I Egyptian Blue Chips Riding The Storm

As Egypt faces an economic crisis, these three Egyptian companies are growing regardless.

For Egypt’s population of over 103 million people, private sector companies are helping drive the economy and create jobs despite challenging market conditions. The private sector contributed 73.7% to the country’s GDP in the 2021 financial year.

Elswedy Electric, TMG Holding, and EFG Hermes Holding are three of the most successful independent Egyptian companies among the blue chips of Egypt’s private sector. Here’s a look at how they retained positive growth last year.

EFG is Egypt’s largest investment bank in terms of total assets, with $5.2 billion in total assets in 2021. It also had $447.12 million in total revenues for 2021, a 23% increase compared to 2020. This result was thanks to its core operations, as well as the acquisition of aiBANK in Q4 2021, which then recorded $16.5 million in revenues.

The company’s operations span 13 countries across four continents. Over the past ten years, the group’s total assets have increased by 84% to hit $5.2 billion by the end of 2021. Its annual profits hit $84.7 million in 2021, an increase of 17.5% compared to the previous year. EFG has also participated in local and regional IPOs, including DEWA’s recent $6.1 billion listing on the Dubai Financial Market.

In May 2022, valU Consumer Finance, a subsidiary of EFG, entered an agreement to become a method of payment on Amazon in Egypt. As part of this, the ecommerce company acquired $10 million of EFG GDRs, but the agreement includes an option to move this investment into valU at a future date. This would result in Amazon owning a 4.25% stake in the issued share capital of valU, based on valU’s valuation of $235 million.

EFG itself has been a target for acquisition for more than a decade. Egyptian billionaire Naguib Sawiris has tried unsuccessfully to acquire the investment bank multiple times since 2012. Most recently, the First Abu Dhabi Bank offered to acquire a minimum of 51% of the EFG’s outstanding share capital. The transaction valued EFG at $1.2 billion, but the bid ultimately failed.

Founded and managed by the Elswedy family since 1938, Elsewedy Electric— Egypt’s top publicly-listed energy and industrials company— is deeply rooted in the Egyptian energy market. Today, the company employs more than 15,000 people and exports to 100 countries across the world.

It saw its net profits increase by 15.2% to hit $204.8 million in 2021, driven by a 30.5% increase in revenues to $3.3 billion. The wires and cables segment contributed 49% to Elsewedy’s annual revenues, hitting $1.6 billion in 2021, making it the company’s top-performing segment, with 59.9% year-on-year increase. In the first half of 2021, Elsewedy Electric acquired 95% of PT CG Power Systems Indonesia and 100% of the Pakistan-based Validus Engineering, at a combined value of $60 million. As a result of the new transactions, Elswedy’s total assets hit $3.6 billion by the end of 2021, an increase of 23.3% compared to a year earlier.

In December 2021, Elswedy Electric inaugurated the $35 million Elsewedy Industrial Complex in Tanzania in the presence of Tanzanian President Samia Suluhu Hassan. The complex is spread across 120,100 square meters, including several manufacturing facilities specializing in products such as cables, conductors, transformers, and PVC. It also includes a logistics center covering 4,800 square meters.

TMG Holding is Egypt’s largest publicly-listed real estate company in terms of total assets, with a 50-year legacy. Its landmark projects include Al Rehab City, East of Cairo, which covers 9.9 million sqms and aims to house 200,000 residents, and the Madinaty project, which spans over 33.6 million sqms and has a capacity for 700,000 residents.

The group has a total land bank of over 74 million sqms across Egypt. Its hotels include the Four Seasons Sharm El Sheikh Resort, the Four Seasons Nile Plaza in Cairo, the Four Seasons San Stefano Grand Plaza in Alexandria, and the Kempinski Nile Hotel. TMG’s hotels have a total of 1,071 rooms.

Since TMG’s listing on the Egyptian stock exchange in 2007, the group’s total assets have grown by 222.6%— to $7.5 billion in December 2021 from end of 2007. The group’s annual revenues have expanded by over 718% in the same period. In 2021, TMG saw its revenues hit $825.2 million, an increase of 9% compared to 2020. This was made up of $650.6 million from real estate revenues, an increase of 2.5%, and $68.2 million from hospitality, an increase of 104%. Other recurring income lines brought in $106 million. Net sales of Noor, the company’s newly launched integrated mega-city, reached $1 billion in 2021. Total new net sales hit over $1.7 billion last year.