CAIRO: Egypt’s Oriental Weavers, the world’s largest machine-woven carpet producer, posted a 5 percent drop in first-quarter net profit on lower domestic demand.
Net profit after minority interests reached LE 92 million ($17.3 million), the company said on Thursday, on revenue of LE 915 million.
"The drop in local sales was due to the lack of capacity as the increase in export orders had to be serviced. Furthermore local demand for consumer products dropped," the firm said in a statement.
The company’s tufted carpets segment also witnessed a 14.5 percent drop. "The segment faced relentless competition and there were issues arising with the production line," it said.
Export sales, however, increased by 15 percent. Oriental Weavers sells 45 percent of its goods locally where it has an 85 percent market share. It exports the rest to over 100 countries.
Exports to Europe grew 28 percent and to the United States by 13 percent. Strongest growth was to China, up 34 percent.
The group said it was optimistic it had weathered the effects of the global financial crisis as demand for consumer goods revives. "We anticipate that local demand will recover in the second quarter and reach its highest level in the third quarter due to the seasonality of the industry," it added.