Good afternoon, ladies and gentlemen. We’re getting over the midweek hump as earnings season here in Omm El Donia is going strong.
THE BIG STORY TODAY
There’s a downpour of earnings today as the 2Q season draws to a close. Among the companies out with earnings: Edita, Rameda Pharma, E-Finance, Contact Financial, and Orascom Development.
^^ We’ll have the full breakdown of all these companies’ results in tomorrow’s edition of EnterpriseAM.
THE BIG STORY ABROAD
Picking up where we left off this morning, former US President Donald Trump has officially been indicted for the fourth time this year for allegedly attempting to overturn his loss in Georgia in the 2020 presidential election. A grand jury charged 19 people in total, including Rudy Giuliani and former chief of staff Mark Meadows. The story is on the front pages of the Financial Times, the Wall Street Journal, and Reuters this afternoon.
** CATCH UP QUICK on the top stories from today’s EnterpriseAM:
The UAE is supplying us with wheat: Egypt has signed a USD 500 mn agreement to purchase wheat from Emirati agribusiness Al Dahra.
Operation Attract FX just expanded: State institutions are inviting Egyptian citizens living abroad to purchase new USD-denominated pension certificates as the government continues to try and attract new hard currency inflows and ease the deepening FX crunch.
Central bank completes T-bill auction: The Central Bank of Egypt (CBE) sold EUR 626.4 mn in one-year EUR-denominated T-bills in an auction yesterday.
MARK YOUR CALENDARS- The Enterprise Finance Forum is taking place on 18-19 September at the St. Regis Hotel in Cairo. This flagship forum is the latest in our must-attend series of invitation-only, C-suite-level gatherings that allow senior members of our community to openly and frankly discuss critical issues in key sectors of the economy.
TAP OR CLICK HERE if you want to express interest in attending. We’ll be sending out the first batch of invitations soon.
MISSED OUR PREVIOUS FORUMS? The EnterprisePodcast has you covered : The Enterprise Podcast’s forum series has been bringing you audio recordings of what was said on stage at the Enterprise Exports and FDI Forum and Enterprise Climate Forum.
IN THIS WEEK’S EPISODE- It’s the very first panel of the Enterprise Climate Forum: Egypt brought home major victories from COP27, signing framework agreements for about USD 85 bn worth of green hydrogen projects, and announcing more than USD 10 bn in funding for the Nexus for Food, Water and Energy (NWFE) program. While we have a long way to go before much of the wins from COP27 will be tangible to the private sector, the opportunities in green hydrogen and NWFE are “now.” Our panelists helped explain how these two can be made actionable. We were joined by Jorgo Chatzimarkakis, CEO of Hydrogen Europe, Khalid Hamza, Director and head of Egypt at the European Bank for Reconstruction and Development, and Khaled Naguib, CEO of Hydrogen Egypt.
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We’re ordering takeout more than we used to: Where takeout used to be a weekly or even monthly treat, it seems to now play a more permanent fixture in our daily meal intake. Sales from fast-food and quick-serve restaurants in the US saw an average 5.75% y-o-y increase in 2Q 2023, reports The Washington Post, citing data collected from the earnings reports of 43 major restaurant chains. That’s compared to a 2.38% increase in sales at fine-dining and sit-down restaurants.
What’s driving growth? Inflation and a wealth of options: While analysts are optimistic that US inflation has peaked, grocery prices remain high as a knock-on effect from the war in Ukraine and residual supply-chain disruptions from the pandemic. Low-income families in the US are also left with reduced purchasing power, after the government rolled back its covid-era enhanced food stamps benefits for groceries. For a family of four, for example, a takeaway pizza is a more affordable option than a healthier home cooked meal. That said, there’s been an uptick in healthier fast-food options, with chains that sell salads now the second fastest-growing restaurant type in the US currently, as “better for you” options attempt to appeal to a growing population of Gen Z shoppers that lean towards vegetarianism.
Plus, there’s a diminishing interest in human interaction: Data indicates that on-premise dining fell 14% between February 2020 and April 2023, while during the same period off-premise dining rose 14%, with drive-thru up 12% and delivery 5%. It might not necessarily be that we no longer want to eat en masse, but rather that many popular fast-food chains no longer provide dining spaces and that the shift away from WFH has brought back desk lunches, WaPo says.
