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Tuesday, 12 May 2020

Earnings watch: Edita profit falls by 44% in 1Q2020; Cleopatra Hospitals on track for 50% profit gain

EARNINGS WATCH- Edita quarterly profit hit by covid-19: The covid-19 pandemic sapped Edita’s profitability during 1Q2020, with the snack food maker reporting yesterday (pdf) a 44% y-o-y drop in net profit. The company announced it had generated EGP 64.4 mn in profits during the three-month period, down substantially from EGP 114.3 mn in the same period last year. Revenues slipped 1.8% y-o-y to EGP 964.1 mn and fell 11% from the EGP 1.1 bn reported in 4Q2019. Edita blamed “slower snack food market activity” caused in large part by the covid-19 pandemic.

The company is pushing ahead with its long-term growth strategy despite short-term covid hit: “Like all businesses across Egypt, Edita’s operations have been impacted by covid-19, however, the company is standing on solid ground with a healthy liquidity position,” the company said. “Overall, Edita’s long-term growth strategy remains intact and is supported by solid fundamentals that go beyond the current crisis. … Edita’s long-term strategy in 2020 remains intact and will focus on driving sustainable revenue growth and utilizing its strong foundations for expansion.” Read the full earnings release here (pdf).

Cleopatra Hospitals on track to report 50%+ profit growth in 1Q2020: Cleopatra Hospitals Group is set to record over 50% y-o-y growth in net profit for the first quarter of this year, the company said in a trading update (pdf) that cited unaudited figures. The company said it expects to report a more than 22% rise in revenues during the quarter to more than EGP 500 mn, supported by top-line growth of 25-30% in the first two months of the year, driven by both its established hospitals and accelerated growth from recently added facilities. The impact of covid-19 “on operations remains limited during the period,” the company said. “Supported by a strong balance sheet and liquidity position, and the defensive nature of Egypt’s healthcare industry, the company is well-prepared to overcome any potential challenges.”

Cleopatra has also rolled out home consultations and telemedicine services as some patients stayed home amid fears of contracting covid-19. The company is also stepping up risk management and contingency planning across its footprint.

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