(MENAFN- Daily News Egypt) El Sewedy Electric company stated in its third quarter of 2019's (3Q) press release that profits dropped by 18% year over year (YoY) and 7% quarter over quarter (QoQ) to EGP 924m, coming in broadly in line with Beltone Financial holding's estimate.
The decline in earnings came with lower interest income by 71% YoY, lower investment income by 15% YoY, and weaker gross margin by 4.0ppts YoY.
This brings the first nine months of 2019 ( 9M19) core earnings to EGP 2.9bn lower by 19% YoY, and net attribute earnings came in EGP 829m lower by 27% YoY, and 11% QoQ in 3Q19 as the company recorded EGP 96m in foreign exchange (FX) losses during the quarter, bringing the 9M19 earnings to EGP 2.7bn lower by 22% YoY.
Revenues in 3Q10 jumped by 27% YoY to EGP 13bn, achieving growth of 26% QoQ, beating Beltone's estimate by 12%, backed mainly by sizable turnkey sales by 50% of total sales, which stood at EGP 6.6bn growing by 108% YoY and 85% QoQ.
Meanwhile cable sales which are 28% of total sales dropped by 7% and 11% QoQ to EGP 3.6bn due to lower average cable prices by 17% YoY. While revenues from the meter segment grew by 13% YoY and dropped by 4% QoQ to EGP 836m in 3Q19.
Transformers followed suit, with segment revenue growing by 13% YoY to EGP 500m. This brings 9M19 top line grew by 14% YoY to EGP 34.5bn.
Despite the notable top line growth, 3Q19 gross profit inched down by 2% YoY and 1% QoQ to EGP 1.7bn, in line with Beltone's estimate, implying a gross profit margin (GPM) of 13.4% came as a result of lower turnkey margins given the end of Egypt's high margin, and fast-track project era. In 9M19, gross profit grew by 2% YoY to EGP 5.3bn, implying GPM of 15.3%.
Finally, Beltone set El Sewedy's fair value at EGP 18.8 and recommended buying.
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