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Egypt Expects ‘Remarkable’ Increase in Direct Investment

Hossam Haiba, CEO of the General Authority for Investment and Free Zones (GAFI), and other officials during a ceremony granting a golden license to establish a home appliances factory. (Asharq Al-Awsat)
Hossam Haiba, CEO of the General Authority for Investment and Free Zones (GAFI), and other officials during a ceremony granting a golden license to establish a home appliances factory. (Asharq Al-Awsat)
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Egypt Expects ‘Remarkable’ Increase in Direct Investment

Hossam Haiba, CEO of the General Authority for Investment and Free Zones (GAFI), and other officials during a ceremony granting a golden license to establish a home appliances factory. (Asharq Al-Awsat)
Hossam Haiba, CEO of the General Authority for Investment and Free Zones (GAFI), and other officials during a ceremony granting a golden license to establish a home appliances factory. (Asharq Al-Awsat)

Hossam Haiba, CEO of the General Authority for Investment and Free Zones (GAFI), expected the Egyptian market to achieve a remarkable increase in direct investment in the coming period, following the huge presidential and governmental support to investment.

Haiba handed over two golden licenses to two manufacturers specializing in the production of home appliances and durable goods on the 10th of Ramadan City, bringing the total number of companies that obtained the golden license to 15 so far.

GAFI CEO emphasized that the future goal is that all investors obtain the golden license, to start pumping investments and establishing factories in the shortest time possible.

A statement issued by the GAFI revealed that the first golden license was received by Umit Günel, General Manager of Beko LLC. According to the license, Beko will establish a factory for the manufacture and assembly of durable consumer goods and electrical appliances.

The second license was received by Luis Alvarez, CEO of BSH Home Appliances, Egypt, and the owner of the trademark (Bosch), with the aim of establishing a factory for cookers and refrigerators.

Beko Egypt plans to complete the first phase of the factory by the end of this year, at an investment cost of USD 107 million. The factory will provide 1,300 direct job opportunities.

BSH Egypt will complete the first phase of its industrial project in the last quarter of next year, at an investment cost of 50 million euros ($53.5 million), creating 500 jobs.

The golden license is an all-inclusive approval whereby an enterprise can establish, operate and manage its project. It encompasses many permits including building permits and permits to allocate the necessary real estate for the project.

It is granted by a decree of the government to companies that establish strategic or national projects contributing to Egypt’s development.

During the past fiscal year 2021/2022, GAFI facilitated the procedures for establishing about 31,000 companies, in addition to facilitating the procedures for increasing the capital of another 2,000, with an increase of 9.4 percent in the number of firms.

Haiba added that the main factors that contributed to the decision to grant the golden license to the two companies are their plans to localize the technology of manufacturing home appliances in the Egyptian market and the target to export a large part of the products to foreign markets.

Such factors are consistent with Egypt's Vision 2030 and boost the Egyptian economy, he added.

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Revenue Growth, Improved Operational Efficiency Boost Profitability of Saudi Telecom Companies

A man monitors the movement of stocks on the Saudi Tadawul index. (AFP)
A man monitors the movement of stocks on the Saudi Tadawul index. (AFP)
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Revenue Growth, Improved Operational Efficiency Boost Profitability of Saudi Telecom Companies

A man monitors the movement of stocks on the Saudi Tadawul index. (AFP)
A man monitors the movement of stocks on the Saudi Tadawul index. (AFP)

Telecommunications companies listed on the Saudi Stock Exchange (Tadawul) achieved a 12.46 percent growth in their net profits, which reached SAR 4.07 billion ($1.09 billion) during the second quarter of 2024, compared to SAR 3.62 billion ($965 million) during the same period last year.

They also recorded a 4.76 percent growth in revenues during the same quarter, after achieving sales worth more than SAR 26.18 billion ($7 billion), compared to SAR 24.99 billion ($6.66 billion) in the same quarter of 2023.

The growth in the revenues and net profitability is the result of several factors, including the increase in sales volume and revenues, especially in the business sector and fifth generation services, as well as the decrease in operating expenses and the focus on improving operational efficiency, controlling costs, and moving towards investment in infrastructure.

The sector comprises four companies, three of which conclude their fiscal year in December: Saudi Telecom Company (STC), Mobily, and Zain Saudi Arabia. The fiscal year of Etihad Atheeb Telecommunications Company (GO) ends on March 31.

According to its financial results announced on Tadawul, Etihad Etisalat Company (Mobily) achieved a 33 percent growth rate of profits, bringing its profits to SAR 661 million by the end of the second quarter of 2024, compared to SAR 497 million during the same period in 2023. The company also achieved a 4.59 percent growth in revenues to reach SAR 4.47 billion, compared to SAR 4.27 billion in the same quarter of last year.

The Saudi Telecom Company achieved the highest net profits among the sector’s companies, at about SAR 3.304 billion in the second quarter of 2024, compared to SAR 3.008 billion in the same quarter of 2023. The company registered a growth of 4.52 percent in revenues.

On the other hand, the revenues of the Saudi Mobile Telecommunications Company (Zain Saudi Arabia) increased by about 6.69 percent, as it recorded SAR 2.55 billion during the second quarter of 2024, compared to SAR 2.39 billion in the same period last year.

Commenting on the quarterly results of the sector’s companies, and the varying net profits, the head of asset management at Rassanah Capital, Thamer Al-Saeed, told Asharq Al-Awsat that the Saudi Telecom Company remains the sector leader in terms of customer base expansion.

He also noted the continued efforts of Mobily and Zain to offer many diverse products and other services.

Financial advisor at the Arab Trader Mohammed Al-Maymouni said the financial results of telecom sector companies have maintained a steady growth, up to 12 percent, adding that Mobily witnessed strong progress compared to the rest of the companies, despite the great competition which affected its revenues.

He added that Zain was moving at a good pace and its revenues have improved during the second quarter of 2024. However, its profits were affected by an increase in the financing cost by SAR 26.5 million riyals and a rise in interest, while net income declined significantly compared to the previous year, during which the company made exceptional returns.