Citadel Capital: Assets Grow to EGP30 billion in FY13

Big 5

Citadel Capital (CCAP) announced in a press release on Sunday, its Financial results for 4Q2013 and FY2013 posting a five-fold rise in assets to EGP 30 bln as part of the firm’s ongoing transformation into an investment company which holds majority stakes in most of its subsidiaries in 5 core industries: energy, transportation, agrifoods, mining and cement.

On the income statement front, the firm’s statutory consolidated net loss narrowed 54.4% year-on-year in 4Q13 to EGP 128.5 m, while on a full-year basis the firm’s net loss was nearly halved, falling to EGP 384.9 m.

The Y-o-Y contraction in net loss owes almost entirely to improved operational performance at the underlying platform and portfolio companies.

This improvement was weighed down by EGP 139.1 m in non-cash impairments taken mainly in 1Q13, related to previously written-down upstream oil and gas investments.

In the final quarter of the year, total aggregate (non-statutory) revenues at operational core and non-core companies surged 13.9% to EGP 1.7 bln. Meanwhile, EBITDA shot up 345.3% to EGP 219.9 m, its highest level in the past eight quarters. This reflects stronger across-the-board performance, led by the cement and mining sectors.

Ahmed Heikal, Citadel Capital Chairman and Founder, commented “A relentless focus on operational improvements and cost optimization at both the Citadel Capital and subsidiary levels was a focus of 2013 and remains a top focus of the current year.”

He added As this year progresses, we will maintain a laser focus on three themes: Exiting our investments in non-core holdings; using the proceeds from that divestment program to both deleverage and fuel growth at core subsidiaries; and investing in governance at the Citadel Capital and subsidiary levels to make certain we have the people and systems we need to make our growth sustainable.”

Under the divestment program, non-core subsidiaries will be exited over the coming three or more years. In the first five months of 2014, the firm has exited its investment in the Sudanese Egyptian Bank (SEB) in a USD 22 m sale and has received an offer to sell 100% of Sphinx Glass for an equity value of c. USD 112 m.

At the Citadel Capital-level, the highlight of 2013 was the receipt of regulatory approval and subsequent launch of a rights issue that saw the firm’s paid-in capital rise to EGP 8 bln upon closure of the second and final subscription period on 9 April 2014. Full subscription to the EGP 3.64 bln capital increase has allowed Citadel Capital to take majority stakes in most of its subsidiaries in five core industries.

With the majority of the acquisitions having taken place by the end of December 2013, the acquisition program had a substantial impact on the firm’s balance sheet, where assets swelled to EGP 30.0 bln as of 31 December 2013 compared with EGP 5.8 bln a year earlier. Starting with the first quarter of 2014, Citadel Capital will also fully consolidated a number of subsidiaries on its income statement.