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New construction awards of $1.6bn for the final quarter of last year takes OCI's year-end construction backlog to $6.4bn, up 7.6 per cent compared with the previous quarter and 14 per cent higher than a year earlier. Dana Smillie for The National
New construction awards of $1.6bn for the final quarter of last year takes OCI's year-end construction backlog to $6.4bn, up 7.6 per cent compared with the previous quarter and 14 per cent higher than a year earlier. Dana Smillie for The National

Juicy prospects ahead for Egypt's giant OCI

What's Up: Orascom Construction Industries, Egypt's biggest listed company by market capitalisation, has a strong bank of contracts and some healthy looking windfalls on the horizon.

Orascom Construction Industries, Egypt's biggest listed company by market capitalisation, has a strong bank of contracts and some healthy looking windfalls on the horizon.

The fertilizer and construction company posted fourth-quarter profits of US$177 million, after deducting one-off costs of $53m, broadly in line with the expectations of JPMorgan analysts. Revenue for the quarter was $1.4 billion, 12 per cent above JPMorgan estimates. New construction awards of $1.6bn for the final quarter of last year takes OCI's year-end construction backlog to $6.4bn, up 7.6 per cent compared with the previous quarter and 14 per cent higher than a year earlier.

OCI also has some large cash injections lined up. The company owns a non-controlling minority stake of 13.5 per cent in the Nigerian-based Notore, which is preparing for an initial public offering. OCI plans to sell its stake when Notore lists, JPMorgan said. The company has also confirmed a potential sale of Gavilon in Canada, in which OCI owns a 16.8 per cent stake at a book value of $340m.

OCI has filed an application with the Egyptian Financial Supervisory Authority to hold an extraordinary general meeting for the demerger of its construction and fertilizer businesses into two concerns trading separately.

Fertilizers, which contributed $248m or 73 per cent of the group's fourth-quarter earnings before deductibles, will remain under OCI control and a new company will be formed to hold the construction business, Nassef Sawiris, OCI's chairman and chief executive, has said.

The company is due to hold its annual general meeting together with the demerger meeting this month. OCI's stock is likely to benefit from further disclosure of the company's financials after the demerger meeting, JPMorgan forecasts.

lmiller@thenational.ae

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