Juhayna Releases Third Quarter 2016 Earnings
THIRD QUARTER 2016
REVENUE
EGP 1,259 mn
▲ 11% Y-o-Y
GROSS PROFIT
EGP 380 mn
▼ 9% Y-o-Y
EBIT
EGP 139 mn
▼ 23% Y-o-Y
NET INCOME
EGP 58 mn
▼ 34% Y-o-Y
DAIRY EGP 636 mn | YOGURT EGP 283 mn | JUICE EGP 293 mn | CONCENTRATES EGP 20 mn | AGRICULTURE EGP 4 mn | ARJU EGP 22 mn |
▲ 10% Y-o-Y | ▼ 5% Y-o-Y | ▲ 22% Y-o-Y | ▲ 58% Y-o-Y | ▼ 33% Y-o-Y |
NINE MONTHS 2016
REVENUE
EGP 3,696 mn
▲ 19% Y-o-Y
GROSS PROFIT
EGP 1,117 mn
▲ 3% Y-o-Y
EBIT
EGP 387 mn
▼ 19% Y-o-Y
NET INCOME
EGP 168 mn
▼ 23% Y-o-Y
DAIRY | YOGURT | JUICE | CONCENTRATES | AGRICULTURE | ARJU |
EGP 1,744 mn | EGP 923 mn | EGP 812 mn | EGP 87 mn | EGP 59 mn | EGP 71 mn |
▲ 9% Y-o-Y | ▲ 14% Y-o-Y | ▲ 38% Y-o-Y | ▲ 60% Y-o-Y | ▲ 10% Y-o-Y |
(Cairo, Egypt) - Juhayna Food Industries (JUFO.CA on the Egyptian Exchange), a leading Egyptian dairy, yogurt and juice manufacturer, announced today its consolidated results for the third quarter of 2016, reporting an 11% year-on-year rise in total consolidated revenue to EGP 1,259 million. Net income dropped 34% to EGP 58 million compared to EGP 88 million in the same period last year, translating into a net profit margin of 4.6% in 3Q16. On a nine-month basis, Juhayna reported a 19% increase in total consolidated revenues to EGP 3,696 million with net income standing at EGP 168 million, a 23% decrease year-on-year, while net profit margin also slid by 2.5 percentage points to 4.6% in 9M16.
The highest contributor to the top line remained the dairy segment with 51% of revenues, followed by juice and yogurt, representing 23% and 22% of revenues respectively in 3Q16. Year-to-date, revenue contribution is also led by dairy with 47%, followed by yogurt with 25% and juice with 22% of revenues. Revenue growth in 3Q16 was driven by an increase in the juice and dairy segments' revenues, which climbed 22% and 10% to EGP 293 million and EGP 636 million in the third quarter, together contributing 89% (or EGP 110 million) of the EGP 124 million year-on-year increase in revenues.
Highlights of Juhayna's financial and operational results along with management's commentary on performance in the quarter follow below. Drawn from the fact that Juhayna operates in a highly competitive environment, management believes that it is in the best interest of shareholders to suspend disclosure of detailed segment analysis information.
Juhayna's full financials are available for download on the company's website: www.juhayna.com.
GROUP CONSOLIDATED PERFORMANCE 3Q16 vs. 3Q15Sales Gross EBITDA EBIT Net Profit Profit
3Q15 3Q16
9M16 vs. 9M15Sales Gross EBITDA EBIT Net Profit Profit
9M15 9M16
TO OUR SHAREHOLDERSAs we continue to adapt our business strategy against the backdrop of a challenging economic environment, we at Juhayna are working diligently to sustain our revenue growth trajectory and profitability levels while upholding the leading operational standards that we have always delivered and you have come to expect.
1,136
1,259
Despite a general escalation in prices and decreasing purchasing power across the Egyptian population, Juhayna recorded an 11% increase in revenues to EGP 1,259 million in the third quarter and a 19% to EGP 3,696 year-to-date. Revenue growth over the nine-month period was owing to enhanced sales across all of the firm's sectors, led by juice and followed by yogurt and milk respectively.
