QALA For Financial Investments : Qalaa Holdings 4Q23 Business Review - Consolidated Results

FY 2023 BUSINESS REVIEW

CAIRO, EGYPT: 06 May 2024

Qalaa Holdings Reports FY 2023 Results

Throughout 2023, Qalaa Holdings concluded several agreements and transactions for the settlement and restructuring of the Group's debts. These transactions have seen Qalaa take a major step in its deleveraging strategy and have greatly reduced the Group's debt levels. The transactions, together with the sale of assets, had a significant impact on the Group's results for the year.

• ASEC Holding's debt settlement and restructuring: ASEC Holding signed settlement agreements with its lenders to fully settle c.EGP 1.4 billion of debt, as well as restructure and settle c.EGP 536 million in debt over two years. The company is now current on all debt repayments with its lending banks;
• FHI settlement: Qalaa signed an agreement with Financial Holdings Investments Ltd. (FHI), whereby Qalaa is to settle the bulk of its liabilities and those of its subsidiaries to FHI. The agreement will also allow Qalaa to acquire shares in some of its subsidiaries (ASEC Holdings, CCTO the Transportation and Logistics business, and United Company for Foundries). In 1Q24, and following the listing of National Printing on the Egyptian Exchange (EGX), FHI indirectly acquired 27.21% of National Printing. As part of the agreement with FHI, Qalaa will have the right to repurchase the sold shares within two years. Qalaa also signed an agreement with FHI that gives Qalaa the right to buy the latter's stake in ASCOM by December 2025;
• In light of the aforementioned sale, which occurred in 1Q23, National Printing's assets and liabilities were classified on Qalaa's financial statements as held for sale.
• NSPO debt settlement: Following the listing of TAQA Arabia's shares on the EGX in July 2023, the National Service Projects Organization (NSPO) acquired 20% of the total shares of TAQA Arabia. As part of the agreement with the NSPO, Qalaa will have the right to repurchase the sold shares within four years. The proceeds of the transaction were used to settle a loan taken out by Qalaa in 2022;
• EIIC and Cape Collard debt settlement: As per Qalaa's AGM approval on 6 July 2023, in 4Q23 Qalaa transferred its ownership stakes in Nile Energy Ltd. and Stratford Investments Ltd., both of which combined own a total of 11.45% in TAQA Arabia, to Emirates International Investment Company (EIIC) and Cape Collard Co., respectively. The transactions were used to settle loans owed to said companies;
• Following the EIIC and Cape Collard settlements, Qalaa is no longer accounting for TAQA Arabia as subsidiary. Instead, Qalaa accounts for its remaining 23.87% interest stake in TAQA by treating the company as an associate using the equity method and reevaluating it to its market value;
• Egyptian banks senior debt settlement: In April 2024, Qalaa signed an agreement with a group of Egyptian banks to settle the entirety of Qalaa's senior debt owed to them, in return for the transfer of a 17.68% ownership stake in TAQA Arabia, a land plot in Tibeen, as well as compensation for variations in the EGP/USD exchange rate and TAQA Arabia's share price. Qalaa will have the right to repurchase the sold TAQA Arabia shares in the fifth year and the banks will have the right to sell the shares back to Qalaa during the sixth year;
• AIB settlement and restructuring: In April 2024, Qalaa signed an agreement with the Arab International Bank for the settlement and restructuring of the debts owed by Qalaa and related parties over a period extending to 2033;
• The remaining components of debt restructuring at Qalaa are currently in their final stages;
• APM transaction: In 3Q23, APM Investment Holdings Limited (APM), a wholly owned subsidiary of ASCOM, sold its c.35% stake in Ethiopia's Kurmuk Gold Project to the Canadian company Allied Gold Corp. The transaction resulted in an EGP 2.6 billion gain on sale of assets in 2023;
• Such agreements serve to reduce Qalaa's debt and financing costs, as well as generate capital gains. Additionally, the transactions have started reflecting positively on Qalaa's financial statements.

