The companies under our coverage in the Food and Beverages sector all witnessed an outstanding quarter when it comes to enhanced profitability and margins, all backed by nearly the same trends with varying extents. These trends are: * Rising top-line levels backed by prices rather than volumes. * Lagging cost rises due to stocking-up of low-priced inventory. * Rise in GPMS backed by the price increases and lagging costs. * Higher EBITDA margins backed by enhanced gross profit...
Revenues supported by dairy and juice segments while bakery lags Revenues reached EGP1,747 mn (+55.8% YoY, +7.5% QoQ) mainly supported by higher selling prices as volumes witness a decline during the quarter. The dairy segment revenues climbed by 74.7% YoY and 11.3% QoQ to record EGP1,401mn, followed by the juice segment recording EGP110 mn with a rise of 45.1% YoY and 49% QoQ. The bakery segment was not as fortunate, recording revenues of EGP236 mn, a decline of 3.1% YoY and 19.3% QoQ. The b...
Cheese & bakery segment continue the rise sequentially and annually; Juice segment struggles DOMT achieved another solid quarter supported by the cheese and bakery segment. Total 4Q22 revenues recorded EGP1,625 mn, an incline of 49.5% YoY and 23.2% QoQ. The cheese segment has been increasing its contribution to top-line throughout the year, reaching 77.5% during 4Q22 (+10.8pps YoY, +5.3pps QoQ), recording EGP1,259 mn during the quarter (+73.6% YoY, +32.2% QoQ) the rise is backed by a 4% incre...
STEADY REVENUE GROWTH BACKED BY VOLUMES AND PRICES Revenues for the quarter climbed by 37.9% and 14.5% to record EGP1,319 mn. Total white cheese sales recorded EGP853 mn with a YoY volume increase of 2%, mozzarella and creamy sales recorded EGP110 mn. Mozzarella volumes climbed by 7% YoY and the creamy volumes by 4% YoY. Juice and milk segment recorded EGP116 mn with a drop in volumes by 10% YoY, while the bakery segment recorded EGP238 mn with a volume rise of 13.5%. 9M22 revenues recorded ...
JUICE SEGMENT ACHIEVING REMARKABLE GROWTH; PHASING OUT OF AGENTS FINALLY PAYING OFF DOMT continued its track of top-line growth, recording EGP1,152 mn for the quarter, compared to EGP670 mn in 2Q21 and EGP1,112 mn in 1Q22, a hike of 72% YoY and 2.7% QoQ. 1H22 revenues booked EGP2,274 mn, compared to EGP1,317 mn, a sharp incline of 72.6% Cheese segment remains the biggest contributor to revenues by 73% for 2Q22 by achieving revenues of EGP835 mn (+77.8% YoY, +3.9% QoQ). White cheese sales vol...
Click through for our F&B Sector update for 2022, in which we present: * Sector Outlook, Hopes, Fears, and Top Picks * Sector Valuation Table and Inter-company Comparison * Individual F&B Players: 2022 Fundamental Review 1. Edita (EFID)| The Flexibility Champion 2. Juhayna (JUFO)| Solidifying Position 3. Domty (DOMT)| Shifting Away from Norm 4. Obourland (OLFI)| Steady State Wins 5. Cairo Poultry (POUL)| Lacks Catalyst
VOLUMES SOARED ANNUALLY ON A WEAK BASE EFFECT; DRIVEN BY THE CHEESE AND BAKERY SEGMENT DOMT continues its track of top-line growth, recording EGP1,122 mn for the quarter, compared to EGP647 mn in 1Q21 and EGP1,087 mn in 4Q21, a hike of 73.4% YoY and 3.2% QoQ. The white cheese segment continues to be the major contributor, with 72% of total sales compared to 71% in 1Q21 and 64% in 4Q21, amounting to EGP804 mn (+74.5% YoY, +10.8% QoQ). White cheese volumes were able to record a 42% incline YoY,...
PRICE INCREASE AND NEW BAKERY LINE BOOSTS TOP-LINE DOMT recorded revenues of EGP1,087 mn for 4Q21, up 13.7% QoQ and 33.3% YoY. This rise was mainly price-supported, which was made possible by the phasing out of agents. The cheese segment acted as the major contributor to top-line with EGP725 mn, translating into 66.7% of total sales and growing by 11.7% QoQ and 25.9% YoY. While the bakery segment witnessed the highest growth across the three segments to reach EGP258 mn, a QoQ rise of 25% and ...
2021-2022 FINANCIAL TARGETS * 4Q21 witnessed exceptional top-line, expected to be within the range of EGP1.09 bn, a 33-34% rise YoY and 13-14% rise QoQ. It was supported by the rise in prices, which was made possible by the phasing out of agents. * NPM for 4Q21 was within the same range as 3Q21 of 4-5%. * Management witnessed a growth in their three core segments, white cheese, juice, and bakery, supported by the resumption of schools and purchasing power recovery during 2021. ...
