Cairo – Mubasher: NBK Capital, the investment arm of Kuwait’s NBK, said in a report Monday that Egypt’s rug manufacturer Oriental Weavers continues to be challenged in terms of pricing and this is leading to depressed margins (as raw material costs are subsiding).
“In terms of the bottom line loss, we do not read much into that as it heavily affected by one-offs,” it added.
The company’s sales increased by 1% YoY in the third quarter of 2015 to EGP 1.5 billion, which is 2% below NBK Capital’s forecast.
Local sales increased by 9% YoY to EGP 685 million, while export sales dropped by 6% YoY to EGP 834 million. Export sales continued to be challenged with the Euro devaluation against the USD, downward revisions in selling prices as well as reduced exposure to a key customer, according to NBK Capital.
Gross profit declined by 5% YoY in 3Q2015 to EGP 158 million, with the GPM contracting by around 70 bps to 10.4%.
Financial results for the first nine months of 2015 showed a drop in profit by 15% year-on-year to EGP 273.26 million from EGP 322.2 million.
