Egypt / Worked scenario
How would FX, inflation and rates affect an Egypt food retailer?
Follow the same business through four quarters. Edit the Excel assumptions to test how contract resets, price recovery and payment timing change the result.
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Profit and cash over four quarters
All amounts are in EGP million unless shown as a percentage. The retailer and its exposures are hypothetical. The starting case holds prices, costs and interest rates at their opening levels. The scenario applies the assumptions below.
Annual totals and margins for the same hypothetical retailer
| Measure | Starting case | Scenario |
|---|
| Revenue | 100.00 | 101.76 |
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| Operating costs | 80.00 | 84.32 |
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| Operating profit | 20.00 | 17.44 |
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| Operating margin | 20.00% | 17.14% |
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| Interest paid | 4.80 | 5.10 |
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| Pre-tax profit | 15.20 | 12.34 |
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| Cash after interest, before tax and capex | 15.20 | 12.60 |
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In this scenario the operating margin falls from 20.00% to 17.14%. Cash differs from pre-tax profit because some sales and costs are settled the following quarter. The fourth quarter ends with EGP 5.18 million in receivables and EGP 5.44 million in payables.
What changes and when
- Starting business. EGP 100 million of annual sales, EGP 80 million in operating costs, and EGP 20 million in local floating-rate debt. The model starts borrowing at 24.00% per year, using the CBE overnight deposit rate of 20.00% from 2026-10-29 plus an assumed 4 percentage-point spread. Starting revenue and costs are spread evenly across quarters.
- FX and domestic costs. USD-linked inputs account for 40% of starting operating costs. A 10% rise in EGP per USD affects that share from Q2, with USD invoice prices held fixed. Domestic input prices rise 8% from Q3 on the remaining cost share. Each change is applied once to the cost level.
- Prices and financing. From Q3, customer prices recover 50% of the combined cost increase at fixed volumes. The borrowing rate rises by 2 percentage points from Q2. Debt stays constant, and interest is paid in the quarter it accrues.
- Collections and payments. Collect 20% of sales and pay 25% of costs in the following quarter. Opening balances carry the same shares of a typical pre-shock quarter.
Incremental effects and cash in the scenario, EGP million
| Quarter | FX cost | Domestic cost | Revenue recovered | Interest paid | Cash after interest |
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| Q1 | 0.00 | 0.00 | 0.00 | 1.20 | 3.80 |
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| Q2 | 0.80 | 0.00 | 0.00 | 1.30 | 3.10 |
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| Q3 | 0.80 | 0.96 | 0.88 | 1.30 | 2.88 |
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| Q4 | 0.80 | 0.96 | 0.88 | 1.30 | 2.82 |
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Use market evidence to set your own inputs
The Egypt model-inputs page links to dated inflation, exchange-rate and policy-rate references, including the deposit rate used here. The 4 percentage-point borrowing spread, FX shock and domestic input-cost shock are analyst assumptions. Urban consumer inflation describes a household basket. A retailer’s costs depend on its suppliers, contract terms and inventory. Use invoices to set the USD-linked share, contract dates to set the reset quarters, and the loan agreement to set the actual borrowing rate.
The cash calculation covers customer collections, supplier payments and interest. Taxes, capex, depreciation, inventory, debt principal changes, hedges, seasonal volumes and demand responses are outside this example.
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