Sewedy Cables sees 2010 profit, exports up

Sherine El Madany
3 Min Read

CAIRO: Egypt s El Sewedy Cables expects net profit to rise 25 percent in 2010 as its loss-making activities recover and sales pick up, it said on Thursday.

Net profit is seen climbing to around LE 800 million ($145 million) in 2010, Sewedy executives said in a conference call.

All investments that were losing in 2009, we expect them to be positive this year, said Ahmed El Homosani, investor relations manager.

Sales pick-up and growing consumption of about 15 to 20 percent will boost profit in 2010, executives added.

Net profit at Sewedy, the largest Arab cable maker by market value, declined 23 percent in 2009 to LE 633.6 million, hit by lower cable prices, reduced export sales and higher costs.

The firm, which has production plants in Egypt, Ethiopia, Nigeria, Yemen, Saudi Arabia, Syria, Algeria, Ghana, Zambia, Qatar, and Libya, has around 10 projects that have yet to produce at capacity.

This year will be better than last year since we will have seven to eight projects operating and adding profit to the company, said Ahmed El Sewedy, its chief executive officer.

Company executives said they planned to increase exports to markets in the Middle East North Africa region, Spain, Portugal, Eastern Europe and Brazil.

Eyes Europe

Analysts say Western Europe and North America, which account for a fifth of demand each, are looking for cables to replace ageing lines and to interconnect electricity networks, while the Middle East s and North Africa s investment plans of more than $60 billion also make it a major market.

We believe there is a big market in Europe. This will be our focus going forward, Sewedy said. There is also good potential in the Gulf … and our main growth there will come from Saudi Arabia and Qatar.

He added the firm targeted a 2 percent share of the European market by the end of this year, up from around 1 percent now.

The firm said in March it had invested ?40 million in two plants in Egypt to manufacture equipment for electricity-generating wind farms. It also said it would supply wind energy projects in Egypt, the Middle East, Africa and Europe.

For wind energy, we believe we secured a lot of orders this year, and we expect to reach full capacity this year, Sewedy said.

Sewedy said in March it signed contracts to install 60 megawatts in North Africa with investments of ?82 million and 36 megawatts in Europe worth ?38 million.

Research shows that the world market for wind turbine installations was worth about ?45 billion ($60 billion) in 2009 and that global installed capacity will more than double to 340 gigawatts by 2013.

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