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FY 2023 BUSINESS REVIEW

CAIRO, EGYPT: 06 May 2024

FY23 Financial and Operational Highlights:

• Qalaa's consolidated revenue grew 17% y-o-y to EGP 97.1 billion in FY23, supported by broad-based growth across all subsidiaries apart from Takamol Cement, which saw its production and sales impacted by the ongoing armed conflict in Sudan. Recurring EBITDA reached EGP 22.7 billion during the year, down from EGP 29.6 billion in FY22 due to lower margins at ERC;
• Qalaa's revenue excluding ERC rose 19% y-o-y, on the back of positive performances across most subsidiaries, reflecting the success of Qalaa's long-term strategy focused on import substitution and developing export-oriented businesses Meanwhile, recurring EBITDA excluding ERC rose by 84% y-o-y following solid results across all subsidiaries;
• ERC contributed c.90% to Qalaa's total revenue in FY23. ERC's refining margins dropped noticeably in FY23, partially reflecting a normalization of oil prices following the significant spike that occurred in 2022 and largely due to a combination of higher feedstock prices, lower refined product prices, and a decline in the quality of feedstock received. Additionally, in July 2023 ERC underwent a planned 17-day production shutdown for the implementation of an overhaul and debottlenecking, which increased production capacity to the tune of 10%. A study is underway for another debottlenecking in 2029, which should increase the plant's capacity by another 10%;
• ERC's receivables from EGPC stood at USD 384.0 million as of 30 April 2024. ERC continues to be fully current on all its scheduled debt payments having made senior debt payments totaling USD 632.0 million in FY23, of which USD 444.0 million were directed towards principal and the remainder towards interest and fees. ERC also remains on track to fully settle its senior debt in 2025, following which ERC will start distributing dividends. ERC's current net senior debt amounts to USD 600 million as of 30 April 2024;
• The Group's export proceeds for 4Q23 reached c.USD 27.6 million, while local foreign currency revenue recorded c.USD 818.5 million during the quarter. On a full-year basis, export proceeds reached c.USD 89.7 million in FY23, and local foreign currency revenue stood at c.USD 3.0 billion. Going forward, the Group will continue focusing on growing its exports and leveraging the cost advantage available to local manufacturers;
• Qalaa recorded a net profit of EGP 6.5 billion in FY23, up significantly from the EGP 1.3 billion achieved in FY22, mainly on the back of a substantial gain on the sale and revaluation of investments, generating EGP 5.0 billion from TAQA Arabia and EGP 2.6 billion from the sale of APM. This is in addition to gains made from the settlement and restructuring of the ASEC Holding debt amounting to EGP 1.3 billion;
• Qalaa's ongoing strategy will continue to focus on the following elements:

1. Qalaa will continue driving growth through small incremental investments in its subsidiaries, expanding cashflows, and thereby reducing its debt to cashflow ratios. Management is confident this strategy will

continue to deliver the desired results;

1. Qalaa is currently studying several new medium-sized,export-oriented, and predominantly green investments with high local value-added components, to be executed through its subsidiaries.

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FY 2023 BUSINESS REVIEW

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4Q 2023 Consolidated Income Statement Highlights

Revenue	Revenue (excluding ERC)
EGP 26.4 bn	EGP 2.4 bn
vs. EGP 24.2 bn in 4Q22	vs. EGP 2.5 bn in 4Q22
EBITDA*	EBITDA* (excluding ERC)
EGP 5.9 bn	EGP 460.2 mn
vs. EGP 9.7 bn in 4Q22	vs. EGP 99.2 mn in 4Q22
Net Income** After Minority	Net Income After Minority** (excluding ERC)
EGP 4.8 bn	EGP 3.8 bn
vs. EGP 408.9 mn in 4Q22	vs. EGP (361.7) mn in 4Q22
FY 2023 Consolidated Income Statement Highlights
Revenue	Revenue (excluding ERC)
EGP 97.1 bn	EGP 9.5 bn
vs. EGP 82.7 bn in FY22	vs. EGP 8.0 bn in FY22
EBITDA*	EBITDA* (excluding ERC)
EGP 22.7 bn	EGP 2.0 bn
vs. EGP 29.6 bn in FY22	vs. EGP 1.1 bn in FY22
Net Income After Minority**	Net Income After Minority** (excluding ERC)
EGP 6.5 bn	EGP 5.9 bn
vs. EGP 1.3 bn in FY22	vs. EGP (1.2) bn in FY22
Highlights from Consolidated Balance Sheet at 31 December 2023
Consolidated Assets	Consolidated Debt
EGP 160.6 bn	EGP 71.9 bn
At current book value vs. EGP 144.9 bn in FY22	Of which EGP 52.2 bn related to ERC***

