Higher production and financing costs cut Eastern Company profit 32.8 per cent

Ahram Online, Tuesday 17 May 2011

Egypt's main tobacco manufacturer witnesses a sharp decline in net profits amid political turmoil

Egypt's Eastern Company, a public enterprise specialising in the manufacture and trade of tobacco products, has released its results for the third quarter of the 2010-11 financial year  (3Q2010/2011) ending 31 March 2011, showing a 32.8 per cent decline to LE148 million against LE221m over the same period last year.

The leading tobacco manufacturer's revenues grew by 9.1 per cent to reach LE1.1 billion in 3Q2010/2011, compared to LE1bn in 3Q2009/2010.

"Clearly, it was a difficult quarter for the Eastern Company, as was the case with most Egyptian companies," a statement from Beltone Financial reads. "Besides higher production costs, the fall in net profit was exacerbated by a surge in financing costs."

Due to its starting of paying interest of loans, the company's third quarter results show finance costs rising steeply from LE2.7m in 3Q2009/2010 to LE26.5m in 3Q2010/2011.

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