Moody’s revises outlook for Dubai’s utility to stable

Moody’s revises outlook for Dubai’s utility to stable
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Updated 13 October 2021

Moody’s revises outlook for Dubai’s utility to stable

Moody’s revises outlook for Dubai’s utility to stable

RIYADH: Ratings firm Moody’s on Wednesday affirmed the Baa2 ratings of state-owned Dubai Electricity & Water Authority and revised its outlook to stable from negative.

“The rating action reflects the credit linkages between DEWA and the government of Dubai. Supportive oil prices and improved prospects for a sustained economic recovery will strengthen the operating environment in Dubai, bolster the emirate’s government finances and limit downside risks to DEWA’s credit profile,” Moody’s said.

The ratings agency expects the company’s operating performance to rebound in 2021, as a result of

increased electricity and water consumption as well as the end of the 10 percent blanket discount on all electricity bills which lasted for three months in 2020 and was not reintroduced in 2021.


Egypt's non-oil exports rose to $2.56 billion in September

Egypt's non-oil exports rose to $2.56 billion in September
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Updated 29 sec ago

Egypt's non-oil exports rose to $2.56 billion in September

Egypt's non-oil exports rose to $2.56 billion in September
  • This reflects the efforts made by the government to support the production and export sectors during the pandemic

Egypt's non-oil exports saw a significant annual increase during September, recording a 16 percent rise as it reached $2.56 billion compared to $2.12 billion in September 2020.

Nevin Gamea, the Egyptian Minister of Trade and Industry, said the country's imports witnessed a noticeable decline of 7 percent during the month of September, reaching $4.9 billion, compared to $5.29 billion in the same month of last year. 

This contributed to a 24 percent decrease in the trade balance deficit as it stood at $2.3 billion last month, compared to $3.8 billion during September the year prior. 

Gamea explained the positive developments achieved during September come as a continuation of the expanding Egyptian merchandise exports since the beginning of this year — growing by 25 percent during the first nine months of 2021 compared to the same period last year. 

This reflects the efforts made by the government to support the production and export sectors during the pandemic, which contributed to the preservation of the export markets.

She pointed out that Egyptian exports to the European Union increased to $739 million in September, compared to $463 million during the same period last year.

Exports to the United States experienced a 52 percent rise to reach $205 million, compared to $135 million during the same period last year. Exports to African countries — excluding Arab countries — rose by 31 percent as well.

Gamea noted that exports of the printing, packaging, paper, literary and artistic works sector and the engineering and electronic goods sector had the highest growth rates at 76 percent and 34 percent respectively when compared to the same period in 2020.

The markets that received the highest levels of Egyptian exports in September included the US, Saudi Arabia and Italy while imports to Egypt were largely from China, the US and Germany.


Kuwait has begun increasing oil production: KUNA

Kuwait has begun increasing oil production: KUNA
Updated 6 min 20 sec ago

Kuwait has begun increasing oil production: KUNA

Kuwait has begun increasing oil production: KUNA

 Kuwait has begun to increase its crude production in accordance with an agreement reached by the Organisation of Petroleum Exporting Countries and its allies, a group known as OPEC+, Oil Minister Mohammad al-Fares said on Thursday.


The minister, cited by the state news agency KUNA, said Kuwait's plans to increase output includes production from the shared zone with Saudi Arabia.

Separately the foreign minister added that the Arab League supports holding elections in Libya on time on December 24 and that all foreign forces should leave the country as stipulated by UN resolutions.


Egypt aims to boost renewable energies to over 42% by 2035: Electricity minister

Egypt aims to boost renewable energies to over 42% by 2035: Electricity minister
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Updated 20 min 53 sec ago

Egypt aims to boost renewable energies to over 42% by 2035: Electricity minister

Egypt aims to boost renewable energies to over 42% by 2035: Electricity minister
  • The minister indicated that Egypt is the largest holder of electrical capacities in the MENA region

Egypt will aim to increase the share of renewable energies to over 42 percent by 2035, after the country reached 2022’s target for boosting renewables to 20 percent early this year. 

The minister of electricity and renewable energy, Mohamed Shaker, noted that Egypt has allocated 7,650 square kilometres of unused lands to new and renewable energy projects, during a meeting with CEO of Lekela Power, Chris Antonopoulos. 

The minister indicated that Egypt is the largest holder of electrical capacities in the MENA region and has the capacity to produce up to 90 gigawatts of wind and solar capacity, citing Wind Atlas. 

