x Abu Dhabi, UAEFriday 21 July 2017

Orascom rides out the chaos as profits soar

Orascom Construction Industry, Egypt's largest listed company, has announced profits of $186 million for the final three months of the year,

CAIRO // Orascom Construction, Egypt's largest listed company, has posted a 76.1 per cent rise in profit for the fourth quarter of last year.
The result belies the fact that its core market is now ensnared in strikes and protests nearly a month after the turmoil that toppled the country's president.
The company announced profits of US$186 million (Dh683.1m) for the final three months of the year, after a bumper quarter for its fertiliser division. Chet Riley, an analyst at Nomura Securities, said the company "had very comprehensive quarterly results, with revenue and earnings growth from both business strands". Its business was "supported by very high underlying fertiliser pricing and increasing margins".
The company's stock is listed on both the London Stock Exchange and the Egyptian Exchange in Cairo, but the latter has been closed since January 27. Its London-listed global depository receipts were about 1 per cent higher in mid-afternoon trading yesterday, at $36, after falling to their lowest level in two years last month.
Orascom Construction has also managed to win contracts during the uprisings in Egypt. The company said it won $50m worth of contracts last month alone and was bidding for new projects. It has also managed to diversify away from Egypt, with the construction side of the business generating 70 per cent of revenue from outside the country in the fourth quarter, its financial statements show.
Nassef Sawiris, the chairman of Orascom Construction, gave a terse summary of the impact of Egypt's political change on the company: "Despite disruptions due to political unrest in Egypt, our fertiliser production facilities continued to produce at normal operating rates. The construction group lost six days of construction site activity during the month, but work sites resumed activity immediately thereafter."
Mr Sawiris is a member of a powerful Egyptian family that has avoided the widespread investigations of corruption within its businesses. Some of the most prominent industrial tycoons, such as Ahmed Ezz of Ezz Steel, have been arrested in recent weeks as complaints soar at the prosecutor's office.
Mr Sawiris's brother, Naguib, who runs Orascom Telecom, has been an important figure on behalf of the business community since protests began on January 25. He took part in a widely watched television debate last week with Ahmed Shafiq, the former prime minister.
Observers say the trenchant criticisms of Mr Shafiq by Mr Sawiris and others led to his resignation.
 
bhope@thenational.ae