Rehan Hamza: Okay, good morning, good afternoon, everyone. This is Rehan Hamza from the Al Ahly Pharos Research.
Rehan Hamza: I'd like to thank everyone for joining us today in Valmore's Fourth Quarter 2025 results call. It's our pleasure to be having Valmore's management with us today, Mr. Jon Rokk, the Group Chief Executive Officer, and Mr. Omar Nashaat, Investor Relations Director.
Rehan Hamza: And now I'd like to hand over the call to Omar for opening remarks. Omar, the floor is yours.
Omar Nashaat: Thank you, Rehan. Good afternoon, everyone, Ramadan Karim, and thank you for joining us today for Valmore Holding's full year and fourth quarter 2025 Results Conference Call.
Omar Nashaat: I'm Omar Nashaat, Valmore's Director of Investor Relations, and before we begin, I would like to, of course, thank Rehan and the entire team at Al Ahly Pharos for hosting us today.
Omar Nashaat: Joining us today would be our CEO, Jon Rokk, who will walk you through, in a minute, will walk you through our full year performance and fourth quarter highlights, and outline the key strategic milestones we achieved during the year.
Omar Nashaat: And share our priorities and outlook as we move into 2026. Following Jon's remarks, we will open the floor for Q&A, which Rehan will thankfully moderate.
Omar Nashaat: Our earnings material are all available on our newly launched Investor Relations website, which went live as part of our transition to Valmore Holding earlier in 2025, and represents an important milestone in our rebranding journey and how we communicate with the capital markets.
Omar Nashaat: We invite you to visit the platform and review the full set of materials related to today's results. And as always, if you have any follow-up questions after the call, please feel free to reach out to Maryam or to myself.
Omar Nashaat: With that, I'll hand over to Jon to get us started.
Jon Rokk: That's right, thank you, Omar, and good afternoon, everyone. I'm delighted to be here today to talk to you about our results, and especially as this is the very first earnings call as Valmore Holding, so I'm very happy to say that.
Jon Rokk: Right, let's start. Look, 2025, we believe, was a remarkable year for us. It was defined by strategic progress and robust operational execution across the whole platform.
Jon Rokk: We delivered strong revenue growth in 2025, supported by improved operating conditions, we had resilient export pricing, and continued execution of our portfolio optimisation program.
Jon Rokk: This momentum carried us through to the fourth quarter, where we delivered top-line growth alongside resilient net profitability, reflecting the strength of our operating platforms.
Jon Rokk: 2025 also marked an important milestone in our Group's evolution, as we formally transitioned from Egypt Kuwait Holding to Valmore Holding. And this rebrand represents a step change in how we position the Group.
Jon Rokk: We'll be bringing greater clarity to our strategic direction, shifting our focus towards broader geographic exposure, building a stronger hard currency earnings mix, and prioritising disciplined capital allocation.
Jon Rokk: Throughout last year, we pursued strategic portfolio optimisation initiatives, we successfully redeployed capital in line with our long-term value creation framework, and as a result, we enter 2026 with a much more streamlined portfolio, enhanced earnings visibility, and multiple embedded growth engines across our core sectors.
Jon Rokk: So before I move into the consolidated results for our businesses, let me start with some of the key developments across the strategic initiatives and investments that we did last year.
Jon Rokk: So, to begin with, we finally had a landmark year for our MDF plant, Nilewood. Following the successful completion of commissioning earlier in the year, the plant has now transitioned into early-stage commercial operations, with ramp-up progressing steadily.
Jon Rokk: We have already begun commercial board sales and secured repeat customers, which gives us confidence in both the product and the market demand. The production lines are performing in line with expectations, and our team remains focused on gradually scaling output and optimising processes ahead of the full commercial production.
Jon Rokk: 2025 was primarily a stabilisation year, focused on bringing the plant fully online. As we enter 2026, we're targeting to ramp up to reach a utilisation of around 70%, which is in line with industry benchmarks for a newly commissioned facility.
Jon Rokk: Over the next 12 to 15 months, we expect to continue ramping up, heading towards 75% and 80% utilisation, with the plant operating at a steady state level throughout 2027, following the full completion of our ramp-up phase.
Jon Rokk: This project represents a key pillar in our strategy to build export-oriented US dollar-generating industrial platforms based in Egypt, while also benefiting from import-substitution dynamics in the local market.
Jon Rokk: As the plant ramps up and progresses, we expect Nilewood to contribute meaningfully to consolidated revenue growth and to start generating positive operating cash flows in 2026.