*Recurring EBITDA excludes one-off selling, general and administrative expenses.

**The optional exceptional accounting treatment of reclassifying the FX to the Other Comprehensive Income (OCI) has been applied in 2023.

***ERC's debt consists of the USD equivalent of EGP 21.8 billion in Senior Net Debt (Senior Debt EGP 29.5 billion - Cash EGP 7.7 billion) and EGP 17.6 billion in Mezzanine Debt and EGP 5.1 billion in SPV debt related to financing ERC.

Qalaa Holdings, a leader in energy and infrastructure (CCAP.CA on the Egyptian Exchange), released today its consolidated financial results for the three-month and full-year periods ending 31 December 2023. Financial and operational highlights follow, as do the management's comments and overview of the performance of Qalaa's different business units. Full financials are available for download at ir.qalaaholdings.com.

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FY 2023 BUSINESS REVIEW

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Financial and Operational Highlights

QALAA HOLDINGS

CONSOLIDATED REVENUE FY23

EGP 97,131.3 mn

◼ Energy - 90%	◼ Mining - 2%
◼ Cement - 4%	◼ Other - 1%
◼ Agrifoods - 2%	◼ Transportation
	& Logistics - 1%

REVENUE PROGRESSION (EGP mn)

	24,181.9	26,398.5			97,131.3
		82,718.1
	4Q22	4Q23		FY22		FY23

RECURRING EBITDA

PROGRESSION

(EGP mn)

9,672.2		5,944.1		29,626.8
			22,696.9
4Q22	4Q23	FY22		FY23

• Qalaa's consolidated revenue grew by 9% y-o-y to EGP 26.4 billion in 4Q23 and closed the full-year period at EGP 97.1 million, a 17% y-o-y increase. Revenue growth for the three and twelve-month periods was largely driven by ERC's contribution.
  ERC's USD-denominated revenue increased by 11% y-o-y in EGP terms to EGP 24.0 billion in 4Q23 and recorded a full-year growth of 17% y-o-y to EGP 87.6 billion. Growth was mainly driven by the depreciation of the EGP against the USD, coupled with an increase in the production volume of refined petroleum products, offsetting the effect of the price decline witnessed during the quarter. ERC continues to contribute the lion's share of the Group's revenues, with 90% of Qalaa's revenues for the year coming from the company. In addition, in July 2023 ERC underwent a planned 17-day production shutdown for the implementation of an overhaul and debottlenecking, which has increased production capacity to the tune of 10%.
• Excluding ERC, Qalaa's 4Q23 revenue dropped by 4% y-o-y to EGP 2.4 billion. However, FY23 revenue excluding ERC stood at EGP 9.5 billion, a 19% y-o-y increase driven by strong performances across most subsidiaries.
  TAQA Arabia's revenue grew 20% y-o-y to EGP 3.7 billion in 4Q23, compared to EGP 3.1 billion in 4Q22. On a full-year basis, revenue recorded EGP 13.5 billion, marking a notable 26% y-o-y increase. Revenue growth for the quarter and full-year period was primarily driven by a strong performance at TAQA Gas, fueled by increased connection revenue and an expansion in CNG volume sold due to additional CNG stations coming online. Positive contributions from foreign currency-linked power generation prices and the implementation of new photovoltaic projects under TAQA Power further bolstered revenue. Revenue growth was further helped by increases in fuel and lube prices, as well as higher volumes at TAQA Petroleum.
  National Printing reported a 22% y-o-y increase in revenue during the quarter to EGP 1.3 billion, and a 21% y-o-y revenue expansion to EGP 5.2 billion in FY23. Top-line growth was driven by strong performances across the company's subsidiaries. On that front, El Baddar continued to capitalize on its new facility, while higher prices at Shorouk for Modern Printing and Packaging and expanded sales volumes at Uniboard reflected positively on
  National Printing's results during both the quarter and the full year.
  Revenue at ASEC Holding shrank by 36% y-o-y in 4Q23 to EGP 972.2 million, and by 17% y-o-y to EGP 3.8 billion in FY23. The top-line decline witnessed during the quarter and full-year period came on the back of the negative impact of the turmoil in Sudan on the operations of its subsidiary Al-Takamol Cement.
  Dina Farms Holding Company recorded a 59% y-o-y increase in revenue to EGP 549.9 million in 4Q23, as well as a 51% y-o-y rise to EGP 1.9 billion in FY23. Revenue growth was driven by improved operations at Dina Farms, as well as

