EAST
Cairo - Mubasher: Pharos Research has maintained their target fair value (FV) for Eastern Co at EGP 390 per share, with an Equalweight recommendation, according to a recent report.
Eastern Co’s gross profit margin rose 1% quarter-on-quarter and 10% year-on-year to reach 39% in the first quarter of fiscal year 2017/2018, beating Pharos’ estimates of 25%.
The tobacco company reported an 18% quarter-on-quarter and 66% year-on-year surge in revenues of Q1 of FY17/18 to EGP 3.2 billion.
Cost of goods sold (COGS) stood at EGP 1.9 billion in Q1 of FY17/18, with an increase of 17% quarter-on-quarter and 44% year-on-year.
Net profit after tax amounted to EGP 1.04 billion from EGP 435 million in Q4 of FY16/17.
“Results show that the company is still benefitting from low-cost dollar inventory,” Pharos added.
Despite Eastern Co has not revealed full details, Pharos claims that the company’s bottom-line growth was driven by a “one-off reversal of provisions”.