The Egyptian Transport and Commercial Services Company S.A.E. (EgyTrans) aims to account for 60% of the market of transferring abnormal and heavy types of equipment, with a plan to seize a large part of the Ministry of Electricity’s projects.
Chairperson and CEO of the company, Abir Leheta, said the company had obtained about 60% of the market of transferring abnormal and heavy equipment in 2016 and aims to maintain its share in 2017.
In an interview with Al Borsa, Leheta said that the company is expanding its role in the service of national projects, where it has benefited over the past two years from the breakthrough in the number of major national projects, such as the Siemens power plant projects, the New Suez Canal, and the Suez Canal tunnels.
She pointed out that the Egyptian market is able to expand over the coming five years, considering the expected number of new and renewable energy projects, as well as the Dabaa nuclear plant.
The company carried out works in the Siemens power plant projects in Beni Suef and the New Administrative Capital, which aimed to produce 4,800MW at each plant. The company also took part in the implementation of the South Helwan power plant with Mitsubishi Hitachi. This power plant outputs 1,950MW.
Leheta said that the two subsidiaries of the company, Egyptian Transportation & Logistics S.A.E. (ETAL) and EgyTrans Depot Solutions Company (EDS), have improved their performance in 2016, which reflected positively on the financial results.
EgyTrans achieved a growth in its business size in 2016 compared to 2015. Revenues increased by EGP215.5m (63.6%), while profits increased by 488%. The profits from the exchange rate difference following the pound’s flotation reached EGP 44m alone.
Leheta noted that the company is set to complete its contracts with the Siemens and Helwan projects in 2017, next to signing a contract with another company to transfer the types of equipment needed for its new fertiliser factory in Ain Sokhna.
She said that the company is aiming to record EGP 18m of net profit in 2017, next to EGP 160m in revenues. She explained, though, that the target is less than 2016, as the revenues achieved in the previous year were extraordinary and mainly driven by the exchange rate.
The company’s hard currency revenues account for 30-40% of total revenues and mostly come from ETAL, she noted.
Leheta said that the company is keen on taking part in national conferences, including Breakbulk 2017, adding that the company can reach out to the biggest clients in the shipping services sector, as well as the project owners, which provides for them an opportunity to gain new partnerships and deals, as well as learn about the latest technologies.
This is not the first time for the company to participate in the conference, she noted, but it will be the first time for it to have its own exhibition inside the conference hall.
Moreover, Leheta said that the company does not intend to inject more capital in its ETAL subsidiary. She also ruled out buying new equipment in 2017.
She pointed out that the company still believes that river transportation services is one of the most important potential opportunities, but it needs more government-sponsored efforts to overcome the challenges in that sector.
The company had liquefied two of its subsidiaries, EgyTrans Barge Link and EgyTrans River Ports. Leheta attributed the decision to the absence of these two companies.
In recent years, the Egyptian government has announced its intention to raise the share of river transport in the shipping sector to 10%—up from 1% now.
The government had noted that there is a plan to establish new river ports in Alexandria and Upper Egypt in order to support the sector, along with deepening the river itself to improve navigation. However, the plans have been faced by more complications, putting it on pause.
Leheta asked the Ministry of Transportation to reconsider decisions No. 800 for the year 2016 and No. 488 for the year 2015, as they caused some shipping lines to leave Egypt and had an indirect impact on maritime shipping complementary projects.
She added that the new increase in the fees imposed on maritime transport activities—also brought about by the resolutions—need to be re-examined.
In addition, Leheta said that the company has participated in the development of the Zohr field in the waters of the Mediterranean Sea, noting that EgyTrans aims to seize a good share in the oil and gas extraction projects in the coming period.
She added that the company will begin a pilot project to operate five trucks in the coming two months, with a cost of EGP 4m, as the company intends to rely on its own fleet to move part of its business.
ETAL, which specialises in transporting cargo of exceptional weight or dimensions and is 100% owned by EgyTrans, has registered a net profit of EGP 12.3m after tax in 2016, up from EGP 2.1m in 2015.
The company has carried out a number of shipments of special packages with abnormal weights and dimensions for a number of projects.
EgyTrans Depot Solutions Company (EDS) also made profits of $470,000 after taxes in 2016, up from $320,000 in 2015—marking an increase of 47.9%. EDS is a subsidiary specialising in the storing, cleaning, and repairing of bulk liquid cargo containers, especially ISO tank containers and tank vehicles. It is owned by EgyTrans.