Oriental Weavers anticipates an improvement in the second half (2H) of 2020 on the back of improved export sales, according to Yasmine El Gohary, Investor Relations Manager at the company.
El Gohary noted that this improvement will reflect in the company’s financial results starting from the third quarter (3Q) of 2020.
The company’s performance is expected to improve with the support of pent-up demand from postponed weddings and national projects. It will be further supported by the launch of higher-quality products that will compete with the cheaper Turkish and Chinese variants.
The company is still looking to provide upside potential driven by the possible recovery in local and export markets
The competitive pressures in the Egyptian textile market, and accompanying weaker pricing, resulted in muted local top line growth throughout fiscal year (FY) 2018/19.
Local volumes continued to suffer in 1Q 2020 as a result of lockdown measures and shorter working hours. The state-imposed precautionary measures had inflicted limited traffic to showrooms, and slower construction and refurbishment activity.
Oriental Weavers introduced another sales channel in late 2019, in the form of an online platform, to adapt to changing consumer purchasing patterns.
Pharos Research expects that export revenues will reach EGP 5.2bn in FY 2019/20, reflecting a decline of about 17% from their previous estimate. The figures will reflect a five-year compound annual growth rate (CAGR) of about 3%, driven by about 1% average selling price CAGR and about 2% volume CAGR, assuming global demand makes a comeback by 2021.