CAIRO: “We are expecting less sales than previous years but our balance sheet is very solid,” Ahmed Badrawi, director of business development at SODIC, said at a conference Monday. Publicly trading firms were invited to a conference organized by the Egyptian Investor Relations Association and the Egyptian Exchange to discuss the effects of recent political and economic developments on their performance in the upcoming year. After an almost two-month closure due to political events that led to the ousting of former president Hosni Mubarak, Egypt's stock market will reopen on Wednesday. “The company today has more than LE 800 million in cash; more than LE 2 billion in receivables. This year's investments are at LE 1.3 billion and the company's land portfolio currently amounts to 8.5 million square meters,” said Badrawi, adding that the real estate developer's projects and deliverables are all on schedule for 2011. According to Badrawi, the company was affected by the lack of internet connection during the early days of the January 25 Revolution as well as when banks were closed, particularly regarding their receivables. Ahmed El-Homosani, investor relations manager at El Sewedy Cables, expects profits to decrease in 2011, with profitability during the first quarter already down 10 percent from an expected 20 percent. He said that the company did not cancel any operations so far and pointed out that the instability experienced in the Egyptian currency does not affect them because most of their sales are in dollars. Egypt sales, which represent 8-10 percent of total investment portfolio, are forecast to be affected by 25 percent and El Sewedy's branch in Libya could decrease exports by 10 percent in the light of recent turmoil. Haitham Abdel Moneim, investor relations manager at carpetmaker Oriental Weavers, said the company expects a drop in production capacity to 70 percent in the first quarter of 2011, and a return to between 90 and 95 percent production capacity the end of the year. He also attributed this to the fact that the company is export-oriented, but added that the versatility Oriental Weavers in using different inputs in the production process has ensured that it will satisfy most orders and contracts. He also pointed out that the company will open its plant for the production of crude polypropylene with an estimated production capacity of 400,000 tons during the second half of this year easing the burden of increasing prices of inputs due to the increasing price of oil. Mohamed Ali Talaat, investor relations manager at garment maker and retailer Arafa Group, said the company's diversified portfolio minimized the impact of recent events. “The company has recently made some changes in its business model in the UK, one of the company's main markets, adding new brand names to the portfolio already manufactured by the company,” he said. Talaat said that the UK had not yet recovered from the financial crisis and noticed a decrease in demand in the middle income segment and so it shifted its business model to target higher-income classes where demand was sustained. According to Talaat, Arafa's high-end British market now contributes 35-50 percent to the company's revenues for that target. He added that Arafa has a 12 percent market share of designer suits in the UK, and export 78 percent of the volume of production of the company amounting to 11 percent of Egyptian exports in readymade garments. Talaat said that the fact the company is export-oriented had helped the company cut its losses.