416
380
259
204
180
139
88
58
The continuation of our price uptick strategy, implemented to help us restore profitability amidst an inflationary macro environment, is helping us gradually pass on the production cost hikes we incur to the consumer and ensuring consistency in top-line growth. However, the effects of the severe weakening of the EGP against the USD and the lack of foreign currency trickled down to our bottom line, which posted a 34% year-on-year decline in 3Q16 to EGP 58 million compared to EGP 88 million in the same period last year.
Although Juhayna applied the increase in Egypt's value-added tax (VAT) rate in September of this year, it is important to note that the effect of the VAT increase on our company is minimal - less than 1% - as dairy and yogurt are exempt and juice products now incur 13% tax, up just 3 percentage points from the previous rate of 10%.
3,103
3,696
We plan to carry on the gradual planned price increases, transferring cost hikes to the consumer while simultaneously optimizing operational efficiency across our factories and administration, with a particular emphasis on our marketing efforts and a focus on decreasing expenses. We have decided to complete all projects currently underway but put a hold on any new investments for the time being, as well as to reduce risk associated with foreign currency by increasing reliance on domestically produced raw materials.
1,088
1,117
664
569
480
387
219
168
I am confident that our long-term vision for this company, with the support of our talented and dedicated team, will see us not only overcome the extenuating circumstances of Egypt's current economic situation but reach new heights in our ongoing success story. I look forward to another quarter of progress and value-creation for all our stakeholders.
Safwan Thabet, Chairman & CEO
REVENUE BREAKDOWN1%1%
2%0.3% 1.7%
21%
23%
3Q1551%
3Q1651%
26%
22%
2% 2%
2%2% 2%
19%
22%
9M1551%
9M1647%
26%
25%
Dairy Yogurt Juices Concentrates Agriculture ARJU
(EGP '000) | 3Q16 | 3Q15 | 9M16 | 9M15 |
Net Sales | 1,259,266 | 1,135,592 | 3,696,483 | 3,103,041 |
Cost of Sales | (879,111) | (719,502) | (2,579,292) | (2,015,519) |
Gross Profit | 380,156 | 416,090 | 1,117,191 | 1,087,522 |
Gross Profit Margin | 30% | 37% | 30% | 35% |
Other Income | 12,520 | 5,753 | 48,340 | 15,458 |
Sales & Distribution Expenses | (196,932) | (174,036) | (600,997) | (466,763) |
General & Administrative Expenses | (42,734) | (36,951) | (146,247) | (106,602) |
Other (Expenses) | (14,295) | (30,701) | (30,106) | (48,759) |
Board of Directors Remuneration | (110) | (95) | (700) | (645) |
Results from Operating Activities | 138,605 | 180,060 | 387,482 | 480,211 |
EBITDA | 203,882 | 259,252 | 568,630 | 664,456 |
EBITDA Margin | 16% | 23% | 15% | 21% |
The Holding Company's Share in Profit of Companies Under Joint Control | - | - | (609) | - |
Revenue of Investments Available for Sale | - | - | 5,571 | - |
End of Service Remuneration | (1,029) | (152) | (3,088) | (9,654) |
Financing Income & Financing Expenses | (65,896) | (45,373) | (162,765) | (126,477) |
Net Profit Before Tax | 71,679 | 134,536 | 226,590 | 344,080 |
Tax Differences from Previous Periods | - | 1 | 3,956 | 231 |
Income Tax | (9,045) | (16,711) | (26,053) | (53,914) |
Investment Tax | - | - | (4,998) | (4,099) |
Deferred Tax | (4,445) | (29,591) | (31,060) | (67,687) |
Net Profit | 58,190 | 88,235 | 168,435 | 218,611 |
5% | 8% | 5% | 7% |
Juhayna Food Industries SAE published this content on 20 October 2016 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 20 October 2016 08:03:08 UTC.
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