CAIRO: Egypt's Oriental Weavers posted a 4.4 percent drop in second-quarter net profit, as a rise in raw material costs offset strong revenue growth. The world's biggest machine-woven carpet maker said on Monday its net income fell to LE 58 million ($9.7 million) from 60.7 million in the same period of 2010. However sales rose 16 percent to LE 1.1 billion, mainly due to a recovery in demand in the Egyptian market for rugs and carpets despite political tension after the overthrow of Egypt's president in February. "The second quarter of 2011 — typically our slowest period of the year — showed the strongest-ever top-line growth for a second quarter in Oriental Weavers' history," said Chairman Mohamed Farid Khamis. Sales to export markets increased by 12 percent year-on-year, outperforming an industry averaging 8 to 10 percent export growth. The firm said Asia was a strong performer while Europe, the United States and Canada began a recovery from a long slump. However profitability was hurt as a 20 percent increase in costs of goods sold, stemming from rising prices of polyprpelene and oil-based raw materials. "As we head into the second half ... an anticipated easing in (costs) ... should see pressures on margins easing," Khamis said. Shares in Oriental Weavers closed up 1.7 percent before the results were announced, while Egypt's broader index was down 0.6 percent.
