Cairo – Mubasher: Pharos Research has reduced the fair value (FV) of Alexandria Containers and Cargo Handling Co’s stock at EGP 185 per share, with an "Equalweight" recommendation, according to a recent report.
The research firm highlighted key earnings driver for Alexandria Containers in fiscal year 2016/2017, including the company’s US dollar-denominated fees since the flotation of the Egyptian pound and the container volumes which dropped by 9%.
Alexandria Containers’ US dollar-denominated fees are likely to fell by 3% in FY17/18, Pharos Research noted, adding that the company may resume its normal fee schedule of 5% growth in fees afterward.
Handled containers are expected to increase by 2% in FY17/18, followed by a 5% annual growth thereafter on the general recovery of imports in Egypt, the report indicated.
Low import levels have negatively pushed the company’s container figures lower in FY16/17, the report added, pointing out that containers growth are likely to remain sluggish in FY17/18.
“We forecast container figures to pick up slowly starting from FY17/18, increasing afterward by 5% annually, throughout our forecast horizon,” the research firm forecast.
Alexandria Containers had previously posted a net profit of EGP 178.5 million in October and a net profit of EGP 742.5 million in the period from January to October.