The meeting was held to support and enhance cooperation between Egypt’s electricity sector and the company, which boasts high expertise in the field of wind energy power plants. 


Egypt economy forecast to grow 5.1% in year to June, 5.5% in 2022/23

Egypt economy forecast to grow 5.1% in year to June, 5.5% in 2022/23
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Updated 21 October 2021

Egypt economy forecast to grow 5.1% in year to June, 5.5% in 2022/23

Egypt economy forecast to grow 5.1% in year to June, 5.5% in 2022/23
  • Tourism has been gradually recovering from COVID travel restrictions put in place in March 2020

Egypt's economy will grow 5.1 percent in the fiscal year that ends in June 2022, but accelerate to 5.5 percent in each of the following two years as tourism continues to rebound and the effects of the coronavirus pandemic wane, a Reuters poll showed.

The central bank said last month economic growth surged to 7.7 percent in the final quarter of the last fiscal year, indicating growth of 3.3 percent for the entirety of 2020/21, up from a previous full fiscal-year estimate of 2.8 percent.

Economists in a July poll predicted economic growth would be 5.0 percent for the year to next June.

"We expect consumption growth to pick up from a low base post-COVID and public investment to remain strong this year," Allen Sandeep of Naeem Brokerage said.

"What will be critical to see is if this growth is sustained in 2022/23, by when the pandemic effects should hopefully subside substantially."

Tourism has been gradually recovering from COVID travel restrictions put in place in March 2020.

Tourism revenue plummeted to $4.9 billion in 2020/21 from $9.9 billion a year earlier. But in the April to June quarter it bounced back to $1.75 billion from a low of $305 million in the same quarter of 2020, according to central bank data.

In the latest Reuters poll, economists expected annual urban consumer price inflation to climb to 6.0 percent in 2021/22, then picking up even further to 6.4 percent in 2022/23 and 7.0 percent in 2023/24, still within the central bank's target range of 5 percent to 9 percent.

Egypt's annual inflation rose to 6.6 percent year-on-year in September, its highest in 20 months, from 5.7 percent in August, mainly due to rising food prices, the state statistics agency CAPMAS said this month. read more 

The currency will weaken to 15.81 Egyptian pounds per dollar by the end of 2021, to 16.25 by the end of 2022 and to 17.24 by the end of 2023, the Oct. 8-20 poll of 22 economists showed.

The central bank is expected to leave its overnight lending rate unchanged at 9.25 percent throughout 2021/22 and 2022/23, then increase it to 10.25 percent by the end of June 2024, the poll found.

"We believe Egypt's sizeable CA (current account) deficit explains the central bank's reluctance to cut interest rates," causing a strong increase in imports and income outflows, RenCap's Yvonne Mhango wrote in a note.


Saudi dairy companies face headwinds in 2021 as lower sales stifle profits

Saudi dairy companies face headwinds in 2021 as lower sales stifle profits
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Updated 21 October 2021

Saudi dairy companies face headwinds in 2021 as lower sales stifle profits

Saudi dairy companies face headwinds in 2021 as lower sales stifle profits
  • Cost of sales as a percentage of revenue also jumped by 3 percent as the government lifted its subsidy on some items of animal feed

Saudi-based dairy companies showed a slump in profits as the sector experienced a decline in sales, according to Tadawul.

Financial reports from the Saudi stock exchange revealed National Agricultural Development Co. (NADEC) made losses of SR7.8 million ($2.1 million) in the nine months to 30 September 2021.

This was partly driven by a drop in company sales which went down by 5.1 percent due to a steep decline in agricultural sector sales following an increase in the VAT rate.

Cost of sales as a percentage of revenue also jumped by 3 percent as the government lifted its subsidy on some items of animal feed. This helped contribute to the 13.5 percent fall in gross profit.

Moreover, general and administrative expenses increased by 4 percent.

In addition, Saudi Dairy and Foodstuff Co. (SADAFCO) experienced a 35 percent decline in its net profit for the 6-month period ending on September 30 2021. Profits fell from SR140.8 million in the same period last year to SR91.7 million.

The slip in profits was, again, fuelled by less revenue, higher raw material prices and a rise in VAT rates (from 5 to 15 percent) in the second quarter of 2020. 

Sales dropped by 7.2 percent when compared to the same period last year while gross profits fell noticeably by 13.4 percent. Sales and distribution expenses slightly rose from 14 percent to 15 percent as well.

Almarai, a dairy giant in the Kingdom, also saw its profits decline significantly by 22.5 percent as it was similarly hampered by the difficult conditions in the sector.