Lecico Egypt net profits down 80%

Lecico Egypt's second quarter net profits tumbled by 80% to LE5.1m due to cost inflation and new tax laws.

Revenue for the three months to the end of June was down 2% year-on-year at LE249.7m, with higher sanitary ware prices offsetting a drop in sanitary ware and tiles sales volumes.

Operating profit was down 42% at LE29.2m (margin down 8.1 percentage points at 11.7%) as a result of cost inflation and a loss of economies of scale due to lower production.

Net profit was down 80% at LE5.1m (net margin down 8.1 percentage points to 2.0%) due to the impact of the new 25% tax rate applied retroactively and affecting the value of deferred tax assets with a one-off charge.

For the first half, revenue was down 11% year-on-year at LE465.2m.

Operating profit was down 40% at LE58.8m, (margin down 6.1 percentage points to 12.6%).

Net profit was down 67% at LE17.6m (margin down 6.2 percentage points to 3.8%).

Chairman and CEO, Gilbert Gargour said: "This is shaping up to be one of the most challenging years in Lecico's recent history.

"The entire region is going through seismic changes with results that are impossible to predict, however confident we are and remain as to the medium term.

"At the same time, almost all our major traditional markets are facing economic or political problems which are badly affecting demand."