Egypt’s Egytrans reports growth in double digits in 9 months

Egyptian Transport and Commercial Services Co – Egytrans announced on Tuesday its consolidated results for the first 9 months of 2019.

Consolidated growth in revenues registered 14.5 percent year-on-year driven by triple digit growth in storage and logistics and double-digit growth in its fully-owned subsidiary Egytrans Depot Solutions (EDS).

“We continue to focus on increasing topline and improving profitability and our results over the last 9 months are a confirmation of that.” Abir Leheta, chairperson of Egytrans, said.

The strong performance of Egytrans’ regular business is especially encouraging,” she said.

“Egytrans’ ongoing strategy to elevate the regular business line, with our increased focus and operational efficiency and increased customer engagement continues to drive traction in this segment. Going forward, we see even greater potential for this business.”

Nine months into 2019 saw revenues increasing by 14.5 percent year-on-year to reach 214.7 million Egyptian pounds ($13.4 million), exceeding Egytrans’ this year budget driven by continued growth of regular business lines revenues, the company said.

In the meantime, cost/revenues ratio added 549.2 bps to record 67.7 percent in the first nine months of 2019 from 62.2 percent in the same period last year. This has led to a drop of 485.8 bps in EBITDA margin to 18.7 percent, compared with 23.6 percent for the first nine months of 2019 and 2018, respectively.

Meanwhile, selling, general, and administrative expense (SG&A) ratio improved by 63.5 percent bps to 13.6 percent in the first nine months of 2019 as opposed to 14.2 percent in the comparable period a year ago.

Net profits after taxes and minority interest for the period reached the target of 2019 despite a decrease of 15 percent year-on-year to 29.8 million pounds. The decline was due to a series of interest rate cuts by Egypt’s central bank, leading to lower investment and net interest income.

In addition, as a result of the appreciation of the Egyptian pound against the U.S. dollar, the books recorded an FX loss of 4.3 million pounds versus a gain of 0.3 million pounds a year ago. This led to a net profit margin fall of 13.9 percent versus 18.7 percent for both periods, respectively.

“We are reaping the rewards of our strategy as we have managed to significantly decrease the impact of cyclical projects business on our revenue stream with a strong top-line organic sales growth in our regular business.”  added Leheta.

“We are also making good progress in executing our operating improvement plan, which is specifically designed to increase margins, reduce working capital, and improve overall operating efficiency reflected in all of our improved financial metrics,”

Egytrans’ separate revenues rose 16.6 percent year-on-year to 188.5 million pounds. Costs were up 21.9 percent to 139.3 million pounds. On the other hand, SG&A added 19.7 percent to 25.2 million pounds. As a result, EBITDA margin lost 360.2 bps to register 12.7 percent to 24 million pounds versus 16.3 percent to 26.4 million pounds in the first nine months of 2019 and 2018, respectively. Net profits after taxes lost 18 percent to 29.2 million pounds in the first nine months of 2019 from 35.7 million pounds for the same period a year ago.

Egyptian Transport and Logistics (ETAL), a fully owned subsidiary of Egytrans, executed specialised transport and installation of cargos with exceptional weight and dimensions for the aforementioned mega projects, in addition to other operations. The company showed a decline of 7.4 percent in year-on-year revenues to 11.9 million pounds. On the other hand, costs increased by 13.6 percent to 4.2 million pounds coupled with a 7.2 percent increase in SG&A to 3.3 million pounds. Finally, net profits after taxes shrank to 40.7 percent to 2.9 million pounds in the first nine months of 2019, compared with 4.8 million pounds in in the first nine months of 2018.

EDS, Egytrans a fully owned subsidiary specialising in storing, cleaning, and repairing liquid bulk cargo containers (ISO Tanks), exhibited a strong growth in its net profits after taxes by 54.4 percent to $0.457 million in the first nine months of 2019, from $0.296 million in the first nine months of 2018. On the top-line front, revenues recorded an increase of 15 percent to $0.834 million. On the same front, costs were almost doubled to $0.110 million, which is partially compensated by a 3.4 percent decrease in SG&A to $0.131 million. These have led EBITDA margin to slightly decline by 30.7 bps to register 71.2 percent from 71.5 percent at $0.594 million in the first nine months of 2019 versus $0.519 million in in the first nine months of 2018.

“Notable is the successful sale of Egytrans treasury share which was bought in October 2018 through the OPR opened by EGX at a fixed price of 7.20 pounds (15 percent premium over the market price of 6.22 pounds) per share for an aggregate amount of 15.9 million pounds.”

The treasury shares sale transaction took place during the third quarter of 2019 via the EGX open market and was sold with a total value of 16.6 million pounds, representing 7.50 pounds per share.