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RECURRING EBITDA

PROGRESSION (Excluding ERC) (EGP mn)

			460.2				1,966.8
99.2			1,070.4
4Q22	4Q23	FY22		FY23

QALAAHOLDINGS.COM

FY 2023 BUSINESS REVIEW

CAIRO, EGYPT: 06 May 2024

ICDP's revenue benefiting from higher selling prices and new product launches.

In 4Q23, ASCOM achieved a 40% y-o-y increase in revenue to EGP 510.0 million, as the EGP devaluation augmented the USD-denominated revenues of ASCOM's two largest revenue generators: Ascom for Chemicals and Carbonates Manufacturing (ACCM) and GlassRock, an insulation material producer. Improved performances across both GlassRock and the company's quarrying operations in Egypt further supported ASCOM's top-line results. On

1. full-yearbasis, ASCOM's top-line rose 41% y-o-y to EGP 1.9 billion following revenue expansion at Egypt Quarrying, in addition to the effect of the EGP devaluation.

Finally, CCTO's transportation and logistics business delivered 32% y-o-y revenue increase to EGP 157.6 million, and the company's top-line stood at EGP 581.6 million in FY23, a 57% y-o-y expansion. Revenue growth came on the back of improvements across all revenue streams of its Egyptian arm

NRPMC.

• Qalaa's recurring EBITDA fell significantly to EGP 5.9 billion in 4Q23 from EGP 9.7 billion in 4Q22. Meanwhile on a full-year basis, recurring EBITDA shrank from EGP 29.6 billion in FY22 to EGP 22.7 billion in FY23. This decline in profitability was largely a result of the declining margins at ERC during the quarter and full-year period.
  ERC's gross refining margins averaged USD 2.5 million per day in 4Q23, down from the USD 4.9 million per day witnessed during 4Q22. The y-o-y drop witnessed in refining margins during 4Q23 was largely attributable to a combination of higher feedstock prices, lower refined product prices, and a decline in the quality of feedstock received. It also reflects a normalization of oil prices following the significant spike that occurred during 2022. Meanwhile, refining margins for FY23 averaged USD 2.6 million per day, down from an average of USD 4.5 million per day in FY22 following similar drivers to the quarterly performance.
• Excluding ERC, Qalaa's EBITDA surged 364% y-o-y from EGP 99.2 million in 4Q22 to EGP 460.2 million in 4Q23. For FY23, recurring EBITDA expanded by 84% y-o-y to EGP 2.0 billion, rising from EGP 1.1 billion in FY22. Enhanced profitability for the reporting period came on the back of strong performances across all subsidiaries.
  Qalaa's EBITDA excluding ERC was primarily driven by contributions from ASEC Holding, National Printing, Dina Farms, and CCTO. Additionally, ASCOM's export-driven businesses delivered a strong performance, capitalizing on its competitive advantage in global markets.
• Depreciation and amortization expenses stood at EGP 2.1 billion in 4Q23, up 24% y-o-y from EGP 1.7 billion in 4Q22, with EGP 1.8 billion of the 4Q23 figure related to ERC. Meanwhile, FY23 depreciation and amortization rose 57% y-o-y to EGP 8.5 billion, compared to EGP 5.4 billion in FY22. Of the FY23 total, EGP 7.2 billion were related to ERC.

