CAIRO: Ceramics company Lecico Egypt said improved volumes in the sanitary ware segment was the main driver of a 25 percent rise in first-quarter earnings.
Profit rose to LE 26.9 million ($4.8 million), on revenue up 11 percent to LE 269.5 million.
"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," Lecico Egypt chairman and chief executive Gilbert Gargour he said.
Lecico, which exports a third of its sanitary ware products including toilets and sinks, has a significant presence in Britain and France.
Its average sanitary ware prices were up 5 percent year-on-year to LE 115.4 pounds per piece as a result of the strengthening of the euro and the sterling exchange rates, the statement said.
Managing director Elie Baroudi said the firm was able to increase its prices in certain markets, and manage its expenses and overheads.
"Sanitary ware volumes have performed very well with an increase of 14 percent over the same period of last year … which demonstrates the strength and resilience of our sanitary ware franchise," he said.
"While in absolute terms distribution and administrative expenses went up by 7 percent, nevertheless as a percentage of sales these expenses decreased to 16.5 percent compared to 17.2 percent in the same period of last year," Baroudi added.
The firm said it anticipated increased export volumes in the coming period and was looking to enter new markets, but it did have some concerns over rising energy prices.
Egypt plans to eliminate subsidies to all industrial sectors by the end of 2011 after gradually ending those going to energy-intensive industries like cement or fertilizer.
"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," Gargour said.
As for its tile division, Lecico said the market could witness potential overcapacity with new competitors entering the Egyptian market, which may pressure margins.
"(This may) require Lecico to reorient production to export markets over the course of the year," the statement said.