El Sewedy hopes profits will breeze in
The Egyptian company El Sewedy sees profits blowing in the Ghana wind.The company expects its wind-related revenue to double after a venture into Ghanian wind-farming was announced yesterday.
The electrical and cables group said it was in negotiations with Ghana, which will require between US$350 million and $400m of investments over the next three years.
If the plan is approved by the Ghanaian government, it would add about 2.3 billion Egyptian pounds to El Sewedy's revenue over the next two or three years and more than double the expected revenue in El Sewedy's wind segment next year, said Hisham Halaldeen, a senior analyst at Naeem Holding who tracks the stock.
About 1.4bn Egyptian pounds of this revenue would be recognised next year, he said. Mr Halaldeen had previously estimated wind segment revenue of 1bn Egyptian pounds for next year, 5 per cent of the company's total revenue.
He placed a target price of 66 Egyptian pounds per share for the company. El Sewedy closed 0.09 per cent up to 54.76 Egyptian pounds on the Egypt Exchange, its highest point in nearly two weeks.
The company said it would begin work on the wind project in the new year. "The segment is yet to contribute meaningfully to the topline revenue," said Mr Halaldeen. He added that the current backlog of wind energy projects is made up mainly of a contract in Libya.
The company expanded into the wind segment when it acquired a 30 per cent stake in the wind energy division of M Torres Olvega of Spain in 2008. It is now bidding for contracts in Egypt and elsewhere in the MENA region.
Despite a low-income economy, with annual per capita income standing at $638 last year, Ghana is "well endowed with natural resources", said Mr Halaldeen.
The firm, which is also the Arab world's largest listed cable maker, has operations in 10 other countries and exports across the MENA region, Brazil, Portugal, Spain and eastern Europe.
It is also working on other projects in Ghana including a road light project at a cost of around 230 million Egyptian pounds and eight power generation projects at 155m Egyptian pounds, scheduled to be completed by the middle of next year.
Updated: December 13, 2010 04:00 AM