Safwan Thabet, Chairman of Egypt’s biggest juice and dairy producer Juhayna Food Industries Co. expected his company’s earnings to rebound in 2015 after a the difficult year 2014 due to the rise in raw material prices.
In an interview during the Reuters Middle Easter Investment Summit 2014, the top official indicated that Juhayna was unable to pass the price rises over to consumers.
However, the year 2015 will likely see strong earnings as raw material prices fell again, according to the chairman.
Juhayna had posted a 67% fall in Q2 net profit to EGP 40 million, compared to the same period a year earlier. The company attributed the profit decline to rising milk prices and an increase in spending on selling and distribution.
A 6-percent rise in sales was outpaced by a nearly 12-percent surge in the costs of goods sold, the company said on Wednesday.
The company’s Q1 consolidated net profit had reached EGP 43.18 million, with a fall by 55% compared with EGP 95.87 million net profit in the same period a year earlier.
Meanwhile, standalone financial results for the same quarter mirrored EGP 117.97 million net profit, a growth by 11.6% compared with EGP 105.74 million net profit in Q1-13.
Juhayna has carried out several major investments over the past period in its dairy and juice production lines.
Asked about the size of planned investments in 2015, Thabet told Reuters they would be similar to those of 2014.
Juhayna invested EGP 400 million in 2011, EGP 650 million in 2012, EGP 1.2 billion in 2013 and EGP 400 million in 2014.
The chairman said Juhayna is not considering currently any acquisitions, adding that the company did not mull acquiring Bisco Misr.