ICA Slides to Lowest Since 2003 as Pemex Cuts Refinery Budget

Empresas ICA SAB, Mexico’s largest construction company, plunged to its lowest in almost 12 years after its client Petroleos Mexicanos announced budget cuts at refineries and limits to pipeline use.

The stock dropped 5.5 percent to 12.27 pesos at 1:56 p.m. in Mexico City after sliding to 11.08 pesos, the lowest intraday price since March 2003. The shares were headed for their eighth straight decline, and the nation’s stock exchange briefly halted trading amid the selloff.

ICA Fluor, a joint venture with Irving, Texas-based Fluor Corp., has won several contracts with Pemex, the state-owned oil producer, including a $1.3 billion coker plant project at a refinery that was announced in December and a $743 million gas pipeline.

Pemex said Monday that it will delay refinery funding as part of larger budget cuts and announced Tuesday that it will limit pipeline shipments to unrefined fuel to prevent theft. That’s hurting the shares of Mexico City-based ICA, according to Invex Casa de Bolsa.

“We’re seeing a moment of panic,” Ana Hernandez, an Invex analyst, said in a telephone interview. “In general the economic conditions aren’t there for a larger budget in infrastructure spending.” She has a buy rating for ICA shares.

On Feb. 16, Pemex’s board approved 62 billion pesos ($4.2 billion) in cuts from its 2015 budget amid declines in oil prices as part of larger government spending reductions.

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