Qalaa Holdings [CCAP.CA] has announced its 2Q16 financial results, showing a net loss of EGP287.1mn compared to a net loss of EGP4mn in 2Q15. The company reported revenues of EGP1.79bn in 2Q16, which represent 11% Y-o-Y growth relative to 2Q15, while EBITDA came in at EGP92.9mn, which represents 40% Y-o-Y decline relative to 2Q15. Based on the company's earnings release, Qalaa reiterates its strategy to allocate generated cash flow and future asset sales to deleverage debt at the holding level. The company noted that the largest revenue contributors were the energy and cement sectors as they had a share of 41% and 32%, respectively. Qalaa’s share of associates declined 82% Y-o-Y because of an overhaul in ASEC cement’s Zahana plant in April, 2016 that led to a decrease in volumes produced and an increase in maintenance expense. Qalaa also incurred non-cash charges of EGP315.1mn, which is about 8x over the amount reported in 2Q15, and this was due to: i) total impairments of EGP255.4mn; ii) FX losses of EGP39.1mn; and iii) booked provisions of EGP20.6mn. Qalaa Managing Director Hisham El-Khazindar mentioned that the company is trying to reduce non-cash charges and mitigate the upcoming FX risk, given the anticipated devaluation move that could endanger the company’s FX denominated debt. El-Khazindar also added that ERC is an important milestone for Qalaa and he expects its mechanical completion by 2H17. (Company disclosure)