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Oriental weavers facing challenges of local currency and Euro depreciation: Khamis Political and economic turbulences in some export countries reduced exports' revenues, company expands in new markets
Oriental Weavers Company recently faced a number of challenges due to the lack in foreign currency and the euro depreciation against the dollar, which affected sales in Europe, said Oriental Weaver's CEO Mohamed Farid Khamis. The foreign currency deficit continues to cause decline in Oriental Weavers' revenues; during stability, it represent 60% but they have declined to 45% during Q3 of 2015. In an investment report from the company targeted to investors, of which Daily News Egypt received a copy, Khamis said the local market witnessed a 9% increase in annual revenues. But the slow growth of some export markets limited sales growth to 1%, recording EGP 1.5bn compared to EGP 1.52bn over Q3 2014. The report showed that the company will keep implementing their exhibitions expansion plan across the country and they target to open four new branches by the end of 2015. Over the past months, they added eight new branches, increasing their total number to 230 branches. The company had earlier announced their board of directors agreed on inaugurating 10 new branches, particularly in northern governorates and Delta regions. Over Q3 2015, the exports' sales declined to EGP 834m, compared to EGP 878m recorded over Q3 2014. Over the first nine months of 2015, exports' sales recorded EGP 2.468bn, compared to EGP 2.642bn over the same period in 2014. The causes of decline are referred to the decrease of exports in European markets, due to the euro depreciation against the dollar along the reduction in sales to one of the most significant costumers with an annual average of 21% during Q3 2015. The company also reduced sales prices in a number of markets. The report further highlighted that a number of export markets witnessed economic and political turbulences, which contributed in exports' decline, including Libya, Yemen, Greece, Iraq, Russia, and Ukraine. To face these challenges, Oriental Weavers started expanding in new markets such as Maldives, Ecuador, Sri Lanka, Azerbaijan, and Vietnam. Regarding sales volume in October 2015, the report noted the company recorded the largest export supply to the US market for ten years. Over Q3 2015, Oriental Weavers' net profit declined to EGP 4m, compared to EGP 71m over the same period last year. Perhaps one of the main reasons for decline in profits is composing allocations worth EGP 75m over this period, compared to EGP 20m during the same period in 2014.
