Egypt’s Suez Canal Authority forecasts significant boost in revenue for fiscal year 2016/2017

Published July 21st, 2016 - 04:00 GMT
Built 146 years ago, the Suez Canal is one of the world's most heavily used shipping lanes. (AFP/File)
Built 146 years ago, the Suez Canal is one of the world's most heavily used shipping lanes. (AFP/File)

Egypt's Suez Canal Authority said on Wednesday it expects its revenues to increase by EGP 7.9 billion in the fiscal year 2016/2017 to reach EGP 56.4 billion.

According to the Suez Canal Authority's budget law published in the state's official newspaper Wednesday, the canal made revenues of EGP 48.5 billion in the past fiscal year.

Monthly revenues have tumbled at the start of this year in January and February before climbing up again in March by 11.8 per cent compared to the month before, reaching EGP 3.477 billion.

The authority also expects its costs and expenses to increase by 30 per cent to reach EGP 32 billion compared to EGP 24.6 billion in fiscal year 2015/2016. Meanwhile, it predicted its net profit to reach EGP 24.3 billion in the current fiscal year compared to EGP 23.9 billion in 2015/2016.

It was customary of the Suez Canal Authority to publish its revenue figures in dollar terms, however it stopped doing so since the start of 2016. This made monthly comparisons hard to assess especially after the central bank devalued the pound in March, Reuters reported.

Egypt's central bank devalued the pound to 8.85 per dollar from 7.73 on March 14 and announced it would pursue a more flexible exchange rate. It later strengthened the pound to 8.78 per dollar.

The canal is one of Egypt's main sources of foreign currency. Egypt has been struggling to revive its economy since a 2011 uprising scared away tourists and foreign investors, other main sources of hard currency.

Egypt's President Abdel Fattah al-Sisi inaugurated an $8 billion expansion of the Suez Canal last August that aimed to double daily traffic and increase annual revenue to more than $13 billion by 2023.

In a move to boost investment and trade, the president issued a decree launching an economic zone associated with the Suez Canal that includes six ports.

The Suez Canal Economic Zone Authority forecasted a boost in revenues during 2016/2017 to reach EGP 1.3 billion compared to EGP 10 million in the past year and a net profit of around EGP 460 million compared to zero profit in the previous year.

The Economic Zone Authority also valued its expenses for 2016/2017 at EGP 840 million compared to EGP 10 million in the past year.


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