Orascom Cons. Inds. ORSD OCI Announces 9M 2012 Results

  Orascom Cons. Inds. (ORSD) - OCI Announces 9M 2012 Results

RNS Number : 1771S
Orascom Construction Inds, S.A.E.
28 November 2012

Results as at 30 September
Egypt / 28 November, 2012 8:00 AM


         OCI Reports 31% Decline in Earnings During the Third Quarter

Summary of Consolidated Results for Q3 2012 ^[1]:

· Consolidated revenues increased 1.0% to US$ 1,371.1 million (EGP 8,305.3
million) versus US$ 1,357.8 million (EGP 8,093.7 million) in Q3 2011

· EBITDA decreased 18.9% to US$ 300.6 million (EGP 1,821.1 million) versus
US$ 370.6 million (EGP 2,208.7 million) in Q3 2011

· Consolidated EBITDA margin of 21.9% and Construction Group EBITDA margin
of 9.0% duringQ3 2012

· Net income  decreased 30.7%  to US$  126.8 million  (EGP 769.2  million) 
versus US$ 182.9 million (EGP 1,090.2 million) in Q3 2011

Summary of Consolidated Results for 9M 2012:

· Consolidated  revenues  decreased  2.3%  to  US$  3,999.2  million  (EGP 
24,174.3 million) versus US$ 4,092.9 million (EGP 24,237.1 million) in 9M 2011

· EBITDA  decreased 20.4%  to  US$ 848.4  million (EGP  5,127.1  million) 
versus US$ 1,066.0 million (EGP 6,312.7 million) in 9M 2011

· Consolidated EBITDA margin of 21.2% and Construction Group EBITDA margin
of 10.4% during9M 2012

· Net income decreased  38.6% to US$ 340.7  million (EGP 2,059.0  million) 
versus US$ 554.7 million (EGP 3,281.9 million) in 9M 2011

Consolidated Construction Group Backlog

· Consolidated backlog as at 30  September 2012 stood at US$ 5.64  billion 
reflecting a  decrease of  4.3% over  the backlog  as at  30 June  2012 and  a 
decrease of 5.2% over the same period last year

· New awards totaled US$ 361.5 million during the quarter

· Infrastructure and industrial work constitute 66.6% of the  Construction 
Group backlog as at 30 September 2012

^[1] Consolidated  financial  figures  presented in  this  press  release  are 

Statement from the Chairman and Chief Executive Officer - Nassef Sawiris 

Our third quarter results  have declined year-on-year.  EBITDA and net  income 
fell by 18.9% and 30.7% respectively primarily due to the seasonal slowdown in
the Construction Group's work  and a decline in  margin from 10.8% during  the 
second quarter  to  9.0%  during  the  third  quarter  as  a  result  of  some 
provisioning on several projects. Overall, net income increased from US$ 119.4
million in the second quarter to US$ 126.8 million in the third quarter on the
back of strong results from the Fertilizer Group.

In November, natural gas supply to both our plants in Egypt witnessed  drastic 
supply cuts arising  from unscheduled stoppages  in the natural  gas grid  for 
maintenance works. The pressure is only gradually returning in the third  week 
of disruptions and stoppages. In order to minimize production down time,  EBIC 
successfully brought forward its  scheduled three week maintenance  turnaround 
from the fourth  week of November  to the  second week. EFC  has also  brought 
forward its revamp/maintenance turnaround  at one of its  urea lines from  the 
first quarter of 2013 to  the fourth quarter of  2012. The natural gas  supply 
shortfalls will have an  impact on our  fourth quarter production  utilization 
rates and results.

We continue to expect strong demand  for our fertilizer products supported  by 
strong fundamentals. Farmers in the United States have witnessed record income
despite the fall  in yields. A  drop in  yields and growing  demand for  crops 
(especially corn and wheat) will bode well for fertilizer prices.

In the United  States, both OCI  Beaumont and Iowa  Fertilizer Company  (IFCo) 
have made noticeable  progress over  the last several  months. OCI  Beaumont's 
ammonia and methanol  lines are now  operational. The plant  is now  producing 
ammonia at the designed capacity of 250 thousand tons and methanol at 70-80  % 
of designed capacity of 750 thousand tons per annum.

