Lecico Egypt growth driven by exports of its toilets to Europe
Ceramics company flushed with success
Good news was scarce yesterday among regional markets warily eyeing global events and finding little locally to cheer. One notable exception was increased profits at Lecico Egypt, a ceramics company with its growth driven by exports of its toilets to Europe. The company said improved volumes in the sanitary ware segment was the main driver of a 25 per cent rise in first-quarter earnings.
Profit rose to 26.9 million Egyptian pounds (Dh17.6m), on revenue that was up 11 per cent to 269.5m pounds, compared with the first quarter last year. "The strength that we had seen in our business in the last quarter of last year continued in 2010 with robust growth in the sanitary ware business across all markets, specifically in Europe but also in Egypt and the Middle East," said Gilbert Gargour, the chairman and chief executive of Lecico Egypt.
Lecico, which exports a third of its products including toilets and sinks, has a significant presence in Britain and France. Its average sanitary ware prices were up 5 per cent over the past year to 115.4 pounds a piece as a result of the strengthening of the euro and the sterling exchange rates, the company said. Elie Baroudi, the managing director, said the company was able to raise its prices in certain markets and manage its expenses and overheads.
"Sanitary ware volumes have performed very well with an increase of 14 per cent over the same period of last year … which demonstrates the strength and resilience of our sanitary ware franchise," Mr Baroudi said. The company said it anticipated increased export volumes in the coming period and was looking to enter new markets but did have some concerns over rising energy prices. Egypt plans to eliminate subsidies to all industrial sectors by the end of next year after gradually ending those going to energy-intensive industries, such as cement or fertiliser. "Any increase in energy prices would be mitigated by the confirmation - received by Lecico from numerous official sources - that sanitary ware is no longer considered an intensive energy user," Mr Gargour said. Lecico shares closed down 1.2 per cent at 21.04 pounds.