Cairo – Mubasher: Qalaa Holdings announced that its greenfield Egyptian Refining Company (ERC), which reached full production capacity in August 2019, sold about 2.8 million tonnes of refined products to the Egyptian General Petroleum Corporation (EGPC) until mid-March.
Moreover, ERC supplied nearly 265,000 tonnes of pet coke and 40,000 of Sulphur to major cement and fertiliser manufacturers, respectively, from August 2019 to mid-March 2020, chairman and founder of Qalaa Holdings Ahmed Heikal said in a statement on Monday.
During the fourth quarter of 2019, ERC generated operational profits of $160 million (sales less feedstock and variable costs) during the fourth quarter of 2019 “on account of widening heavy fuel oil (HFO) to diesel spreads”.
“However, ERC’s operational profits were not booked on its income statement and instead accounted for as a reduction in the company’s “project under construction” on its balance sheet.”
“Starting Q1-20, ERC has been classified as an asset with consolidation of profits on Qalaa’s income statement as of January 2020.”
As for the impact of the coronavirus (COVID-19) crisis on the company, Heikal said, “In the early months of 2020, recessionary fears and ongoing volatility in oil markets have pushed oil prices to record lows and have narrowed spreads between HFO and diesel prices.”
This led to lowering ERC’s gross refining margin (GRM), which peaked at $3 million per day during Q4-19, and will have a negative impact on ERC’s profitability during its first year of operation.
In 2019, Qalaa Holdings turned to losses of EGP 1.525 billion, versus net profits of EGP 929.068 million in 2018, including minority shareholders’ rights.
