QALA For Financial Investments : Qalaa Holdings 1Q23 Business Review - Consolidated Results

1Q 2023 BUSINESS REVIEW

CAIRO, EGYPT: 15 July 2023

Qalaa Holdings Reports 1Q 2023 Results

• Qalaa's consolidated revenue grew 62% y-o-y to EGP 30.3 billion in 1Q23 and recurring EBITDA reached EGP 10.3 billion compared to EGP 3.9 billion in 1Q22, supported by strong performances across all subsidiaries;
• ERC was the primary driver behind consolidated revenue growth, contributing c.77% to Qalaa's total revenue in 1Q23. ERC's refining margins have remained strong during the quarter but have significantly tapered in 2Q23, heading towards normalized margins.
• Despite ERC's receivables from EGPC having reached USD 699 million as of 31 March 2023, EGPC continues to make payments that have since reduced the outstanding balance to USD c. 510 million as of end of June 2023. This is a positive development that enabled ERC to pay USD 445 million towards the settlement of debt and the funding of the Debt Service Reserve Account in June 2023;
• Excluding ERC, Qalaa's revenue grew by 38% y-o-y and recurring EBITDA increased by 105% y-o-y in 1Q23, driven by positive performances across Qalaa's subsidiaries, which saw improved results on the back of the Group's long-standing strategy of focusing on import substitution, export-oriented businesses, and businesses with very high local value added;
• TAQA Arabia's solid top line results were primarily driven by a strong performance at its gas division (TAQA Gas), including the increase in CNG volumes sold as a result of the expansion in CNG station numbers. Revenue was also supported by the increase in fuel prices at TAQA Arabia's petroleum product distribution division (TAQA Petroleum);
• ASEC Holdings delivered a 26% y-o-y revenue growth on the back of the depreciation of the EGP against foreign currencies in which the revenues of some of the platform's subsidiaries are denominated;
• National Printing's revenue was up across all its product lines. The segment benefitted from a combination of higher prices and improved volume;
• ASCOM's growth was mostly driven by the impact of the EGP devaluation on the USD denominated businesses such as Ascom for Chemicals and Carbonates Manufacturing, and insulation material producer GlassRock;
• Dina Farms' revenue grew y-o-y supported by improved operations across all business segments; ICDP, the dairy and juice producer, benefited from selling price increases across the board, coupled with new product launches;
• The Group's export proceeds reached c. USD 24.2 million in 1Q23, while local foreign currency revenue recorded c. USD 798.4 million. Moving forward, Qalaa will continue focusing on exports to benefit from the cost advantage available to local manufacturers;
• Finalizing debt restructuring at Qalaa Holdings remains a priority. Some of the debts related to Qalaa and its subsidiaries have been successfully settled or restructured. Moreover, Qalaa is negotiating the settlement of other debt obligations using the shares of its recently listed subsidiary TAQA Arabia, with the option of repurchasing these shares in the future. Qalaa may continue to employ this strategy with other assets going forward, as it reaches agreements with its creditors around debt settlement and restructuring. Going forward, Qalaa may also divest a few small non-core or under-performing businesses and assets;
• The aforementioned debt settlement/restructuring may see Qalaa recognize gains in the coming period, driven by capital gains from the sale of a few assets;

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1Q 2023 BUSINESS REVIEW

CAIRO, EGYPT: 15 July 2023

• Qalaa has been resilient despite highly challenging macroeconomic conditions. The Group will continue driving growth by making small incremental investments in its subsidiaries, expanding its cashflows, and thereby reducing debt to cash flow ratios. Management is confident this strategy will continue to deliver;
• Qalaa is currently studying several new medium-sized, export oriented, predominantly green, and high local value-added investments, to be executed through its subsidiaries;
• The staff and assets of Qalaa's Sudan affiliate Takamol Cement are safe and continue to operate at a limited capacity. Qalaa continues to closely monitor the ongoing developments within the country;
• Starting 1Q23, Qalaa applied the optional exceptional accounting treatment introduced to the Egyptian Accounting Standards which allows for the FX gains/losses incurred following the devaluation of the EGP to be reclassified into other comprehensive income (OCI) under equity on the balance sheet. 1Q22 financials were restated accordingly for ease of comparison.

