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MIRA INFORM REPORT
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Report No. : |
500211 |
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Report Date : |
30.03.2018 |
IDENTIFICATION DETAILS
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Name : |
RIVA PHARMA |
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Registered Office : |
Public Free Zone Street, No. 6, Al Wafaa Wa Al
Amal, Nasr City, Cairo |
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Country : |
Egypt |
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Financials (as on) : |
31.12.2017 |
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Date of Incorporation : |
1997 |
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Legal Form : |
Egyptian Joint Stock Company |
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Line of Business : |
Subject is engaged in the manufacture of pharmaceuticals. |
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No. of Employees : |
80 |
RATING & COMMENTS
(Mira Inform has adopted New Rating mechanism w.e.f. 23rd
January 2017)
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MIRA’s Rating : |
A |
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Credit Rating |
Explanation |
Rating Comments |
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A |
Acceptable Risk |
Business dealings permissible with
moderate risk of default |
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Status : |
Satisfactory |
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Payment Behaviour : |
No Complaints |
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Litigation : |
Clear |
NOTES :
Any query related to this report can be made
on e-mail : infodept@mirainform.com
while quoting report number, name and date.
ECGC Country Risk Classification List
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Country Name |
Previous Rating (30.09.2017) |
Current Rating (31.12.2017) |
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Egypt |
C1 |
C1 |
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Risk Category |
ECGC
Classification |
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Insignificant |
A1 |
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Low Risk |
A2 |
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Moderately Low Risk |
B1 |
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Moderate Risk |
B2 |
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Moderately High Risk |
C1 |
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High Risk |
C2 |
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Very High Risk |
D |
EGYPT - ECONOMIC OVERVIEW
Occupying the northeast corner of the African continent, Egypt is
bisected by the highly fertile Nile valley where most economic activity takes
place. Egypt's economy was highly centralized during the rule of former
President Gamal Abdel NASSER but opened up considerably under former Presidents
Anwar EL-SADAT and Mohamed Hosni MUBARAK. Agriculture, hydrocarbons,
manufacturing, tourism, and other service sectors drove the country’s
relatively diverse economic activity.
Despite Egypt’s mixed record for attracting foreign investment over the
past two decades, poor living conditions and limited job opportunities have
contributed to public discontent. These socioeconomic pressures were a major
factor leading to the January 2011 revolution that ousted MUBARAK. The
uncertain political, security, and policy environment since 2011 has restricted
economic growth and failed to alleviate persistent unemployment, especially
among the young.
In late 2016, persistent dollar shortages and waning aid from its Gulf
allies led Cairo to turn to the IMF for a 3-year, $12 billion loan program. To
secure the deal, Cairo floated its currency, introduced new taxes, and cut
energy subsidies - all of which pushed inflation above 30% for most of 2017, a
high that had not been seen in a generation. Since the currency float, foreign
investment in Egypt’s high interest treasury bills has risen exponentially,
boosting both dollar availability and central bank reserves. Cairo will need to
make a sustained effort to implement a range of business reforms, however, to
induce foreign and local investment in manufacturing and other labor-intensive
sectors.
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Source
: CIA |
SUMMARY
Company Name :
RIVA PHARMA
Country of Origin :
Egypt
Legal Form :
Egyptian Joint Stock Company
Registration Date :
1997
Issued Capital :
US$ 2,250,000
Paid up Capital : US$
2,250,000
Total Workforce :
80
Activities :
Manufacturers of pharmaceuticals.
Financial Condition :
Fair
Payments :
No Complaints
Operating Trend :
Steady
COMPANY
NAME
RIVA PHARMA
ADDRESS
Registered &
Physical Address
Street : Public Free Zone Street, No. 6
Area : Al Wafaa Wa
Al Amal, Nasr City
Town : Cairo
Country : Egypt
Telephone : (20-2) 22709936
Facsimile : (20-2) 22709937
Mobile : (20-102) 2251660
Email : info@rivapharma.com / riva@rivapharma.com
Premises
Subject operates from a medium sized suite of offices and a factory that
are rented and located in the Industrial Area of Cairo.
