Domty 1Q2021 Sales dropped by 13% after phasing out the agents
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_____Highlights of 1Q21____
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HIGHLIGHTS OF THE CONSOLIDATED INCOME STATEMENT:
(Numbers in EGP million):
| Description | 1Q2021 | 4Q2020 | 3Q2020 | 2Q2020 | 1Q2020 |
| Net Sales | 647.1 | 815.7 | 724.1 | 710.9 | 744.8 |
| Gross profit | 132.7 | 205.3 | 179.5 | 167.3 | 183.9 |
| Gross Profit Margin | 20.51% | 25.16% | 24.80% | 23.54% | 24.69% |
| EBIT | 9.5 | 83.4 | 69.8 | 59.1 | 56.4 |
| EBIT Margin | 1.47% | 10.23% | 9.65% | 8.31% | 7.57% |
| Net Profit Before Tax | -1.9 | 69.9 | 56.4 | 43.5 | 44.5 |
| Profit Margin Before Tax | -0.29% | 8.56% | 7.79% | 6.13% | 5.97% |
| Net Profit | -3.4 | 52.9 | 41.3 | 31.7 | 32.1 |
| Net Profit Margin | -0.53% | 6.48% | 5.7% | 4.46% | 4.31% |
| EBITDA | 27.7 | 100.4 | 86.6 | 76 | 73.2 |
| EBITDA Margin | 4.28% | 12.30% | 11.97% | 10.70% | 9.83% |
Cairo, 15 June 2021
Arabian Food Industries Company Domty S.A.E. (DOMT.CA on the Egyptian Exchange), announced today its consolidated results for 1Q2021.
Domty achieved sales of EGP 647.1 million.
Commenting on the 1 st quarter's performance, Domty CEO Mr. Mohamed El Damaty said:
"In the first quarter, the company went through exceptional circumstances as a result of the steady rise in the prices of raw materials, especially oils, which rose by more than 40%, as well as powdered milk, packaging materials and shipping costs, in addition to the continued closure of schools, which affected the profitability."
Due to the significant rise in the prices of raw materials and the company's desire to increase cheese prices, management decided to phase out all cheese agents, a step that we were hesitant to take in order not to affect the company's sales value, however in light of raising prices over the course of the First half of the year, we took that decision.
This led to a decline in 1Q2021 sales by EGP 90 million, however the impact of the decision to phase out agents we believe it will continue to affect 2Q2021 sales.
As of the 3Q2021, a positive impact of this decision will occur by reducing the number of accounts receivables days in the market by almost 20 days.
With regard to the sales volume, the company achieved a growth of 4% in white cheese (after neutralizing the effect of phasing out the agents), this was offset by a 9% decline in the bakery segment sales as a result of school closures in the first quarter of this year, in comparison to the first quarter of last year.
The company expects a challenging second quarter in light of the rise in raw materials prices and the completion of the phasing out of the agents. Which we concluded in mid-May hence, operation started to return to normal. As of June1 st, we raised the price of the Domty sandwich by 22% to be sold at EGP 5 for the end consumer, we still have to raise the price of Tetra Pak white cheese by about 4%, based on market situation we will work on this in the coming few months, with a verbal commitment from government sector to adjust/increase our selling prices to those entities by July.
The company expects to achieve a net profit margin of 6% to 7% in 3Q2021 providing the raw materials prices remain stable, however indicators are in favor of a decline in raw material prices in the second half of the year, which will enhance the company's profitability going forward.
· Sales Revenue breakdown for 1Q2021:
| Segment | Revenue (EGP mn) | Gross Margin By Segment |
| Cheese | 460.5 | 19.60% |
| Juice | 56.2 | 15.6% |
| Bakery | 130.4 | 28.60% |
| Total Revenues | 647.1 | 20.51% |
· Consolidated Income Statement
| (EGP mn) | 1Q2021 | 1Q2020 |
| Net Sales | 647.1 | 744.8 |
| Cost of Sales | -514.3 | -560.9 |
| Gross Profit | 132.7 | 183.9 |
| Gross Profit Margin | 20.51% | 24.69% |
| Sales & Marketing Expenses | -120.2 | -121.5 |
| General & Administrative Expenses | -12.9 | -13.8 |
| Total SG&A | -133.1 | -135.3 |
| Other Income | 10.3 | 7.9 |
| Provisions | -0.153 | -.002 |
| Right down of prepaid and other debtors accounts | -0.192 | - |
| Capital losses | -.001 | - |
| Operating Profits | 9.5 | 56.4 |
| Operating Profit Margin | 1.4% | 7.58% |
| Net Interest Expense | -11.3 | -11.9 |
| Health insurance contribution | -1.6 | -1.9 |
| Net Profit Before Tax | 3.5- | 42.6 |
| Income Tax | 0.1 | -10.5 |
| Net Profit | 3.4- | 32.1 |
| Net Profit Margin | -0.53% | 4.31% |
For viewing the full set of financials kindly visit domty.org
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About Arabian Food Industries Company Domty S.A.E.
Domty, founded in 1988and headquartered in Egypt, is a leader in the growing Egyptian cheese and juice market. The Company manufactures markets and distributes a range of branded white and processed cheeses and juice products, with a family of nearly 200 SKUs under a brand portfolio including Domty, Damo, Gebnety and Bravo. Domty is a household name and the number-one cheese producer in the nation by market share. The Company sells to tens of thousands of retail and business customers as well as to more than 46 export destinations. Learn more about Domty by visiting Domty.org
Contact
Ahmed Mohy Eldin
Investor Relations and Corporate Affairs Director
T: +202- 010 - 0555 2235| ahmed.mohy@domty.org
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