Egypt's biggest publicly traded phosphate-based fertiliser producer said yesterday profit in the first half fell 47 per cent from a year earlier, and it blamed the decline on disruption caused by the Egyptian revolution.
Net income at Egyptian Financial and Industrial Company (EFIC) decreased to 25.9 million Egyptian pounds in the period, compared with 48.7m pounds in the same period last year, the company said in a regulatory filing.
The EFIC plant in the Suez was closed for a month before the revolution for maintenance, which hindered operations. In addition the company had to shut down several plants during the revolution. EFIC has the capacity to produce 1.2 million tonnes a year, commanding 70 per cent of the local market and exporting its residual tonnage to global markets.
"It's been an extraordinarily tough year for the company. The results are a reflection of the number of days they were able to operate those plants," said Omar Taha, an analyst Beltone Financial Holding, based in Cairo.
He said that while the company argued the events in Egypt did not allow for normal production levels, management's inability to deal with them was also a principal contributing factor.
"Across our coverage universe, we saw other companies able to shift around resources and implement emergency plans for production [and] not to fall below optimum levels," he said.
In addition, a weakening currency during the quarter has made it more expensive for EFIC to buy Russian-imported sulphur, priced in dollars, which is used in the phosphate production line to make fertiliser.
Sulphur has increased from US$200 a tonne to $220 during the six-month period, while Egypt's currency has weakened to 5.96 per dollar from 5.87 during the same period.
EFIC is recovering from two tough years of operations.