Branch Offices
Location Description
68 Street No. 105 Office
premises
Maadi
Cairo
Tel: (20-2) 25253042
Fax: (20-2) 25251110
KEY
PRINCIPALS
Name Position
Dr Saad El Din Mahmoud Mohamed Chairman
Mahmoud Abdallah Fekry Saad Managing
Director
Amaal Saad El Din Mahmoud Director
Mohamed Ali Abd El Aziz Director
Hoda Said El Din Mahmoud Director
Wael Murshy General Manager
Ayman Ismail Finance
Manager
Ahmed Abdallah Administration
Manager
Mohamed Fathy Purchasing
Manager
Dr Ghada Kamel Sales
Manager
Dr Adel El Tahlawi Marketing
Manager
LEGAL
FORM & OWNERS
Date of Establishment : 1997
Legal Form : Egyptian Joint
Stock Company
Issued Capital : US$ 2,250,000
Paid up Capital : US$ 2,250,000
Name of
Shareholder (s)
Percentage
Mahmoud Abdallah Fekry Saad 47.18%
Dr Saad El Din Mahmoud Mohamed 22.29%
Amaal Saad El Din
Mahmoud 5.38%
Hoda Said El Din Mahmoud 5.16%
Local businessmen and private investors 19.99%
Notes to the legal
Form A Joint Stock Company (
SAE ) can be both a public or private company the capital of which is divided
into shares of equal value; the
liability of the shareholder is confined to the value of the shares to which he
subscribes, and he is not liable for the debts of the company except within the
limit of those shares. A JSC may be 100% owned by foreign investors and there
should be at least three shareholders. The minimum capital of JSC companies is
EGP 250,000 or EGP 500,000 if it is a public company.
OPERATIONS
Activities: Engaged in the manufacture of pharmaceuticals.
At present Riva supply the regional markets with more than 45 drugs covering a wide spectrum of pharmacological activities.
The pharmaceutical manufacturing
activities at Riva Pharma are licensed by the Ministry of Public Health of
Egypt and are covered by manufacturing license no. 2/2000 issued on 2/5/2000
for the manufacture of non -sterile products. Riva Pharma became an approved
UNRWA supplier in September 2004.
Import Countries: India
Export Countries: Kuwait, United Arab
Emirates, Tunisia, Algeria, and Libya.
Brand Names: RIVA PHARMA
Operating Trend: Steady
Subject has a workforce of 80 employees.
FINANCIAL
DATA
Financial highlights
provided by local sources are given below:
Currency: Egyptian
Pounds (EGP)
Year Sales
Year Ending 31/12/15: EGP
37,100,000
Year Ending 31/12/16: EGP
37,850,000
Year Ending 31/12/17: EGP
39,000,000
Local sources consider subject’s financial condition to be Fair.
Note: According to Egyptian
Commercial Law, only Joint Stock Companies SAE (Listed on the Stock Market) are
required to publish their financial
information. Financial information on other legal forms can only be obtained
from the companies / businesses directly
BANKERS
Export Development Bank of Egypt
108 Mohi El Din Abu El Ezz Street
Mohandessin
Cairo 11111
Tel: (20-2) 33619005 / 33385877
Fax: (20-2) 33385940 / 33385938
PAYMENT
HISTORY
No complaints regarding subject’s payments have been reported.
SANCTION
LIST CHECKS
The subject and its shareholders have been checked in the following
sanctions list databases:
Sanctions list Results
United Nations Sanctions No
matches
Australian Sanctions No
matches
Bureau of Industry and Security (US) No
matches
EU Financial Sanctions No
matches
Office of the Superintendent of Financial
Institutions (Canada) No
matches
OFAC - Specially Designated Nationals (SDN) No
matches
UK Financial Sanctions (HMT) No
matches
US Consolidated Sanctions No matches
GENERAL
COMMENTS
During the course of this investigation the following sources were
consulted:
- Internal database
- Journals, directories, media
& web searches
- Local Registry office
Local sources report that the subject’s operating history is clear with
payment obligations met in a generally timely manner. The financial position is
satisfactory and the company is deemed a fair trade risk.
