Orascom Construction Q4 net profit jumps 42 pct

Orascom Construction Industries, Egypt's top listed builder and fertiliser maker posted a 42 percent rise in fourth-quarter net profit after construction margins and global fertiliser prices improved

Egypt's biggest firm by market capitalisation posted net profit of $105.8 million, just below an average forecast for $111.3 million in a Reuters poll, although within a $98 million to $132 million range.

 

Ahmed Shams, an analyst of EFG-Hermes said "The results were slightly positive, operational-wise, but the bottom line was impacted by one-off losses, which is not a big deal. I wouldn't change my stance on this company"

 

Shams added that "Net profit was dampened by a larger-than-expected foreign exchange loss of $7.7 million after the euro's depreciation against the dollar impacted OCI's euro deposits"

 

Analysts forecast OCI would post a higher net profit year-on-year as global urea and ammonia prices rose, increasing the portion of revenue contributed by its relatively high-margin fertiliser operations.

 

Its fertiliser group sold 1.358 million tonnes of urea at an average price of $266 per tonne and 384,000 tonnes of ammonia at an average price of $251 per tonne in 2009, OCI said in a statement accompanying the results.

 

"We are optimistic that market conditions for urea and ammonia will continue to improve during 2010," the firm's chairman and chief executive, Nassef Sawiris, said in the statement.

 

The firm's shares traded 0.8 percent higher by 0936 GMT, while the main index was nearly flat.

 

OCI said its contruction wing was granted $3.16 billion of new awards in 2009, about two thirds of which was infrastructure work.

 

Consolidated backlog stood at $6.65 billion at end-December, down 7.8 percent from the previous quarter.

 

Fourth-quarter earnings before interest, tax, depreciation and amortisation (EBITDA) jumped to $225.4 million from $147.3 million in 2008. Consolidated revenue in the quarter dropped 5 percent to $966.6 million compared to a year earlier.

 

In 2008, the firm posted fourth-quarter net profit from continued operations of $74.5 million, which excluded gains from the sale of a 45-percent stake in Sokhna Port Development Company.