Forbes Middle East has ranked the Eastern Company among the 100 strongest companies in the Middle East in 2020.
The evaluation included the most profitable to trade companies in the region, alongside market value, sales, net profits, and total assets factors.
This comes despite many companies having been severely affected by the coronavirus (COVID-19) pandemic. The global health crisis has negatively the market values of companies operating in the Middle East over the first three months of this year.
The Eastern Tobacco Company has bucked the trend, however, issuing robust results of EGP 3.7bn in revenues for the third quarter (Q3) of fiscal year (FY) 2019/2020. It is one of the few entities to have maintained resilience in sales, despite the ongoing global pandemic.
The company sold 16.2bn cigarettes in the local market, down 4.2% quarter-on-quarter (q-o-q) as a result of a significant price hike on tobacco implemented in late February, and up 6.8% year-on-year (y-o-y).
As for toll manufacturing/third-part production, which accounts for 17% of revenues, the segment revenues stood at EGP 619m, down 15% q-o-q and up 17% y-o-y.
The consolidated gross margin (GPM) amounted to 40.1%, down 1.7pps q-o-q and up 3.1pps y-o-y.
The y-o-y improvement in GPM was due to the Egyptian pound’s appreciation, which resulted in lower raw material costs. Also affecting the improvement has been the increase in ex-factory prices due to the cut in retailers’ margins on some products, and an improved sales mix.