The Egyptian stock market experienced a mixed day on Tuesday, with some stocks seeing significant gains while others continued to decline. Despite the overall downward trend in the market, shares of Upper Egypt Flour Mills Company stood out, surging by 20% in a single session. This remarkable increase came on the back of the company's announcement to distribute 18 Egyptian pounds per share to its shareholders.
The surge in Upper Egypt Flour Mills Company's stock was triggered by its decision to increase its issued and paid-up capital from 70 million Egyptian pounds to 100 million Egyptian pounds. This increase of 30 million Egyptian pounds was achieved by cutting from the company's legal reserve account and distributing free shares to existing shareholders at a rate of one free share for every 2.33 shares held. As a result, the company's total number of shares rose to 10 million from 7 million, with a nominal value of 10 Egyptian pounds per share.
The company's board of directors approved the capital increase to comply with the minimum capital requirements and avoid being transferred to the list of small and medium-sized projects, which would have led to delisting procedures. After the increase, the company's legal reserve stood at 53.3 million Egyptian pounds, still meeting the legal requirements. This move is expected to enhance the company's financial position and potentially boost its future performance.
In addition to the capital increase, Upper Egypt Flour Mills Company's board also approved amendments to its articles of association. The amendments included adding new activities such as manufacturing and trading in various types of woven and paper bags, screening and sorting seeds, grains, and agricultural products, as well as buying, selling, leasing, reclamation, and cultivation of lands and animal and poultry wealth.
Earlier in the week, the company announced that its board had approved a proposal for dividend distributions for the fiscal year. The proposal, which will be presented to the company's ordinary general assembly, includes distributing 18 Egyptian pounds per share to shareholders, totaling 126 million Egyptian pounds. Additionally, 9.173 million Egyptian pounds will be allocated to the statutory reserve, 1.59 million Egyptian pounds to the capital reserve, and 42 million Egyptian pounds will be allocated as a provision for workers' distributions.
The company's financial statements for the previous fiscal year showed a 19.5% decline in net profit. Upper Egypt Flour Mills Company recorded a net profit of 224.26 million Egyptian pounds for the period from July 2025 to June 2026, compared to 278.49 million Egyptian pounds in the previous fiscal year. The company's revenues for the current fiscal year stood at 2.71 billion Egyptian pounds, slightly down from 2.75 billion Egyptian pounds in the previous year.
Despite the positive performance of Upper Egypt Flour Mills Company, the overall Egyptian stock market continued its downward trend. The main index, EGX30, declined by 0.33% to close at 52,297 points. The EGX70 index, which tracks small and medium-sized companies, fell by 0.51% to 18,421 points, while the broader EGX100 index dropped by 0.34% to 24,619 points. The market's capital lost around 14.7 billion Egyptian pounds, bringing the total market capitalization to 4.076 trillion Egyptian pounds.
Key points
- Upper Egypt Flour Mills Company's stock surged 20% after announcing a capital increase and dividend distribution.
- The company's board approved a proposal to distribute 18 Egyptian pounds per share to shareholders.
- Despite the positive performance of some stocks, the overall Egyptian stock market continued its downward trend.
