The income statement, known in Arabic as Consolidated and standalone statements or published as قائمة الدخل, shows a company's financial performance over a specific period. It measures how much money a business brought in, what expenses it incurred, and what remained as profit for shareholders. For investors on the Egyptian Exchange (EGX), understanding this statement helps evaluate whether a business is genuinely profitable and efficient.
While complete income statements contain dozens of detailed lines, AskBorsa focuses on two core profit indicators: Gross profit and Net profit. Understanding the step-by-step structure helps you navigate financial reporting with confidence.
The Anatomy of an Income Statement
An income statement is structured like a waterfall, starting with total sales at the top and subtracting costs line by line until reaching the bottom line.
1. Revenue (Sales)
Revenue is the total value of goods or services sold to customers before subtracting any expenses. It reflects market demand for the company's offerings and its pricing power.
2. Cost of Sales (Cost of Goods Sold)
Cost of sales includes direct costs associated with producing goods or delivering services. This includes raw materials, direct factory labor, and manufacturing overhead.
3. Gross Profit
Subtracting the cost of sales from revenue leaves Gross profit. This shows how efficiently a company produces its products relative to its direct costs.
4. Operating Expenses
Operating expenses cover the indirect costs of running the business, including general administration, selling and marketing expenses, and depreciation.
5. Finance Costs and Tax
Finance costs include interest payments on bank loans and foreign exchange differences. After deducting these costs and corporate taxes, you arrive at the final line item.
6. Net Profit
The final result is Net profit, representing the total earning generated for shareholders during the Fiscal year.
Why AskBorsa Highlights Gross Profit and Net Profit
Full financial reports can be overwhelming for retail investors. AskBorsa streamlines this data by focusing on key indicators:
- Gross profit: Evaluates primary production efficiency and core product profitability.
- Net profit: Shows total profitability after all operational, financial, and tax expenses.
Comparing these two figures over time reveals whether margin changes stem from core operations or external items like interest rates or tax adjustments.
Real Examples from the EGX
Let's examine historical income metrics across different sectors on the EGX using AskBorsa's tracked data.
For industrial conglomerate Elsewedy Electric, tracking Gross profit and Net profit shows how manufacturing volume impacts the bottom line:
- In 2021, Elsewedy Electric achieved Gross profit of 9.47 billion EGP and Net profit of 3.53 billion EGP.
- In 2022, Elsewedy Electric reported Gross profit of 14.89 billion EGP and Net profit of 5.42 billion EGP.
- In 2023, Elsewedy Electric reported Gross profit of 31.2 billion EGP and Net profit of 10.12 billion EGP.
- In 2024, Elsewedy Electric recorded Gross profit of 45.92 billion EGP and Net profit of 17.46 billion EGP.
Consumer goods companies show different dynamics. Consider food producer Juhayna:
- In 2021, Juhayna recorded Gross profit of 2.83 billion EGP and Net profit of 526 million EGP.
- In 2022, Juhayna generated Gross profit of 3.11 billion EGP and Net profit of 638 million EGP.
- In 2023, Juhayna posted Gross profit of 4.51 billion EGP and Net profit of 1.02 billion EGP.
- In 2024, Juhayna posted Gross profit of 7.73 billion EGP and Net profit of 2.74 billion EGP.
| Juhayna · Annual · EGP | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| Net profit | 428 million | 526 million | 638 million | 1.02 billion | 2.74 billion |
| Gross profit | 2.84 billion | 2.83 billion | 3.11 billion | 4.51 billion | 7.73 billion |
For tobacco and consumer goods company Eastern Co, comparing recent full-year figures highlights historical performance trends:
- For 2023, Eastern Co achieved Gross profit of 8.25 billion EGP and Net profit of 7.66 billion EGP.
- For 2024, Eastern Co reported Gross profit of 9.21 billion EGP and Net profit of 9.18 billion EGP.
Annual vs Quarterly Statements
When reviewing figures on AskBorsa, pay attention to the timeframe. Annual statements present whole-year totals, while quarterly reporting shows progress every three months. Looking at Year-on-year growth quarterly metrics helps evaluate seasonal trends without getting misled by brief fluctuations.
For instance, during Q1 2024, Elsewedy Electric recorded Net profit of 3.98 billion EGP, while in Q1 2025 it posted 4.15 billion EGP.
What to Look for When Reading Income Statements
- Consistent Growth: Look for steady expansion in both Gross profit and Net profit over multi-year periods.
- Margin Stability: Ensure that net profit grows proportionally with gross profit, showing that operating costs remain controlled.
- One-Off Gains: Check if a sudden jump in net profit comes from core sales or non-operating events like asset sales.
- Consolidated Statements: Always confirm whether you are analyzing group-wide results, as listed Egyptian holdings typically report consolidated figures.
