Political turmoil drops Egypt's Sewedy Q1 net profit to 43.8%
Egypt's El Sewedy Electric, the Arab world's biggest listed cable maker, on Wednesday reported a 44-percent drop in its 2012 first quarter consolidated net profit which it blamed on political turmoil in its main Middle East markets.
Net profit fell to LE102.7 million (US$16.99 million) from LE182.8 million in the first quarter of 2011, the company said. Turnover fell by 3 percent to LE3.5 billion.
Analysts say the firm cut some production due to weaker demand for wires and cables in Egypt, which is going through a bumpy political transition, and Syria, racked by conflict.
A company official said Syria output was 30 percent of capacity there.
"The results are below our estimates," said Essam Abdel Aleem, an analyst at Naeem brokerage. "We are expecting lower profits through 2012 mainly because of the unrest in Syria, which forms 15 percent of the company's assets, and instability in Egypt."
Sewedy, which has production plants in Egypt and 10 other countries, also makes windfarm equipment.
The company said it expected revenue levels in 2012 to be similar to those of 2011.
"We expect a marked improvement in Egypt in 2013 once the presidential elections are behind us with political stability restored and the focus back again on infrastructure spending," said Chief Executive Officer Ahmed El Sewedy.
Sewedy shares inched down 0.1 lower percent on Wednesday while the benchmark index closed fractionally higher.
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