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NET PROFIT PROGRESSION

(EGP mn)

						6,523.2
408.9		4,787.1		1,256.3
4Q22	4Q23	FY22		FY23

Bank interest expense recorded EGP 1.8 billion in 4Q23, up 13% from the EGP 1.6 billion recorded in 4Q22. For FY23, it rose 54% y-o-y from EGP 4.6 billion in FY22 to EGP 7.1 billion. This came as a result of higher interest rates, as well as the impact of FX translations.

• It is worth noting that all FX gains/losses incurred in 2023 following the EGP devaluation were reclassified into other comprehensive income (OCI) under equity on the balance sheet, as per the exceptional accounting treatment adopted by Qalaa. In 4Q23, Qalaa recorded an FX loss of EGP 524 million as a result of the hyperinflation treatment in Sudan. However, the total impact of Sudan's hyperinflation in FY23 reflected a gain of EGP
• 1. million.
• Qalaa recorded consolidated net income after minority interest of EGP 4.8 billion in 4Q23, up significantly from the EGP 408.9 million achieved in 4Q22. Meanwhile, FY23 net income stood at EGP 6.5 billion, a 419.2% y-o- y increase from the EGP 1.3 billion achieved during FY22. Bottom-line growth was mainly driven by the significant EGP 2.4 billion gain on sale of the APM Investment Holdings Limited (APM) Ethiopian mine in 3Q23. This is in addition to the EGP 1.5 billion gain on the sale of assets associated with the divestment of the shares of TAQA Arabia to Emirates International Investment Company (EIIC) and Cape Collard Co. that took place in 4Q23. Bottom-line expansion was further supported by the EGP
• 1. billion gain resulting from the revaluation of the Qalaa's remaining stake in TAQA Arabia, as well as the EGP 1.3 billion gain from the settlement of ASEC Holdings loans.
• It is worth noting that as of 30 April 2024, ERC's Net Senior Debt stands at USD 600.0 million, down from USD 730.0 as of 31 December 2023.

Net Bank Debt Progression (EGP mn)

			March 2022:	September 2022:	January 2023:
45,000			EGP floatation	EGP floatation	EGP floatation
40,000
35,000
30,000
25,000
						21,803
20,000						17,682
15,000						13,176
10,000
						5,051
5,000						2,453
0						783
Mar'2020	Jun'2020	Sep'2020 Dec'2020 Mar'2021 Jun'2021 Sep'2021 Dec'2021 Mar'2022	Jun'2022 Sept'2022 Dec'2022 Mar'2023 Jun'2023 Sept'2023 Dec'2023
Net Senior ERC Debt	Subordinated ERC Debt	Qalaa SPV Debt related to financing ERC	QH Senior Debt	Qalaa SPV Debt	Operating Company Debt*

• Operating Company Debt has declined at year end due to the exclusion of the debt of National Printing , currently accounted for as Held for Sale, as well as the debt of TAQA Arabia, which has been deconsolidated

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Debt Settlement and Asset Transactions In-Depth Look

• ASEC Holding debt settlement and restructuring: ASEC Holding signed settlement agreements with its lenders to fully settle c.EGP 1.4 billion of debt, as well as restructure and settle c.EGP 536 million in debt over two years, generating a gain of EGP 1.3 billion. Following the agreements, ASEC Holding is now current on all debt repayments with the company's lending banks.
• FHI debt settlement and share transactions: Qalaa has signed an agreement with Financial Holdings Investments Ltd. (FHI), whereby Qalaa is to settle the bulk of its liabilities and those of its subsidiaries to FHI. The agreement will also allow Qalaa to acquire shares in some of its subsidiaries that were owned by FHI. At its conclusion, Qalaa's ownership will increase from 67.6% to 92.3% in CCTO, from 69.3% to 99.05% in ASEC Holding, and from 67.46% to 99.96 in United Company for Foundries. In parallel, FHI indirectly acquired 27.21% of the recently listed National Printing, representing the majority of Qalaa's stake in the company. As part of the agreement with FHI, Qalaa will have the right to repurchase the sold shares within two years. Qalaa also signed another agreement with FHI that gives Qalaa the right to purchase FHI's stake (14.39%) in ASCOM, exercisable between the end of September 2024 and the end of December 2025.

