Juhayna Food Industries has reported revenues of EGP 1.9bn in the second quarter (Q2) of 2020, reflecting a slight year-on-year (y-o-y) decrease of 5.9%.
The company also reported that its revenues in the first half (H1) of the year amounted to EGP 3.7bn, reflecting a slight downturn of 1.9% y-o-y. The decline was mainly driven by the lower demand for juice products, particularly in the single-serving “on-the-go” products. This has been attributed to the decrease in demand off the back of the novel coronavirus (COVID-19) pandemic and related restrictions.
Juhayna’s net profit in Q2 of 2020 grew 9.4% to EGP 118mn, despite capital losses of EGP 20m due to the sale of unutilised agricultural assets and reduction of agricultural land. The net profit margin increased by 0.9pps to reach 6.2%.
For H1 of 2020, the company’s net profit amounted to EGP 232m, realising an increase of 29%, with the net profit margin increasing by 1.5pps to reach 6.3%.
This was driven by the lower financing costs due to decreased net debt levels (down to EGP 1.5bn in Q2 of 2020 from the EGP 2.1bn reported in Q2 of 2019). Juhayna also reported that there was a lower cost of financing as the Central Bank of Egypt (CBE) lowered the lending rate by 300bps.
Safwan Thabet, Juhayna’s Executive Chairperson and CEO, noted that the management’s strategy to optimise the company’s operations and lower expenses remains ongoing.
This is occurring mainly through a lowering of inventory levels, thus reducing debt and financing expenses, alongside a restructuring of the current workforce to enhance productivity across all departments. The company has also introduced consumer-directed promotions to revitalise some market segments.
In Q2 of 2020, Juhayna also finalised a distribution deal with Rabea Tea, as part of its strategy to leverage its expansive distribution network and fully optimise its capacity.