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Monday, 28 November 2016

LG Egypt faced a challenging 2016, lost nearly USD 150 mn -CEO

LG Egypt had a dismal 2016, CEO says: LG Egypt incurred losses of nearly USD 150 mn in 2016, CEO Don Kwack told Al Mal. The company was growing at a clip of 10% per year until 2H2015, but this flattened after, falling to -30% y-o-y by the start of 2016, Kwack says, blaming the FX rate fluctuations. The plant is operating at 55% capacity and the prospect of expanding beyond producing flat screen TVs to washing machines and AC units is contingent on hard currency availability. He says LG Egypt is still struggling to repatriate profits as although CBE regulations allow for it, obtaining USD liquidity is still a challenge, but the company has no plans to exit Egypt. The float will impact all sale prices similarly, Kwack explained; finished products that were imported will hardly see any price increases because they were imported using exchange rates of “EGP 16-17” per USD 1, but others, manufactured domestically, could see their prices nearly double and their inputs we previously imported at the official FX rate of EGP 8.8 per USD 1, he says. LG has invested USD 180 mn in Egypt.

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