Egyptian billionaire Ahmed Elsewedy's Elsewedy Electric lifts sales 37% as margins narrow

Elsewedy Electric grew second-quarter sales 36.7 percent to $1.76 billion (88.02 billion Egyptian pounds), though profit rose at barely a third of that pace, and investors marked the shares down 2 percent.

Net income for the three months to June reached $101.8 million (5.08 billion pounds), up 11.6 percent from $91.2 million (4.55 billion pounds) a year earlier. Sales in the comparable quarter had been $1.29 billion (64.41 billion pounds). Basic earnings per share from continuing operations came to 2.04 pounds against 1.82 pounds, according to figures compiled by S&P Capital IQ. Conversions use the Aug. 11 rate of 49.88 pounds to the dollar, Billionaires.Africa calculations.

The gap between the two growth rates shows up in margins. Net income equalled 5.77 percent of sales in the quarter, down from 7.06 percent a year earlier, a compression of 1.29 percentage points, a Billionaires.Africa calculation. Across the half year the ratio fell to 6.07 percent from 7.02 percent.

The six-month figures follow the same shape. Sales rose 31.9 percent to $3.27 billion (163.32 billion pounds) from $2.48 billion (123.80 billion pounds), while net income increased 14.1 percent to $198.9 million (9.92 billion pounds) from $174.3 million (8.69 billion pounds). Earnings per share reached 4.03 pounds against 3.55 pounds.

Elsewedy Electric shares closed at 107.11 pounds on the Egyptian Exchange on Wednesday, down 2 percent from the previous close of 109.30 pounds and 1.75 percent lower over five sessions. The stock remains up 36.88 percent since the start of January.

Analysts covering the company are unusually cautious given that run. The two brokers tracking Elsewedy carry an average target price of 95.50 pounds, roughly 12.6 percent below where the shares last traded, while maintaining an outperform consensus.

The results give a current value to the family holding that controls the company. Ahmed El-Sewedy, president and chief executive since 2006, held 546,252,820 shares, or 25.52 percent, in his most recent disclosed position. At Wednesday's close that stake is worth 58.51 billion pounds, about $1.17 billion, a Billionaires.Africa calculation. It was valued at roughly $897 million in March last year.

His brother Sadek, the non-executive chairman, held a near-identical 25.53 percent. The El-Sewedy family held 78.7 percent of the listed company as of January 2025 and 68.1 percent by that July. Mohamed, Azza, Zainab and Mona El-Sewedy have also held positions in the business.

The family began trading electrical equipment in 1938, took on distribution for Egypt's only cable manufacturer in 1960, and opened Arab Cables in 1984 as the first private-sector cable factory in a market where every other producer was state-owned. Cables still account for close to half of group sales, split between energy and special cables at 46.5 percent and electrical equipment and accessories at 7 percent, with turnkey solutions making up the balance.

The revenue surge reflects an acquisition and export drive that has taken the company well beyond its home market over the past year.

Elsewedy bought a 60 percent stake in Thomassen Service in May. The company signed a 58 million euro financing arrangement with Commercial International Bank in February to support a Hungarian power project, part of a European expansion. Its Saudi unit opened a plant in Riyadh in November with $40 million of investment, and a joint venture with Deutsche Bahn signed a contract with Egypt's National Authority for Tunnels the same month. A subsidiary took an 18.7 million dinar contract from Kuwait's Public Authority for Housing Welfare in January and won work from Angola's electricity distribution company on the same day.

The group also agreed this month to manufacture four high-voltage transformers for a substation powering a planned artificial intelligence data centre in Southland, New Zealand, under a pre-purchase agreement between the developer Datagrid and the national grid operator Transpower.

Elsewedy set out a three-year expansion strategy in early 2025 aimed at doubling exports and using artificial intelligence to raise productivity, and operates in 19 countries across seven segments spanning cables and accessories, electrical products, telecommunications, transformers, wind energy, energy measurement, and engineering, procurement and construction.

Shareholders approved an annual dividend in May, paid on June 4.