Saudi Industrial Development Co. (SIDC) expects a negative impact of SAR 9 million on Q4 earnings this year, as its wholly-owned subsidiary Arab Spring Foam Mattresses Manufacturing Co. Ltd (Sleep High – Egypt) will be hurt by the floatation of the Egyptian pound.
The amount includes SAR 4.1 million in currency differentials and SAR 4.9 million in FX translation, the company said in a statement on Tuesday.
The financial impact was estimated in light of the official rate announced by the Central Bank of Egypt (CBE) on November 3.
SIDC added that several precautionary measures have been taken to mitigate the negative impact of the currency devaluation, while other alternative options are being considered to hedge against more losses going forward.
Earlier this month, Egypt’s CBE decided to freely float the pound and hike interest rates by 300 basis points in an attempt to fulfil requirements to get a $12 billion loan from the International Monetary Fund (IMF).
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