Cairo – Mubasher: Pharos Research has set Oriental Weavers Carpets’ target price (TP) at EGP 14.6 per share, recommending ‘Overweigh’.

The household durables company is expected to report higher margins for the first quarter of 2019 as polypropylene prices fell to $1,125 per tonnes quarter-to-date, from an average of $1,218 per tonnes in Q4-18, the research firm said in a recent report.

Moreover, Oriental Weavers, listed on the Egyptian Exchange (EGX), plans to locally launch products for wholesalers in Q1-19 that target low-to middle-income consumers in an effort to compete with Turkish products, which could push local volumes, according to the report.

Oriental Weavers’ management has proposed a cash dividend of EGP 1.50 per share, which “translates to a dividend payout ratio of 132% and a dividend yield of 12.2%”, the report added.

On Sunday, Oriental Weavers reported a 25.8% year-on-year decline in consolidated profits for fiscal year 2018.

The company has achieved a profit of EGP 550.23 million in the 12-month period ended 31 December 2018, versus EGP 741.7 million in 2017, including minority shareholders’ rights.

Sales rose slightly to EGP 10.4 billion last year from EGP 10.23 billion in 2017.

At the level of standalone business, profits increased to EGP 745.8 million in 2018, versus EGP 813.99 million a year earlier.