Obourland for Food Industries has announced its audited results for the first half (H1) of 2020, reporting 5% top-line growth.
The company’s net sales for the period recorded EGP 1,249.0m, of which EGP 1,172.4m was generated from white cheese sales, and EGP 70.9mn from its Juice and Milk segment.
The second quarter (Q2) of the year witnessed a strong performance with the sales volumes increasing by 6% year-on-year (y-o-y) and a 9% increase in revenues. This was mainly driven by the increase in white cheese sales volumes, in addition to a 3% increase in average white cheese prices.
Moreover, the gross margin improved significantly in 2020 due to the instalment of new production lines at the beginning of the year. The company has also taken advantage of cheap raw materials due to the plunge in prices for these materials in the aftermath of the novel coronavirus (COVID-19) pandemic.
Obourland achieved a net profit of EGP 140.1m during H1 of 2020, a 10% growth compared to H1 of 2019. This translated into a net profit margin of 11.2% for H1 of 2020, an increase of 0.5bps y-o-y.
Ashraf Hamed Sherif, Vice Chairperson at Obourland, said that the Q2 of 2020 was a strong period for the company in terms of revenues, volumes of sales, and profit margins. This occurred despite the unprecedented market conditions in the aftermath of the pandemic.
“We witnessed a strong quarter in terms of volumes of sales in the cheese segment, growing by 6% to record 26,400 tonnes of white cheese in Q2 of 2020, compared to 24,900 tonnes in Q2 of 2019,” he said. “This compensated for the 2% decline in white cheese sales in Q1 of 2020. Overall, the sales of white cheese increased 1.8% to record 49,800 tonnes in H1 of 2020, compared to 48,900 tonnes in H1 of 2019.”
Dairy products continued to surge in Q2 of 2020, achieving a 56% increase in sales volumes in H1 of 2020. Juice products, however, have been hit badly during the restrictions put in place for the pandemic, with sales dropping 25% in H1 of 2020. This result is satisfactory to the company’s management as the main focus in its strategy is on dairy products.