consumers sector in Egypt Archives - HC

HC: Juhayna Food Industries, Gradual normalization

Posted on July 15, 2026 by Marwa Nakhla

We forecast JUFO to deliver a c18% revenue and c26% EBITDA 2026–30e CAGR, supported by higher prices and volumes
A gradual margin normalization will pave the way for higher dividend distribution, despite planned expansions, in our view

In a recent report, HC Brokerage shed light on the consumer sector through an evaluation of Juhayna Food Industries’ performance. They forecast revenue growth supported by both price and volume increases.

Pakinam El-Etriby, Consumers Analyst at HC commented that: “JUFO’s operations normalized in 2025, after a strong 2024 led by concentrates, with this trend expected to continue in 2026: In 2024, JUFO delivered a strong y-o-y improvement in operational performance, with gross profit margin (GPM) expanding to c30% from c23% in 2023 as concentrate revenues grew by around threefold y-o-y to EGP3.15bn, contributing c13% of total revenues, up from c7% in 2023 and c2% in 2022. The surge was supported by JUFO capitalizing on the 2024 orange tree crisis, along with favorable factors, including the Ras El Hekma investment deal and macro reforms, that improved USD availability at the official rate. In 2025, however, GPM started normalizing to c25%, driven by the resolution of the Brazil supply disruption, which weighed on concentrate revenues, declining by c56% y-o-y to EGP1.40bn and contributing only c5% of total revenues. We forecast concentrate revenues to decline by a further c27% to EGP1.03bn in 2026, representing c3% of total revenues, broadly in line with pre-2023 levels, and forecast concentrates to average c3% of revenue over our 2026–30e forecast horizon. We see that concentrates have already normalized, accounting for c40–45% of total exports as of 1Q26, down from c85% of exports in 2024, and representing c2% of total revenues, in line with 2021–2022 levels.”

“We forecast JUFO’s revenues to grow at a 2026–30e CAGR of c18%, driven by higher average selling prices and volume growth: For 2026e, we expect revenues to increase by c21% y-o-y to EGP36.2bn (c1% above our prior estimate), supported by price and volume growth. We also assume JUFO’s core segments (dairy, yogurt, and juice) to grow by c23% y-o-y. Meanwhile, we expect the concentrates segment to normalize to pre-crisis levels, reaching EGP1.03bn (down c27% y-o-y and contributing c3% of total revenues). Over 2027–30e, we estimate revenues to grow at a CAGR of c18%, also supported by higher prices and volumes. In 2026e, we expect GPM to remain broadly stable at c25% (lower than our prior estimate of c32% assuming higher concentrates), as we believe that JUFO is more likely to pass on cost increases to consumers to preserve margins, especially due to global cost pressures – particularly due to higher shipping and insurance costs– resulting from ongoing geopolitical tensions. Although skimmed milk powder (SMP)’s price increased c7% y-o-y in 1Q26 to USD2,946/ton, and further rose by c23% y-o-y to USD3,459/ton in 2Q26, likely impacted by the recent geopolitical tensions, JUFO is unlikely to be significantly impacted as it secured most of its SMP needs at favorable prices at the beginning of the year, according to management. Over 2027–30e, we estimate GPM to average c28%, gradually increasing to 29.9% by the end of our forecast period. We expect EBIT to stand at EGP4.93bn in 2026e (below our previous estimate of EGP6.94bn), implying an EBIT margin of c14% (below our prior estimate of c19%). Over 2027–30e, we forecast EBIT margin to average c16%, reaching c18% by the end of our forecast period. We also expect SG&A/sales to average c12% over 2026–30e and forecast total export rebates of EGP848m, equivalent to c4% of total exports. We expect net debt to increase to EGP6.46bn as of 4Q26e from EGP5.96bn in 4Q25 (implying a drop in net debt-to-equity to 0.62x in 4Q26e from 0.74x in 4Q25), then rise further to EGP6.76bn by 2028 in line with the company’s expansionary plans, and decline thereafter. Consequently, we expect the 2026e net profit margin (NPM) to increase by only 0.10 pp to c8% (lower than our previous estimate of c13%), primarily on lower margins, gradually increasing to c13% by 2030e.” Consumers Analyst concluded.

About HC Brokerage

HC Brokerage is an affiliate of HC Securities & Investment– a full-fledged investment bank providing investment banking, asset management, securities brokerage, research, and custody services. HC Brokerage is an Egyptian registered company and member of Egypt’s Financial Regulatory Authority (FRA), and its registered address is 34 Gezirat Al-Arab St., Mohandessin, Giza, Egypt, Dokki 12311

For further information, please contact: Research@hc-si.com

HC: Oriental Weavers, normalization is ahead, despite oil tailwind,

Posted on December 25, 2025February 4, 2026 by Marwa Nakhla

Despite a favorable polypropylene price outlook, we see ORWE’s operational performance normalizing on stable FX
We expect total revenue to grow at a 2025 –30e CAGR of c7%, GPM to average c12%, and NPM margin to average c9%
In a recent report, HC Brokerage presented their evaluation of Oriental weavers forecasting the company’s performance to gradually normalize amid EGP stability.