IFCo, our new Greenfield plant  in Wever, Iowa, was  issued its air permit  by 
the Iowa Department of Natural Resources (IDNR) last month and the plant broke
ground  last  week  in  an  event  attended  by  the  Governor  of  Iowa.  The 
Construction Group was awarded  the Engineering, Procurement and  Construction 
(EPC) contract to build  the plant and Maire  Tecnimont and ThyssenKrupp  Uhde 
will  be   supplying  state-of-the-art   technology  for   the  project.   The 
construction of the  plant is scheduled  for completion during  the summer  of 
2015. The plant  will produce  1.5 -  2.0 million  metric tons  of urea,  urea 
ammonium nitrate (UAN), ammonia and diesel exhaust fluid (DEF) upon completion
and will supply farmers in the US Corn Belt. The total investment cost of  the 
project is  now expected  to be  approximately US$  1.65 billion  and will  be 
funded with a combination of equity and a tax-exempt bond issuance.

In Algeria, Sorfert Algeria expects to  complete all mechanical works on  Line 
II at  the end  of December.  Once  these works  are complete,  all  necessary 
permits will be obtained during the first quarter of 2013 ahead of the planned
full-fledged commercial  production.  Our team  is  working closely  with  our 
partner to ensure  all planned works  are complete on  time and all  necessary 
permits are  obtained. We  expect  Sorfert Algeria  to start  contributing  to 
earnings during the first half of 2013.

In addition, the Fertilizer Group announced that it has acquired  distribution 
rights of  ammonium sulphate  (AS) produced  by Lanxess  N.V. at  its  Antwerp 
facilities in  Belgium. The  distribution rights  were acquired  from  Fertiva 
GmbH,  a  wholly  owned  subsidiary  of  Eurochem.  The  deal  entails  up  to 
approximately 1 million  metric tons of  AS including granular  AS, a  premium 
fertilizer product.  OCI's  wholly  owned  subsidiary,  Netherlands-based  OCI 
Nitrogen currently  distributes approximate  0.75 million  metric tons  of  AS 
produced by  DSM  N.V. in  the  Netherlands. Combined,  the  Fertilizer  Group 
expects to annually distribute  1.75 million tons of  AS in both standard  and 
granular form, making  it a  leading supplier in  the European  market and  in 

The Construction Group reported a 4.3%  decrease in backlog over the  previous 
quarter and the backlog as at the end  of the third quarter stood at US$  5.64 
billion. New work secured during the  third quarter totaled US$ 361.5  million 
and US$ 1.49 billion during the first nine months. The Group is increasing its
focus  on  the  United   States'  infrastructure  program  and   petrochemical 
construction market in addition  to expanding its presence  and work in  Saudi 
Arabia and Iraq.

The Construction  Group recently  announced  that it  will acquire  the  Weitz 
Company, a general contractor based in Des Moines, Iowa. The Group has already
received Weitz's Board approval for the transaction and an agreement has  been 
signed. At  present,  final shareholders'  approval  is pending  but  expected 
imminently. The Group is  expected to pay a  total consideration of less  than 
US$ 90 million on an enterprise value basis.

The Weitz Company will be pivotal in  the construction of IFCo and will  allow 
the Construction Group to bid  on infrastructure and industrial  opportunities 
in the United  States market in  addition to commercial  and federal work.  We 
expect to start consolidating  Weitz's results and  backlog during the  fourth 

The Egyptian Tax Authority has been reviewing the tax years 2005 - 2010.  Our 
auditors and tax advisors  have presented all  necessary documentation to  the 
authorities. We are confident that new laws will not be applied  retroactively 
and that our legal and financial position is in accordance with paragraph 8 of
article no. 50 of law no. 91 of 2005, which clearly exempts all capital  gains 
resulting from the sale of shares listed on the Egyptian Stock Exchange (EGX).

On the  planned  demerger of  the  company's construction  business  from  its 
fertilizer  business,  we  continue  to  work  with  the  Egyptian   Financial 
Supervisory Authority (EFSA)  to receive  final procedural  approvals for  the 
demerger, however no progress has taken place since October.


For additional information contact: 

                                   For additional information on OCI:

OCI Investor Relations Department:  


Omar Darwazah                       

Email: omar.darwazah@orascomci.com  OCI stock symbols: OCIC.CA / OCIC EY /
                                    OCICqL / ORSD / ORSCY

Erika Wakid
                                    Orascom Construction Industries (OCI)
Email: erika.wakid@orascomci.com
                                    Nile City Towers - South Tower

                                    2005A Corniche El Nil
Hassan Badrawi
                                    Cairo, Egypt

Tel: +202 2461 1036/0727/0917

Fax: +202 2461 9409

                     This information is provided by RNS
           The company news service from the London Stock Exchange


QRTPGGBGGUPPUQR -0- Nov/28/2012 07:00 GMT
Press spacebar to pause and continue. Press esc to stop.