29 Jan 2018 07:00
Domty profitability continues at a higher rate than planned as a result of sales volume recovery
_____Highlights of 4Q17_____ Unaudited
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UNAUDITED HIGHLIGHTS OF THE CONSOLIDATED INCOME STATEMENT:
(Numbers in EGP million):
Description | 4Q2017 | 3Q2017 | 2Q2017 | 1Q2017 | 4Q2016 |
Net Sales | 615 | 680 | 487 | 471 | 463 |
Gross profit | 137.4 | 132 | 95 | 87 | 61 |
Gross Profit Margin | 22.35% | 19.48% | 19.58% | 18.52% | 13.29% |
EBIT | 65.3 | 55 | 39 | 4 | -20 |
EBIT Margin | 10.62% | 8.11% | 7.95% | 0.93% | -4.35% |
Net Profit Before Tax | 40.1 | 30 | 15 | - 5 | - 39 |
Profit Margin Before Tax | 6.52% | 4.45% | 3.12% | -1.05% | -8.38% |
Net Profit | 30.6 | 22 | 12 | - 6 | - 29 |
Net Profit Margin | 4.97% | 3.30% | 2.47% | -1.27% | -6.33% |
EBITDA | 80 | 69 | 51 | 19 | - 4 |
EBITDA Margin | 13.01% | 10.18% | 10.49% | 4.08% | -0.88% |
Cairo, 28 January 2018
Arabian Food Industries Company Domty S.A.E. (DOMT.CA on the Egyptian Exchange), Egypt's largest cheese manufacturer by market share, announced today its unaudited consolidated results for 4Q2017,
Commenting on the quarter's performance, Domty Vice Chairman Mr. Mohamed Omar El Damaty said: Certainly, we are pleased with the results of this quarter. All the indicators were positive, the growth in the gross and the net profit was higher than planned, and the consumer consumption rates are back to normal levels, especially in the carton packed white cheese, which is a good indicator of the future. This product is the most important product to the company and has gained greater importance for the Egyptian consumer as it is the cheapest source of protein compared to the other available protein alternatives.
The company suffered greatly after the flotation, hence the composition of the company's products that dependend on low end products targeting the lower income segment through our fighter brands (Gebnety and Damo) and also Domty 80 grams size, that made the flotation impact more severe and resulted in our disability to raise prices. Accordingly we adopted a new strategy which is supporting and promoting the Domty Plus product line plus opening new distribution channels through the ministry of supply grocery stores located throughout Egypt. We succeeded in reducing the dependence on the fighter brands, which accounted about 40% of the local market sales and now represent less than 20 %. which resulted in increasing our sales to reach the 2016 numbers plus reaching a gross profit of more than 23% in the carton pack white cheese.
In terms of other products, there is also a sales volume recovery, but at a lower rate.
In 2017 Domty marketing expenses were higher than the normal company rates in order to promote and support the Domty plus product line. Domty plus brand now accounts for 50% of the volume of sales of carton packed white cheese, in addition to securing Domty debts in the local market that belonged to agents and reaching less than 45 days on hand, including also modern trade,chains, Hotels and catering.
The only downside remains the length of the collection period for the government sector and export agents, but with no risk to the company.
On the export side, we are optimistic after appointing a new head of the exports which led to achiving our juice sales export target in the fourth quarter which increased from $ 250 thousand in 4Q2016 to reach $ 450 thousand in 4Q2017.
On white cheese exports we are expanding in the African markets and we are looking forward to achieve our set targets during 2017.
Regarding the new products, the company intends to launch the bakery products portfolio in the market by the end of the first quarter of 2018, in addition to the flavored milk hence to enhance the top line and grow the profitability rates.
Our main objective of the company is to grow the gross and net income margins by relying on the high margin products while the decline in raw materials prices. We are hoping for an interest rate cut and that the EGP appreciates against the USD.
The first half of 2017 was difficult and complex due to our product mix that gave a negative impression on the ability of the company to make profits. The company preferred not to disclose the its strategies and plans to ensure the success of the new policies in the market.
We hope a continuous improvement in the purchasing power and the macro-economy in order to ensure reaching the profitability rates of 2015 by the end of this year.
Sales revenue breakdown for 4Q2017:
(Unaudited figures)
Segment | EGP million |
White Cheese | 513.8 |
Mozzarella Cheese | 36.4 |
Processed Cheese | 5.1 |
Juice | 59.7 |
Total Sales | 615 |
Days on Hand (average collection period splitting):
(Unaudited figures)
Accounts receivables class | Customer balance on 31-12-2017 (EGP mn) | Number of days(average) |
Governmental agencies & Exports | 281 | 149 |
Agents( fully supervised by Domty) | 58 | 30 |
Remaining local customers | 203 | 48 |
Total Accounts Receivables | 542 | 81 |
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About Arabian Food Industries Company Domty S.A.E.
Domty, founded in 1988and headquartered in Egypt, is a leader in the growing Egyptian cheese and juice market. The Company manufactures, markets and distributes a range of branded white and processed cheeses and juice products, with a family of nearly 200 SKUs under a brand portfolio including Domty, Damo, Gebnety and Bravo. Domty is a household name and the number-one cheese producer in the nation by market share. The Company sells to tens of thousands of retail and business customers as well as to more than 35 export destinations. Learn more about Domty by visiting Domty.org.
Contacts
Ahmed El HomosaniInvestor Relations and Corporate Affairs DirectorT: +202- 010 - 6665 4045| ahmed.elhomosani@domty.org
Ahmed Mohy EldinInvestor Relations and Corporate Governance ManagerT: +202- 010 - 0555 2235| ahmed.mohy@domty.org