Reading a company's results: what to check and what it leaves out

A company's results answer three questions: did it make a profit, what does it own and owe, and did real cash come in? You don't need to read every line. A handful of numbers, compared with the same period last year and adjusted for inflation, tells you most of the story.

In Egypt, high inflation and a falling pound can make results look stronger than they are. So always ask how much of the growth is real.

The three statements in plain words

The income statement covers a period, such as a quarter or a year. The balance sheet is a snapshot on the last day of that period. The cash flow statement shows the cash moving between the two.

Revenue, profit, margins, debt and cash

Revenue (sales) is the money from selling goods or services. Profit is what is left after costs. A company can grow revenue and still earn less, if costs rise faster.

Margins turn profit into a percentage of revenue, so you can compare years:

• Gross margin = gross profit ÷ revenue. It shows pricing power over raw materials and production costs.
• Operating margin = operating profit ÷ revenue. It adds salaries, rent and marketing.
• Net margin = net profit ÷ revenue. It includes interest, tax and one-off items.

Debt matters because interest comes before shareholders. A simple test is interest cover: operating profit ÷ finance costs. The lower it is, the less room the company has if sales slow or rates rise.

Cash is the reality check. Profit includes sales not yet paid for and gains on paper. Cash from operations shows what actually arrived. If profit keeps rising while operating cash stays flat, ask why.

Per-share numbers and what each leaves out

When you own a share, you own a small slice of these numbers. Per-share figures make that slice visible.

No single ratio tells you whether a share is cheap or expensive. Each is a starting point for questions.

Growth vs one-off gains

Not all profit repeats. One-off items include selling land or a factory, an insurance payout, or a currency gain. They raise this year's profit but won't happen again next year.

Find these lines and their notes, then work out profit without them. Compare that "underlying" profit from year to year.

Why inflation and devaluation distort EGP results

With prices rising fast, a company can sell the same number of units at higher prices and report strong growth. That is nominal growth. Real growth removes inflation:

Real growth = (1 + nominal growth) ÷ (1 + inflation) − 1

Egypt's annual urban inflation was 13.9% in September 2026, according to CAPMAS. At that rate, revenue growth of 13.9% only keeps pace with prices. This is the same idea as a real return on your savings.

Devaluation adds a second distortion. When the pound falls against the dollar:

• A company holding dollar cash books an FX (foreign exchange) gain in pounds.
• A company with dollar loans books an FX loss, because the debt costs more pounds to repay.
• Importers' costs jump, which can squeeze margins a quarter or two later.

These FX lines can swing net profit sharply either way. They say little about the core business.

Where Egyptian companies publish results

Listed companies file their financial statements with the Egyptian Exchange (EGX) and the Financial Regulatory Authority (FRA). Quarterly statements are due within 45 days of the quarter's end, with the auditor's limited-review report, according to Enterprise (August 2026). Annual statements must be approved by the general assembly within three months of the year's end.

Results and other disclosures appear on the EGX website's company disclosure pages and on the company's own website. Baker McKenzie's listing guide (updated February 2026) says they must stay there until the next statements are published.

Late filing is common. In August 2026, the EGX listing committee fined about 50 companies a combined EGP 1.04 million for overdue statements. Third-quarter 2026 statements are due by mid-November 2026.

Worked example: Company A, a food producer

Company A has 100 million shares. Its income statement, in EGP millions:

The FX gain comes from USD 9 million of dollar deposits when, in this example, the pound fell by EGP 5 per dollar: 9 × 5 = EGP 45 million.

Margins

The net margin rose, but gross and operating margins fell. The improvement came from the FX gain, not the business.

Per-share numbers

Say the share price is EGP 13.60 and the company proposes a dividend of EGP 0.68 a share.

• EPS: 136 ÷ 100 = EGP 1.36 (2025: 88 ÷ 100 = EGP 0.88).
• P/E: 13.60 ÷ 1.36 = 10.0.
• Dividend yield: 0.68 ÷ 13.60 = 5.0%.

Now remove the FX gain. Profit before tax becomes 170 − 45 = 125. After 20% tax that's 125 − 25 = EGP 100 million, so underlying EPS is EGP 1.00. On that basis the P/E is 13.60 ÷ 1.00 = 13.6, not 10.0.

Growth, nominal and real

The headline says profit jumped 54.5%. In real terms, the underlying business earned about the same as last year.

Debt and cash

In this example, debt rose from EGP 250 million to EGP 300 million. Interest cover slipped from 150 ÷ 40 = 3.75 times to 175 ÷ 50 = 3.5 times.

Cash from operations was EGP 95 million, and the company spent EGP 60 million on new equipment. That leaves EGP 35 million of free cash. The proposed dividend costs 0.68 × 100 = EGP 68 million, almost twice that. The gap has to come from cash reserves or more borrowing.

Questions to ask when reading results

• Is revenue growing faster than inflation?
• Are gross and operating margins steady, rising or falling?
• Which profit lines are one-offs, and what is profit without them?
• How much of the result comes from FX gains or losses?
• Is debt rising faster than profit? Is interest cover falling?
• Does cash from operations roughly match net profit?
• Is the dividend covered by free cash flow?
• What does the auditor's report say?

Your plan

1. Find the filing. Open the company's disclosures on the EGX website or its own investor page. Note the period and the filing date.
2. Read the income statement first. Write down revenue, operating profit, finance costs and net profit for this period and the same period last year.
3. Work out the margins for both periods and see which way they moved.
4. Strip out one-offs. Remove FX gains, asset sales and similar lines to get underlying profit.
5. Adjust for inflation. Divide (1 + nominal growth) by (1 + inflation) and subtract 1.
6. Check debt and cash. Compare debt with last year, and cash from operations with net profit.
7. Then look at per-share numbers. Work out EPS, P/E and dividend yield on both reported and underlying profit.
8. Read the notes and the auditor's report before you draw any conclusion.
9. Compare over several years, and against other companies in the same sector, not just against an index like the EGX30.

What to watch out for

• One quarter is not a trend. Food, tourism and retail sales are seasonal. Compare a quarter with the same quarter last year, and look at several years.
• Adjusted figures. Companies may highlight "adjusted" or "normalised" profit that leaves out costs they'd rather you ignore. Check what was removed and why.
• Auditor notes and qualified opinions. A qualified opinion or an "emphasis of matter" paragraph means the auditor has a concern. Read it in full.
• Related-party deals. Sales to, or loans from, companies owned by the same shareholders or managers may not be on market terms. They appear in the notes.
• Thinly traded shares. Low liquidity means the price may not react to results the way you expect.

This guide is for education only. It is not advice to buy or sell any share.