Daily News Egypt learned that EFG Hermes is preparing for IPO of a large private company on the Egyptian Exchange (EGX), where Hermes was hired as the offering’s financial advisor to determine the value of the offer which is expected to take place in November. It comes in parallel with Hermes’ preparation for offering another big company on the London Stock Exchange during the last quarter of this year.
With regard to the government’s IPO programme, sources at Hermes said the offering has been heavily promoted, but some legal procedures are being finalised, expecting to announce the offering soon.
Hermes is also competing for offering a stake in Abu Qir Fertilizer Company, which is expected to be implemented in 2020.
In terms of acquisitions, Hermes is close to execute about three new deals in the next few months, including a deal for a large desalination company.
Hermes reported earnings of EGP 304m in the second quarter (Q2) of 2019 on operating revenues of EGP 1.1bn. The group’s total assets stood at EGP 38.6bn at the end of Q2 of 2019.
“Another buoyant quarter for EFG Hermes, with the Group growing its bottom line by roughly 50% for Q2 and the first half (H1) of the year. The Group’s net profits crossed EGP 300m for another quarter, reporting a net profit after tax and minority interest of EGP 304m in 2Q19, up 49% year-over-year, driven by higher net profit reported by the Investment Bank and the NBFIs,” the group said in a statement.
It added that the group’s revenues increased 13% y-o-y to reach EGP 1.1bn in 2Q19, driven by strong revenue growth delivered by the NBFIs platform, which contribution to the group’s revenues reached 31% in 2Q19.
Fees and commissions, which represented 75% of the Group revenues in 2Q19, rose 15% y-o-y to EGP 784m, underpinned by Tanmeyah’s robust revenue growth.
Moreover, it added that the NBFIs platform continues to deliver strong results, with its revenues climbing 73% y-o-y to EGP 322m in 2Q19. Tanmeyah was the main contributor to that growth with its revenues increasing 83% y-o-y to EGP 275m in 2Q19.
Sell-side revenues inched up 4% y-o-y to EGP 364m in 2Q19, on higher brokerage revenues and despite lower investment banking revenues.
Furthermore, the buy-side revenues declined 31% y-o-y to EGP 98m in 2Q19, despite private equity’s revenues climbing on higher management fees, as asset management revenues declined on lower incentive fees.
Capital markets and treasury operations revenue contribution to the Group’s total revenues came at 25% in 2Q19, with its revenues increasing 6% y-o-y to EGP 267m. Revenues were supported by net interest earned.
Hermes noted that the increase in the Group’s operating expenses was confined to a single digit, increasing 9% y-o-y to EGP 672m in 2Q19, on higher employee expenses and other operating expenses related to Tanmeyah’s headcount expansion, the increase in its portfolio and higher number of branches as compared to a year earlier. Moreover, employee expenses to operating revenues came at 45% in 2Q19.
The group’s revenue growth surpassing the increase in expenses, for a second quarter, thus reporting a net operating profit of EGP 379m, up 21% y-o-y in 2Q19 and a net operating profit margin of 36%.