RCC published its 2Q17 results, with net income (pre-appropriations) coming in at EGP41mn, up 251% Y-o-Y and 3% Q-o-Q. The growth in earnings vs. last quarter comes despite a softening in EBITDA margin, and is largely due to a jump in finance income to EGP2.7mn from nil last quarter. The Y-o-Y surge in earnings remains largely driven by the devaluation of the EGP in November 2016, which drove propelled 2Q17 revenue by 79% Y-o-Y given that most of RCC’s revenue is denominated in foreign currencies.

Total revenue grew by a healthy 7% Q-o-Q and +79% Y-o-Y to EGP187mn as a result of strong revenue growth in local revenue in Egypt, particularly in the Insourcing business. On a geographical basis, revenue from Egypt stood at EGP147.3mn for the quarter, expanding to 78.9% of revenue from last quarter’s 78.1%, while revenue from the UAE stood at 17.3% and revenue from Poland fell to 3.8%.

The company is yet to disclose operating KPIs for 2Q17. Please note we do not formally cover the stock.

Raya Contact Center (RCC): EGP13.52 as of 13 Aug. 2017, Not Rated, MCap: USD76mn, RACC EY/RACC.CA

Omar Maher