Citadel Capital Reports Surge in Assets to USD 4.22bn



Citadel Capital Reports Surge in Assets to USD  4.22bn, 5.7% Rise in Non-Statutory Aggregate Revenues to USD0.91bn, and 45.2% Decline in Statutory Net Loss as Firm Releases FY13 Results

Full-year aggregate (non-statutory) revenues and EBITDA of operational core and non-core companies rises to highest levels in eight quarters. Statutory financials report near-halving of full-year loss to usd54.11 million.

Citadel Capital (CCAP.CA on the Egyptian Exchange), a leading investment company in Africa and the Middle East, released today its consolidated financial results for the fourth quarter and full year 2013.

Highlights of the results include a more than five-fold rise in assets on the balance sheet to USD 4.22 billion as part of the firm’s ongoing transformation into an investment company that holds majority stakes in most of its subsidiaries in five core industries: energy, transportation, agrifoods, mining and cement. 

On the income statement front, the firm’s statutory consolidated net loss narrowed 54.4% year-on-year in 4Q13 to USD 18.07 million, while on a full-year basis the firm’s net loss was nearly halved, falling to USD 54.11 million. The year-on-year contraction in net loss owes almost entirely to improved operational performance at the underlying platform and portfolio companies. This improvement was weighed down by USD 19.56 million in non-cash impairments taken mainly in 1Q13, related to previously written-down upstream oil and gas investments.

Meanwhile, total aggregate (non-statutory) revenues at operational core and non-core companies rose 5.7% to USD0.91billionin FY13; that improvement was dwarfed by a 67.1% increase in aggregate EBITDA to USD77.82 million on the back of more efficient management and improving market conditions. While now moving in the right direction, Management notes that EBITDA-level improvements will only begin to impact the company’s bottom line later in 2014 and into 2015, particularly as energy subsidies are lifted — a core theme for many Citadel Capital platforms — and infrastructure spending continues to rise.

In the final quarter of the year, total aggregate (non-statutory) revenues at operational core and non-core companies surged 13.9% to USD0.24billion. Meanwhile, EBITDA shot up 345.3% to USD30.92 million, its highest level in the past eight quarters. This reflects stronger across-the-board performance, led by the cement and mining sectors.

“A relentless focus on operational improvements and cost optimization at both the Citadel Capital and subsidiary levels was a focus of 2013 and remains a top focus of the current year,” said Citadel Capital Chairman and Founder Ahmed Heikal. “As this year progresses, we will maintain a laser focus on three themes: Exiting our investments in non-core holdings; using the proceeds from that divestment program to both deleverage and fuel growth at core subsidiaries; and investing in governance at the Citadel Capital and subsidiary levels to make certain we have the people and systems we need to make our growth sustainable.”

Under the divestment program, non-core subsidiaries will be exited over the coming three or more years. In the first five months of 2014, the firm has exited its investment in the Sudanese Egyptian Bank (SEB) in a US$ 22 million sale and has received an offer to sell 100% of Sphinx Glass for an equity value of c. US$ 112 million.

At the Citadel Capital-level, the highlight of 2013 was the receipt of regulatory approval and subsequent launch of a rights issue that saw the firm’s paid-in capital rise to USD 1.12 billion upon closure of the second and final subscription period on 9 April 2014. Full subscription to the USD0.51billion capital increase has allowed Citadel Capital to take majority stakes in most of its subsidiaries in five core industries.

With the majority of the acquisitions having taken place by the end of December 2013, the acquisition program had a substantial impact on the firm’s balance sheet, where assets swelled to USD 4.22 billion as of 31 December 2013 compared with USD0.82 billion a year earlier. Starting with the first quarter of 2014, Citadel Capital will also fully consolidated a number of subsidiaries on its income statement.

Highlights of the 4Q13 performance of the firm’s investments in each of Citadel Captial’s five core industries follow.


Aggregate revenues at operational core platforms rose 9.7% year-on-year in 4Q13 to USD 48.94 million, while EBITDA grew 17.8% to USD 6.41 million, driven by rising contributions from all TAQA Arabia divisions. On a full-year basis, sector revenues rose 4.6% to USD 0.18 billion, while EBITDA was flat at USD 21.03million, weighed down by a lower contribution from Tawazon which reported lower waste collection rates due to difficulties with the EEAA (Egyptian Environmental Affairs Agency, discussed in detail in the Energy section). Construction at Egyptian Refining Company is on track to allow an early-2017 start of operations; TAQA Arabia continues to strong growth figures despite national supply challenges; Tawazon remains a leading producer of refuse-derived fuel and is seeking new supply contracts; and Mashreq is in non-exclusive negotiations with potential international partners for its fuel bunkering and logistics hub.


The segment posted aggregate revenues in 4Q13 of  USD 20.50 million, a 38.7% year-on-year rise, with EBITDA-level losses improving 88.0% in the same period. In the full year, revenues rose 12.4% to USD 74.16 million, while EBITDA saw a 49.6% narrowing to a loss of USD 7.11million. Improved performance came across the board at Nile Logistics (Egypt and Sudan) and Africa Railways (Rift Valley Railways in Kenya and Uganda). In Egypt, stevedoring operations helped make up for lower barge utilization rates at Nile Logistics, while Nile Barges in South Sudan is capturing new market share and looking forward to the 2014 launch of a rehabilitation plan. At Rift Valley Railways, the closure of a capital increase for Africa Railways allowed the latter to acquire an additional stake in April 2014, and also earmark additional funds for the ongoing successful five-year turnaround program.


Aggregate sector revenues fell 7.0% year-on-year in 4Q13 amid a work stoppage at dairy producer Enjoy on the back of funding challenges. On a full-year basis, however, revenues rose 5.3% while EBITDA climbed to USD10.46million from USD0.27million the previous year on the back of improved management and market conditions at the rest of the division’s subsidiaries, including Dina Farms, Rashidi El-Mizan, ICDP and Rashidi for Integrated Solutions, in addition to lower losses from Wafra on a shift to use experts and machinery to level and develop land for third parties. Margins on farming projects for other parties are very high, allowing a stronger contribution to EBITDA.


In the fourth quarter, Mining division platform company ASCOM reported a 3.0% dip in consolidated revenue to USD18.42 million, while EBITDA came in at positive  USD 2.66 million, a significant y-o-y increase over negative USD1.24 million in 4Q12. On a full year basis, the company reported a 2.4% fall-off in revenues, but a flip to a positive EBITDA of USD2.97 million from a loss the previous year, largely on the back of improved profitability at Egyptian quarrying operations and a better performance from subsidiary ACCM.


Aggregate sector revenues rose 25.4% year-on-year in 4Q13 to USD91.44million, primarily on higher revenues from the cement division (the sector includes both cement and construction operations); EBITDA was up 83.3% in the same period. For the full year, revenues rose 9.0% to USD 0.04 billion on the back of the start of operations at ASEC Minya, a greenfield plant in Egypt, while EBITDA surged 66.6% to USD28.68million.

Full financial statements and management’s analysis of the performance of operational core platform companies as well as the firm’s standalone and consolidated financial results are available for download at