Earnings Report /
Egypt

Talaat Moustafa Group Holding: 3Q22 | A Strong Quarter

  • Sales in 3Q22 reached EGP9.7 billion, up 49.2% y/y and 63.6% q/q.

  • Net profit in 3Q22 increased 7.0% y/y and 62.4% q/q to EGP887.4 million.

  • 9M22 hotel revenue of EGP1.5 billion stands to increase even further in 4Q22 given COP27 in Sharm El Sheikh.

Al Ahly Pharos Securities Brokerage
14 November 2022

Impressive growth in sales

  • TMGH achieved 3Q22 sales of EGP9.7 billion, up 49.2% y/y and 63.6% q/q, bringing 9M22 sales to EGP21.0 billion, down 23.6% y/y due to an unfavorable base effect, whereby 9M21 had witnessed the massive launch of Noor.

  • Revenue in 3Q22 grew 17.2% y/y and 67.7% q/q to EGP6.8 billion, taking 9M22 revenue up 23.0% y/y to EGP13.9 billion, supported by a 17.6% y/y increase in real estate revenue to EGP10.7 billion, an 81.8% y/y increase in hotel revenue to EGP1.5 billion, and a 28.6% y/y increase in service revenue to EGP1.8 billion.

  • Gross profit in 3Q22 increased 6.7% y/y and 61.5% q/q to EGP2.0 billion, translating to a GPM of 29.5%, lower annually and sequentially, and bringing 9M22 gross profit to EGP4.3 billion, up 16.3% y/y.

  • Net profit in 3Q22 increased 7.0% y/y and 62.4% q/q to EGP887.4 million, leading to an NPM of 13.0%, lower annually and sequentially, and bringing 9M22 net profit to EGP2.0 billion, up 17.7% y/y.

Maintain Overweight

With 9M22 sales of EGP21.0 billion, TMGH is on track to exceed our FY22 sales forecast of EGP24.4 billion projected in our EGP16.66/share valuation. TMGH’s 9M22 hotel revenue of EGP1.5 billion is also already higher than our FY22 forecast of EGP1.2 billion and stands to increase even further in 4Q22 given COP27 in Sharm El Sheikh. We maintain our Overweight recommendation given strong sales performance and solid recurring income.