Egypt's Oriental Weavers posts $130 million Q1 revenue as profits begin recovering

Oriental Weavers Carpet Company, the world's largest manufacturer of machine-woven rugs and carpets, posted consolidated revenue of EGP 6,896.91 million, approximately $130.33 million, in the first quarter ended March 31, 2026, a sequential improvement of 11.8 percent from the EGP 6,167.51 million, or $116.55 million, recorded in the preceding quarter, as the El Kamah family's Egyptian industrial group shows early signs of recovery after a year in which full-year profits declined significantly below their prior peak.

Net income for the quarter came in at EGP 614.28 million, equivalent to $11.61 million, up from EGP 530.64 million, or $10.03 million, in the fourth quarter of 2025. Gross profit reached EGP 824.94 million, or $15.59 million, with a gross margin of approximately 11.96 percent. Operating income for the quarter was EGP 541.37 million, equivalent to $10.23 million. EBITDA came in at EGP 810.91 million, or $15.32 million, a slight sequential decline of 6.2 percent from the prior quarter.

The Q1 results arrive after a full year 2025 that produced consolidated net profits after tax of EGP 2.26 billion, approximately $42.7 million, down from EGP 2.54 billion, or $48 million, in 2024, a drop of approximately 11 percent. Revenue for the full year 2025 reached EGP 24.29 billion, or $459 million. The profit decline reflected the normalization of pricing tailwinds that had inflated 2024 results. Oriental Weavers had benefited significantly in the aftermath of Egypt's March 2024 currency devaluation, which pushed export and local prices sharply higher and drove exceptional earnings through the first half of 2025. As those effects faded through the second half of the year, margins compressed and the full-year number retreated from its prior-year level.

The company's ordinary general assembly approved cash dividends of EGP 997.66 million, or $18.85 million, for 2025, payable in three instalments: EGP 0.50 per share on May 20, 2026, EGP 0.50 per share on October 28, 2026, and EGP 0.50 per share on February 24, 2027. At EGP 1.50 per share across the three instalments, the dividend reflects the board's continued commitment to shareholder returns even in a year where the bottom line retreated.

The outlook for 2026 appears more constructive. HC Brokerage, in a research note earlier this year, forecast that gross profit margins would expand to approximately 13 percent in 2026, from around 12 percent in 2025, driven by an anticipated decline in oil prices that would reduce polypropylene costs, the primary raw material input for machine-woven carpet production. The brokerage also flagged an expected 87 percent increase in export rebates to EGP 786 million, or $14.85 million, including EGP 100 million, approximately $1.89 million, from government backlog payments, as a meaningful earnings accelerant. Net profit margin is forecast at approximately 11 percent for the full year 2026. A capital gain of approximately EGP 482 million, or $9.11 million, is also expected from the sale of US machinery and two buildings following the closure of the company's American manufacturing facility.

Oriental Weavers was founded in 1979 in Cairo by Mohamed Farid Khamis, a leading Egyptian entrepreneur and industrialist, and listed on the Egyptian Exchange in 1997. The company sells into more than 130 countries across Europe, the Americas, Africa and Asia, and runs a network of over 120 showrooms in Egypt. It operates three business segments: woven, where the majority of revenue is generated; tufted; and non-woven. Chair Yasmine Khamis has been leading the group through its digital transformation agenda, highlighted by the launch of a unified e-commerce platform in May 2026 and the planned introduction of OW Studio, an AI-powered customisation tool that will allow customers to design and order personalised rugs through the group's digital channels.

The sequential improvement in Q1 2026 revenue and profit, against a backdrop of normalising pricing and lower raw material cost expectations, suggests the group's underlying business is finding its footing after the distortions of the devaluation cycle. Whether margin expansion materialises in line with brokerage forecasts will depend on where global oil and petrochemical prices settle over the remainder of the year.