Egyptian dairy company Domty announces Q2 business results
Arabian Food Industries Co (Domty), Egypt’s largest cheese manufacturer by market share, announced on Wednesday its consolidated results for the second quarter of the year.
Domty posted a net profit of 37.5 million Egyptian pounds ($2.26 million) in the second quarter of 2019 buoyed by achieving sales of 646.8 million pounds.
“The Company started to reap the benefits of the implementation of the structural changes and policy adjustments in local sales, export, logistics, and marketing,” chief executive for commercial affairs Ahmed Elkattan said.
Such changes and reforms have “led to an increase in the net profit margin by 31 percent compared to 1Q2019 and by 63 percent compared to 4Q2018.”
Domty reported a sales growth in all cheese categories such as carton pack cheese (Tetra Pak), fresh cheese, creamy cheese, and mozzarella compared to the second quarter of 2018. This is with the exception of sales of Tetra Pak cheese to the governmental sector, where the company’s sales to this channel decreased by 22 percent compared to the second quarter of last year, which has negatively impacted the overall sales growth.
The company started implementing a plan to change its juice packaging and began the re-launch. It is preparing to launch 100-percent juice (with no added sugar) product under the brand name Slim to meet the needs of a large segment of consumers inside and outside Egypt.
Domty’s statement showed that the company continues to take successful steps in the bakery segment where it was able to achieve sales targets in the second quarter which represents 91 percent of sales achieved in the first quarter.
After the holy month of Ramadan, the company was also able to recover and sell 100 percent of the production capacity immediately and this has continued to date.
As for the development of the local sales performance, the company began to use the latest technology to raise the efficiency of operations. It began to re-apply the system (HAND HELD) in Greater Cairo and that should cover the whole country by the end of the first quarter of 2020. The company said it had selected the latest versions of the operating system and activated the GPS in the distribution vehicles as a second step towards the implementation of the digital transformation plan in the distribution sector.
Domty started the current year with intensive marketing activities followed by reducing marketing expenses gradually. Marketing expenses decreased by 48 percent in the second quarter compared to the first quarter.
“We plan to keep the marketing expenses at low levels during second half of 2019.” the company said.
The “net profit margin has been steadily growing since 4Q2018 despite the decline in purchasing power which has been felt by most companies in different business sectors especially FMCG’s, plus our structural reforms in the distribution sector befitting the company.” vice chairman Mohamed El Damty said.
“Going forward, we see the growth coming from the bakery industry in the years to come which encouraged us to add a new bakery line in the next year to help the company reach sales exceeding 3.5 billion pounds in 2020.”