Egypt's Lecico Q2 profit dips 20pc
Cairo, August 10, 2009
Egyptian ceramics company Lecico posted a 20 per cent fall in second-quarter net profit to 30.3 million Egyptian pounds ($5.5 million) on Monday.
Lecico had net sales of 273 million pounds in the quarter, compared to 287 million pounds in the same period a year earlier, it said on its website.
Lecico produces tiles, sinks and other bathroom items made at two factories in Egypt and one each in Lebanon and France.
The firm said the 5 per cent fall was driven by lower average selling prices for its sanitary wares division due to declining European currencies, but was partially offset by growth in tile revenues.
Lecico exports more than half its sanitary wares - toilets, basins, urinals and sinks - with a significant presence in Britain, Ireland and France.
The firm expects full-year sales to be lower as a result of 'fragile and volatile' demand in Europe.
The firm said it would seek to offset this by growing market share in existing markets with new products and by acquiring new customers.
Lecico is also expanding its operations to Germany, Algeria and Saudi Arabia.
'As a management team, we are continuing to focus on generating sales and cutting costs,' managing director Elie Baroudi said in a statement published on the firm's website.
Analysts from investment bank EFG-Hermes said the results were 'operationally solid' and that the firm would likely exceed full-year profit estimates if it retains its higher margins.
The firm's EBIT (earnings before interest and tax) margin was 18.5 per cent in the second quarter, compared with 16.2 per cent a year earlier, though its net profit margin slipped to 11.1 per cent from 13.2 per cent in the second quarter of 2008.-Reuters