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EKH’s net profits declined by 39.9% YoY، Fertilizers and Petrochemicals hit the hardest

Fertilizers and Petrochemicals hit the hardest

What

Egypt Kuwait Holding (EKH) announced its consolidated earnings for 2023.

Revenues: USD 801.1 million, a 27.5% YoY dip

Gross Profit: USD 357.5 million, a 32.6% fall YoY

Gross Profit Margin: Tumbled to 44.6% in 2023, from 48% in 2022. Usually, it’s an indicator of the company’s efficiency in managing costs and generating profits.

Operating Income: Which is an indicator of the company’s profitability from its core business operations — decreased by 35% YoY to USD 297.4 million.

Net Profit: USD 217.8 million, plummeting 39.9% YoY

Net Profit Margin: Slipped to 27.2% in 2023 from 32.8% in 2022. This helps investors assess if a company’s management is generating enough profit from its sales and whether operating and overhead costs are under control.

The Main Drivers:

The company linked the sharp decline in net profits to three factors: the drop in urea prices, the Russia-Ukraine conflict, and the devaluation of the Egyptian pound against the US dollar in early 2023, as reflected in the financial statements.

Sector Breakdown

Energy and Energy-Related witnessed a slight hit, 7.3% YoY, generating a gross profit of USD 88.9 million.
Fertilizers and Petrochemicals, their largest industry, suffered a significant blow. Gross profits plummeted by 49.4% to USD 173.1 million YoY.
Diversified saw slight improvements, generating USD 102 million in gross profits, a 2.5 % rise
- Btw: The company invested USD 250 on diversifying their products and services portfolio in 2023.

Dividends Announcement: On the same day, the company proposed distributing USD 67.6 million to shareholders. The dividends stand at USD 0.06/share.