*Key news articles for today*
Net foreign reserves inched up to USD34.35 billion in February from USD34.22 billion in January 2023.
Budget deficit increased by 4% YoY to EGP367 billion during 1H22/23 as government expenses increased by 19.7% YoY. This came due to a 36.2% YoY hike in interest expenses accounting for 41.7% of total expenses.
The cabinet released a statement denying rumors that mass transit (microbuses and buses) fares increased.
According to Al-Mal newspaper, the minister of finance expects issuing sovereign sukuk worth USD3.2 billion within four years. The proceeds will be used to finance budget projects.
The ministry of finance targets extending government debt maturity to 3.4 years, compared to 1.8 years. The ministry also targets reducing debt to GDP to less than 80% by 2026. Moreover, the government aims at increasing budget revenues by 18% during FY22/23.
Natural gas consumption by electricity stations declined by 1.1bcm to 2.2bcm during February, compared to its peak during last August.
The ministry of finance is planning to spend export subsidy during the same year of recording exports. The government paid EGP48 billion to 2,500 company since October 2019, and until currently.
ETEL (FV: EGP29.50, OW) reported 4Q22 financial results where net profit came in at EGP3.0 billion in 4Q22 (+29.6% YoY, +25.9% QoQ). On an annual basis, net profit recorded EGP9.18 billion (+9.0% YoY) in 2022. BoD proposed distributing DPS of EGP0.75. ETEL is currently trading at 2023f P/E of 4.7x and EV/Adjusted EBITDA of 2.8x.
DOMT released their 4Q22 financial results showing net profit for the quarter recorded EGP102.9 mn, compared to EGP525 mn in 4Q21 and EGP51.6 mn in 3Q22. DOMT BoD suggested a dividends distribution of EGP0.50/share. DOMT is currently trading at a FY23 P/E of 7.4x and an EV/EBITDA of 5.2x.
CORRECTION | Referring to our comment on ESRS’s news yesterday expecting a consolidated net loss of around EGP2 billion in 4Q22 on the estimated forex loss of EGP3 billion, we need to highlight that the estimated negative bottom-line during the quarter is subject to include the total amount of forex loss. However, using different possible accounting treatments in booking forex losses may result in a break-even or minor positive earnings in the quarter.
SVCE announced its FY22 financial results, recording a net loss of EGP208.7 million vs. a net loss of EGP225.5 million in FY21.
Egypt could increase the capacity of its electricity line with Jordan to up to 3 GW from its current 550 MW, according to a cabinet statement.
The Egyptian National Railways is looking for a Local or an international consortium to design, supply, install, and operate the signaling and communications system within the trade logistics project of the “Cairo-Alexandria” axis, at a cost of c. USD400 million.
Vitol and Goldman Sachs are expecting Brent to rise above USD100/bbl later this year as demand surges following the end of covid-19 lockdowns in China. Global demand for oil is expected to reach a record 101.7 million barrels per day this year.
EGPC plans to increase crude oil and condensates production to 630-640k bbl/day during 1H23.
Weekly Commodities Update
| | Last Price | WoW Change, %
| Brent, USD/bbl | 85.8 | 3.2%
| Diesel-HSFO Spread, USD/ton | 455.2 | 3.9%
| Egypt Urea, USD/ton | 403.0 | 3.1%
| Polyethylene, USD/ton | 1,180.0 | 0.0%
| Polypropylene, USD/ton | 1,050.0 | -0.5%
| Steel/Iron Ore Spreads, USD/ton | 515.7 | 5.0%
| LME Aluminum Cash Price, USD/ton | 2,361.0 | 3.3%
| Egyptian Retail Cement, EGP/ton | 1,863.0 | -0.3%
| Steam Coal FOB Newcastle Australia, USD/ton | 188.9 | -9.7%