Egyptian consumer businesses to become more lucrative in Q4 2023: HSBC

The report expected profit margins of Egyptian consumer goods companies to decline in the second and third quarters of 2023, before recovering in the last quarter of the year.

HSBC said the devaluation of the pound, which boosted inflation, had a negative impact on Egyptian companies' profits.

For the first quarter of 2023, the report noted that "margins remained resilient on the back of the sharp devaluation since end-October 2022. The gross margins were supported by low-cost inventory, while revenue growth was mainly driven by pricing."

HSBC expected the price-to-earnings ratio (PE) for Egyptian consumer businesses to reach 890 percent during the next 12 months, up from 700 percent before the pound’s devaluation in October, yet below a five-year average of 1000 percent.