Investment and research firm Renaissance Capital reduced its target price for Edita Food Industries S.A.E. (EFID.CA on the Egyptian Stock Exchange) shares to EGP 31.1 per share, marking a 10.1% decline from EGP 34.5. Renaissance Capital said Edita's profits over the past two quarters were less than expected. Last week, Edita reported a minimal decrease in net profits in the second quarter (Q2) of 2015, recording EGP 66.96m compared to EGP 67.05m in Q2 of 2014. As for the company's revenues, they rose to EGP 514.8m up from EGP 455.19m in 2014. Over the first six months of 2015, Edita marked a 4.3% increase in net profits, registering EGP 148.2m, up from EGP 142.1m in the same period last year. Ordinary shares of the Egyptian snack food maker started trading in early April. In parallel, trading of global depositary receipts (GDRs), each representing five ordinary shares, also began on the London Stock Exchange. The start of trading comes after the conclusion of a book-building process that saw selling shareholders offer 92,483,770 ordinary shares to institutions. A further 16,320,665 shares were offered to retail shareholders in Egypt, according to investment bank EFG Hermes. The company's market capitalisation is EGP 6.7bn ($891m), with a free float of 30% between the London Stock Exchange and the EGX. On the second day of Edita trading, Actis, that was set to acquire a 30% stake in Edita, announced its partial exit from the snack food company through the sale of a 15% stake as part of the stock offering. In June 2013, Actis invested $102m to acquire a 30% stake of Edita at a rate of $46.8 per share, or a nominal price of EGP 10. The transaction, which was brokered by HC Securities, reflected Actis' optimism towards Egypt's snack food market, despite macroeconomic hurdles the company faced, the company said at the time. Actis' activities in Egypt have increased this year as a 60/40 joint venture between Actis and Mainstream Renewable Power. Lekela Power announced in June the signing of two Memoranda of Understanding (MoUs) with the New and Renewable Energy Authority (NREA) for one 50 MW solar power plant in Aswan and one 50 MW wind power plant in the western Gulf of Suez, under the feed-in tariff scheme.
