The Egyptian Transport and Commercial Services Company, Egytrans, continues to outperform the market, recording 26% revenue growth, nearly 5 times the average market growth of 4.3%, according to the company's financial statements of the first half (H1) of the year. Abir Leheta, chairperson of Egytrans, said, "Our diverse business activities contributed to this growth momentum." Egytrans' consolidated 1H19 Revenues increased by 25.7% to reach EGP 156.1m driven by growth in regular business. However, the company's net income after taxes witnessed a slight decrease of 5.1%, reaching EGP 23.7m, down from EGP 25m in 1H18, registering a net profit margin of 15.2% in 1H19 vis-a-vis 20.1% in 1H18. This decline was due to the FX loss of EGP 3.3m because of the national currency appreciation in addition to a low net interest income which decreased by 58.4% to EGP 1.5m in 1H19. The company's earnings before interest, tax, depreciation, and amortisation (EBITDA) lost 760.1 bps to reach 19.6% vs. 27.2% for 1H19 and 1H18, respectively, affected by the increase in operating costs by 49% in 1H19. Meanwhile, the Cost/Revenues ratio rose to 1,071.6 bps to record 68.6% in 1H19 vis-à-vis 57.9% in the same period of the previous year as a result of decrease in the company's business line. Mubasher Research attributed the decline in Egytrans' profits to 47.3% increase in activity-based costs, which exceeded the growth rate of consolidated revenues during the period. Mubasher noted that the development plans of transport and logistics in Egypt provide for increasing the market share of rail transport and reduce that of road transport in the market of goods transport. Hence, Egytrans' plans to enter the rail transport sector and benefit from the new legal amendments that aim to open the door for the private sector to participate in the implementation, operation, management, and maintenance of railways, may be a catalyst for Egytrans in the future. Of course, the major national road projects in Egypt will have positive effects on the transport and logistics sector in the coming period.
