Misr Cement – Qena has reported a positive bottom-line in its results for the second quarter (Q2) of 2020, despite a sizeable drop in volumes both quarter-on-quarter (q-o-q) and year-on-year (y-o-y).
The company posted a positive bottom-line on higher margins, with net profit of EGP 14m, down 63% q-o-q, but up 180% y-o-y.
Revenues amounted to EGP530m, declining 35% q-o-q and 30% y-o-y, with the q-o-q and y-o-y drop in top-line driven by lower sales volumes of 30% and 38%, respectively.
The average cement price dropped by 7.2% q-o-q, but rose by 11.6% y-o-y. The company’s gross profit margin (GPM) came in at 16.6% in Q2 of 2020 versus 16.1% in Q1 of 2020 and 15.7% in Q2 of 2019. The q-o-q and y-o-y GPM expansion is primarily due to lower raw material costs, notably in terms of energy consumption.
As per industry indications, while cement sales started off strong in 2020, specifically during the month of February, the momentum slowed down from March, due to the novel coronavirus (COVID-19).
The volume weakness in Q2 of 2020 was largely anticipated, impacted by a slowdown in construction activity due to the pandemic-related containment measures, and the holy month of Ramadan.