1Q 2024 Earnings Release

Cairo 28th May 2024

Robust 1Q24 Results Driven by Price, Volume and Favorable Raw Material Cost.

ORWE's transformation continues to yield favorable results reporting outstanding 1Q24 results, achieving all-time high revenues with a remarkable 22% y-o-y increase. Gross Profit margin reached all time-high of 19.1%, and an EBITDA Margin of 20.5%. Additionally, net attributable income reached EGP 427 million increased by 4.1% y-o-y.

Key Highlights of 1Q 2024

EGP 5,038 m

EGP 961 m

in Revenues

in Gross Profit

22% y-o-y

71% y-o-y

19% GP margin

EGP 1,035 m

EBITDA (Ex-Rebates)67% y-o-y 21% margin

EGP 558 m

in Net Income 38% y-o-y

Att. Net income 4%

1Q 2024 Highlights

Revenue grew by 22% y-o-y (5% q-o-q) in 1Q24 reaching EGP 5,038 million. International sales, constitute 58% of total revenues, increased by 12% y-o-y (4% q-o-q). Meanwhile, Egypt revenues increased by 38% y-o-y (+27% q-o-q). This robust top-line growth was primarily driven by higher average selling prices, volume recovery, and the impact of EGP devaluation.

Gross profit reached EGP 961 million, reflecting a 71% y-o-y increase (+32% q-o-q), with a gross profit margin of 19.1% compared to 13.6% in 1Q23. This marks the highest gross profit margin achieved to date, though we anticipate this figure will normalize throughout 2024. The improvement in gross profit margin is primarily attributed to a rise in average selling prices, which outpaced the increase in raw material costs in EGP terms. The COGS to sales ratio stood at 81% in 1Q24, down from 86% in the same period the previous year, supported by lower-priced inventory, production efficiency and streamlining operations.

EBITDA (ex-Rebates) recorded EGP 1,035 million in 1Q24, representing an increase of 67% y-o-y, EBITDA margin expanded to 20.5%, up from 14.9% in 1Q23. This improvement was driven by enhanced gross profitability, coupled with a reduction in the SG&A/Sales ratio, which reached 4.6% in 1Q24, compared to 4.8% in 1Q23, influenced by the higher proportion of EGP component in the SG&A figure.

Net Income increased by 38% reaching EGP 558 million compared to EGP 404 million in 1Q23. Attributable income recorded EGP 427 million in 1Q24, reflecting a 4.1% increase from EGP 411 million in the same period last year.

Dividends: Leveraging ORWE's consistent performance and healthy cash flow, the company distributed LE1.25 dividends to shareholders in April 2024, highlighting the company's ongoing commitment to delivering superior Total Shareholders Return (TSR).

Summary Consolidated Income Statement (EGP m)

EGP m

1Q2024

1Q2023

Change

Revenue

5,038

4,142

22%

Gross Profit

961

562

71%

% Margin

19.1%

13.6%

EBITDA

1,035

619

67%

% Margin

20.5%

14.9%

Net Income

558

404

38%

% Margin

11.1%

9.7%

1Q 2024 Earnings Release

Cairo 28th May 2024

Results in a Nutshell

ORWE, the world's leading carpet producer by volume, has reported its 1Q24 results today, recording revenues of EGP 5,038 million, up 22% y-o-y. This revenue growth translated into impressive gross profit figures, which surged by 71% y-o-y to EGP 961 million in 1Q24, accompanied by margin enhancement to 19.1%, representing the highest margin achieved to date.

ORWE achieved robust growth in both the international and Egyptian market, capitalizing on its adaptable business model, diverse portfolio, and strong brand equity. In our international markets, the average selling price (ASP) increased by 13%, influenced by EGP devaluation on international revenues. On the domestic front, ASP increased by 20%, driven primarily by implemented price increases.

Volume increased by 6% y-o-y in 1Q24, primarily driven by a notable 15% surge in Egypt sales volume, reflecting the resilience of the domestic consumer market. However, international volumes remained stagnant, influenced by global logistical disruptions caused by the Red Sea region.

Total SG&A expenses for 1Q24 amounted to EGP 230 million, reflecting a 16% y-o-y increase, largely influenced by inflationary pressures. Despite this, the SG&A expenses as a percentage of total sales decreased to 4.6% from 4.8% in 1Q23. This reduction is primarily attributed to EGP-denominated expenses, in contrast to the 58% USD-based revenues.

