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Egyptian cheese maker Arabian Food Industries Company (Domty) saw its net profit dip by 3.8 percent quarter-on-quarter due to currency losses caused by the devaluation of the pound and rising global inflation.
Net profit for the first three months of the year reached 50.5 million pounds ($2.7 million), down from 52.5 million in the fourth quarter of 2021, but an improvement from the previous year’s loss of 3.4 million pounds.
“The (Q1 2022) bottom line was hit by forex losses of about EGP12 million resulting from the devaluation of the Egyptian pound that occurred by the end of March,” the company said in a statement on the London Stock Exchange (LSEG).
“Our raw material costs are (also) suffering from the global inflation… We are doing the best we can to pass on price increases to the end consumers gradually in order not to affect the demand negatively,” said the Egypt-headquartered company, which manufactures a range of branded white and processed cheese and juice products.
Non-oil business conditions in Egypt continued to deteriorate in May as rising price pressures continued to weigh on spending, according to the latest S&P Global Egypt Purchasing Managers’ Index. The country’s PMI stood at 47.0 in May, an improvement from April’s 46.9, but still below the 50.0 threshold.
Revenues
Despite pressures from currency devaluation and global inflation, Domty noted that its revenues still rose 73 percent year-on-year, driven by higher sales in dairy, bakery and juice segments.
Sandwich and white cheese sales volumes jumped by 53.2 percent and 42 percent, respectively, while juice and mozzarella sales went up by 26.5 percent and 11 percent.
The company said it is “pleased” with the results, citing that its profits have been maintained above 50 million pounds for the third quarter in a row.
(Reporting by Cleofe Maceda; editing by Seban Scaria)
