07 April, 2020

Egypt's logistics market likely to recover from Covid-19 slowdown in Q3 - Egytrans Chief

Company to maintain cautious outlook for 2020 as revenues decline in 2019

Image used for illustrative purpose. A worker cycles past containers outside a logistics center near Tianjin Port, in northern China, May 16, 2019.

Image used for illustrative purpose. A worker cycles past containers outside a logistics center near Tianjin Port, in northern China, May 16, 2019.

REUTERS/Jason Lee

Egypt's logistics market is likely to recover from the slowdown due to Covid-19 in the third quarter as industrial production, and consumer demand picks up, the Chairman and Managing Director of Egytrans said in a statement on Monday.

"Our current model is built on an expectation that the logistics and transport industry will continue to face slowdowns as centres of production close [and] this will impact players in the market and pricing," the statement quoted Leheta as saying.

She said the "situation is fluid," which made it difficult to put "clear estimates on time and the level of impact" but expressed optimism that the market would improve "as early as the third quarter" with an expected sharp rebound and rise in prices due to capacity shortages as production restarts, and "as consumer confidence drives healthy demand in the fourth quarter when inherent growth drivers" kick in.

"Fortunately, Egypt's economic growth has almost always relied on strong domestic demand supported by both private and public consumption, driving with it a vast demand for logistics and transportation services," she explained.

The EGX-listed company's consolidated revenues for 2019 declined 11.1 percent year-on-year to 247 million Egyptian pounds ($15.7 million) despite a 2.7-fold growth in core business lines, while net profits declined by 23.8 percent to 31.9 million pounds ($2 million).

Lehata noted in the statement that the company's focus in the current environment is on safeguarding employees, and on Business Continuity Management (BCM) to help mitigate the effects of Covid-19 on business operations and dealings.

In Egypt, logistics expenditure is expected to cross $50 billion by 2024, the statement concluded.

(1 US Dollar = 15.75 Egyptian Pounds)

(Writing by Eman Hamed; Editing by Anoop Menon)

(anoop.menon@refinitiv.com)

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