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Egypt Kuwait Holding achieves net profit of $62.6 million in Q1 2024

Attributable net income rose by 4.3% y-o-y to $62.6 million

KUWAIT: Egypt Kuwait Holding recorded revenues of $193.0 million in Q1 2024, primarily impacted by the softness in urea prices globally following the all-time peak reached in 2022, as well as the devaluation of the EGP towards the end of the quarter. Despite the volatile operating conditions, EKH’s profitability reflects continued resilience, with gross profit and EBITDA margins standing at 44 percent and 40 percent, respectively. Net profit closed at $71.9 million, resulting in a net profit margin of 37 percent, while EKH’s attributable net income rose by 4.3 percent year-over-year to $62.6 million.

Supported by EKH’s solid performance and strong cashflows, the company distributed a dividend of USD six cents per share to shareholders in April 2024, affirming the company’s unwavering commitment to delivering sustainable value to shareholders. EKH has successfully distributed over $67 million in dividends in FY 2023 and approximately $800 million since inception.

Commenting on the Group’s performance, EKH Chairman Loay Jassim Al-Kharafi said: “During the first quarter of the year, we continued to reap the rewards of the strategic investments we’ve diligently made over the past year, aimed at diversifying, and strengthening our portfolio. We worked meticulously to grow our earnings, despite challenging macroeconomic conditions, building a solid base for the rest of the year and reiterating EKH’s resilience and ability to deliver superior returns.”

“In 2024, we will focus on directing our main efforts towards exploring expansion opportunities in regional markets and venturing into new and diverse sectors. Our goal remains to foster sustainable growth and optimize revenue streams in foreign currencies. Concurrently, our team remains unwavering in its commitment to enhancing profitability. With steadfast confidence in our new executive management, we plan on capitalizing on these achievements to propel the company along its growth trajectory.”

Commenting on the Group’s performance, EKH CEO Jon Rokk said: “I am pleased to report on EKH’s performance during my first quarter as Company CEO. During Q1 2024, the company achieved revenues of $193 million, accompanied by a gross profit margin of 44 percent. This resulted in a notable y-o-y increase of 4.3 percent in net profit attributable to the company, reaching $62.6 million.”

“Our strategic investments in fertilizers and petrochemicals front have ensured resilience and yielded positive results despite challenges such as global urea price volatility and the EGP devaluation. Specifically, investments in SpreaMisr have opened up lucrative opportunities, driven by increased production capacities in the existing production lines and the operation of new production lines. Meanwhile, at AlexFert, revenues are gradually rebounding following peaks in urea prices, with our increased ownership of 75.33 percent significantly enhancing USD-denominated revenues.”

“In the Energy and Energy-Related segment, ONS has showcased robust performance driven by expansion efforts, including enlarging our concession area to 440 sq km and drilling two new wells. Meanwhile, NatEnergy’s downstream natural gas distribution subsidiaries have prioritized expanding household installations, while Kahraba continued to reap the rewards of our new concession awarded in 2022 for the 10th of Ramadan South Industrial Developers Zone, effectively doubling its distribution volumes y-o-y.” “In our Insurance & Diversified segment, Delta Insurance’s growth has offset the adverse effects of EGP devaluation, while Bedayti, our microfinance subsidiary, has experienced rapid growth since its establishment, with revenues up by 32 percent y-o-y and net profit up by 18 percent y-o-y in the Q1 2024.”

“Lastly, I am pleased to add that we are working hard to ensure that our Nilewood production facility, a joint venture with renowned German MDF producer Holzwerkstoffe GmbH, is on track to commence operations, marking growth and diversifying revenue streams as well as positively impacting our bottom line.”

“As we move forward into 2024, our primary focus remains on executing growth initiatives to enhance scale and create value for our stakeholders while also exploring opportunities for regional expansion and diversification into new sectors, all with the aim of driving growth and resilience across our business.”

Egypt Kuwait Holding Co cash dividends

The company distributed cash dividends of six cents per share for 2023, with $67 million in total. This distribution was made possible by the company’s outstanding performance and strong cash flows. Consequently, the total cash dividends distributed since the company’s establishment amount to $800 million approximately.

Founded in 1997, Egypt Kuwait Holding Company is listed on both the Kuwait and Egyptian stock markets. Over the past decades, it has emerged as one of the largest, leading, and fastest-growing investment companies in the Middle East. Its diverse portfolio spans five major sectors: fertilizers, petrochemicals, gas upstream and distribution, power production and distribution, insurance and non-bank financial services. The Egypt Kuwait Holding Company is aiming to continue achieving high return on investment rates for its investors based on a strong investment portfolio and a competent management team.

EKH strategic investments continue to bear fruit with the Group recording a top-line of $193.0 million in Q1 2024, demonstrating solid profitability with gross profit margin and EBITDA margin recording 44 percent and 40 percent, respectively. Attributable net income reached $62.6 million, supported by resilient performance and growth across the business.

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