In light of the aforementioned sale, which occurred in 1Q23, National Printing's assets and liabilities were classified on Qalaa's financial statements as held for sale.

• NSPO debt settlement: On 9 July 2023, TAQA Arabia's shares began trading on the Egyptian Exchange (EGX) under the ticker (TAQA). The company's shares were listed directly on the EGX without initially being offered to investors via an Initial Public Offering (IPO). Following the listing, the National Service Projects Organization (NSPO) acquired 20% of the total shares of TAQA Arabia, from Silverstone Capital Investments Ltd., a subsidiary of Qalaa. As part of the agreement with the NSPO, Qalaa will have the right to repurchase the sold shares within four years from the date of the deal's completion (9 July 2023), at a repurchase price equal to the original purchase price, plus an agreed upon annual investment return. The proceeds of the transaction were used to settle a loan taken out by Qalaa in 2022, settling an outstanding balance of EGP 1.6 billion as of 30 June 2023.
• EIIC and Cape Collard debt settlement: As per Qalaa's AGM approval on 6 July 2023, in 4Q23 Qalaa transferred its 100% ownership stake in Nile Energy Ltd., the owner of 7.5% of TAQA Arabia shares, and its 100% ownership stake in Stratford Investments Ltd., the owner of c.4% of TAQA Arabia shares to Emirates International Investment Company and Cape Collard Co., respectively. The transactions were used to settle loans owed to Emirates International Investment Company and Cape Collard Co.
  Following the EIIC and Cape Collard settlements, Qalaa is no longer accounting for TAQA Arabia as subsidiary. Instead, Qalaa accounts for its remaining 23.87% interest stake in TAQA by treating the company as an associate using the equity method and reevaluating it to its market value, which amounted to EGP 4.3 billion. Furthermore, the transactions resulted in the recognition of a gain in Qalaa's consolidated income statement amounting to EGP
  5.0 billion.
• Egyptian banks senior debt settlement: In April 2024, Qalaa signed an agreement with a group of Egyptian banks, namely Banque Misr, Banque du Caire, Arab African International Bank, and Al Ahli Bank of Kuwait to settle the entirety of Qalaa's senior debt owed to them, in return for the transfer of a 17.68% ownership stake in TAQA Arabia, a land plot in Tibeen, as well as compensation for variations in the EGP/USD exchange rate and TAQA Arabia's share price. Qalaa will have the right to repurchase the sold TAQA Arabia shares in the fifth year from the sale of the shares, while the banks will have the right to sell the shares back to Qalaa during the sixth year. Both the call option and the put option are set at a repurchase price that equals the original purchase price, plus an agreed upon annual investment return.

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• AIB settlement and restructuring: In April 2024, Qalaa signed an agreement with Arab International Bank for the settlement and restructuring of the debts owed by Qalaa and related parties over a period extending to 2033.
• APM transaction: In 3Q23, APM Investment Holdings Limited (APM), a wholly owned subsidiary of ASCOM, sold its c.35% stake in Ethiopia's Kurmuk Gold Project to the Canadian company Allied Gold Corp. The revenue from the transaction includes the receipt of c.11.5 million shares in Allied Gold in favor of APM Investment Holdings Limited, at a total value of c.USD 25.1 million as of 30 September 2023, as well as deferred payments totaling USD 65.6 million by Allied Corp in three installments starting 30 September 2024 and ending 30 September 2027. This resulted in an EGP 2.6 billion gain on sale in 2023.

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Management Comment

"Going forward, we will continue to push ahead with our growth strategies across our various platforms over the next few years, keeping a close eye on identified investment opportunities."