Pakinam El-Etriby, Consumers Analyst at HC commented that: “ORWE to benefit from lower oil and polypropylene prices in 2026e, followed by gradual normalization amid EGP stability: ORWE historically benefited from times of EGP devaluation, given that exports account for more than c50% of its total sales. In 2024, total revenues rose by c38% y-o-y to EGP24.3bn, supported by a c41% y-o-y increase in export prices to EGP227/sqm following the 6 March EGP devaluation, and c28% y-o-y rise in local prices to EGP191/sqm. Consequently, its adjusted gross profit margin (GPM), excluding inventory write-downs of cEGP271m in 2Q24 and cEGP500m in 4Q24, would have reached c16%, compared to its reported GPM of c13%. In 1Q25, the company continued to benefit from the residual effects of the EGP devaluation, with export and local prices increasing by c39% y-o-y and c27% y-o-y, respectively, leading to a c27% y-o-y increase in total revenue to EGP6.40bn. Revenues for 2Q25 and 3Q25, however, increased modestly by c7% y-o-y to EGP6.17bn and EGP6.90bn, respectively, with local and export prices normalizing. As a result, we expect 2025e GPM to stand at c12%. In 2026, we expect GPM to improve to c13%, primarily due to an anticipated decline in oil prices, which should translate into lower polypropylene costs. Moreover, the massive overcapacity in the global chemicals sector and increased trade tensions have weakened near-term recovery prospects, a situation that could further deteriorate in 2026 amid expected large capacity additions from China, according to Fitch. Consequently, this outlook reflects softer petrochemical pricing amid global oversupply from these capacity additions, which, in our view, is likely to reduce polypropylene prices, as evidenced by recent price trends. Oil prices are expected to drop to USD61.3/bbl in 2026e from an average of USD68.1/bbl in 2025e and USD79.9/bbl in 2024, according to Bloomberg.”

“We forecast ORWE’s revenues to grow at a 2025–30e CAGR of c7% driven by higher average selling prices and muted volume growth: We expect 2025e revenues to increase by c7% y-o-y to EGP26.0bn (c6% below our prior estimate), supported by a c11% y-o-y rise in average selling price (ASP) to EGP238/sqm (c1% above our prior estimate), yet a c4% y-o-y decline in volumes to 110m sqm (c7% below our prior forecast). We anticipate export revenues accounting for c67% of total revenues (vs. c65% previously), reflecting a favorable base effect as 1Q25 was still impacted by the EGP devaluation. We estimate 2026e revenues to grow by c3% y-o-y to EGP26.9bn (c13% below our prior estimate), driven by a c8% y-o-y increase in ASP to EGP239/sqm (c4% lower than our prior estimate), assuming easing inflation rates and relatively stable FX rates, and a c3% y-o-y increase in volumes to 113m sqm (c9% lower than our prior estimate). We forecast a c64% export contribution to total sales (vs. c63% previously). Over 2027–30e, we forecast a c8% revenue CAGR, underpinned by a c6% increase in ASP and c2% growth in volumes. We expect 2025e GPM to stand at c12% (vs. c14% previously), down c1 pp y-o-y and further to c13% in 2026e (vs. c14% previously), assuming a decline in oil and polypropylene prices. Over 2027–30e, we forecast GPM to average c12%, gradually normalizing to c11% by the end of our forecast period. We forecast 2025e EBIT margin to narrow by 1.90 pp y-o-y to 8.99%, on GPM contraction and c29% y-o-y decline in export rebates to EGP421m, with the government’s recent reduction of export rebates/total exports to c4% from c7% previously. In 2026e, however, we expect a 2.46 pp y-o-y expansion in EBIT margin to c11%, supported by GPM improvement and a c87% y-o-y increase in rebates to EGP786m, including an EGP100m from government backlog out of a total EGP400m to be received in cash, and higher exports which now include the US market following the shutdown of its US factory, increasing its exports from Egypt. Over 2027–30e, we expect EBIT margin to average c10%, with export rebates growing at a CAGR of c3%, reaching EGP892m by the end of our forecast period. During 2026e, we expect a capital gain of cEGP482m from the sale of its US machinery and two buildings. Consequently, we expect net profit margin (NPM) to stand at c8% in 2025e, c11% in 2026e, and to average c8% over 2027–30e.” Pakinam El-Etriby concluded.

About HC Brokerage

For further information, please contact:

Research@hc-si.com

HC: Eastern Company, rebuilds momentum

Posted on August 11, 2025January 28, 2026 by Marwa Nakhla

Higher selling prices, volume recovery, and replenished inventory should enhance EAST’s operations over FY25/26–29/30e
The ERP and investment income from UTC should also preserve EAST’s profitability and support cash dividend distribution

In a recent report, HC Brokerage presented their vision about Egypt’s consumers sector through an updated evaluation of Eastern Company where they expect the company’s profitability to be preserved.

