Egyptian businessman Medhat Khalil’s Raya reports double-digit percent decline in profits

Raya Holding for Financial Investments, an investment business created by Egyptian entrepreneur Medhat Khalil, saw a double-digit drop in earnings in the first nine months of 2022, with profit after tax falling below $12 million.

In comparison to the same period last year, the group’s consolidated profit fell by 41 percent, from EGP481.86 million ($19.65 million) in the first nine months of 2021 to EGP283.92 million ($11.6 million), as operating rigidity caused by the volatile macroeconomic environment had a significant impact on the group’s earnings.

Despite an increase in revenue from EGP12.4 billion ($506 million) to EGP14.1 billion ($575.2 million), the double-digit decline in earnings can be attributed to rising operational costs, which adversely reduced profit margins.

The increase in operational expenses during the period under review can be attributed to the group’s increased investments in new operations, as well as expansions across its lines of business and other costs associated with the group’s administrative buildings.

Aside from the significant increase in operating expenses that impacted Raya Holding’s earnings, the Egyptian group disclosed that its last year’s profits included a one-time gain of EGP327.7 million ($13.37 million) from the sale of the shares of BariQ, one of Raya Holding’s subsidiaries that will be completely divested in November 2021.

Despite the reduction in earnings, the group’s total assets climbed from EGP14.41 billion ($587.8 million) at the start of the year to EGP19.42 billion ($792.1 million) as of Sept. 30.

The group also exited the loss position on its balance sheet as it moved from a retained loss of EGP470.4 million ($19.2 million) at the beginning of the year to retained earnings of EGP113.42 million ($4.62 million).

Raya Holding is an Egyptian investment conglomerate formed in 1999 by the merger of entities owned by Khalil and Orascom Group. The businessman presently owns 58.1 percent of the company, or 1,245,661,205 shares.

His stake in the company is currently worth EGP3.3 billion ($134.6 million), making him one of the Egyptian Exchange’s wealthiest investors.