Net interest income reached EGP 48 million in 1Q24, from an EGP 26 million Net interest expense in 1Q23. Interest income recorded EGP 185 million in 1Q24, up 138% versus 1Q23, surpassing the increase in net interest expense, demonstrating effective cash management strategies. In addition, OW recorded EGP 132 million investment income as a result of GDR translation gain, offsetting a portion of the FX losses reported.

Income tax recorded in 1Q24 were EGP 164 million compared to EGP 54 million in the same quarter of last year. It's important to note that the effective tax rate is distorted by dividends distributed from group entities, reaching 23%. However, we anticipate that this rate will normalize throughout the year.

OW's Net income reached EGP 558 million in 1Q24, marking a 38% y-o-y increase. However, excluding one-offs such as the China facility sale in 1Q23, net income experienced a significant 341% y-o-y surge compared to 1Q23. This demonstrates profitability stemming from pure operational performance.

1Q 2024 Earnings Release | Page 2

1Q 2024 Earnings Release

Cairo 28th May 2024

Revenue Contribution

by region 1Q24

Revenue Breakdown by Segment 1Q24

Revenue Breakdown by Volume 1Q24

I. International Markets

ORWE's global reach extends to exports in up to 130 countries worldwide. In the first quarter of 2024, international sales amounted to EGP 2,933 million, indicating a 12% y-o-y increase (+4% q-o-q). The macroeconomic landscape continues to play a crucial role in shaping global demand and consumer behavior, particularly through inflation rates, interest rates, and housing market dynamics. One of the factors that dragged 1Q results is the disruptions stemming from the Red Sea situation, without these disruptions, we would have seen even better results.

1Q24 Revenue Growth by Region

In 1Q24, America experienced a 25% y-o-y increase in revenues, driven by EGP devaluation. In addition, retailers are actively rebuilding their inventory levels. In 1Q24, European sales grew by 11% y-o-y, driven by local currency devaluation compared to 1Q23. In the GCC region, sales decreased by 31%, primarily as a result of delivery delay due to the red sea situation. Additionally, overstocking in the Saudi market and the reintroduction of Turkish carpets further contributed to the decline.

1Q 2024 Earnings Release | Page 3

1Q 2024 Earnings Release

Cairo 28th May 2024

Egypt Revenue Breakdown by

Distribution Channel 1Q24

Egypt Revenue Breakdown by

Segment 1Q24

II. Egypt:

In 1Q24, Egypt's revenues surged by 38% to EGP 2,104 million, a notable increase from EGP 1,530 million in the same quarter of the previous year, (+7% q-o-q). This growth was predominantly driven by an increase in average selling prices, with volumes rising by 15%. During the first quarter, Egypt performed well across all segments, particularly the tufted segment, which saw an impressive 63% y-o-y increase in revenues, fueled by a 43% increase in volumes. Moreover, the woven products category experienced a 32% y-o-y sales boost, while the non-woven segment recorded a 55% y-o-y surge, both supported by volume and price increases.

A. Direct to Consumer Segment (DTC):

DTC segment, which is sales through our showroom network, accounts for 53% of Egypt's total sales, demonstrated an impressive 29% y-o-y increase. This surge was attributed to a combination of price adjustments, and volume recovery.

B. Sales & Distribution Segment (S&D):

Meanwhile, S&D revenues, which represent OW wholesale channel, accounts for 44% of Egypt sales in the first quarter of 2024, registered an impressive 49% y-o-y growth. This surge was bolstered by heightened wholesale demand as they anticipated further price increases.

C. E-commerce in Egypt

While e-commerce represents a minor percentage of the company's topline, it is experiencing notable growth through sales on the OW online portal and other digital platforms. In 1Q24, e-commerce sales reached LE 4.6 million, marking a 31% increase from LE 3.5 million in the same period last year.

III. Hospitality Segment:

Oriental Weavers' hospitality segment serves several prominent global names while maintaining a strong local presence. In the local segment, sales increased 50% y-o-y in 1Q24, with 54 contracted projects, including hotels, mosques, and universities. One of the most iconic projects of the quarter is the "Sayeda Zainab Mosque" located in the heart of Cairo. In the international segment, sales rose by 14% y-o-y in 1Q24, with 98 contracted projects. Key international projects include Intercontinental El Madina, Hilton UK, and Ritz Carlton Abu Dhabi.

