Arabian food company (Domty) announced its consolidated results of the third quarter of 2019 (3Q19), with a core net income jump by 46% year-over-year (YoY) and 35% quarter-on-quarter (QoQ), recording EGP 51m, beating Beltone Financial holding’s expectations by 64% on expected margins.
The growth in earnings came on the expanse of operating margins and lower net finance costs.
Revenues grew by 4% YoY and 11% QoQ to EGP 720m, in line with Beltone estimates, reflecting the recovery of the core cheese segment by 76% at the top line, after the cheese market’s slowdown in the first half of 2019 (1H19), along with better performances in all other segments.
Management noted in the earning’s release statement that white cheese sales witnessed a 2% YoY growth, despite the decline in sales of carton pack cheeses, while all other cheese categories (carton packs through other channels, fresh, creamy, and mozzarella) witnessed positive sales growth on an annual basis, increasing Domty’s market share in Cairo.
Juice segment revenues came in almost flat YoY but rose by 13% QoQ. Domty reported that sales of a newly launched cheese sandwich product rose by 44% QoQ to EGP 78.5m.
Gross profit increased by 18% YoY to EGP 191mn, implying a gross profit margin of (GPM) of 26.5%, with a higher contribution of a more profitable cheese sandwich with 36% GPM versus 26% for cheese, and a higher GPM for the juice segment as the company raised juice prices in the first nine months of 2019 (9M19).
Earnings before Income Tax (EBIT) witnessed a similar growth of 19% YoY, while EBIT margin recorded 11.9% despite higher selling and marketing expenses to sales recording 14.9% in 3Q19, compared to 13.3% in 3Q18.