Edita Food Industries Reports 2Q2019 Earnings
Edita delivers 9.3% y-o-y revenue growth to EGP 862.8 million in 2Q2019, driven by an improved product mix; gross profit margin expanded 5.2 percentage points to 33.5% y-o-y while net profits increased 26.3% y-o-y to EGP 31.7 million
Edita Food Industries S.A.E. (EFID.CA on the Egyptian Exchange & EFID.L on the London Stock Exchange), a leader in the Egyptian packaged snack food market, announced today its results for the first half ended 30 June 2019, reporting a 10.1% y-o-y top-line expansion to EGP 1,845.0 million. Net profit in 1H2019 came in at EGP 146.0 million, a 69.9% y-o-y increase. On a quarterly basis, revenue increased 9.3% y-o-y to EGP 862.8 million in 2Q2019, with net profit expanding 26.3% y-o-y to EGP 31.7 million for the period.
Commenting on the quarter’s performance, Edita Chairman and Managing Director Eng. Hani Berzi said: “Edita’s growth in the second quarter and first half of 2019 continued to be a factor of our constantly improving product mix, with new product launches and strategic market segmentation allowing the company to expand its consumer base and capture higher value from sales. An expanding top-line combined with company-wide cost control efforts are helping reaffirm the company’s improved profitability, with GPM climbing 5.2 percentage points to 33.5% and our bottom-line delivering double-digit growth.”
On a segment basis, Edita’s wafer segment recorded a 39.2% y-o-y increase in revenue in 2Q2019, with its contribution to total revenue increasing to 8.8% from 6.9% in the second quarter of last year. The company’s rusks segments grew 42.3% y-o-y in 2Q2019 and made up 9.7% of total sales compared to the 7.4% contribution in the same quarter of 2018. Meanwhile, Edita’s core cake and croissant segments saw their revenue grow 3.1% y-o-y and 7.6% y-o-y, respectively in 2Q2019. Edita’s cake segment continued to contribute the largest share of total sales at 45.0%, while the croissant segment made up 32.1% of total sales.
“We are also proud to have had Molto as the national supporter of the Total AFCON 2019 as well as for Freska to have sponsored the Egyptian national football team during the championship. These sponsorships coincided with the installation of a new wafer production line at our E08 facility and the launch of our latest product, Freska Pops. The wafer expansion along with our candy line extension earlier in the year fall under our long-term expansion plans, which see us continuing to explore new propositions in other segments and utilize the space afforded by our E08 facility,” commented Berzi.
“Meanwhile on the regional front, we took several steps to strengthen our foothold in the newly penetrated Moroccan market. Notably, Edita Morocco has signed a long-term lease agreement for a plot of land, and construction is set to begin during the second half of 2019. The new facility will allow us to better serve regional markets as a key long-term strategic goal,” said Berzi.
In the first six months of the year, gross exports reported a 17.3% y-o-y growth to EGP 150.2 million, making up 8.1% of Edita’s total gross sales. Edita’s gross exports increased to EGP 64.5 million in 2Q2019, making up 7.4% of Edita’s total gross sales for the quarter.
“Finally, the quarter just ended saw Edita successfully secure a loan from the International Finance Corporation amounting to USD 20 million and an option to extend by a further USD 10 million. Our plan is to utilize the facility in financing the company’s capital expenditures as well as growth opportunities across our regional footprint. At the same time, management will continue to optimize the company’s product portfolio and drive cost minimization and efficiencies,” concluded Berzi.