Pakinam El-Etriby, Consumers Analyst at HC commented that: “FX availability, tax brackets adjustment, and price hikes improved EAST fundamentals, in our view: After a challenging 2023 and part of 2024, EAST witnessed several positive developments. In 4Q22/23 and FY23/24, its local cigarette volumes significantly declined, primarily due to USD shortages and a hike in raw tobacco prices. At that time, Egypt experienced an FX crunch, which limited EAST’s ability to import raw tobacco. As a result, its volumes dropped by c46% y-o-y to 8,660m cigarettes in 4Q22/23 and c26% y-o-y to 43,158m cigarettes in FY23/24, from an average quarterly level of 16,306m cigarettes and yearly level of 64,919m cigarettes in the previous three years. However, by 4Q23/24, volumes began to recover following the 6 March EGP devaluation and the USD35bn Ras El Hekma deal, which improved USD liquidity at banks and raw materials importation. Volumes increased by c28% y-o-y in 4Q23/24, c70% y-o-y in 1Q24/25, and c33% y-o-y in 2Q24/25, yet declined by c19% q-o-q in 3Q24/25 due to Ramadan seasonality in March. On the pricing front, EAST increased its selling prices in November 2024 by c12%; however, not enough to restore its margins. And on 29 June, the government allowed an exceptional measure by increasing the retail price ceiling of the first tax bracket by c23% to EGP48.0/pack, allowing EAST to increase its retail prices on 18 July by c14%, and paving the way for it to revert to its higher pre-FX crunch margins. The government also approved increasing the local cigarette flat tax by only EGP0.50/pack, which is also positive given that the new flat tax of EGP5.00/pack represents 10.4% of the retail price of EGP48.0/pack, compared to the previous EGP4.50/pack flat tax, representing 11.6% of the retail price of EGP38.9/pack. EAST also increased its inventory coverage to 11.3 months in 3Q24/25 from 7.1 months in 2Q24/25 and 2.5 months in 1Q24/25, to mitigate inflationary pressures. The company sold its Factory Nine to United Tobacco Company (UTC) in July 2024 for EGP1.58bn, and hence it ceased to recognize leasing income from it starting 2Q24/25.

“We forecast EAST net income to grow at an FY26/27—29/30e CAGR of c14%, supporting future cash dividend distribution: In FY25/26e, we expect revenue to grow by c49% y-o-y to EGP58.7bn (c32% above our prior estimate), largely attributed to c33% y-o-y increase in local ex-factory prices to EGP17.1/pack (versus our previous estimate of EGP11.4/pack) while volumes increasing by c12% y-o-y to 64,831m cigarettes (slightly below our earlier estimate of 68,416m cigarettes). We assume a further c12% increase in the tax bracket in 2Q25/26e to EGP53.8/pack from EGP48.0/pack, assuming a retail price of EGP50.0/pack (ex-factory price of EGP18.7/pack) by 4Q25/26e. Over our FY26/27—29/30e forecast period, we expect revenue to grow at a CAGR of c10%, underpinned by volume and price growth of c2% and c8%, respectively, as volumes normalize and price increase momentum continues. We estimate FY25/26e GPM to expand by c9 pp y-o-y to c39%, supported by higher prices and ERP-related cost efficiencies, and average c44% over our FY26/27—29/30e forecast period. We forecast EBIT margin to increase by c10 pp y-o-y to c37% in FY25/26e, and average c42% over our FY26/27—29/30e forecast period. We anticipate EAST to record provisions of EGP2.43bn in FY24/25e for its early retirement program (ERP), assuming 2,000 employees opt in, resulting in annual savings of EGP529m, on our numbers, and expect it to stop provisioning for it post FY24/25e. As a result of the margins expansion, cost reduction, and hefty investment income from UTC, especially after it increased its selling prices in July, we expect EAST’s EPS to grow at a FY26/27—29/30e CAGR of c14%, supporting future cash dividend distribution. While EAST had consistently maintained a net cash position, it turned into a net debt position of EGP2.31bn as of 3Q24/25, parallel to its strategy to build up inventory to hedge inflationary pressures. However, assuming a drop in the cash conversion cycle (CCC) to nine months in 4Q24/25e from around 15 months in 3Q24/25, we expect EAST to start reverting to a net cash position of EGP8.10bn as of 4Q24/25e and remain in a net cash position until the end of our forecast period.” Pakinam concluded.

About HC Brokerage

For further information, please contact:

Research@hc-si.com

We forecast JUFO to deliver a c18% revenue and c26% EBITDA 2026–30e CAGR, supported by higher prices and volumes

A gradual margin normalization will pave the way for higher dividend distribution, despite planned expansions, in our view

Higher selling prices, volume recovery, and replenished inventory should enhance EAST’s operations over FY25/26–29/30e

The ERP and investment income from UTC should also preserve EAST’s profitability and support cash dividend distribution