Are students at risk of getting the short straw with inaccurate AI detection tools? With reports of AI bots passing law exams and cheating high school students using tools like ChatGPT, education institutions have also been increasingly relying on AI detection tools — although these tools run the risk of falsely accusing students of cheating, the Washington Post says. ChatGPT’s parent company, OpenAI, recently shut down its detection software due to serious reliability concerns, while AI detection program GPTZero has also proven faulty after claiming the US Constitution was the product of AI. Still, AI detection tools are still used in schools and universities, the WaPo says
There’s plenty of recourse for students (or working adults) to avoid falling into trouble: Educators and AI scientists stress that AI tools should not be taken as the final word, and that students accused of cheating using AI (particularly when that accusation comes from an AI tool) can fight back against these claims. AI detection tools may appear scientific, but they are prone to false positives, especially for nonnative speakers, these experts say. Teachers and bosses should also be exercising their judgment and knowledge of the person’s work before leveling accusations, they note. “Our guidance is, and has been, that there is no substitute for knowing a student, knowing their writing style and background,” said Annie Cechitelli, Turnitin chief product officer.
Korean TV is the gift that keeps on giving: Netflix show Behind Your Touch, which recently became available on the streaming platform, follows the story of a young veterinarian, Bong Ye-bun, who gains unexpected supernatural abilities after being exposed to a meteor shower. Her gift? Psychic powers when touching people’s — and pets’ — behinds, which gets her in a fair amount of trouble. When, through a string of coincidences, she meets young Moon Jang-yeol, a young detective down on his luck, the pair decide to combine their set of skills to solve crime, a feat that promises to be difficult in the sleepy small town that is Mujin, Chungjeong-do. Aside from the endearing insights we get into animals’ minds, like an old dog who feels guilty when seeing his owner leave for work then return and share his food, the comedy is light, entertaining and a refreshing take on romcoms.
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⚽ Spain booked its spot in the 2023 Women’s World Cup finals after defeating Sweden 2-1 in a thrilling match earlier today. Despite the Spaniards’ dominance, the match saw no goals before the 81st minute, after which three goals were scored within just eight minutes, with the tides of chance turning between the two teams in a rollercoaster of emotions. We’ll find out who Spain will face off against in the final after Australia and England play in the semi-final tomorrow at 1pm, with the losing team from tomorrow’s match set to compete against Sweden for third place.
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? OUT AND ABOUT- (all times CLT)
El Sawy CultureWheel’s annual book fair is on its third day today and will continue until Friday, 18 August. The fair will include different events which include discussions, book signings and even cultural competitions.
This weekend’s lineup at the New Alamein Festival:
Singer Hakim will perform this Thursday, 17 August — ticketsare available on Tazkarti.
Mohamed Mohsen and maestro Ahmed Oweida will share a stage this Thursday, while actor Ali Quandil will also perform a standup comedy show. Tickets for both performances are available on Tazkarti.
Get some more laughs over the weekend with The Elite Standup on Friday, 25 August at Paragon Beach Hub, New Alamein. The show will start at 7pm. Tickets are available on Tazkarti.
Akher Zafir is back again: The Jordanian rock band is back in Egypt to hold a performance on Saturday, 19 Augustin Bibliotheca Alexandrina as a part of the summer carnival. You can reserve your tickets through their website. They will also be performing in Cairo at ElSawy Culturewheel in Zamalek on Monday, 21 August at 8pm, with tickets available for purchase from the venue’s website.
Russ is coming to New Alamein. American pop star Russ will be performing as part of the New Alamein Festival on Friday, 25 August. Tickets are available on Tazkarti.
Get ready for a fancy event with exquisite music at the Omar Khairat concert at Royal Maxim Palace Kempinski on Tuesday, 22 August. The concert will start at 6:30pm until 10:30pm. Get your tickets on TicketsMall.
DJs Kygo , Tiësto, Kungs and Frank Walker are performing on Saturday, 28 October at the Giza Pyramids. The concert will be part of the next edition of the four-day Palm Tree Music Festival (PTMF) which will be held from Thursday, 26 October until Sunday, 29 October.