COUNTRY
OUTLOOK
Recent
Developments
The first quarter of FY17 (July to June)
marked a slowdown in growth recording 3.4 percent compared to 5.1 percent in
the same quarter last year, with annual growth in FY16 registering 4.3 percent.
Growth was constrained by severe shortages in hard currency, an overvalued
exchange rate and sluggish growth in Europe, Egypt’s main trading partner. Key
sectors continue to experience negative growth, particularly tourism and the oil
and gas extractives sector that has been suffering from underinvestment and
arrears.
The annual fiscal deficit in FY16 increased
to 12.1 percent of GDP, up from 11 percent the year before. However, in the first
half of FY17 the deficit declined to 5.4 percent of GDP, down from 6.4 percent
in the same period last year. The improvement in the first half is solely
driven by a decline in total expenditures, which compensates for a drop in
total revenues. Lower expenditures were driven by a decrease in subsidies and
public wages as a percentage of GDP.
The most recent data for the first quarter of
FY17 show an overall surplus in the balance of payments of 0.5 percent of
projected GDP, compared to a deficit of 1 percent during the same period of the
previous year. The improvement in external accounts was mainly due to the
narrowing trade deficit induced by an increase in merchandise exports (by 11.2
percent) and a decline in merchandise imports (by 4.8 percent). Meanwhile, Suez
Canal receipts further deteriorated by 4.8 percent and net private transfers
also declined by 21.8 percent. As a result, the current account deficit widened
to 1.4 percent of GDP compared to 1.1 percent in the same quarter of the
previous year. More positively, FDI inflows increased to US$1.9 billion over
the same period, up from US$1.4 billion the previous year.
To stimulate growth and address major
macroeconomic imbalances, the government embarked on a major economic reform
program. The key features include (i) the liberalization of the exchange rate
regime; (ii) fiscal consolidation through a combination of expenditure and
revenue measures, notably cuts in fuel subsidies, containment of the wage bill
and introduction of VAT; and (iii) reforms to the business environment and
addressing impediments to industrial activity.
The reform program was supported by an IMF
Extended Fund Facility of US$12 billion which contributes to cover Egypt’s
financing needs, the rest of which has been covered through disbursements under
the World Bank, the African Development Bank and a number of bilateral loans,
in addition to a recent issuance of Eurobonds in the amount of US$4 billion.
Following the floatation, the exchange rate displayed strong overshooting
(hitting its
lowest rate of 19.5 in December compared to a
pre-float fixed rate of 8.8), but has subsequently strengthened as foreign
investor confidence picked up and backlogs of USD orders to finance imports
eased. Net international reserves reached US$26.4 billion at-end January (6
months’ imports), up from a pre-floatation level of US$19 billion.
Currency weakening has led to a sharp rise in
inflation, which reached its highest recorded level of 30.2 percent in February
2017. Following the currency floatation, the CBE increased interest rates by
300 basis points (bringing the cumulative increase to 550 basis points since
March 2016) to absorb excess liquidity and curb inflation. High inflation has
contributed to the aggravation of social conditions, given the persistently
high unemployment (12.6 percent in 2016). The recently adopted reform program
involves efforts to improve social safety nets, notably through the partial
reallocation of freed up resources from reduced energy and food subsidies; the expansion
of cash transfer programs; and an increase in the general pension budget by 15
percent. Nonetheless, the mitigation of recent adverse
shocks will continue to depend on an
effective targeting mechanism.
