In a recent report, HC Brokerage provided its assessment of Oriental Weavers (ORWE), projecting that the company’s operational performance will gradually normalize as the Egyptian pound stabilizes.
Pakinam El-Etriby, consumer analyst at HC, noted that ORWE is expected to benefit from lower oil and polypropylene prices in 2026, followed by gradual normalization amid EGP stability. Historically, ORWE has gained from periods of EGP devaluation, given that exports account for more than 50% of total sales.
Company Performance in 2024 and Early 2025
In 2024, ORWE’s total revenues surged approximately 38% year-on-year (y-o-y) to EGP 24.3 billion, driven by a 41% y-o-y increase in export prices to EGP 227/sqm following the March EGP devaluation, and a 28% rise in local prices to EGP 191/sqm. Adjusted for inventory write-downs of around EGP 271 million in 2Q24 and EGP 500 million in 4Q24, the company’s gross profit margin (GPM) would have reached approximately 16%, compared to the reported 13%.
In 1Q25, ORWE continued to benefit from residual effects of the EGP devaluation, with export and local prices increasing by around 39% and 27% y-o-y, respectively. Total revenues rose 27% y-o-y to EGP 6.40 billion. However, revenues for 2Q25 and 3Q25 grew more modestly, by approximately 7% y-o-y to EGP 6.17 billion and EGP 6.90 billion, as prices normalized. As a result, 2025e GPM is expected to stand at approximately 12%.
Revenue and Profit Outlook 2025–2030
ORWE’s revenues are projected to grow at a 2025–2030e CAGR of around 7%, driven by higher average selling prices (ASP) and muted volume growth. Export revenues are expected to represent roughly 64–67% of total sales, reflecting the continuing impact of past EGP devaluation in 1Q25.
The gross profit margin is forecast to improve to around 13% in 2026, primarily due to anticipated declines in oil and polypropylene prices. Over 2027–2030, GPM is expected to average 12%, gradually normalizing to 11% by the end of the period. The EBIT margin is projected to expand to approximately 11% in 2026, supported by improved GPM and higher export rebates, including EGP 100 million from government backlog and increased exports to the U.S. following the closure of ORWE’s U.S. factory.
Additionally, ORWE is expected to realize capital gains of around EGP 482 million in 2026 from the sale of machinery and buildings in the United States, contributing to a net profit margin of 11% in 2026, with an average of 8% over 2027–2030.
Factors Affecting Future Performance
The report highlighted that global overcapacity in the petrochemical sector, particularly with large capacity additions from China, may put downward pressure on polypropylene prices in 2026. Nevertheless, lower oil prices and reduced production costs are expected to support ORWE’s margins and stabilize operational performance in the coming years.
