Egyptian construction workers (Photo: OCI)
Egypt's Orascon Construction Industries (OCI) reported a 34 per cent drop in quarterly net income on Tuesday, blaming debt restructuring and other charges.
The country's largest listed firm said its net profits for the fourth-quarter of 2011 fell to $122.6 million (LE802.6 million) versus $186 million (LE1,064.5 million) for the same period the year before.
The Egyptian firm has managed to oversee a rise in operating profit despite local economic turmoil as it boosts exports of fertilisers and benefits from infrastructure growth across the Middle East.
OCI's consolidated construction backlog was $6.4 billion by the end of 2011, up 7.7 per cent from three months earlier -- a promising sign during what was arguably the toughest year for Egypt's economy in a generation.
The company said its focus on infrastructure rather than the trouble real estate sector helped cushion its construction operations against greater losses.
Earnings before interest, tax, depreciation and amortisation grew 6.8 per cent to $341 million, compared with a forecast for $347 million, while revenue grew 7 per cent to $1.41 billion.
One-off items such as charges related to early repayment of debt, expenses for an employee stock option plan and a reduction in investment income all hit the bottom line, OCI said in a Tuesday statement.
"The combined negative effect of the above on net income was US$ 51.5 million," explained Nassef Sawiris, OCI's chairman.
The firm's fertiliser-producing operations are progressing on track, he added, referring to expansions in the United States, Algeria and the Netherlands, as well as Egypt. Production capacity would increase by 60 per cent by the end of 2012, Sawiris added.
The company entered the fertiliser industry with its purchase of Egyptian Fertilizers Company (EFC) in 2008.
OCI plans to split the construction and fertiliser businesses and aims to hold a shareholder meeting in April to approve the demerger. Sawiris said the final split should take place around two months after it secures shareholder approval.
OCI stocks gained 2.1 per cent during Tuesday trade on Egypt's stock exchange.