Activity in Egypt’s non-oil economy contracted for a 27th month

Newsletter

06 Mar 2023

Activity in Egypt’s non-oil economy contracted for a 27th month, with businesses seeing little prospect that high inflation and foreign-currency shortages will ease this year. The Purchasing Managers’ Index compiled by S&P Global, which measures the performance of the private sector, rose to 46.9 in February from 45.5 the month before, yet remained well below the 50 mark that separates growth from decline. Export sales fell for a second consecutive month, with companies signaling that “a weak foreign economic climate had suppressed sales.” (Bloomberg)

Egypt's foreign exchange reserves increased to 34.352 billion USD by the end of February
Compared to 34.224 billion USD at the end of January 2022, an increase of 128 million USD. Egypt's cash reserves consist of cash cover in foreign currencies in addition to reserves of gold deposited in the treasuries of the Central Bank of Egypt. (Al Mal)
The net foreign liability position of the Egyptian banking system widened to 21.7 billion USD in January from 20 billion USD the month before
Following two months of improvement, which picked up central bank data. Commercial banks were responsible for much of the decline, with their liabilities growing by 1.4 billion USD to 13.1 billion USD. (Al Mal)
Ride-hailing app Uber has raised its prices for the second time in a month
This time in response to the government’s decision to raise fuel prices by as much as 11% last week. The minimum charge for UberX, UberX Saver and Uber Comfort has increased by 7.5-8% while the base rate is by as much as 11%. (Uber)
Egytrans expects to wrap a majority acquisition of trucking firm National Company for Transportation and Overseas Services (NOSCO) before the end of 1H 2023
Due diligence is still underway to determine the transaction’s value, which will be announced upon its completion. Egytrans in October said its board had agreed to pursue the NOSCO acquisition and that the two firms were considering executing the transaction through a share swap. Under the arrangement, NOSCO shareholders would receive new shares in Egytrans via a capital increase. The final method of the transaction will depend on the results of an independent fair value study. (Al Mal)
Samih Sawiris is leading the redevelopment in Morocco of the Mogador resort in Essaouira, Morocco
In a drive worth as much as 4 billion AED. Sawiris is leading a consortium of four investors. Sawiris will invest through SOSTNT, his Luxembourg-based investment company. The three other investors are Emirati investment company Al Nowais, Egyptian hotel chain Sunrise Resorts & Cruises, and Belgium-based construction company Besix, a subsidiary of the Sawiris family’s Orascom Construction, our source said. The consortium signed an agreement to “revive” the activities of a firm named Societe D'aménagement D'essaouira Mogador (SAEMOG), which owns the seaside resort. Several Moroccan ministers and officials also signed the agreement. (Enterprise)
Palm Hills Developments booked record-high net income after tax and minority interest of EGP 1.26 bn in 2022, up by 52% y-o-y
Revenues climbed 76% y-o-y to more than 13.6 billion EGP, another all-time high. New sales were up by half to a record 26.0 billion EGP. The EGX-listed company sold 20% more units in 2022 than the year before, with all projects seeing a rise in average sale prices. Almost 90% of new sales were accounted for by residential properties, which were up 51% y-o-y, while commercial sales rose 44%. (EGX)
Pharma and cosmeceuticals firm Macro Group saw its net income rise 18% y-o-y to 173.9 million EGP in 2022
Revenues grew 23% y-o-y to record 729.6 million EGP. The company attributed the rise in revenues to a 26% y-o-y uptick in average pricing. Total sales volumes fell 3% y-o-y to 18 mn units, as market headwinds and inflationary pressures limited consumers’ purchasing power. The company introduced 30 new products last year – a third of them in 4Q alone — and plans to introduce another 35 new products in the near to medium term. Macro made its debut on the EGX in the first quarter of last year. (EGX)
Macro turned to exports to hedge against headwinds
Export sales more than quadrupled to hit 30.5 million EGP in 2022 after Macro hired an export manager to increase its footprint across the Middle East and Africa. The move “increased Macro Group’s access to hard currency, cushioning foreign exchange fluctuations and making it easier in acquiring the necessary imported raw materials for premium products” company chair Ahmed Elnayeb said. (Al Mal)
Domty posts 266.87% YoY leap in 2022 consolidated profits
Arabian Food Industries Company (Domty) (DOMT) reported a 266.87% year-on-year (YoY) jump in its consolidated net profits after tax and minority interest for the full year ended December 31st 2022. The company’s consolidated net profit attributable to the parent company rose to 265.701 million EGP in 2022 from 72.424 million EGP in 2021. Moreover, Domty recorded sales amounting to 5.217 billion EGP last year, rising from 3.360 billion EGP a year earlier. (EGX)
FRA shortens time required to increase capitals of EGX-listed companies
The Financial Regulatory Authority (FRA) has amended the rules of listing capitals in the Egyptian Exchange (EGX), allowing shortening the time needed to increase capitals of listed firms. The amendments also enable the companies’ general assemblies to authorize their boards of directors to complete and follow up on capital increase according to a timetable, in tranches, and with a maximum limit equal to the issued capital. (Arab Finance)