Egyptian tycoon Ahmed Ezz loses $42.9 million from stake in Ezz Steel

Egyptian multimillionaire industrialist Ahmed Ezz’s ownership stake in top steelmaker Ezz Steel has lost a total of $42.9 million in market value since the beginning of the year, as market players on the local exchange reallocate capital into firms with significant upside potential.

Ezz Steel is the Middle East and North Africa’s largest independent steel manufacturer, with a steel production capacity of 7 million tonnes per year, which it trades and distributes through regional subsidiaries.

Ezz, who founded Egypt’s top steelmaker in 1994, owns a majority 60.7-percent stake, totaling 329,816,198 shares.

The multimillion-dollar decline in his stake may be attributed to a recent sell-off of the company’s shares, as investors shift capital into undervalued firms with great upside potential as the earnings season continues.

As of press time on Feb. 19, shares in the steelmaker were valued EGP12.94 ($0.822), 38 basis points lower than the exchange’s starting price yesterday.

In the first nine months of 2021, Ezz Steel made a profit of EGP3.75 billion ($238.3 million), compared to a net loss of EGP4.11 billion ($261.1 million) the previous year, as revenue increased from EGP26.45 billion ($1.68 billion) in 2020 to EGP49.1 billion ($3.1 billion) due to a consistent growth in sales throughout the year.

In order to get a significant share of Egypt’s iron and steel industry, Ezz Steel’s subsidiary, Al Ezz Dekhelia Steel, has obtained regulatory clearance to purchase an 18-percent interest in Egyptian Steel Company for EGP2.5 billion ($159.2 million).

Since the start of the year, the steelmaker’s shares have fallen from a price EGP14.99 ($0.952) to EGP12.94 ($0.8223) at the time of drafting this report, accumulating a total 13.7-percent stake for the shareholders.

The market value of Ezz’s shareholding has fallen from EGP4.9 billion ($314.2 million) at the start of business this year to EGP4.2 billion ($271.2 million) at the time of writing, as a result of the price reduction.

The multimillionaire businessman has lost a total of EGP676.1 million ($42.9 million) since the start of 2022.