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1Q 2023 BUSINESS REVIEW

CAIRO, EGYPT: 15 July 2023

1Q 2023 Consolidated Income Statement Highlights

Revenue		Revenue (excluding ERC)
EGP 30.3 bn		EGP 6.9 bn
vs. EGP 18.7 bn in 1Q22		vs. EGP 5.0 bn in 1Q22
EBITDA*		EBITDA (excluding ERC)
EGP 10.3 bn		EGP 1.6 bn
vs. EGP 3.9 bn in 1Q22		vs. EGP 783.4 mn in 1Q22
Net Income After Minority**		Net Income After Minority (excluding ERC)**
EGP 73.0 mn		EGP (475.6) mn
vs. EGP 468.9 mn in 1Q22***		vs. EGP 255.1 mn in 1Q22***
Highlights from Consolidated Balance Sheet at 31 March 2023
Consolidated Assets		Consolidated Debt
EGP 184.2 bn		EGP 95.2 bn
At current book value vs. EGP 144.9 bn in FY22		Of which EGP 61.9 bn related to ERC

*Recurring EBITDA excludes one-off selling, general and administrative expenses

**In 1Q23 QH applied the optional exceptional accounting treatment of reclassifying the FX to the Other Comprehensive Income (OCI). Comparative figures of 1Q22 have been restated accordingly.

***Including a one-off gain of EGP 842 million booked as a result of debt restructuring at the Transportation and Logistics sector

ERC's debt consists of the USD Equivalent of EGP 37.57 billion in Senior Net Debt (Senior Debt - Cash) and EGP 16.6 billion in Mezzanine Debt

Qalaa Holdings, a leader in energy and infrastructure (CCAP.CA on the Egyptian Exchange), released today its consolidated financial results for the first quarter ending 31 March 2023. The Group recorded a 62% y-o-y increase in revenue to EGP

30.3 billion in 1Q23, and recurring EBITDA of EGP 10.3 billion compared to EGP 3.9 billion in 1Q22. The solid performance reflects solid refining margins at ERC and strong performances across all subsidiaries.

It is worth noting that ERC's refining margins remained strong in 1Q23 despite beginning to taper, averaging USD 3.7 million per day during the quarter compared to USD 2.7 million per day in 1Q22 and USD 4.9 million per day in 4Q22. Refining margins continued to taper in 2Q23 as they head towards normalized margins. Excluding ERC, Qalaa's revenue grew by 38% y-o-y to EGP 6.9 billion in 1Q23 and recurring EBITDA increased by 105% y-o-y to EGP 1.6 billion in 1Q23.

At Qalaa's bottom line, the Group recorded a net income after minority of EGP 73.0 million, down 84% from the EGP

468.9 million recorded in the same period last year. It is to be noted that in 1Q22, the Transportation & Logistics segment underwent a debt restructuring process which led to a one-off gain of EGP 842 million during that quarter. Furthermore, 1Q23 Net Profit was negatively affected by the significantly higher finance costs following globally elevated interest rates, as well as higher taxes during the period.

Financial and operational highlights follow, as do the management's comments and overview of the performance of different business units. Full financials are now available for download at ir.qalaaholdings.com.

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1Q 2023 BUSINESS REVIEW

CAIRO, EGYPT: 15 July 2023

Financial and Operational Highlights

QALAA HOLDINGS	• Qalaa's consolidated revenue grew by 62% y-o-y in 1Q23 to EGP 30.3 billion,
CONSOLIDATED REVENUE 1Q23	primarily driven by ERC's revenue contribution.
	ERC's USD denominated revenue increased in EGP terms by 71% y-o-y to EGP

23.4 billion in 1Q23, compared to EGP 13.7 billion in 1Q22. ERC's revenue constitutes around 77% of Qalaa Holdings' top line for the quarter. No slowdowns or shutdowns took place at ERC during the quarter.

EGP 30,287.2 mn

• Energy - 87% ◼ Agrifoods - 1%
• Packaging & ◼ Transportation &

Printing - 5%	Logistics - 0.4%
◼ Cement - 4%	◼ Other - 0.7%
◼ Mining - 2%

• Excluding ERC, Qalaa's 1Q23 revenue was up 38 % y-o-y, recording EGP 6.9 billion, driven by improved performances across all subsidiaries.
  TAQA Arabia's revenue grew 27% y-o-y in 1Q23 reaching EGP 2.9 billion compared to EGP 2.3 billion in 1Q22. The company's revenue growth was primarily driven by a strong performance at TAQA Gas, including the increase in CNG volumes sold as a result of the expansion in CNG station numbers. Revenues were also supported by the increase in fuel prices at TAQA Petroleum.