Sayeda Zainab Mosque

1Q 2024 Earnings Release | Page 4

1Q 2024 Earnings Release

Cairo 28th May 2024

Debt Breakdown

Balance Sheet:

The Company recorded a net debt of EGP 383 million as of 31 March 2024

compared to a net debt of EGP 121 million as of 31 December 2023. OW booked

inventories of EGP 9,162 million as of 31 March 2024, up from EGP 6,927 million

as of 31 December 2023, impacted by the EGP devaluation. Meanwhile, trade and

notes receivable increased to EGP 4,365 million as of 31 March 2024, from EGP

3,163 million as at 31 March 2022. This resulted in OW recording FCFE of EGP

1.1bn.

Recent Developments:

Green Corner:

OW has made a strategic decision to invest in International Renewable Energy

Certificates (IRECs). This investment signifies our unwavering support for

renewable energy projects and underscores our contribution to the global

imperative of fostering clean energy generation. By committing to 12,200 MWh

of IRECs, we anticipate a reduction of 6000 tons of CO2 emissions, a tangible step

towards our overarching sustainability goals and our collective endeavor to build

a greener, more sustainable future.

1Q 2024 Earnings Release | Page 5

1Q 2024 Earnings Release

Cairo 28th May 2024

Consolidated Income Statement (EGP million)

Net Sales

Less:

COGS

Gross Profit

Gross Profit Margin*

Less:

Selling & Distribution Expenses

General & Administrative Expenses

Sum

Net Income from Operation Activities Operation Activities Margin

Add / Less:

Provisions & Impairment Provision of ECL Investment Income Interest Income Treasury Income Other Revenues Capital Gain Financing Expenses Foreign Exchange Differences

Reverse Impairment of Assets held for Sale Gain from asset held for Sale

Returns on financial assets at cost Income from financial investment (GDR) Sum

Net Profit for the Period before Income Tax

EBT Margin

Add / Less:

Current Income Tax

Deferred Tax

Income Tax for the Period

Net Profit for the Period

Net Profit Margin

Equity Holders of the Parent

Minority Interest

1Q 2024

1Q 2023

Change

5,038

4,142

22%

17,659

13,256

33%

4,077

3,581

14%

15,109

12,000

26%

961

562

71%

2,550

1,256

103%

19.1%

13.6%

14.4%

9.5%

67

47

42%

209

172

21%

163

150

8%

513

437

17%

230

198

722

609

731

364

101%

1,828

647

182%

14.5%

8.9%

10.3%

4.9%

-30

-11.5

-98.5

-118.4

-9.5

10.8

-68.3

-49

-

0.1

51.7

28.4

34.7

17.9

101.7

47.9

133.8

59.8

240.9

150.6

3.3

3.2

329

800

4.2

9.1

24.4

12.4

-137

-104

-459.4

-304

-157

-169

-166.2

72.6

-

252.36

252.4

-

24.6

34.8

16.7

-

15.01

131

-

-9.9

93

-111%

257.6

495.4

-48%

721

457

58%

2,085

1,142.7

82%

14.3%

11.04%

11.81%

8.62%

-169

-55

207%

-234.4

-200.1

17%

4.9

1.4

40.8

1.6

-164

-53.6

206%

-193.6

-198.5

-2%

558

404

-38%

1,892

944

100%

11.1%

9.7%

10.7%

7.1%

427

411

4.1%

1,740

843

106%

130

-7

151.8

101.3

50%

1Q 2024 Earnings Release | Page 6

1Q 2024 Earnings Release

Cairo 28th May 2024

Consolidated Balance Sheet (EGP million)

March-2024

FY 2023

Long Term Assets

Fixed Assets (Net)

