Flash Report /

Pioneers Holding for Financial Investments: Management webinar key takeaways

  • FY21 profit is expected to grow by 40.0% compared to FY20 and by 10.0%-15.0% compared to FY19.

  • Real estate revenue is projected to grow significantly in FY21.

  • PIOH’s split into three companies is expected to be concluded in 1Q21.

Al Ahly Pharos Securities Brokerage
14 January 2021

FY21 looking bright

  • The company is budgeting FY21 in comparison to FY19, given the exceptional circumstances of FY20.

  • PIOH is targeting 10.0%-15.0% growth in sales and profit in FY21, compared to FY19 (which had recorded net profit of EGP1.1 billion). This FY21 expected growth would translate into around 40.0% growth when compared to FY20. FY20 performance y/y is expected to be similar to 9M20 performance y/y.

  • PIOH’s revenue is split across three segments, with contributions standing at 52.0% by real estate and construction, 47.0% by industrials, and 1.0% by financials.

Contractors segment expected to do very well in FY21; cables segment recovering

  • In its contractors segment, PIOH has around EGP5.0 billion in construction awards with external companies, in addition to its latest EGP700.0 million construction award announced a week ago, and around EGP3.5 billion in construction awards within its internal companies.

  • For the cables segment, the company is witnessing recovery after the acquisition of Giza Cables.

  • For the financial services segment, the company is expecting to receive the license to establish a micro-finance business soon.

Real estate revenue projected to grow significantly in FY21

  • For the real estate segment, the company has project launches in the FY21 pipeline, including its North Coast project, which is expected to bring in at least EGP2.0 billion in sales, and its Telal Sokhna project (which should bring in sales of around EGP5.4 billion across FY21 and FY22). The company also plans to launch a new Ain Sokhna project by its subsidiary, UNIT, in alliance with another PIOH subsidiary soon.

  • The company’s Stone Street project has so far generated EGP600.0 million in office sales. The company sells office and medical space, but leases out its commercial retail space.

  • The company plans to deliver a significant number of units in FY21, which should translate into a significantly higher revenue figure in FY21. The company’s deliveries in Stone Park/Residences are important for its commercial space, given that the company expects more than 50.0%-60.0% of commercial traffic to come from residents.

  • PIOH subsidiary, Rooya, is valued at EGP8.4 billion, according to an IFA valuation.

Split coming up

  • Regarding PIOH’s split into three companies (real estate, industrials, and financials), the company is aiming to conclude the split based on financials as of end of December 2020 and have the financials of each of the three companies ready starting 1Q21.

  • The split of the stock will be done according to each segment’s portion of PIOH’s book value.