REVENUE PROGRESSION

(EGP mn)

			30,287.2
	18,681.6
	1Q22		1Q23

RECURRING EBITDA

PROGRESSION

(EGP mn)

	3,889.7		10,330.1
	1Q22		1Q23

National Printing delivered a 54% y-o-y increase in revenue, reaching EGP 1.4 billion during 1Q23 from EGP 915 million in 1Q22, as it continued reaping the rewards of its new El Baddar state-of-the-art facility. Revenue was up across all three of the segment's companies, owing to a combination of increased volumes and higher prices.

Meanwhile, ASCOM delivered a 74% y-o-y increase in top line to EGP 498.3 million in 1Q23, mostly driven by the impact of the EGP devaluation on the USD denominated businesses such as ACCM and GlassRock.

In 1Q23 ASEC Holding's revenue was EGP 1.3 billion, up 26% y-o-y compared to 1Q22, owing to the depreciation of the EGP against foreign currencies in which the revenues of some of the platform's subsidiaries are denominated.

Meanwhile, Dina Farms revenue reached EGP 409.8 million in 1Q23, up 49% y- o-y. The company's performance was backed by improved operations and ICDP's revenue benefiting from higher selling prices, coupled with new product launches.

Finally, CCTO delivered a 40% y-o-y revenue increase to EGP 130.7 in 1Q23 driven by improvements across all revenue streams at its Egypt arm NRPMC.

• Qalaa's recurring EBITDA grew substantially in 1Q23 to EGP 10.3 billion compared to EGP 3.9 billion in 1Q22. Profitability was primarily supported by
  ERC's positive performance during the year.
  ERC's gross refining margin averaged USD 3.7 million per day in 1Q23, up from USD 2.7 million per day in 1Q22, following higher oil product prices. Refining

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RECURRING EBITDA

PROGRESSION (Excluding ERC) (EGP mn)

			1,609.3
	783.4
	1Q22		1Q23

NET PROFIT PROGRESSION

(EGP mn)

468.9

73.0

1Q22 1Q23

QALAAHOLDINGS.COM

1Q 2023 BUSINESS REVIEW

CAIRO, EGYPT: 15 July 2023

margins have started to normalize in 2023 after reaching a peak in 2022, declining versus the USD 4.9 million per day in 4Q22.

Consolidated Recurring EBITDA Progression Chart* (EGP mn)

Consolidated EBITDA Consolidated EBITDA ex- ERC

	10,504
9,025	10,330
	8,841

											3,890
										2,088
									1,205			1,057	1,609
				762
329	290	303	328	367	320	626	357	750		783
				932		931
				320						521	512
329	290		328		214	303		454
303	360	90

1Q19 2Q19 Q319 Q419 1Q20 2Q20 3Q20 Q420 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23

• Excluding ERC, Qalaa recorded a recurring EBITDA increase of 105% y-o-y to EGP 1.6 billion in 1Q23 compared to EGP 783.4 million in 1Q22, driven by improved profitability across all the Group's subsidiaries.
  Qalaa's EBITDA excluding ERC was primarily driven by contributions from
  TAQA, National Printing, and ACH. Additionally, ASCOM's export-driven businesses delivered a strong performance, capitalizing on its competitive advantage in global markets, with increased pricing at GlassRock and higher volumes at ACCM.
• Depreciation and amortization expenses stood at EGP 2.2 billion in 1Q23, up 82% y-o-y compared to EGP 1.2 billion in 1Q22, of which EGP 1.8 billion are related to ERC.
• Bank interest expense recorded EGP 2.1 billion in 1Q23, up 93% y-o-y versus the EGP 1.1 billion recorded in 1Q22. The increase was attributed to higher interest rates, reflecting global monetary tightening, along with the impact of FX translations.
• As per the exceptional accounting treatment adopted by Qalaa, all FX gains/losses incurred following the devaluation of the EGP were reclassified into other comprehensive income (OCI) under equity on the balance sheet. It is worth noting that in 1Q23, Qalaa recorded an FX gain of EGP 350.6 million as a result of hyperinflation treatment in Sudan, compared to a loss of EGP 37.7 million in 1Q22.
• Qalaa Holdings recorded a consolidated net income after minority interest of EGP 73.0 million for 1Q23, down 84% from the EGP 468.9 million recorded in

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