We’ve come a long way so far in the Q2 2020 earnings season (or Q4 2019/20 for those companies closing their fiscal years in June). So far, out of the EGX 30 current constituents, 23 (76.7%) have posted their figures whether unaudited or full financials. Meanwhile, seven companies (23.3%) are yet to publish their financials. The 23 companies that published their figures have shown collective earnings of EGP6.5bn (-17.3% y/y, -10.7% q/q), whereas the top line came in at EGP56.0bn (-8.8% y/y, -7.3% q/q). It isn’t much of a surprise to see slippage, both on annual and quarterly bases, since the effect of COVID-19 induced lockdown measures were expected to be more visible in Q2 more than Q1.
Here are some interesting observations we noted out of the 23 companies:
— All companies reported profits, except for only three which posted losses: BTFH, DSCW, and HELI.
— From a y/y window, two companies turned to losses: DSCW and HELI; but only HELI turned to losses sequentially.
— From a y/y window, two companies turned to profitability: AUTO and EMFD; but only SKPC turned to profits sequentially.
From a sectorial point of view, we note the following:
— Only Energy & Utilities and NBFS posted y/y growth in earnings, the former carried by EKHO, while the latter driven by HRHO.
— Sequentially, only NBFS and Industrials saw q/q earnings growth, with the latter represented by SWDY.
— Four sectors (out of 10) saw net margin expansion q/q: NBFS, Energy & Utilities, Industrials, and Materials.
— Banks continued to hold the lion’s share within EGX 30 constituents, commanding 46% of the sample’s earnings, followed by Real Estate (17%), Telecom (12%), and Industrials (8%).
— So far into the Q2 2020 earnings season (based on all EGX 30 constituents’ total return from 12 July through 1 September), seven sectors had an average positive total return, while three had an average negative total return.