Edita Food Industries: about Q3-2023 in a Nutshell

Cairo / EG. (ef) Edita Food Industries S.A.E., a leader in the Egyptian packaged snack food market, announced in November its results for the quarter ended 30 September 2023, recording revenue of EGP 3,116.2 million, up 54.6 percent y-o-y (year-over-year) primarily driven by improved pricing and strong performance across all segments. Edita’s profitability prevailed against the challenging operating environment, with gross profit rising 51.7 percent y-o-y to EGP 1,034.1 million and gross profit margin remaining stable at 33.2 percent. This positive trend continued down the income statement, with Ebitda increasing 52.8 percent y-o-y to reach EGP 671.8 million, and net profit expanding by 48.5 percent y-o-y to register EGP 424.9 million, with an associated margin of 13.6 percent.

On a nine-month basis, Edita recorded revenues of EGP 8,754.0 million in 9M-2023, up 70.1 percent compared to the first nine months of 2022 supported by strong and consistent growth across the past three quarters. Over the same period, net profit grew 87.6 percent y-o-y to reach EGP 1,182.4 million, with an expanded margin of 13.5 percent compared to 12.2 percent in 9M-2022, continuing an increasing trend in profit margin quarter-on-quarter.

Edita’s flexible and dynamic business model and its ability to adjust pricing strategies, while introducing new products that cater to consumers demand, has allowed the company to navigate economic headwinds and maintain its growth trajectory. This was highlighted in Edita’s impressive double-digit sales growth across all six of its segments for the quarter. Growth was driven by a series of direct and indirect price increases that have migrated consumers to high- er average price points, while maintaining volume growth and market share. In 3Q-2023, Edita implemented a 45.7 percent y-o-y (year-over-year) increase in average price per pack to reach EGP 3.15, while average price per ton was 56.4 percent higher than in the same quarter last year. Despite the price increase, total packs sold reached 989 million up by a 6.1 percent y-o-y increase. This was accompanied with stable amounts of tons sold, with bakery being the main driver of volume growth in 3Q-2023. On a nine-month basis, the average price per pack increased 39.6 percent y-o-y to EGP 2.93 and total packs sold came in at 2,983 million, up 21.8 percent compared to 9M-2022.

In 3Q-2023, gross profit reached EGP 1,034.1 million, marking a substantial 51.7 percent y-o-y increase with an exceptional improvement in gross profit and margins at the cake segment. Strong gross profit growth and stable margins came despite a 60.9 percent y-o-y increase in cost of sales to EGP 1,770.3 million in 3Q-2023. Higher costs were driven by sever inflationary pressures on Edita’s direct materials. However, Edita successfully absorbed higher direct material costs with improved pricing and higher operational efficiencies, with manufacturing overheads (MOH) as a percentage of sales having declined to 8.8 percent in 3Q-2023 versus the 9.9 percent recorded last year. In 9M-2023, Edita recorded gross profit of EGP 2,827.2 million, a strong 60.9 percent y-o-y growth with an associated margin of 32.3 percent.

Total SG+A increased to EGP 411.5 million in 3Q-2023, up 42.7 percent y-o-y due to a 58.7 percent y-o-y increase in general and administrative expenses, a 34.1 percent y-o-y increase in selling and distribution expenses, and a 30.8 percent y-o-y increase in advertising and marketing expenses. Nevertheless, SG+A as a percentage of sales was down to 13.2 percent compared to 14.3 percent in the same quarter last year. On a year-to-date basis, total SG+A recorded EGP 1,220.9 million, accounting for 13.9 percent of sales against 16.7 percent recorded over the same period last year.

Ebitda for the quarter stood at EGP 671.8 million, up 52.8 percent y-o-y with a stable Ebitda margin of 21.6 percent. Edita continued to maintain its Ebitda profitability despite elevated costs supported by SG+A efficiency and high operating leverage. On a nine-month basis, Ebitda went up by 75.8 percent y-o-y to reach EGP 1,783.0 mil- lion, with an expanded Ebitda margin of 20.4 percent on the back of a series of strong quarter-on-quarter performances.

Edita’s top-line performance was mirrored in its bottom-line, which rose by 48.5 percent y-o-y to EGP 424.9 million in 3Q-2023, with an associated profit margin of 13.6 percent. Year-to-date, net profit came in at EGP 1,182.4 million, increasing by a notable 87.6 percent y-o-y with an expanded net profit margin of 13.5 percent against 12.2 percent recorded in 9M-2022.

Edita recorded gross export sales of EGP 312.0 million, up by 141.0 percent y-o-y and contributing 10 percent to total revenue during the quarter compared to 7 percent in 3Q-2022. In USD terms, export sales booked USD 10.1 million, up 48.0 percent. Year-To-Date, export sales booked USD 25.2 million, up 48.5 percent year-over-year.

On the regional front, Edita’s facility in Morocco recorded EGP 36.0 million in revenues, remaining stable compared to last year. On a nine-month basis, revenues reached EGP 259.6 million, up 191.7 percent y-o-y. For additional information please read the Company’s PDF file below (1176 KB):