Cairo – Mubasher: Elsewedy Electric is planning to enter new markets in Europe and Latin America to compensate for the decreased demand for wires and cables in the GCC states, according to a report by Pharos Research.

The Egyptian firm is aiming to expand across all segments as it maintained capital expenditure of EGP 900 million for fiscal year 2017.

“Elsewedy Electric is now better positioned to compete with rivals, thanks to the Egyptian pound's flotation,” Pharos Research said.

The company is seeking to grow a backlog of EGP 32.2 billion by 2019, as the company is pursuing to compete for power generation awards in Africa and the GCC.

The company is targeting a “turnkey revenue of EGP 17 billion in FY17, and turnkey margins to range between 17% and 18% in FY17, and to decline to 16% going forward post the completion of fast track projects,” the report added.

The manufacturing firm is expecting the smart metres’ growth to be driven by demand in Egypt and the GCC, Pharos stated, noting that wires and cables gross processing margin (GPM) will range between 16% and 17% in FY17 as the company depletes cheap inventory.

The firm’s internal generated funds will be used to finance working capital, in order to minimise its current debt level of EGP 9.9 billion.

Elsewedy’s management stressed that there will be no further dividend announcements until the first quarter of 2018.