8,618

6,374

Projects in Progress

457

269

Investments - at Fair Value

973

649

Right of use assets

503

455

Total Long-Term Assets

10,552

7,748

Current Assets

Inventory

9,162

6,927

Trades & Notes Receivable

4,365

3,613

Debtors & Other Debit Accounts

897

715

Treasury Bills

2,788

2,127

Financial Assets

512

629

Cash on Hand & at Banks

2,771

1,800

Total Current Assets

20,496

15,360

Current Liabilities

Provisions

279

226

Banks - Credit Accounts

5,791

4,191

Long Term Liabilities - Current Portion

364

240

Lease Contracts Liabilities- Current Portion

132

115

Suppliers & Notes Payable

2,642

2,162

Dividends Payable

161

57

Creditors & Other Credit Accounts

1,348

975

Tax Payable

234

179

Total Current Liabilities

10,952

8,143

Working Capital

9,544

7,218

Total Investment

20,095

14,965

Shareholder's Equity

Issued & Paid Capital

665

665

Reserves

2,009

1,795

Retained Earnings

2,187

705

Net Profit for the Period

427

1,740

Exchange Differences Arising on Translation of Foreign Currency

11,999

7,905

Total Equity Attributable to Equity Holders of the Parent

17,288

12,809

Non-controlling Interest

1,949

1,362

Total Equity

19,237

14,171

Long - Term Liabilities

Long Term Loans

300

246

Deferred Taxes Liabilities

123

149

Lease contract obligations

436

399

Total Long-Term Liabilities

848

794

Total Shareholder's Equity & Long-Term Liabilities

20,095

14,965

1Q 2024 Earnings Release | Page 7

1Q 2024 Earnings Release

Cairo 28th May 2024

Statement of Cash Flows (EGP million)

March 24

March 23

Cash flows from Operating Activities:

Net Profit for the Period before Income Tax

722

457

Adjustments to Reconcile Net Profit to

Net Cash Provided by Operating Activities

Fixed Assets Depreciation

271

225

Depreciation of right of use assets

33

30

Provisions other than Deprecation

30

12

Provision for Expected Credit Loss (IFRS 9)

9

-11

Interest Income

-35

-18

Reverse provisions

-252

Gain from Liquidation of available for sale assets

-25

Financing Expenses

137

104

Treasury bills return

-134

-60

Investment Income

-0.1

Capital Gain

-4

-9

Operating Profits before Changes in Working Capital

1,029

453

Change in Working Capital

(Increase) in Inventory

175

344

Decrease (Increase) in Trades & Notes Receivable and other Debit Accounts

989

-101

Decrease (Increase) in Suppliers & Notes Payable and other Credit Accounts

-802

459

Cash Flows Provided by Operating Activities

1,392

1,155

Interest Income

35

18

Paid Financing Expenses

-137

-104

Income Tax Expense

-113

-63

Cash Flows Provided by Operating Activities

1,176

1,006

Cash Flows from Investing Activities

Payments for Purchase of Fixed Assets and Projects in Progress

-170

-98

Proceeds from Investments

0.1

Proceeds from Sale of fixed assets

6

19

Payment for purchase of treasury bills

-1,632

-601

Payment for financial assets

410

Proceeds from selling assets available for sale

296

Proceeds from Sale of Treasury Bills

1,778

609

Net Cash Flows (used in) Investing Activities

392

225

Cash Flows from Financing Activities

Proceeds (Payment) from Banks - Credit Accounts

170

-1,130

Dividends Paid

-12

-56

Translation Differences of Financial Statements

-533

7

Paid for Lease obligations

-28

-43

(Payment) Proceeds in Long Term Liabilities

22

-26

Net Cash Flows (used in) Provided by Financing Activities

-381

-1,28

Net Change in Cash & Cash Equivalents During the Period

1,187

-17

Cash & cash equivalents at beginning of the period

2,273

2,195

Translation Differences Related to Cash & Cash Equivalents

458

152

Cash & Cash Equivalents at End of the Period

3,918

2,330

1Q 2024 Earnings Release | Page 8

1Q 2024 Earnings Release

Cairo 28th May 2024

Ownership structure:

ABOUT ORIENTAL WEAVERS CARPET COMPANY

Oriental Weavers is a global player in machine-woven rugs and carpets; the company is renowned for superior product design and quality, as well as technological innovation. Today, the company is one of the largest producers of machine-made woven rugs in the world. It is management's vision to build a state-of-the-art, internationally competitive carpet and home textile company, characterized by a sharp focus on its customers and driven by marketing- and export-oriented strategies.

(www.orientalweavers.com)

FORWARD-LOOKING STATEMENTS

Certain information contained in this document consists of forward-looking statements reflecting the current view of the Company with respect to future events, and is therefore subject to certain risks, uncertainties, and assumptions. Many factors could cause the actual results, performance, or achievements of the Company to be materially different from any future results, performance, or achievements that may be expressed or implied by such forward-looking statements, including worldwide economic trends, the economic and political climate of Egypt and the Middle East, and changes in business strategy as well as various other factors. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in such forward-looking statements. Recipients of this document are cautioned not to place any reliance on these forward-looking statements. The Company undertakes no obligation to republish revised forward-looking statements to reflect changed events or circumstances.

# # #

1Q 2024 Earnings Release | Page 9

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Oriental Weavers Carpet Co. SAE published this content on 28 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 28 May 2024 06:16:05 UTC.