ICA Tumbles After OHL Highway Contract Is Revoked

Empresas ICA SAB (ICA*), Mexico’s largest construction company, fell the most in more than seven months after Puebla’s state government voided a highway-building contract for toll-road and airport operator OHL Mexico SAB. (OHLMEX*)

OHL tumbled 6.7 percent to 17.40 pesos at the close today, while Mexico City-based ICA dropped 7.7 percent to 22.14 pesos for the largest decline since Sept. 22.

OHL disclosed the loss of the Puebla contract on May 10, and its 14 percent plunge in the past two trading days was the largest since the Mexico City-based company first sold shares in November 2010, according to data compiled by Bloomberg.

“We expect this action to lead the market to reassess the stock’s risk profile, which in our view is high,” Marcos Duran, a Scotia Capital analyst in Mexico City, wrote in a May 11 report on OHL. Duran, who rates the shares as sector underperform, said the Puebla contract to build and operate the highway was the “company’s least-valuable” concession.

Luz Montemayor, a spokeswoman for ICA, attributed the share-price decline to “market conditions” and said the company was expecting “a very solid year.” ICA said May 2 that it expects 2012 sales growth of 11 percent to 14 percent.

“Our portfolio of infrastructure operation and construction contracts supports our expectation of maintaining a dynamic of growth and profitability during 2012,” Montemayor said.

A spokesman for OHL didn’t return a telephone message and an e-mail message.

To contact the reporter on this story: Brendan Case in Dallas at bcase4@bloomberg.net

To contact the editor responsible for this story: Ed Dufner at edufner@bloomberg.net

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