Qalaa’s cement subsidiaries, ASEC Cement and ASEC Cement Djelfa Offshore, have signed a preliminary agreement to sell 100% of Algerian Cement Plant Djelfa for $60m transaction to a consortium of Algerian investors.

Djelfa has a license to build a 3 million ton per annum cement plant in the city of Djelfa, Algeria.

The transaction, which is subject to conditions precedent, is expected to close by year-end 2016. 

Qalaa’s effective (indirect) ownership of AACC (Djelfa) stands at approximately 37%.

Ahmed Heikal, Qalaa Holdings Chairman and Founder, said: “This transaction further delivers on our strategy of divesting non-essential assets and significantly reducing financial risk by deleveraging at the holding and platform company levels.” 

“Our aim is to re-focus management bandwidth on holdings with high growth potential including energy, transportation and logistics, and mining,” he said.

Qalaa Holdings has recently released its consolidated financial results for the second quarter of 2016, reporting a net loss after minority interest of EGP 287.1m (1H16: EGP 529.8m) on revenues of EGP 1.8bn (1H16: EGP 3.53bn). 

Comparative 2015 figures are adjusted to reflect the divestment of ASEC Minya, ASEC Ready Mix, Misr Qena Cement, Rashidi El-Mizan, RIS, Tanmeyah and Mashreq, eliminating the figures of divested companies in addition to figures of investments held for sale starting 1Q16, including Africa Railways. Additionally, ASCOM’s 2016 results were added to Qalaa’s 2015 figures, owing to ASCOM’s income statement consolidation starting 3Q15, for a more accurate comparison of year-on-year results.

Top-line growth during the second quarter of 2016 was largely attributable to an 18% increase in TAQA Arabia revenues and a 13% improvement in ASEC Holding revenues.

EBITDA for the quarter stood at EGP 92.9m, down 40% year-on-year from the EGP 155.6m posted in 2Q15.

Management, however, is confident that the temporary drop witnessed in 2Q16, owing to operational hiccups at cement subsidiaries primarily Sudan’s Takamol plant, will reverse in the coming quarters as productivity is already improving and hence EBITDA contributions will return to their normal levels.

“Despite operating in an extremely difficult economic environment, Qalaa’s second quarter results show improvements in revenue almost entirely across the board,” said Heikal. 

“The top-line improvement reflects both the resilience of our subsidiaries and management’s ability to focus on proven winners following a divestment strategy that has allowed us to focus on our most profitable investments and maintain a forward-looking, long-term vision for the company,” he added.

Formerly known as Citadel Capital, Qalaa Holdings controls subsidiaries in industries including Energy, Cement, Transportation & Logistics, and Mining.