Bottom line back in the green: Local steel manufacturer Ezz Steel posted a net income of EGP 1.3 bn in 1Q 2024, up from a net loss of some EGP 2.5 bn in the same three-month period last year, according to a financial statement (pdf) from the company.

Revenues are also up: The company’s EGP-denominated revenues were up 80.0% y-o-y to EGP 50.2 bn in the quarter. However, in USD terms, revenues recorded a 15.7% y-o-y increase to USD 1.0 bn as steel on the back of exchange rate fluctuations following the devaluation of the pound after the float of the EGP at the beginning of March.

Exports still on the rise: Exports were up 43.9% y-o-y in 1Q 2024 to USD 410, driven by hot rolled coil steel exports that were up 101.5% y-o-y and accounted for 66.8% of all exports.

Remember: Ezz Steel closed 2023 in the red, posting a net loss of of EGP 717 mn for the year despite a 70% y-o-y jump in revenues, as the FX crisis that persisted until earlier this year contributed to FX exchange losses for the steel maker and domestic demand dropped. In the first quarter of 2024, the company’s FX losses amounted to only EGP 255 mn, down from (pdf) EGP 8.9 bn in 1Q 2023.

Looking ahead: “In the medium term, the successful flotation of the Egyptian pound on 6 March, 2024, the new economic measures adopted, and the implementation of the new building legislations are still expected to spur growth and increase consumption. However, on the short term, lack of liquidity and higher costs due to inflation act as a drag on demand,” the company said in comments on its release on the LSE.

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