Get your running shoes ready for the 2023 edition of the El Gouna Half Marathon, which is scheduled to take place on Saturday, 11 November. You can sign up for the marathon from here — and catch the lowest registration price with the early bird special which starts today and ends Saturday, 30 September.
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? UNDER THE LAMPLIGHT-
If you liked Rules of Civility and A Gentleman in Moscow , you’ll enjoy Amor Towles’ third novel. The Lincoln Highway, a New York Times bestseller, is a coming of age novel about Emmett Watson after he is freed from a juvenile work farm where he was imprisoned for over a year for involuntary manslaughter. Upon his release, Emmett has to come to terms with the harsh realities ahead: He is now an orphan who is left to fend for himself and his younger brother after the brothers lost their family farm to the bank. But his plans are thwarted when he realizes that he and Billy are not alone. They are joined by two of Emmett’s former companions from the Salina Juvenile Detention Center, Duchess and Woolly, who decide to alter the Watsons’ plan by heading to New York instead of California. Through the 10-day journey, the children go through a series of misadventures that teach them an invaluable number of lessons the hard way.
Oriental Weavers reported EGP 290 mn in attributable net income in 2Q 2023, up 37% y-o-y, according to the company’s earnings release (pdf). The company’s revenues rose 31% y-o-y to EGP 4.3 bn during the quarter. Net income in 1H 2023 climbed 56% y-o-y to EGP 700 mn, with revenues rising 29% y-o-y to EGP 8.4 bn.
Sidi Kerir Petrochemicals’ net income after tax rose 210% y-o-y to EGP 678.2 mn in 2Q 2023, according to the company’s financial statements (pdf). Revenues for the quarter were up 67% y-o-y to EGP 2.9 bn. The company’s bottomline rose 74% y-o-y EGP 1.2 bn in 1H 2023, while revenues came in at EGP 6.5 bn, up 69% y-o-y.
MARKET ROUNDUP-
The EGX30 rose 0.4% at today’s close on turnover of EGP 2.35 bn (17.1% above the 90-day average). Foreign investors were net sellers. The index is up 23.0% YTD.
In the green: Sidpec (+4.1%), Credit Agricole (+3.7%) and Orascom Development (+2.9%).
In the red: Ezz Steel (-3.7%), Heliopolis Housing (-2.1%) and Beltone Financial Holding (-1.6%).
OUR FOUNDER OF THE WEEK– Every Tuesday, Founder of the Week looks at how a successful member of Egypt’s startup community got their big break, asks about their experiences running a business, and gets their advice for budding entrepreneurs. Speaking to us this week is Farah El Ashiry (LinkedIn), founder of Fufa.
My name is Farah El Ashiry and I’m the founder of Fufa, a clothing brand offering uniquely designed, locally made, high-quality garments with a drive to showcase Egyptian culture. I studied Integrated Marketing Communication at the American University in Cairo, although I always wanted to study fashion. My family wasn’t keen on me traveling abroad to study, so my dad enrolled me in a full-time, three-year program at the Italian Fashion Academy in Dokki, which I completed in parallel with my full-time bachelor’s degree at AUC.
Before I graduated, I started my first business — although I didn’t consider it a business at the time, and treated it more as more of a project. The business, which I called Bint El Balad, initially started making printed cushions and garments before shifting to evening wear and customized dresses for a few clients. I then began transitioning to readymade garments, starting with a small collection I called Petite Bourgeoisie. Later on, my grandmother gave me fabrics she had from Tokyo that were vibrant and colorful, which I used to make the first Fufa beach collection. It started with a 42-piece collection for the summer, which I launched in August 2014. The first batch got sold right away, so I made another batch, which I also sold out quickly, and that was the starting point. From there, I gradually started releasing casual wear and fall pieces that were bohemian-inspired and unique.
My pieces proved to be special because most fashion or clothing businesses starting out at the same time were focused on evening wear and soiree gowns — beach wear wasn’t very available from local businesses in Egypt, so my products were niche. I gave myself six months to see where things would go and whether it was feasible to continue as a business. If it didn’t work out, I planned to get a job in the marketing industry.