Jon Rokk: Turning now to our…
Jon Rokk: To our gas distribution platform in Saudi Arabia, EKACOM, we continue to see steady operational momentum following the commencement of commercial supply earlier in the year.
Jon Rokk: Gas consumption volumes are increasing in line with tenant demand, and additional industrial customers are being connected as activity with Dammam Industrial City 3 continues to scale.
Jon Rokk: We are currently supplying a growing number of factories with throughput ramping up progressively. As more tenants become operational, we expect volumes to increase meaningfully throughout this year.
Jon Rokk: The 22km gas network that was developed by EKACOM has an initial capacity of 25 million standard cubic feet per day, with the ability to scale significantly as demand grows. This will position us very well to capitalise on the long-term expansion of the industrial city as its developed area increases over time.
Jon Rokk: Strategically speaking.
Jon Rokk: This 35-year concession strengthens our regional footprint and enhances our exposure to stable, recurring, infrastructure-based cash flows with long-term visibility.
Jon Rokk: The embedded growth potential within the industrial zone provides an organic volume ramp as industrial activities accelerate.
Jon Rokk: EKACOM reflects our refreshed investment strategy of deploying capital into essential infrastructure platforms that serve clear industrial demand and benefit from structural growth dynamics within high-growing economies.
Jon Rokk: With our operational track record in gas distribution and energy infrastructure, we remain confident in our ability to scale this platform efficiently and pursue further opportunities across the Kingdom over time.
Jon Rokk: I'll now move on to our new UK investment, Endolys, which had its financial close in August 2025. Commencement of capital deployment and execution has continued to progress to plan as expected.
Jon Rokk: The site works in Darlington, which is in the northeast of England, are advancing as scheduled, with detail engineering progressing and key equipment procurement underway. Construction activities remain aligned with our targeted timeline, and we're on track to commence commercial operations during the fourth quarter of this year.
Jon Rokk: As a reminder, our Phase 1 comprises of 6 reactors, with a total annual processing capacity of approximately 60,000 tonnes of plastic.
Jon Rokk: The UK's regulatory framework provides strong visibility on the feedstock availability, while previously secured off-take arrangements support commercial predictability as we move towards early-stage production.
Jon Rokk: We will be deploying in total 60 million sterling to develop the first phase of this state-of-the-art plastics pyrolysis facility, which will chemically recycle post-consumer plastic waste to produce circular ethylene cracker feedstock designed to be blended into virgin naphtha streams and steam crackers.
Jon Rokk: This feedstock displaces virgin fossil feedstock in the manufacturing of new plastics, supporting chemical recycling, and contributing directly to circular polymer production.
Jon Rokk: Strategically, this project enhances our hard currency earnings mix and establishes a scalable industrial platform along with global circular economy trends.
Jon Rokk: Funding remains disciplined and supported by capital recycling initiatives completed during the year, reflecting our continued focus on redeploying capital into high-return, hard currency-generating assets.
Jon Rokk: But more importantly, this investment reflects our refreshed strategic priorities.
Jon Rokk: Focusing on opportunities that address clear structural demand and solve tangible industrial challenges.
Jon Rokk: Global demand for recycled plastics continues to grow, while regulatory direction and environmental pressures are accelerating the shift away from alternatives such as landfill and incineration.
Jon Rokk: Together, these developments will well position Endolys within a demand-driven, sustainability-linked value chain with long-term growth potential.
Jon Rokk: So, moving on, I'll now cover our portfolio optimisation program, which started in 2024, but continued momentum in 2025. It was very active as we actively recycle capital and redeploy the proceeds into scalable, higher-return platforms.
Jon Rokk: So during the year, we executed several strategic transactions, which included the divestment of our 63.3% stake in Delta Insurance to Al Wafa Insurance, and this move generated around 67 million US dollars, which we then primarily channeled towards the funding of the capital for the UK Endolys project.
Jon Rokk: We also completed additional optimisation initiatives, including the sale of our UAE-based subsidiary, Shield Gas, and the monetisation of sovereign government bonds that had previously been impaired on our balance sheet.
Jon Rokk: So these actions, they come… they're part of our ongoing efforts to streamline the portfolio, reduce our exposure to EGP-denominated earnings, while channeling capital towards higher return opportunities that enhance long-term value creation.
Jon Rokk: Finally, 2025 marked an important milestone for the Group. As I mentioned earlier, we completed our corporate rebrand and transition from Egypt Kuwait Holding to Valmore Holding.
