x Abu Dhabi, UAE Thursday 20 July 2017

Qatar success already pays off for Orascom

Egyptian builder stands to gain from new 2022 projects.

Orascom Construction Industries (OCI) has emerged as a clear beneficiary of Qatar's successful bid to host the 2022 FIFA World Cup.

As Egypt's biggest publicly traded builder, OCI has an extensive presence throughout the GCC, analysts say. Its 45-year relationship with Qatar also stands the company in good stead.

Contrack International, a construction company based in the US and 100 per cent owned by Orascom, has completed several prestigious projects in Qatar including the Weill Cornell Medical College, the Al Jazeera Children's Channel building and the Science and Technology Park.

"It's a well-known name there," said Mohamed Kotb, the director of asset management at Naeem Brokerage. "It has the experience, the power to negotiate and get the business, and the international partnership," he said without elaborating on how much money he expected the company to make in Qatar. "OCI will have a good portion of the pie from the World Cup win," Mr Kotb said.

Shares in the company rose 0.7 per cent to 280.91 pounds on the Egyptian Exchange. It has rallied nearly 8.6 per cent in the past month.

When the award of the World Cup to Qatar was announced, shares in OCI jumped to their highest level in six months.

Construction and contracting companies have made known their hopes of taking advantage of the boom in infrastructure projects in the run-up to the tournament, despite it being more than 11 years away.

But Mr Kotb singled out OCI as the "only cross-border" construction company having the capability to meet Qatar's World Cup infrastructure needs.

Another competitor that could become a major beneficiary is the UAE builder Arabtec, which also has operations in Qatar.

Third-quarter profit at OIC rose 22 per cent to US$147.6 million. The value of its backlog of projects was $600m in the quarter and $2.1 billion for the nine-month period.

OCI's second arm, which is in fertiliser, will also keep the company in positive territory, with prices for the nitrogen-based nutrient urea forecast to rise next year as farmers look to maximise their yields.

 

fhalime@thenational.ae