RE: Egypt keeps delivering24 Mar 2023 12:54
Panda1 you missed off the recovery part in Egypt economy at the bottom
The continued effect of global macroeconomic volatility on the Egyptian economy has resulted in both a significant devaluation of the Egyptian Pound in the year and ongoing restrictions on US Dollar transfers by the Central Bank of Egypt. These restrictions have made it challenging to repatriate cash from our Egyptian operations. In order to manage the Group's exposure to the currency devaluation risk of the Egyptian pound, in Q4 2022, United opted not to accept the payment of our USD denominated receivables in Egyptian pounds (EGP), unless required for operational purposes. Whilst this policy has resulted in an increase in the receivable balances in Q4 and a corresponding reduction in the cash balances, holding USD denominated receivables mitigate the likely realised foreign exchange losses from the devaluation of cash balances held in EGP.
2022 has been a challenging year for the Egyptian economy however recent developments in the last quarter including the agreement of a $3 billion funding facility from the International Monetary Fund (IMF) has brought increased stability to the EGP/USD exchange rate. This stability has supported fund inflows to the country and with it increased USD liquidity since the beginning of 2023. We therefore remain confident that our EGPC receivables balance will reduce during 2023 and given the flexibility around the capital expenditure programme in Egypt we are confident we can continue to manage our working capital position to support our business operations.
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