AMOC:The Beginning Of The Show

AMOC:The Beginning Of The Show

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AMOC: The Beginning of the show

February 27, 2017


Amr El Sayed – Karim M.Riad

This time we went to the skyscraper’s cheif Eng. Amr Mustafa. Before he took over as a chairman and CEO of AMOC, he served several positions in the national petroleum authority, his latest title was vice president of the NPA.

We went to hear the full story from his side, and what’s to come after the general assembly meeting. He started the chat by talking about the stock split. Mustafa continued by confirming that they are working on complying with all the stock exchange regulations and requirement after the EGA, “it won’t take more than 3-4 weeks max” he said.

Coming to the new additions to the company’s activities, “First you must know that there is a big difference between the refinery and manufacturing activities in the petroleum sector. The refinery uses crude oil as a raw material for a long process of filtration, which results in several products. AMOC is a manufacturer where we require the diesel product to start our manufacturing process,” Mustafa said.

The company’s profits depend on acquiring raw materials, and manufacturing them into products sold with fixed margins. Moustafa states that AMOC exports, monthly, USD 4.5 to 5 million worth wax products, while the oil products are sold in the domestic market, and the other products are sold to the national petroleum authority.

During the past couple of years, AMOC was able to build a solid cash reserve, which is almost an EGP 1 Billion (of which USD 30 million). With such reserve comes hard decisions between either investing these amounts in CDs, or retaining them for business development.

First of such business development activities is the Mixing Unit. AMOC already produces oil for the domestic and international companies in Egypt. “We have some facilities in which those companies can mix, fill, and pack their oil products, and we contracted with two companies until now,” Mustafa stated. Secondl, AMOC made an agreement with the national petroleum authority and MEDOR, where they will refine oil for the national petroleum authority, while renting the refining line from MEDOR. “These business activities will lead to a 4% monthly profits on AMOC’s USD holdings. A USD 2/barrel is our margin, and we aim to refine c350-500 thousand barrels. The operation will take over on the 21st of March 2017, and the profits will show on our 4th quarter earnings,” Moustafa stated.

AMOC also will reduce its dependency on the domestic suppliers by utilizing the international market, and importing a portion of their raw materials needs by adding the import activity to its business.

Moreover, AMOC is adding the partnership activity to its business as they are mainly looking forward to participate with the holding company for gas, and the holding company for petrochemicals projects. “Generally the internal rate of return of petrochemical projects is faster than the refining projects, and doesn’t need that huge amount of investments” Mustafa said. All of these activities are related to the petrochemical sector, However,Eng.Amr Mustafa wants to go further with AMOC future by adding the ability to buy shares in listed and non-listed petrochemical companies. “We want to build a perfect investment portfolio for AMOC in which we could add more value for the Shareholders.” Adding on, AMOC is studying two listed companies to buy in, however they refused to comment on the identities of those companies.

Mainly the FY 2016/2017 will be a remarkable, “we made EGP 608 Million by the end of January, and we target EGP 1 billion by the end of this year”Eng. Amr Mustafa seems confident about the company’s strategy however we will be reviewing the company again after the 3rd quarter earnings release.

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