Earnings for the full-year of 2018 fell on higher COGS: Dice Sport & Casual Wear’s (DSCW) earnings dropped 13% y/y to EGP154mn in 2018 from EGP177mn in 2017. Earnings were largely pressured by COGS which escalated by 36% to EGP1.11bn as the company incurred the full costs of labor in its Cairo Cotton Center’s (CCC) factory while operating at low utilization rates. Highly leveraged, DSCW saw its interest expense climb 30% y/y to EGP92mn, weighing on earnings. Earnings in Q4 2018 were nearly flat on a yearly basis but shot 80% up to EGP47mn on a sequential basis, predominantly driven by 51% q/q revenue growth to EGP483mn. This resulted in a lower ratio of SG&A as a percentage of revenue, contracting to 9% from 14% in Q3 2018.
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