Rameda reports higher revenues, lower bottom line in 1Q 2023: Tenth of Ramadan for Pharma Industries and Diagnostic Reagents (Rameda) net income dipped in 1Q 2023 as a solid rise in revenues failed to offset the impact of inflation and the depreciation of the EGP, it said in its earnings release (pdf) yesterday. Revenues increased 14% y-o-y to EGP 392 mn on the back of higher private sales, though net profit fell c.4% to EGP 68.7 mn due to rising costs and higher interest rates.

Price hikes, high-value sales support revenues: Rameda’s private sales grew 19% y-o-y to EGP 264.3 mn — accounting for more than half of the firm’s revenues during the quarter — as it hiked prices and focused sales efforts on higher-priced products. Export sales also recorded strong growth, climbing 35% y-o-y to EGP 35.7 mn on the back of higher sales to Libya. Toll manufacturing generated EGP 40.0 mn in revenues, up 59% y-o-y due to a rise in toll manufacturing prices and enhanced utilization of some of the company’s production lines.

More hikes on the way: Prices of products representing 77% of the company’s revenues were increased by an average 31% during the quarter, while those accounting for the remaining 23% were hiked by an average 55%, CEO Amr Morsy said, adding that the company is “looking forward to receiving increased approvals for price hikes over the course of the year.”

Revenues were offset by rising costs: Rameda’s cost base increased almost 26% y-o-y to EGP 213.2 mn due to higher raw material prices and wages, while its financing costs rose 40% on higher interest rates.

Looking ahead: “Over the course of the year, we will continue pivoting strategically and identifying avenues for growth as we navigate what’s expected to be a challenging year ahead in our home market of Egypt,” said Morsy. “The group is regularly exploring lucrative product launches and acquisition opportunities, particularly those under free pricing frameworks, as well as other business ventures beyond our local borders to further diversify our revenue streams and strengthen the resilience of our business model.”

EKH EARNINGS, REVENUES DOWN-

EKH income falls on lower commodity prices, weak EGP: Egypt Kuwait Holding’s (EKH) net income attributable to shareholders fell 16% y-o-y to USD 60 mn in 1Q 2023, according to itsearnings release (pdf). The downturn came on the back of a drop in urea export prices and the depreciation of the EGP, which saw the investment company’s revenues fall 23% y-o-y to USD 224.9 mn during the quarter.

Top-line growth was hampered by weaker urea prices: Revenues from the company’s fertilizer and petrochemical segment fell 11% to USD 135.2 mn during the quarter due to the normalization of urea prices, which fell 32% y-o-y to an average of USD 467 per ton. AlexFert — in which EKH recently increased its indirect ownership — saw revenues retreat 38% y-o-y to USD 77.2 mn.

The impact was partially cushioned by petchem subsidiary Sprea Misr, whose revenues grew 10% y-o-y to USD 58.1 mn after the company hiked selling prices, increased sales volumes across most product lines, and upped the capacity of newly-commissioned production lines. EKH’s fertilizers and petrochemicals segment — composed solely of Sprea and Alex Fert — contributed 60% of revenues during the quarter.

What they said: “We are working diligently on enhancing our future growth prospects and are proud to see that the positive results from our recently commissioned investments have already started to materialize,” said CEO Sherif El Zayat. “We are looking forward to unlocking a significant stream of USD denominated revenue and cash flow following our acquisition of an additional 15% in Bawabet Al Kuwait (“BKH”), effectively increasing our direct and indirect stake in AlexFert.”

ORIENTAL WEAVERS PROFITS RISE-

Oriental Weavers profits up 74% on higher revenues, China exit: Oriental Weavers’ net income attributable surged 74% y-o-y to EGP 411 mn in 1Q 2023 on the back of higher revenues and the EGP 277 mn sales proceeds from its exit from China, according to its earningsrelease(pdf). The carpet maker’s revenues jumped 27% y-o-y to EGP 4.1 bn during the quarter.

In detail: Local revenues, which accounted for 37% of the firm’s total revenues during the quarter, rose 39% y-o-y to EGP 1.5 bn, supported by the company’s decision to raise prices. Woven products saw the sharpest increase in sales, which rose 44% y-o-y due to rising sales and a 30% increase in prices. Export revenues, meanwhile, climbed 21% y-o-y to EGP 2.6 bn, driven by the devaluation of the EGP. Sales in the GCC region recorded the strongest growth, rising 60% y-o-y.

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