The Clap Oriental Weavers (ORWE) net profits decreased by EGP 63 million year-over-year (YoY), recording EGP 236 million in Q1-2022.
The decline in profits occurred despite an increase in sales by 18% on an annual basis, reaching EGP 3.26 billion in Q1-2022.
Reasons for declining profits Beltone Financial attributed the decrease due to price increases in raw materials, especially petrochemicals. ORWE was prompted to increase their product prices by 5%, but it was difficult to increase prices for products out for export due to Turkish competitors.
The company is expected to gradually increase prices of their local products by 30%.
The company also suffered due to interest rate raises, as the cost of financing increased by 24% on an annual basis.
The currency devaluation also affected profits, due to the fact that 62% of the company’s debt is in dollars & euros.