Oriental Weavers reported a good performance in its financial results for the third quarter (Q3) of 2020, on the back of a strong recovery in export markets and lower raw material prices.
The company recorded revenues of EGP 2.59bn, up 42.9% quarter-on-quarter (q-o-q) and 10.3% year-on-year (y-o-y). The company’s bottom-line stood at EGP 301.9m, reflecting an increase of 466.1% q-o-q, and 151.7% y-o-y, with the gross profit margin (GPM) coming in at 14.8%, up 5.9% q-o-q and 4.0% y-o-y.
The price of the main raw material polypropylene amounted to $985/tonne, down 2.9% q-o-q and 9.4% y-o-y.
Export sales, which accounted for 66.3% of total sales, amounted to EGP 1.72bn, up 49.7% q-o-q and 20.3% y-o-y. The company’s sales volumes stood at 21,282 ksqm, up 47.2% q-o-q and 28.3% y-o-y, with the average price amounting to EGP 80.6/sqm, up 1.7% q-o-q and down 6.3% y-o-y.
Local sales, which accounted for the remaining 33.7% of total sales, amounted to EGP 871.5m, up 31.2% q-o-q and down 5.3% y-o-y. Sales volumes came in at 10,209 ksqm, up 21.5% q-o-q and down 0.5% y-o-y. The average price amounted to EGP 85.4/sqm, up 8.0% q-o-q and down 4.8% y-o-y.
The company collected export rebates worth EGP 89m in Q3 of 2020. The export rebate backlog amounted to EGP 467m as of 30 September 2020. With regards to the near-term outlook, management painted a positive picture, noting that strong demand continues to persist from export markets and, with local sales picking up as well.