Jon Rokk: The rebrand was accompanied by a launch of a refreshed strategic framework and business plan, providing clearer direction on how we expand geographically, optimise the portfolio, strengthen our core platforms, as well as enhancing operational performance, financial resilience, and capital market presence.
Jon Rokk: The new identity is now fully rolled out, ensuring a consistent and forward-looking profile that aligns with our evolving investment approach and long-term strategic objectives.
Jon Rokk: It reflects our heightened ambitions to accelerate sustainable growth, extend our footprint beyond our traditional markets, and unlock long-term value by investing in new platforms that can drive differentiated returns over the coming decade. We have a new vision, mission, and purpose which sets out these ambitions.
Jon Rokk: Okay, so let's move on to our consolidated performance, and I'll talk through our results for 2025, before moving into the individual businesses' performances.
Jon Rokk: In terms of the Group, revenues reached 685 million US dollars in 2025, which was up 24% year-on-year, driven by strong growth across our portfolio, and further supported by improved operating conditions, and the continued execution of our portfolio optimisation agenda.
Jon Rokk: In the fourth quarter alone, revenues increased 15% year-on-year to reach 166 million US dollars.
Jon Rokk: Our gross profit margin remained really solid at 35% in both 2025 and the fourth quarter. EBITDA margin expanded to 47% for the full year, and remained strong at 48% in the fourth quarter, reflecting improved operating conditions and enhanced efficiency across the portfolio.
Jon Rokk: Stronger contributions from higher margin platforms help offset ramp-up costs associated with newly commissioned assets, and the early-stage operational phases of certain projects.
Jon Rokk: At the bottom line level, net profit was broadly stable, year-on-year, at 186 million dollars in 2025, which delivered a healthy net profit margin of 27% for last year, noting that in 2024, the net profit was boosted by a one-off FX gain, which amounted to about 54.5 million dollars versus an actual FX loss for us last year of 5 million dollars. Adjusting for the one-off FX gains, underlying net profit for 2025 would have increased by more than 40% year-on-year.
Jon Rokk: Attributable net profit for 2025 amounted to 161 million dollars, in line with our revised consolidated guidance range that we gave of between 156 and 166 million dollars.
Jon Rokk: This compares to 163 million dollars in 2024, which again was significantly boosted by those FX gains.
Jon Rokk: In the fourth quarter of last year, net profit increased 7% year-on-year to 49.4 million dollars, translating into a net profit margin of 30%, while attributable net profit rose 12% year-on-year to 43.5 million dollars.
Jon Rokk: In line with our capital allocation framework and our commitment to delivering sustainable shareholder returns, I'm pleased to confirm that the board has proposed a cash dividend of 4.5 US dollar cents per share for 2025, subject to the final General Assembly approval.
Jon Rokk: This reflects both the resilience of our earnings base and our confidence in the Group's ability to generate strong cash flows going forward.
Jon Rokk: On behalf of the board, I'd very much like to thank our management teams, our employees, our partners and shareholders for their continued trust and support as we move forward as Valmore Holding.
Jon Rokk: Looking ahead, we're expecting this year's net profit to be largely in line with 2025 levels, supported by sustained growth momentum and improving operating conditions across our core platforms. And we'll discuss company-level guidance for each one separately as we go through this call.
Jon Rokk: But for now, important to highlight that on the consolidated level, we are working on a number of initiatives which should bridge the gap from the non-recurring part of our 2025 net profit.
Jon Rokk: Okay, moving on now, with the companies, and, we'll start with, AlexFert.
Jon Rokk: AlexFert delivered a strong fourth quarter, with natural gas supply remaining stable, and utilisation maintained at full run rate throughout the quarter, alongside sustained strength in export urea pricing.
Jon Rokk: Revenues rose 23% year-on-year, and 22% quarter-on-quarter to 72.6 million dollars, which is supported by a recovery in export fertiliser volumes as gas availability improved over the quarter.
Jon Rokk: Our export volumes increased 33% sequentially, and 11% year-on-year, while pricing remained favorable, averaging 447 dollars per ton in the fourth quarter, compared to the previous quarter in 2024 of 364 dollars.
Jon Rokk: On a full-year basis, revenues increased 18% year-on-year to 251 million dollars, driven by a 24% rise in average export urea prices to that average of 423 dollars per ton during 2025.
Jon Rokk: So our gross profit grew 21% year-on-year, and 50% quarter-on-quarter to 30.1 million dollars in quarter four of 25, with gross profit margin broadly remaining stable year-on-year at 42%, and improving sequentially by 8 percentage points.