Egypt’s El Sewedy Cables (SWDY.CA), the largest Arab cable maker by market value, said on Thursday it expected net profits to rise 20-25 percent in 2010, up from an expected 10 percent rise in 2009.
The firm said in April it expected its 2009 net profit to rise 10 percent as it derives more revenue from non-cable operations.
“For 2010, we’re expecting it to be much better than 2009, by around 20-25 percent,” Chief Executive Ahmed El Sewedy said on a conference call.
El Sewedy said the increase would come from investments in Saudi Arabia, Qatar, Yemen and Algeria that would had not yet come online or were still not generating revenue.
“Most of our new investments, we have no income from them. until now, our income from the meters is almost negligible, our income from the power transformers is almost negligible,” El Sewedy said. “All these projects will be running and getting revenue by next year. This is why we are expecting better profitability by 2010.”
The company’s investments in wind power generation projects would also begin paying off by next year, El Sewedy said.
“Wind is our future … It will not reflect any profit this year, (but) it will begin giving some income by next year,” El Sewedy said.
He added that the firm had been approved as a supplier for new meters in several European countries that were planning to replace millions of mechanical meters.
The firm said last week its net profit for the first quarter of 2009 had dropped 26 percent to 192 million Egyptian pounds ($34.30 million) as wire and cable sales dropped.
El Sewedy said he expected tough competition in the cable business in the next two years, in light of new companies and fresh investments coming into the market.
Investment bank EFG-Hermessaid in January that El Sewedy’s earnings in the first quarter of 2009 would be weak, but that growth would pick up in the long term, driven by El Sewedy’s expansion into non-cable, high-growth activities.
