy sector. Positive results were achieved at the North Sinai offshore gas concession, where production commenced at the Aton-1 well (the second well in Phase 3B) in the third quarter of 2024 with a production rate of 15 million cubic feet per day. The Group aims to maintain gas production rates at 55 million cubic feet per day until the end of 2026.
Al-Kharafi noted that since acquiring the North Sinai offshore concession, EKH has invested USD 247 million in exploration and development activities, adding approximately 223 billion cubic feet to gas reserves.
He added that the Group is focused on maximizing sustainable value for shareholders through a proactive capital recycling strategy. This approach involves optimizing the performance of its investment portfolio by leveraging competitive advantages and export potential, in addition to enhancing collaboration among subsidiaries.
Meanwhile, Jon Rokk, CEO of EKH, expressed pride in the strong results achieved by the Group during the first nine months of the current year, despite the adverse impact of the EGP devaluation against the USD on Group revenues. He noted that the solid results underscore the Group’s ability to turn opportunities into tangible outcomes, and that thoughtful investment and strategic planning are the foundation of success in achieving profits despite challenges.
As the year-end approaches, Rokk stated that the company remains committed to achieving positive growth rates in the coming period. He highlighted that growth is supported by recent expansions, especially amid expectations of price recovery and stability, which are expected to contribute to profit growth and enhance operational efficiency across the investment portfolio.
He attributed the achievements to the diligent efforts of the management team and employees, along with the strategic initiatives undertaken by the company. Rokk expressed confidence in the Group’s ability to capitalize on attractive growth opportunities, ensuring continued growth and success amid dynamic operating conditions.
Fertilizers and Petrochemicals Sector
Rokk noted that revenues from the Fertilizers and Petrochemicals sector reached USD 74 million during the third quarter of 2024, while net profit totaled USD 28 million, with a 4-point improvement in the net profit margin to reach 38%.
He pointed out that the Group benefited from an increased stake in Alexandria Fertilizer Company (AlexFert), enabling the company to achieve positive results driven by an 11% quarter-on-quarter increase in urea export prices to USD 335 per ton. He expressed confidence in the company’s ability to continue achieving strong results in the coming period, supported by global urea price increases and steady gas supplies thanks to recent Egyptian government efforts. AlexFert recorded revenues of USD 47 million during the third quarter of 2024, with net profit reaching USD 18 million, and the net profit margin expanding to 38%.
Meanwhile, Sprea Misr recorded revenues of USD 27 million during the third quarter of 2024, reflecting a quarter-on-quarter increase of 3%, supported by gradual price recovery. Net profit reached USD 10 million, with the net profit margin expanding to 38% in the third quarter of 2024.
Energy Sector
On a related note, revenues from the Energy and Energy-Related segment totaled USD 57 million during the third quarter of 2024, marking a year-on-year increase of 12% and a 57% quarter-on-quarter increase. This performance was driven by strong results from both NatEnergy and the North Sinai offshore gas concession. The segment's net profit amounted to USD 15 million, with an increase in the net profit margin to 26%.
NatEnergy reported revenues of USD 42 million in the third quarter of 2024, representing a year-on-year growth of 15%, supported by growth in Kahraba's electricity distribution activities, along with progress by Fayum Gas in its high-pressure steel pipeline project. NatEnergy achieved net profit of USD 10 million in the third quarter of 2024, with positive future prospects supported by anticipated increases in natural gas connection fees and electricity tariffs, which will help improve profit margins.
Furthermore, the North Sinai offshore gas concession generated revenues of USD 15 million during the third quarter of 2024, representing a year-on-year growth of 5% and an 11% quarter-on-quarter increase, driven by successful commissioning of new wells that boosted production volumes. Net profit for the period reached USD 6.5 million, with a net profit margin of 43%.
Insurance Sector
Revenues from the Insurance and Diversified segment amounted to USD 22 million during the third quarter of 2024, supported by the segment’s continued strong performance from the previous quarter.
Delta Insurance, the largest contributor to the segment's revenues, generated USD 18 million during the third quarter of 2024, a year-on-year growth of 20%, driven by revaluation of insured assets and rising insurance premiums, along with improved returns on the insurance portfolio supported by high interest rates. Delta Insurance’s net profit contribution to EKH grew by 28% year-on-year to USD 4 million in the third quarter of 2024, translating to a growth of over 97% in EGP terms, reflecting the strong fundamentals and significant growth potential of the sector.
It is worth noting that Egypt Kuwait Holding Company, established in 1997 with issued and paid-in capital of USD 282 million and listed on both Boursa Kuwait and the Egyptian Exchange, is one of the Middle East's leading and fastest-growing investment entities. The company’s diversified investment portfolio spans five main sectors, including fertilizers and petrochemicals, gas distribution, power generation and distribution, as well as insurance and non-banking financial services.