Outlook
GDP is expected to grow by 3.9 percent in
FY17, and will be largely driven by public investment and to some extent net
exports. Private investment is expected to pick up only in the second half of
FY17, supported by enhanced competitiveness following the depreciation of the
currency and the gradual implementation of business climate reforms. Tourism is
also expected to steadily recover on the back of a weaker currency. Yet, growth
will likely be undermined by slower growth of private consumption, which is
expected to be negatively affected by record high inflation rates. Prudent
monetary policy is projected to bring inflation down over the forecast horizon
after the one off effects of depreciation, subsidy reforms, and the
introduction of VAT dissipate.
The fiscal deficit is projected to narrow to
10.5 percent in FY17, contingent on the government’s commitment and ability to
sustain its fiscal consolidation plan. With the implementation of the VAT, the
expected increase in the VAT rate to 14 percent from the current 13 percent,
and efforts to improve tax collection, revenues are expected to improve, while
expenditures will continue to be contained.
The current account deficit is expected to
start improving in FY17, supported by a positive exchange rate effect and an
increase in remittances transferred through formal channels.
In the near term high inflation is likely to
have negative short-term effects on households. Current efforts to improve
targeting in the food smart-card program,
currently used to protect the vulnerable population from food price shocks and
ensure a minimum level of food security, could provide additional resources for
an improved safety net.
Risks and challenges
Policy slippage and absence of real-sector
reforms may negatively impact the anticipated economic recovery. Deteriorating
security risks can adversely affect the recovery of the tourism sector,
traditionally a main source of revenue and foreign currency.
On the social front, resources from fuel
subsidy reform to be allocated to social programs may be lower than expected
due to currency depreciation, but efforts
should continue to improve the efficiency of the safety net system. Sustained
high unemployment may lower households’ ability to improve their living
conditions.
Key Economic
Indicators 2014 2015 2016* 2017* 2018 2019
Real GDP Growth (%) 2.9 4.4 4.3 3.9 4.6 5.3
Inflation Rate (%)
10.1 10.4 10.2 20.1 14.2 11.3
Current Account Balance (% of GDP) -0.9 -3.8 -6.1 -5.5
-4.4 -3.8
Fiscal Balance (% of GDP) -11.5 -11.0 -12.1 -10.5
-9.2 -7.3
* Forecast
FOREIGN EXCHANGE RATES
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Currency |
Unit
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Indian Rupees |
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US Dollar |
1 |
INR 65.04 |
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1 |
INR 92.28 |
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Euro |
1 |
INR 80.62 |
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EGP |
1 |
INR 3.69 |
Note :
Above are approximate rates obtained from sources believed to be correct
INFORMATION DETAILS
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Analysis Done by
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NIS |
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Report Prepared
by : |
TPT |
RATING EXPLANATIONS
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Credit Rating |
Explanation |
Rating Comments |
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A++ |
Minimum Risk |
Business dealings permissible with minimum
risk of default |
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A+ |
Low Risk |
Business dealings permissible with low
risk of default |
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A |
Acceptable Risk |
Business dealings permissible with
moderate risk of default |
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B |
Medium Risk |
Business dealings permissible on a regular
monitoring basis |
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C |
Medium High Risk |
Business dealings permissible preferably
on secured basis |
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D |
High Risk |
Business dealing not recommended or on
secured terms only |
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NB |
New Business |
No recommendation can be done due to
business in infancy stage |
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NT |
No Trace |
No recommendation can be done as the
business is not traceable |
NB is stated where there is insufficient information to facilitate rating. However, it is not to be considered as unfavourable.
This score serves as a reference to assess
SC’s credit risk and to set the amount of credit to be extended. It is
calculated from a composite of weighted scores obtained from each of the major
sections of this report. The assessed factors are as follows:
·
Financial
condition covering various ratios
·
Company
background and operations size
·
Promoters
/ Management background
·
Payment
record
·
Litigation
against the subject
·
Industry
scenario / competitor analysis
·
Supplier
/ Customer / Banker review (wherever available)
This report is issued at
your request without any risk and responsibility on the part of MIRA INFORM
PRIVATE LIMITED (MIPL) or its officials.