Domty 1Q2109 earnings release

Domty achieved a net profit of EGP 28.8 million for 1Q 2019 with sales growth of 10.6% driven by bakery sales

HIGHLIGHTS OF THE CONSOLIDATED INCOME STATEMENT:

(Numbers in EGP million):

Cairo, 15 May 2019

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 consolidated results for 1Q2019.

Domty achieved a net profit of EGP 28.8 million in 1Q2019, after achieving sales of EGP 654.8 million,.

Commenting on the 1st quarter's performance, Domty Vice Chairman Mr. Mohamed Omar El Damaty said:" The Company has succeeded in achieving a satisfactory growth rates in the first quarter, we completed the exit from some sales agents in addition to reducing the stock levels/ inventory at others, which affected the growth rates, which was supposed to be higher by about 5 %.

The commercial sector is adopting a new vision & major structural changes in the company's policies in sales, distribution and marketing; hence increase in distribution of the cheese sector within a very competitive cheese industry.

We will be focusing on profitable / high margin cheese brand (Domty Plus).

We also managed to develop the gross profit margin to become higher than that for 4Q2018, taking advantage of the presence of high-margin product (Domty Sandwich), which gives the company and investors confidence in the future of the company's profits by increasing the contribution of baked goods with the increase in capacity by the end of the third quarter of this year.

In terms of marketing, the first quarter was the second highest quarter in the company's history in terms of advertising due to the fierce media and marketing spending of the competitors in the cheese market, hence the company's desire to maintain its leadership.

The increase in marketing expenses was the main factor for the decline in net profit versus last year, but it was an essential investment especially with the new launches expected in the coming period.

Finally, we expect the profitability rates in the second quarter to be at the same level of quarter 1, especially that Ramadan is not a good month for the company as the demand decline in general and especially for baked goods, but we expect that the changes made in the company's commercial polices and strategies to be paid off in Q3,plus the increase in capacity of the bakery sector which will allow this sector to reach 20 % of total company sales.

Going forward we are planning to re launch our juice brand which we believe it will have a positive impact on the company's profitability providing no major economic events .

· Sales Revenue breakdown for 1Q2019:

To view the complete set of financial statements kindly visit www.domty.org .

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 40 export destinations. Learn more about Domty by visiting Domty.org.

Contact

Ahmed Mohy EldinInvestor Relations and Corporate Affairs DirectorT: +202- 010 - 0555 2235| ahmed.mohy@domty.org