Full Article at IIR has reaffirmed its Recommended rating for PIA after undertaking a review post the appointment of a new Portfolio Manager, Harding Loevner. The full report can be found on the IIR website. On 26 July 2021, Pengana International Equities Limited (PIA) announced a fully franked dividend of 1.35 cents per share for the June quarter. This represents an 8% increase on the March quarter dividend and takes the total dividends declared for FY21 of 5.1 cents per share, fully franked....
In this report we assess the average material prices for 2Q21 and depict the impact of pricing trends on the financial performance of the relevant listed equities in Egypt. Prices of raw materials in the food and beverages sector continued to normalize in 2Q21, except for prices of SMP and WMP. Accordingly, we expect a gradual recovery of margins to appear in the 3Q21 results of JUFO, EFID, DOMT and OLFIas price increases kick in and with seasonality of revenues. Most companies have an invent...
DECLINE IN REVENUE DUE TO PHASING OUT AGENTS AND CLOSURE OF SCHOOLS DOMT recorded revenues of EGP647 million for the quarter, down 20.7% QoQ and 13.1% YoY. This came lower than our expectations of EGP781 million as the company phased out all credit agents which resulted in lost revenues of about EGP90 million. DOMT believes that this will improve the profitability and flexibility of the company to increase prices and will also affect the cash flow starting from 3Q21. Since agents buy products...
Not out of the woods, with a challenging year ahead. We hold our views unchanged, cutting our Egypt food TPs by c10%, on average, factoring: i) an average 35bps cut in 2021e GPM, reflecting a higher-than-expected spur in commodity prices, and ii) slower-than-anticipated recovery in cheese volumes, amid the higher magnitude of price hikes. Beyond 2021e, improved affordability should allow for better cost passing ability (+3-5% price hikes over 2022-25e), offsetting any weakness in EGP, as the pro...
We present the 1Q21 material prices that are relevant to the petrochemical, consumer and industrial & materials sectors. In our 12-page report, we depict the impact of such changes on the financial performance of listed equities in Egypt. We also present the quarterly breakdown of each sector. Most companies have inventory of raw material that covers somewhere around 2-3 months. The increase in raw material costs is slowing down in 2Q21. Accordingly, we expect the pressure on margins to appe...
JUHAYNA (JUFO): FACING MANAGEMENT, COMPETITIVE AND RAW MATERIAL COST PRESSURES – ALL PRICED-IN * JUFO is currently trading at EGP5.29/share with 2021 EV/EBITDA multiple of 4.3x; which reflects a potential upside of 108% considering our fair value of EGP11.00/share. * JUFO is currently trading at FY21 P/E of 7.5x which is much lower than its 5-year average multiple of 28.4x and 3-year average multiple of 27.5x. * The current price levels of JUFO are the lowest since late 2016, follo...
2020 ON THE GROUND UPDATE * Strong quarter expected for 4Q20 with revenues of EGP816 million (up 26% YoY, 13% QoQ), which is a record high for the DOMT, driven by 1) The recovery in white cheese volumes coming from retail and wholesale channels, 2) Strong performance of the bakery segment with the back-to-school season in Mid-October, 3) Government sales volumes getting back on track. Total revenues for the year exceeded EGP3 billion, up 12% YoY. * DOMT was able to achieve and exceed in...
CHEESE SEGMENT SUFFERS; BAKERY SEGMENT SAVES TOPLINE DOMT recorded 3Q20 revenue of EGP724 million (+0.5% YoY and +1.9% QoQ), reflecting a drop in the cheese segment but the noticeable improvement in the bakery segment saved Domty's topline. The bakery segment witnessed an impressive YoY increase in sales despite the closure of schools and universities during the quarter and accounted for 18% of total revenues. MARGINS WEIGHED DOWN BY CHEESE SEGMENT Net profit and NPM recorded EGP41 million (...
Healthy topline performance despite many challenges * DOMT was able to achieve c.10% YoY increase in topline in 2Q20 despite witnessing slower sales from key demand pockets like tourism, restaurants, supply ministry and student-age demographics, in addition to slower traffic to small groceries and kiosks due to the curfew and weak demand during Ramadan season. * Cheese sales saw annual and sequential growth owing to the company's focus on the premium 'Domty plus' SKU, which grew by 35%...
Cheese segment leads annual and sequential top line growth DOMT recorded 2Q20 revenue of EGP711 million (+9.9% YoY but -4.6% QoQ), reflecting strong annual recovery in the cheese segment and higher capacity in the bakery segment. Sales of cheese (74% of topline) reacted positively to the boost in retail sales during 1H20, which compensated for the drop in sales to the ministry of supply over the same period. The cheese segment’s +4.1% YoY and +1.5% QoQ growth in topline was also supported by ....
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