Egypt-based bakery group Edita Food Industries has set out plans to increase prices on products sold under its flagship brand Molto.
The London-listed company said the hikes would improve profits amid “global inflationary pressures and rising commodity prices”.
Edita generated a net profit of EGP163.7m (US$10.4m) in the opening six months of 2021, up sharply on the EGP67.5m booked a year earlier.
Gross profits rose 27.2% to EGP736.5m on the back of a 33.7% increase in revenue to EGP2.32bn. Edita’s gross profit margin stood at 31.8%, compared to 33.4% in the first half of 2020. When Edita announced those numbers in August, the company said the “cost of direct materials” had grown by almost 71% in the second quarter versus a year earlier.
In a stock-exchange filing yesterday (25 October), the company said Molto products previously priced at EGP2 per pack have been raised to EGP3. Items that were priced at EGP3 a pack have moved up to EGP4. Edita said Molto SKUs priced at EGP5 per pack “have been left unchanged”.
Chairman Hani Berzi added: “Having introduced a host of innovative new products in 2020 and 2021 and made important investments in expanding our production capacity, Edita has moved to leverage its dominant market position by adjusting price points across our Molto product range.
“Besides marking important progress on our portfolio optimisation strategy, the increases will help mitigate the effects of heightened raw material costs, which come as global energy shortages and supply chain dislocations have pushed global commodity prices to multi-year highs.”
Edita manufactures branded snack products including packaged cakes, croissants, biscuits and confectionery. It exports to 17 markets in the Middle East and north Africa.
In 2020, the company generated revenue of EGP4.02bn, flat on a year earlier. More than 42% of its revenue came from packaged cakes. Net profit was EGP302.2m, down 16.6% on 2019.