Juhayna 's 1Q 2011 revenues weak: Beltone Financial

Ahram Online, Thursday 7 Apr 2011

The fundamentals of Juhayna Food Industries, Egypt's near monopoly supplier of dairy, juice and yoghurt products, have weakened according to a recent report

First quarter 2011 is expected to be Juhayna's the weakest. (Photo file)

Juhayna Food Industries revenues are estimated to come in at LE420 million with net income to reach LE62 million, recording a slight increase of four per cent compared to last year's rates, with a net profit margin of 14.7 per cent, a report by Beltone Financial reveals.

"The first quarter of the year has been historically Juhayna’s weakest quarter, in addition to approximately a week of lost sales during the early days of the revolution," the report entitled "Juhayna: The full cream stock" reads.

Two weeks ago, Egypt's anti-monopoly watchdog said Juhayna had violated competition laws and fixed prices of raw milk bought from farmers. The report expects the company to see a double-digit growth in its sales in the next four years.

"We forecast a yearly double-digit growth for Juhayna’s sales (2011-2015) by 26 per cent and net profit of 31 per cent in the same period, with the net profit outpacing sales due to the expected improvement in margins," the investment bank adds, attributing the boost to many factors, including growth opportunities in the dairy, juice and yoghurt markets, and the conversion from loose to packaged milk and yoghurt.

On the other hand, the report warns of the company’s vulnerability to rises in raw material costs. It has also cautioned the company over competition in the local market, and the foreign exchange risk due to increasing imports of powdered milk.

The company has reported a 23.3 per cent rise in 2010 full-year net profit to LE227.8 million ($38.50 million) compared to a year earlier.

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