Arafa Holding, Egypt’s biggest garment exporter, saw its net profit more than double in the nine-month period from February to October, the Egyptian stock exchange said on Sunday.
Net profit was $13 million, up from $6 million in the same period a year ago, the statement said, without providing further details, reported Reuters.
Arafa Holding’s revenues fell by 21.8 percent year-on-year to reach $70 million in the third quarter of 2010. Net profit after minority interest decreased by 8.3 percent from the past year to $1.1 million.
In its daily market report, investment bank Beltone Financial said, “We like the noticeable improvement in profitability, despite the fact that revenues dropped, due to the divestiture of Arafa’s European subsidiaries, SRG and Melka International, in quarter one of 2010, which were grouped under Arafa’s 79.3 percent UK-owned subsidiary, the Baird Group.
“The increase in net profit is due to the higher operating profit resulting from lower costs (SG&A costs fell by more than 40 percent), mainly in the retail segment, in the first nine months of 2010 versus [the previous year], reflecting Arafa’s successful efforts to restructure this business.”
The firm foresees a “strong quarter four of 2010 due to the quarter’s high seasonality of sales, on the back of the high Christmas demand.”
