Egypt revolution hits company profits

Profits are sagging at some of Egypt's biggest companies in a fresh sign the country's revolution continues to take it toll on its economy.

Banking and property have been among the sectors hardest hit by the revolution and the political uncertainty that followed, analysts say.

Commercial International Bank, Egypt's largest lender, has announced an 11 per cent decline in second-quarter profits, compared with the same period last year, to 443 million Egyptian pounds (Dh272.5m).

Profits at Talaat Moustafa Group, one of the country's biggest developers, slumped 40 per cent in the second quarter to 202m pounds. Palm Hills Development, another big property player, is projected to lose 45.3m pounds in the second quarter.

"To book profits you need to deliver the unit, and in the current political environment we did have some delays in construction," said Jan Hasman, an analyst at EFG-Hermes.

"The country was at a standstill during the most crucial events of the revolution, and some of the construction could not be delivered."

Banks, meanwhile, have taken a hit because of companies' reluctance to buy equipment or to borrow to expand their businesses in the current uncertainty. They are also feeling the brunt of a decline in trade to and from Egypt - financing commerce made up a substantial part of some banks' business.

"For banks the main negative effect was in the first quarter, when there was a clear drop in loan growth driven by lower capital expenditure and loan demand," said Tarik El Mejjad, an analyst with Nomura in London. Take a deeper look at the state of Egypt's biggest listed companies, and analysts say the picture gets far more complicated.