I never really planned on starting my own business — I initially planned to get experience at a fashion house or a production house after graduating, but when I found that there was huge demand for what I was doing, the momentum was too much to just stop and go work elsewhere. Four months after releasing our first collection at Fufa, I doubled down: I bought a workshop, I bought my first industrial sewing machine, and hired a dedicated seamstress, and decided to keep going and gauge demand as we grew.
For the longest time — maybe for years — I felt like it was just a project, not a business, because it was a one (wo)man show [laughs]. I only had the seamstress I hired, along with a tailor who had been teaching me how to tailor and alter garments since I was young. There were a lot of things that I learned on the fly and as the business grew, like how to set up an online presence, the details of order fulfillment and packaging, merchandising, photoshoots, how to approach stores to display my products — it’s a long list of things that go into building a strong business. I dedicated time for myself to do several internships to better understand these things, including at factories producing for Zara and Stradivarius, and businesses outside of Egypt that produce swimwear, as well as taking courses on inspiration building for fashion brands. Studying at the Italian Fashion Academy gave me the technical skills I needed, but the business side wasn’t part of my studies.
Fufa has come a long way from where it started. I initially started making my products with fabrics I got from my grandmother or sourced from the market, but then began moving more towards using unique fabrics that tell a story. I needed to learn the ins and outs of making textiles and textile patterns, and I remember my grandfather telling me to take a tour around Egypt to get inspiration from different areas in the country. We now have our own textile printing line and we create collections based on destinations around the country, such as Fayoum, El Gouna, and Nubia.
I feel like there’s a lot that I gave up as I was building my business — the challenges sometimes feel endless. It’s exciting, but there are lots of challenges. Every step or component of the business, such as the retail component or going online, has challenges or problems to iron out. Because I learned things as I went along, rather than learning the business side of things, it sometimes feels like I gave up a lot of time because everything needed patience. Still, if you were to ask me whether I would prefer a 9-5 or working on my business, I would choose Fufa any day. It’s a business, but it also still feels like a hobby because I’m passionate about and love what I do.
The best part of my job is that I love being in a creative industry where I can create something from scratch. After launching collections showcasing different destinations in Egypt, we realized our impact not only on the touristic side of these areas in the country, but also on their local populations. We work with so many women breadwinners and have a dedicated production line employing women who can’t necessarily venture out of their homes and work at a factory, so we actually bring sewing machines to their homes so that they can have an income. I also love that our brand is focused on sustainability and that we have the chance to work with lots of NGOs in Egypt to support sustainability.
The worst part of the job is that being both the founder and creative director means I have to attend to business matters and decisions that I don’t necessarily want to handle — everything from the legal side, to tax and finance. They’re foreign concepts that I’m not fond of or interested in per se, but it comes with the territory of being a business owner and I have to be part of these decisions. I would much rather only focus on the creative side — designing the fabrics, directing photoshoots, that kind of stuff — but there’s actually a great extent to which they go hand in hand: Understanding the business aspect of things actually helps guide my creative decisions.
We have a lot of growth plans for Fufa, including setting up new branches of our brick and mortar store — particularly expanding our concept store, which we set up in Diplo in Sahel to showcase products from Egyptian brands that share a similar ethos with Fufa. We also want to expand internationally, starting with beach destinations such as Greece, Spain, and Italy. We also have our eyes on other markets such as Australia and the US, where we actually get a lot of international orders, and we want to cater to these customers.
I have a big support network of mentors in different industries that I rely on for advice for my business. For each part of the business, I know the go-to people I feel comfortable talking to and who have been with me on the journey since the beginning, so they know what the best next step is.
The startup scene in Egypt has been really booming since I started Fufa, and there are so many businesses that I think are doing a great job in every industry. One of my mentors and close friends is Hossam Taher, who founded Orcas, so seeing him grow his business has given me a lot of inspiration for my own journey.
If I wasn’t in the fashion scene or industry, I would probably be doing something in the tourism industry. Egypt has so much to offer and show beyond the historic tourist attractions, and I would love to actively participate in showcasing these attractions and our unique destinations in a special way.