Caustic soda and chlorine producer Misr Chemical Industries (MCI) has reported a significant jump in earnings on the back of the novel coronavirus (COVID-19) pandemic.
The company posted profits of EGP 26m for the two-month period over April and May 2020, compared to the EGP 7m reported in the same two month period of 2019.
MCI is one of the few companies to have reaped the economic benefits of the pandemic. Demand for caustic soda and chlorine has surged due to the increased focus on hygiene and sanitisation.
As a result, utilisation rates for these products rose well above 50%, to cater to the increased local demand.
Sales of caustic soda had already increased 48% quarter-on-quarter (q-o-q) and 14% year-on-year (y-o-y) in the third quarter (Q3) of fiscal year (FY) 2019/20. The increase came on the back of panic buying towards the end of March, as consumers stocked up on disinfectants and detergent products.
Moving forward, MCI is expected to continue to benefit from higher demand y-o-y. Margins are, however, expected to be higher on the back of cost savings from the EGP 0.1/kwh cut in power tariffs that commenced in March, as electricity represents about 40% of the company’s total costs.