Cigarette maker Eastern Company posted a 2.6 percent rise in net profit to LE 851.9 million ($150 million) for the year to end-June, helped by a late scramble to avoid a sales tax.
Brokerage CI Capital had forecast net profit of LE 848 million for the cigarette monopoly, which also makes higher-margin brands for multinationals such as British American Tobacco and Philip Morris.
"The increase is due to strong earnings growth in the fourth quarter … as consumers stockpiled in anticipation of higher cigarette prices," Ingy El-Diwany of CI Capital said.
The government implemented a new sales tax on cigarettes for fiscal year 2010-2011, raising the prices of local and foreign brands. Egypt’s fiscal year starts July 1.
"Last year in the fourth quarter there was also a LE 30 million provisions expense (for Eastern) over tax disputes, versus nil for this quarter," El Diwany added.
