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Improved performance in core business and Operational Management offsets negative COVID impact
Positive outlook for 2021 as market rebalances
Cairo, Egypt : Egytrans, a leading transport and logistics company, announced annual results for Q4 2020, detailing its financial performance progress in terms of growth volumes and revenues. Although the global industry contracted by 9%, albeit with large fluctuations in demand during the year, Egytrans was able to manage the impact through tight operations cost and agile capacity deployment. In spite of a revenue decrease of 12.4%, due to the pandemic, Egytrans has managed to come out in the green with net profits after taxes reaching EGP 13.1 million.
“From a shift in global supply chains, shipping patterns, whiplash demand, to panic buying and extraordinary freight rates, 2020 has been one of the most complex and demanding years in the history of the industry,” stated Abir Leheta, Chairman and CEO of Egytrans, explaining that after the initial steep disruption of demand, a partial recovery in the demand during a period where services remained curtailed, implied an extreme challenge to cope with in terms of cost and capacity management. The focus according to Leheta, “was on business continuity guided by three objectives which continue to guide our decisions: protecting our employees, serving our customers by keeping our global network operating, and supporting the wider society during the pandemic.” Proactive risk management, deployment of effective crisis and business continuity plans, and a strong resolve from employees ensured that, so far, the operational impact of COVID-19 has been minimized.
Egytrans group revenues for 2020 reached EGP 216 million, representing a decrease of 12.4% Y-o-Y. As a result, net profits after taxes for the year declined by 59%, reaching EGP 13.1 million down from EGP 31.8 million, registering a net profit margin of 6% vis-a-vis a margin of 12.9% in 2019. This decline in Net Profits was diluted by our continued emphasis on cost and cash discipline, in addition to improved performance in 2020 in core business areas such as Logistics & Land Transportation. Meanwhile group net operating profit margin showed strong decline from 13.9% recorded in 2019 reaching 7.2% in 2020 mainly as a result of the increase in SG&A/revenues ratio from 15.1% to 19.2% in addition to the increase in cost/revenues ratio from 71% in 2019 to 73.6% in 2020.
Egytrans’ separate revenues reached EGP 189.8 million showing a decline of 14.5% Y-o-Y. In the meantime, costs improved by 7.9% to EGP 160.9 million while SG&A added 12.5% to EGP 36.6 million. As a result, net operating profit turned to loss by EGP 7.6 million in 2020 from EGP 14.8 million in 2019. Net profits after Taxes decreased 51% to EGP 13.9 million in 2020 vis-à-vis EGP 28.3 million a year ago, representing Net Profit Margins of 7.3% and 12.7% for both respective periods. Earnings per Share (EPS) reached EGP 0.30 for 2020 compared to 0.74 in 2019.
Egytrans’ subsidiary, ETAL, achieved an increase in revenues of 39.2% Y-o-Y, reaching EGP 22.4 million in 2020 compared to EGP 16.1 million 2019 as the market for large infrastructure projects has slowly begun moving from the complete COVID induced halt with a focus on fulfilling delayed projects. Meanwhile, net profits after taxes recorded a 53.4% drop Y-o-Y to EGP 1.8 million in 2020.
Egytrans ISO Tank Depot solutions business recorded a slight 0.4% increase in its 2020 net profits after taxes to USD 0.564 million vis-a-vis USD 0.562 million in 2019. On the top level, revenues recorded an increase of 22.9% to USD 1.4 million as opposed to USD 1.2 million in 2019.
Commenting on the future of the logistics market for this year, Leheta said that “As the pandemic continues to impact the transportation and logistics industry operationally and financially, it is difficult to predict the business impact in 2021”. It is expected that, according to reports, full recovery for Egypt will be by 3Q21 with partial recovery by 2Q21. “As a result, we believe it will depend wholly on the duration of the pandemic and the resulting lockdowns of countries and economies globally, as well as on the associated changes in demand patterns.” Leheta further noted that Egytrans’ plans for 2021 align with the “current realities” with a view to ensuring business continuity while planning ahead for the future. “The forthcoming period will therefore be one of restructuring. We will continue to focus on growing our logistics business, expanding our product portfolio to relevant markets and increasing cross-selling and upselling to our customers to deliver profitable, organic growth. In addition, we expect to continue to acquire capabilities and growth platforms, particularly within warehousing and land transport services to further strengthen our integrated product offerings,” she added.
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© Press Release 2021
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