Oriental Weavers, a prominent carpet manufacturer based in Egypt and led by accomplished business tycoon and executive Yasmine Khamis, faced a decline in profits below the EGP950 million ($31 million) mark at the end of its 2022 fiscal year.
This drop was driven by an increase in raw material costs as well as a surge in both production costs and operating expenses.
Despite an impressive 16.2-percent increase in revenue from EGP11.4 billion ($372.1 million) to EGP13.26 billion ($432.9 million), the Khamis-led company experienced a nearly 22-percent profit decline from EGP1.21 billion ($39.4 million) in 2021 to EGP944.17 million ($30.8 million) in 2022.
The significant decline in the company’s profits can be primarily attributed to the surge in raw material costs, including wool, polypropylene, backing, and finishing materials. These materials are essential to the company’s operations and have resulted in higher unabsorbed costs.
Despite this challenge, the management team is focused on enhancing the company’s global market position.
To mitigate the impact of rising raw material costs on earnings in the current fiscal year, the management is now pursuing strategic restructuring and operational re-engineering efforts to reduce both fixed and variable costs.
Additionally, the company is developing a pricing strategy with alternative product offerings.
In addition to the impact of rising raw material costs on earnings, the group’s profit was also affected by a surge in selling and distribution expenses, as well as administrative expenses during the reviewed period.
Oriental Weavers, led by Khamis and other family members of the late Mohammed Farid Khamis, is a prominent carpet manufacturer and distributor with active operations in about 150 countries worldwide.
Shares of the company are currently trading at EGP10.79 ($0.352), representing a 1.8-percent increase from their opening price on the Egyptian Exchange this morning.
As a result, the market value of the Khamis family’s 56.58-percent stake in the leading carpet manufacturer is now worth EGP4.06 billion ($132.5 million).
Despite the decline in earnings, the board members approved a cash dividend distribution of EGP0.60 ($0.0196) per share for 2022, totaling EGP399.06 million ($13.03 million).
The dividend payment will result in the family receiving EGP237.8 million ($7.76 million) from their 56.58-percent stake in the company.