"I am extremely proud of Qalaa's solid top-line performance during the past year, which stands as a testament to the Group's strength and resilience amidst a challenging macroeconomic environment," said Qalaa Holdings' Chairman and Founder Ahmed Heikal. "During the year, Qalaa's revenue expanded by 17% y-o-y, with top-line growth coming largely on the back of the impressive results achieved at the Egyptian Refining Company. However, ERC's margins witnessed a sharp decline, continuing to drop from the exceptional highs witnessed during 2022 towards more normalized levels. This was further exacerbated by the armed conflict in Sudan and its effect on Al-Takamol Cement's performance. As we head into 2024, we are looking to continue building on our strong top-line performance over the past year. In parallel, we remain committed to prioritizing the growth of our subsidiaries' cashflows and deploying them in a prudent manner towards high-yield incremental investments that fall in line with our debt repayment plan."

"Across the board, our portfolio companies continue to demonstrate their ability to withstand pressure, taking advantage of the new macroeconomic dynamics and reaping the rewards of Qalaa's carefully executed growth strategy. On that front, all our business segments recorded solid performances throughout the year, successfully capitalizing on the increased focus on local manufacturing and import substitution, as well as a portfolio structure that shields against devaluation pressures. Going forward, we will continue to push ahead with our growth strategies across our various platforms over the next few years, keeping a close eye on identified investment opportunities. With the positive results achieved across our business segments during the year, I remain confident in my positive outlook for the Group. Our portfolio companies' cash flows are strong with very low levels of debt, and with growth achieved through efficiencies and small, incremental investments. We have reached our targets regarding reducing operating companies' debt," Heikal added.

"Today, the global economy continues to face a number of difficulties as the world experiences one of the most challenging macroeconomic periods in recent memory. As a consequence of the unprecedented levels of debt, as well as the elevated inflation and interest rates that countries worldwide are currently facing, the expectations of suppressed long-term economic growth, high borrowing costs, and an increased focus on debt reduction remain in place. On top of that, the increasingly evident effects of climate change, coupled with the ongoing geopolitical tensions across various regions, have further exacerbated the levels of stress placed on the global financial system," Heikal stated.

"These global difficulties, as well as local structural issues, have created a challenging domestic macroeconomic environment. Inflation rates remain high, and the Central Bank continues to implement a tightening monetary policy to rein in rising price levels, especially in the wake of the latest currency devaluation in March of 2024. That said, Egypt remains an attractive investment destination for regional and international investors, and I am confident that the country's long-term economic prospects remain positive. This is evidenced by the latest multi-billion-dollar agreement between Egypt and the United Arab Emirates to develop the Egyptian coastal city of Ras El Hekma, a move that has the potential to kickstart a significant round of foreign investments within the country. For our part, Qalaa remains well- positioned to overcome the prevalent challenges thanks to our carefully executed

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strategies, as well as our resilience, flexibility, and efficiency, which are embedded into the core of our DNA," continued Heikal.

"On a separate note, I am pleased to announce that we have reached several agreements with a number of Egyptian banks regarding the settlement and restructuring of the Group's debts. These agreements included moves such as the listing of National Printing on the Egyptian Exchange, and the sale of Qalaa's majority shareholding in the company to Financial Holdings Investment Ltd. This comes as part of Qalaa's strategy of deleveraging its balance sheet and divesting some of its businesses and assets to settle the Group's outstanding debts," concluded Heikal.

"In 4Q23, our significant efforts to reach settlements and restructuring agreements with the various lenders of Qalaa and its subsidiaries have started bearing fruit. We have recently reached agreements with a number of Egyptian banks, as well as several non-bank creditors, regarding the settlement and/or restructuring of all the Group's debts due to those parties," said Hisham El-Khazindar,Qalaa Holdings' Co-Founderand Managing Director. "These transactions are reflecting very positively on Qalaa's profitability and will continue to do so over the coming period. The reduction of Qalaa's risk levels, primarily by deleveraging and expanding the Group's cashflows, remains at the forefront of our priorities."

Detailed overviews of the performance of operational companies in each of Qalaa's core industries follow;

complete financials are available for download at ir.qalaaholdings.com.

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