Orascom Constructions Industries (OCIC) third-quarter net income declined 31 percent, meeting analyst estimates, as Egypt’s largest publicly traded business booked provisions on several projects. The shares tumbled.
Profit in the period declined to $126.8 million from $182.9 million a year earlier, primarily due to a “seasonal slowdown” in the construction group’s work and “provisioning on several projects,” the Cairo-based builder and fertilizers maker said. The mean estimate of six analysts was for a profit of $127 million, according to data compiled by Bloomberg.
OCI said it expects “strong demand” for its fertilizers to continue due to record incomes for farmers in the U.S. and a rise in demand for crops, especially corn and wheat.
OCI’s shares fell 6.7 percent to 216 Egyptian pounds at 1:02 p.m. in Cairo, heading for the lowest close since January. That pares this year’s gain to 6.9 percent, compared with an increase of 34 percent for the EGX30 (EGX30) Benchmark Index.
The company, which is facing tax-evasion accusations on the 2007 sale of its cement unit to Lafarage SA (LG), said its auditors and tax advisers have presented all the necessary documentation to the authorities. OCI argues capital gains tax did not exist at the time of the sale, so the law should not be applied “retroactively.”
To contact the editor responsible for this story: Shaji Mathew at email@example.com