Food and beverage sector
Food and beverages are among the most prominent defensive sectors that are able to adapt to all changes and fluctuations, whether economic or political, supported by high purchasing power in the local market, amid the success of food companies in recording high rates despite the repercussions of the economic crisis that imposes its greatest burden on the economic community.
“Amwal Al-Ghad” tracked the results of the most prominent food companies listed on the Egyptian Stock Exchange during the financial period ending September 2022, which showed a positive growth rate in terms of profits and revenues, amid expectations of stagnation in non-core products during the next years.
Hisham Hamdy, consumer sector analyst at Naeem Securities Brokerage Company, said companies in the food and beverage sector saw growth in their operating results during the first nine months of this year, on a year-on-year basis, indicating that there are companies that have benefited from exceptional economic conditions. opportunities that the country went through during the year. .
He reviewed Juhayna’s financial results, expecting it to reach £11bn in revenue by the end of this year, with revenues to top £13bn and £208m as a result of the company raising the prices of its products by around 24% since the start of the year after rising raw material prices with exchange rate movements and the supply chain crisis.
He explained that the rate of increase in product prices is not enough to face the challenges of the exchange rate and the crisis of supply chains with high prices of raw materials, noting that it is common for companies in the food and beverage sector to face crises with falling profits and can sometimes suffer losses while if the crisis is not resolved and purchasing power and prices do not return to normal. – Within 8 months to a year – and then continue to grow its profits, especially since it cannot overcome the high prices of raw materials to the end user quickly and without control.
Hamdi noted that companies in the food sector could sometimes benefit from higher product prices in case raw material prices return to decline, in order to achieve jumps in their profit growth due to high prices, but also an increase in purchasing power.
He expected a decline in food companies’ sales volume in non-essential products such as juices and packaged milk for Juhayna, saying that Juhayna’s market share had improved significantly, as dairy’s share was around 63 percent in the nine-month period. , an increase of 5% on an annual level, and for juices 26%, an increase of 1%, and yogurt 31%, an increase of 1%, and yogurt 50%, which is a stable percentage on an annual level.
He pointed out that the company managed to store 85 percent of its milk needs from the domestic market, which saved it from the impact of the dollar’s rise in price in the past period, which reduced the share of milk powder imports from 40 percent to 15 percent. .
Regarding the leverage ratio, Juhayne said total leverage was around £626m in 9 months compared to £458m in the comparative period, expecting it to increase as a result of increased raw materials such as milk powder, corn, soya. oil and wheat in 2023 and the company’s need to secure large inventories in anticipation of any economic emergency.
As for Obour Land, Hamdi said it is among the winners of inflation and the decline in purchasing power of luxury goods, as consumers buy cheese and increase demand for it. Therefore, expect better business results for her in 2023.
He predicted that Labor Land would end the current year with revenues of around £4.360 billion and reach £5.668 billion next year.
He believes that consumption of 77 percent of Obour Land’s needs from abroad puts it at the mercy of dollar prices, noting that the company has raised the prices of its products by about 30 percent since the beginning of the year, and further price increases are expected during 2023, unless the price of the dollar falls .
For Delta Sugar, he said that 2022 was exceptional for it, as sugar prices reached the level of 13,500 compared to 7,000 in 2021, indicating that the company is selling molasses and beet residues that are used as animal feed and in industry. of alcohol, which did not benefit it during the period as a result of the doubling of its export prices.
And the analyst of the consumer sector at Naeem Securities Brokerage Company expected that the current year will end with revenues of more than 4 billion pounds, and that revenues during the next year 2023 will reach about 4 billion and 731 million, considering 2022 as an exceptional year for Delta Šećer and that it will face an increase in the prices of its products during the first half with a return to normal levels during the second half of 2023, leading to a drop in profits to normal levels as well as revenues.
Juhay’s sales rose to £8.6bn
During the first 9 months of this year, Juhayna Food Industries also achieved a 3.2 percent drop in profit on an annual basis.
The company posted a net profit of £474.08m during the period from January to the end of September 2022, compared to a profit of £490.19m during the same period in 2021, taking minority rights into account.
The company’s sales rose over the nine months to £8.16 billion at the end of September, compared with £6.52 billion in the same period last year.
In standalone results, the company turned to profit, making £81.15m in the period from January to the end of September last year, compared with losses of £3.07m in the comparable period in 2021.
Domty’s profit growth of 717%
The profit of Arab Food Industries Company – Domty in the first 9 months of this year increased by 717% on the annual level.
And it posted a net profit of £162.68m from the start of January to the end of September 2022, compared with a £19.91m profit in the same period last year, taking minority rights into account.
The company’s revenue rose over the nine months to £3.59bn at the end of September, compared with £2.27bn in the same period in 2021.
The company’s profits rose in standalone results for the first nine months of the year to £158.31m at the end of September, compared with £9.21m in the same period last year.
“Delta Sugar” records a profit of 735 million pounds
Delta Sugar’s profit increased in the first 9 months of this year by 79 percent on an annual basis.
And it posted a net profit of £735.21m in the period from January to the end of last September, compared with a profit of £411.6m in the same period last year.
The company’s revenue rose over the nine months to a record £3.08 billion at the end of September, compared with £2.49 billion in the same period last year.
The company attributed the increase in profits to market conditions that enabled the company’s management to sell from the beginning of the production season, which led to the availability of liquidity and a reduction in the burden of financing and overdrafts, which resulted in a reduction in debt interest.
The reasons were also that the company’s management pursued a policy of selling to more customers, which led to the existence of competition and non-monopolies, which led to quick disposal and sale of products at an appropriate economic price.
And she continued: “The increase in prices of by-products of molasses and beet pulp is due to global events that led to an increase in the prices of corn, soybeans and animal feed, and considering that the by-products created from molasses, sugar, the beet industry and beet pulp are considered basic inputs and alternatives to expensive animal feed.”
HRK 3.14 billion in total sales of “Obour Land”
Obour Land Food Industries’ profits for the first nine months of 2022 rose 28% year-on-year.
The company made a profit of £326.65 million in the period from January to September 2022, compared with a profit of £255.18 million in the comparable period last year, taking minority rights into account.
The company’s sales rose over the nine months to £3.14 billion, compared to sales of £2.12 billion in the comparable period in 2021.
The company’s profits rose in standalone results to £326.87m in the January to September period last year, compared to £255.24m in the comparable period last year.