Cairo - Mubasher: Pharos Research said it maintained its buy recommendation for Al Ezz for Ceramics and Porcelain (GEMMA) despite the strong headwinds the company is expected to face due to volatile demand patterns observed at home and in key export markets.

Pharos expects GEMMA's volumes sold in 2015 to drop to a 5-year low, to 11.1m sqm. Afterwards, it expect volumes to bounce back to 13.0m sqm by 2020 (a level the company comfortably crossed in 2013).

In addition, Pharos expects a gradual increase in average net selling prices throughout its forecast horizon to hit EGP 84.7/sqm by 2020.

The research unit pointed out that if Q3-15 net income comes in line with expectations (cc EGP 6-7m), GEMMA will post a net income figure closer to the EGP 30.0m mark.

GEMMA posted a decline of 59% in net profits for the first half of 2015, as it reached EGP 13.46 million compared with EGP 32.96 million for the same period of 2014.