Edita re­struc­tures prod­uct port­fo­lio to re­cover sales in 2017

Price in­creases of an av­er­age of 91% se­cure the com­pany prof­its de­spite sharp drop in sales

The Daily News Egypt - - Business | Stock Market - By Mah­moud Hashem

Edita Food In­dus­tries plans to re­cover the pace of sales growth this year and open new ex­port mar­kets. Menna Shams El Din, in­vestor re­la­tions and busi­ness de­vel­op­ment man­ager at Edita, said that the com­pany started im­ple­ment­ing a strat­egy to re­struc­ture its prod­ucts port­fo­lio last De­cem­ber, dur­ing which it aims to ex­pand its sales in or­der to re­store the com­pany’s sales vol­ume.

She pointed to the log­i­cal pres­sures that sale quan­ti­ties are sub­jected to un­der the in­fla­tion­ary pres­sures that af­fect the pur­chas­ing power of the con­sumer, in ad­di­tion to the com­pany rais­ing its prices by 91% on av­er­age to main­tain profit mar­gins.

Hani Berzi, chair­per­son of Edita, said that the com­pany has be­come more ac­com­mo­dat­ing to mar­ket changes and adapt­ing to the on­go­ing eco­nomic re­forms. Dur­ing the first quar­ter of 2017, Edita’s prof­its rose 22% year-on-year to EGP 47.83m com­pared to EGP 39.16m in the same pe­riod last year, af­ter rev­enues rose 24% to EGP 642m, com­pared to EGP 518.09m in the com­pa­ra­ble quar­ter of 2016. The com­pany’s sales vol­ume de­clined dur­ing the first quar­ter of 2017 by 37.3% to 15,600 tonnes com­pared to 24,900 tonnes in 2016, mean­ing the com­pany achieved higher prof­its through its dra­matic price in­creases de­spite a drop in sales vol­ume.

In a dif­fer­ent con­text, Shams El Din said that the com­pany is con­sid­er­ing en­ter­ing new mar­kets in Nige­ria, Dji­bouti, and Ethiopia for ex­port this year un­der the com­pany’s plan to open new ex­port mar­kets in or­der to raise the ex­port pro­ceeds, which cur­rently ac­count for 7% of the com­pany’s sheer sales. She added that the com­pany plans to ex­pand its ex­ports to Mid­dle Eastern mar­kets, par­tic­u­larly Pales­tine, Iraq, Le­banon, Jor­dan, and Saudi Ara­bia. Edita shares are trad­ing at EGP 19.4 per share.The com­pany’s mar­ket value is stand­ing at EGP 14.03bn.

A re­search pa­per is­sued by Pharos Hold­ing said that Edita plans to in­crease its direct dis­tri­bu­tion of prod­ucts to in­crease mar­ket share, not­ing that re­tail mer­chants will ac­count for 75% of prod­ucts, while whole­saler will only ob­tain 25% of the com­pany’s pro­duc­tion in 2021. The com­pany plans to start op­er­at­ing the first pro­duc­tion lines of its new plant E08 in the Po­laris Al Zamil In­dus­trial Park (PZIP) dur­ing the sec­ond half of 2017.Ad­di­tion­ally, the com­pany also con­tracted for two more pro­duc­tion lines in prepa­ra­tion for in­stal­la­tion and op­er­a­tion in the new plant dur­ing the sec­ond half of 2017 to pro­duce wafer and cake.

In May 2016, Edita bought a 55,500-square-me­tre plot at the PZIP at a cost of EGP 54m.The com­pany also in­vested EGP 160m in the con­struc­tions of the first phase of the plant there.

Edita has the largest mar­ket share of Egypt’s snacks mar­ket. Edita’s plants re­ceive 77% of the raw ma­te­ri­als from lo­cal sup­pli­ers, with the re­main­der from other sup­pli­ers in Amer­ica, Europe, and the Mid­dle East, ac­cord­ing to the com­pany’s web­site.

THE COM­PANY’S SALES VOL­UME DE­CLINED DUR­ING THE FIRST QUAR­TER OF 2017 BY 37.3%

The chair­per­son of Edita Food In­dus­tries, Hani Berzi

Newspapers in English

Newspapers from Egypt

© PressReader. All rights reserved.