Egypt's wealthy Khamis family nearly doubles Oriental Weavers profit on export subsidy windfall

Oriental Weavers, the Cairo carpet manufacturer controlled by Egypt's wealthy Khamis family, nearly doubled its second-quarter profit and passed a billion pounds in a single quarter for the first time, carried by American and European buyers while Egyptian households cut back.

Net profit reached $22.5 million (1.12 billion Egyptian pounds) in the three months to June, up 98.2 percent from a year earlier. Revenue rose 12.8 percent to $139.5 million (6.96 billion pounds). The net margin widened 6.9 percentage points to 16.1 percent.

Chief executive Hazem Al Zifzaf said the company achieved the result despite supply chain disruptions and raw material volatility arising from the United States-Iran war, alongside weaker global demand and subdued consumer spending at home.

The half-year figures follow the same pattern. Revenue for the six months reached $278.7 million (13.9 billion pounds), up 10.6 percent, while net profit climbed 80.4 percent to $40.4 million (2.01 billion pounds).

Export subsidies did much of the work

The profit jump is considerably larger than the improvement in the underlying business, and the gap sits in a single line.

EBITDA rose 17.7 percent to $18.9 million (941 million pounds) in the quarter. Net profit rose 98.2 percent. Between those two lines sits export rebates, which increased 285.7 percent to $9.1 million (452 million pounds) from 117 million pounds a year earlier. That figure alone equals roughly 40 percent of the quarter's net profit, a Billionaires.Africa calculation.

The company said the collection included 150 million pounds from backlog claims settled through government fee offsets and cash collections. Egypt operates an export subsidy programme that reimburses manufacturers for a portion of overseas sales, and payments have historically run behind schedule. Rebates for the full half came to $13.1 million (654 million pounds), up 277.5 percent.

Operating costs climbed across the board. Cost of goods sold reached $120.3 million (6.0 billion pounds), up 10 percent, with manufacturing overheads up 15 percent on higher utilities and labour costs up 21 percent. Raw materials rose 4 percent. General and administrative expenses increased 55 percent to $5.7 million (283 million pounds) on higher salaries and consulting fees.

Gross profit still improved sharply, rising 36.3 percent to $19.8 million (988 million pounds), with the gross margin widening 2.5 percentage points to 14.2 percent.

The balance sheet moved further. Oriental Weavers reported a net cash position of $22.1 million (1.1 billion pounds), against net debt of 2.1 billion pounds a year earlier. Cash and equivalents rose 48.3 percent to $137.7 million (6.87 billion pounds), and total assets increased 11.5 percent to $739.5 million (36.9 billion pounds). Free cash flow for the half reached about 2.0 billion pounds, up 245 percent, though the second quarter contributed only 308 million pounds of that after the first quarter delivered 1.61 billion.

Capital spending rose 88 percent to $7.3 million (364 million pounds), equal to 5 percent of sales. The company expects full-year capex of $24.1 million (1.2 billion pounds), directed at feeding lines, production capacity, health and safety, and digital work.

America takes half of export sales

International markets supplied 70 percent of revenue and 67 percent of volume, generating $98.2 million (4.9 billion pounds) and growing 17 percent.

America accounted for 48 percent of those export sales and Europe 36 percent, with the Gulf at 5 percent, Asia at 5 percent, Africa at 3 percent and hospitality at 2 percent. The woven segment drove the performance, with revenue up 22 percent on a 20 percent rise in volumes, and average selling prices up 2 percent on currency depreciation. Tufted exports grew 5 percent on a matching volume increase.

Non-woven exports moved the other way. Revenue fell 13 percent as volumes dropped 23 percent, which the company attributed to a market shift toward higher quality products in a segment where its capacity remained constrained. Average selling prices rose 13 percent, partly offsetting the volume loss.

Egyptian sales tell a different story. Domestic revenue grew 4 percent to $42.1 million (2.1 billion pounds) and contributed 30 percent of the total, achieved through pricing rather than volume. Woven revenue at home rose 7 percent despite a 15 percent fall in volumes, on a 25 percent increase in average selling prices. Tufted volumes fell 3 percent and revenue was broadly flat. Non-woven prices rose 12 percent, met customer resistance, and pushed volumes down 17 percent for a 7 percent revenue decline.

Wholesale accounted for 45 percent of domestic sales and company showrooms 40 percent, with depots at 11 percent and e-commerce and hospitality making up the balance.

What the family holds

The Khamis family held 54 percent of the listed company as of June 30, according to the release, through two vehicles: M&M Khamis with 29 percent and FYK with 25 percent. Billionaires.Africa reported the family holding at 56.58 percent as recently as April.

Fitihi Group holds 12 percent, Ataqa Group 6 percent and Olayan Holding 3 percent. Local institutions account for 12 percent, foreign institutions 7 percent, local retail 4 percent and foreign retail 2 percent.

Yasmine Mohamed Khamis leads the group alongside her siblings, having taken the non-executive chairmanship of a business her father, Mohamed Farid Khamis, founded in 1979 with a single loom operation. The company listed on the Egyptian Exchange in December 1994 and describes itself as the world's leading manufacturer of woven carpets, running vertically integrated operations from fibre extrusion and dyeing through spinning, weaving and finishing.

Shareholders approved a dividend of 997.66 million pounds for the 2025 financial year, or 1.5 pounds a share, payable in instalments from May. The Khamis family's share of that came to about 564.36 million pounds. Full-year revenue for 2025 reached 26.6 billion pounds, up 10 percent, with profit close to flat.

Oriental Weavers reported net attributable profit of $21.0 million (1.05 billion pounds) for the quarter, up 97.7 percent, and $38.2 million (1.91 billion pounds) for the half. Adjusted net profit for the six months was 1.71 billion pounds after stripping out 300 million pounds in net capital gains.