The Board of Directors at Alexandria Containers and Goods (ALCN) has approved the company’s budget estimates for fiscal year (FY) 2021/22.
The company targets a net profit of EGP 1.4bn, up 7% versus the annualised indicators for the first eight months (8M) of 2021, and flat compared to EGP 1.4bn in FY 2019/20.
The company plans to invest EGP 273.3m as capex for the year. Its tentative strategy for the upcoming year targets to increase container fees by 13% year-on-year (y-o-y) to EGP 3,009, compared to EGP 2,762/container YTD in FY 2020/21.
Operating revenues are budgeted at EGP 2.56bn, up 13% versus the annualised YTD indicators for FY 2020/21 (8M21) and EGP 2.58bn in FY 2019/20.
It also aims to increase the number of containers to record 850,000, up 4% y-o-y, and down compared to 974,000 in FY 2019/20.
The gross margin is estimated to stand at 49.7%, compared to 53.3% YTD in 2021 and 61.2% in FY 2019/20. However, this is well below the 60% margin recorded in February 2021, which was boosted by a drop in the cost of labour.
Naeem Research sees that the announced budget expectations as conservative estimates for the upcoming year. Meanwhile, the targeted revenue seems unsurprising, as ALCN could exceed its profit estimates by a noticeable degree given significant savings.
These are set to accrue from the recent reduction is labour costs, with companywide salaries cut by about 20%.
On the other hand, a source confirmed with Daily News Egypt that the company will not be listed on the Egyptian Exchange (EGX) during the current year.