The Egyptian Refining Company (ERC) has contributed c.90% to Qalaa Holding’s total revenue during the financial year ending 31 December 2023 (FY 2023).

Yet, ERC’s refining margins in FY 2023 saw a notable decline. This can be attributed to two key factors: a return to normalcy in oil prices after the 2022 surge, and a combined effect of higher costs for raw materials (feedstock), lower selling prices for refined products, and a decrease in the quality of the crude oil they processed.

Moreover, in order to boost capacity, ERC completed a 17-day planned shutdown in July 2023 for an overhaul and debottlenecking project. This successful project resulted in a 10% increase in production capacity. Looking ahead, a study is underway for another debottlenecking effort targeted for 2029, which is expected to yield a further 10% capacity increase.

Qalaa announced that ERC had outstanding receivables of $384 million from the Egyptian General Petroleum Corporation (EGPC), as of April 30, 2024. ERC maintained a clean record on debt payments. In FY 2023, they fulfilled all scheduled senior debt obligations totaling $632 million. This included $444 million directed towards principal repayment, with the remaining amount covering 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 $600 million as of 30 April 2024,” the company said.