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Wednesday, 11 November 2020

Earnings watch: Rameda, Edita, Sarwa, CI Capital, Amer Group

EARNINGS WATCH- Rameda profits soar in 3Q2020: Rameda Pharma reported 134% bottom line growth during 3Q2020, with net profits rising to EGP 24.9 mn from EGP 10.7 mn last year, according to a company earnings release (pdf). Revenues remained flat during the three-month period, coming in at EGP 235.4 mn, marginally higher than EGP 235.1 mn reported in 3Q2019. Net profit rose by 117% y-o-y during 9M2020 to EGP 68.7 mn while revenues increased by 9% to EGP 627.9 mn despite the volume of private sales falling 22.4%. The easing of covid-19 restrictions helped to drive Rameda’s recovery, although export volumes still dropped 14.1% y-o-y during the first nine months of the year as a result of the general slowdown in global trade from the pandemic, said CEO Amr Morsy.

The 4Q outlook: Rameda’s outlook for the rest of 2020 “looks promising” as consumer behavior continues to normalize and covid-19 restrictions are eased, said Morsy. The company expects to increase production of freeze-dried products and hopes to up its participation in public sector contracts following improvements made to the Unified Medical Procurement Authority’s digital tender platform.

Edita’s net profit rose 0.8% to EGP 107.5 mn in 3Q2020, from EGP 106.6 mn last year, according to the company’s earnings release (pdf) on Tuesday. The snack food producer’s revenues slipped 2.7% during the quarter to EGP 1.06 bn from EGP 1.09 bn in 3Q2019. Declines during the quarter were mitigated by the company’s decision to raise prices, which increased by 10.2% on average across its product range, the statement said.

The company is staying the course on the strategy outlined at the beginning of the year and is focusing on diversifying sales revenue by expanding into new segments. It is looking to increase its share in the biscuits market in the near-term by launching new products, and will increase its range of more expensive products.

Sarwa’s net profit eased more than 30% to EGP 194 mn in the first nine months of 2020 from EGP 280 mn in the same period last year, the company said in a press statement (pdf) yesterday. Profit for the period would have been down just 2% in the period setting aside the company’s new insurance business and adjusting for ESOP amortization, the new tax treatment of interest income from t-bills, and expenses incurred from applying the IFRS 9 reporting standard. Sarwa’s total financing portfolio grew by 14% y-o-y to reach EGP 7.3 bn, driven by a 24% increase in auto financing and a recovery in consumer goods, which had declined 14% during the lockdown in 2Q. Gross premiums written by the company’s insurance ventures were up by 264% to EGP 202 mn during the period. Operating costs, meanwhile, rose 41% as the company ramped up investment in expanding its branch count, AI systems, digital platforms for clients and brokers, and marketing.

Looking ahead: “We have also prepared fully for the application of new accounting and regulatory rules, and with an array of new funding sources being finalized, our strong balance sheet further supports the strong growth potential ahead,” Sarwa said in a statement to Enterprise.

CI Capital reported a 15% drop in net profit after tax and minority interest in 9M2020, closing the period with profits of EGP 287 mn as revenues declined 11% to EGP 1.6 bn compared with the same period last year, according the company’s earnings release (pdf).

Amer Group’s net profits fell to EGP 9.98 mn in 9M2020 from EGP 39.36 mn during the same period last year, according to an EGX disclosure (pdf). Poor performance in 9M2020 came as the group’s hotels, restaurants and mall businesses were hit by reduced footfall thanks to covid-19, according to a statement (pdf).

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