Earnings Report /
Egypt

Talaat Moustafa Group Holding: 2Q22 – Unfavorable base effect on sales

  • 2Q22 sales declined 66.2% y/y to EGP5.9 billion given 2Q21 had witnessed the massive launch of Noor

  • 2Q22 revenue rose 45.8% y/y to EGP4.1 billion and net profit rose 29.4% y/y to EGP546.6 million

  • TMGH is on track to meet our FY22 sales forecast of EGP24.4 billion projected in our EGP16.66/share valuation

Al Ahly Pharos Securities Brokerage
8 August 2022

Sales expectedly lower compared to Noor-backed 2Q21 level

  • TMGH achieved 2Q22 sales of EGP5.9 billion, down 66.2% y/y and up 10.4% q/q, bringing 1H22 sales to EGP11.3 billion, down 46.2% y/y due to an unfavorable base effect, whereby 2Q21 had witnessed the massive launch of Noor.

  • Revenue in 2Q22 grew 45.8% y/y and 34.5% q/q to EGP4.1 billion, taking 1H22 revenue up 29.2% y/y to EGP7.1 billion.

  • Gross profit in 2Q22 increased 37.3% y/y and 14.6% q/q to EGP1.2 billion, translating to a GPM of 30.6%, lower annually and sequentially, and bringing 1H22 gross profit to EGP2.3 billion, up 26.1% y/y.

  • Net profit in 2Q22 reached EGP546.6 million, up 29.4% y/y and down 3.4% q/q, leading to an NPM of 13.4%, lower annually and sequentially, and bringing 1H22 net profit to EGP1.1 billion, up 27.9% y/y.

Maintain Overweight

With 1H22 sales of EGP11.3 billion, TMGH is on track to meet our FY22 sales forecast of EGP24.4 billion projected in our EGP16.66/share valuation. We remind you that TMGH is targeting FY22 sales of around EGP24.0 billion. We maintain our Overweight recommendation based on our EGP16.66/share valuation.