Currency difference losses for the Egyptian Company “Ezz Steel” were exacerbated in the first quarter of this year, which incurred net losses of EGP 2.5 billion, despite a 50% increase in sales.
The Company’s business results, issued today, revealed that the currency differences losses in the first quarter amounted to EGP 8.9 billion, which put pressure on the Company’s profitability violently. After its revenues increased by 49.4% to reach EGP 27.8 billion, it eventually incurred net losses of EGP 2.5 billion.
The Group said that due to the lack of liquidity in foreign currencies in the banking sector, it turned from the fourth quarter of last year to gradually increasing exports again to secure the foreign currency needed to import raw materials and consumables.
It should be noted that the Company incurred currency differences losses in January and February amounting to EGP 5.28 billion, which means that the currency differences worsened to record in March alone about EGP 3.6 billion.
Egypt liberalized its local currency price three times from March 2022 until last January, which prompted the Egyptian pound to decline against the dollar by about 25% during the first half of this year and by more than 95% since the beginning of the Russian-Ukrainian crisis in March 2022, to now the trade is at EGP 30.90 per dollar.
Iron prices increased at the “Ezz Steel” Company, which has the largest market share in the Egyptian rebar market, by 93.6% in one year, as the price of a tonne at the beginning of last March reached EGP 38.2 thousand, compared to EGP 19.7 thousand in March 2022.
Some iron and steel manufacturers in Egypt complain about the scarcity of foreign currency needed to continue their business and import raw materials in the largest Arab country in terms of population, to the extent that some of them resorted to reducing production or stopping it altogether.