The local Orascom Construction Industries (OCI)has maintained its strong rate of growth of turnover and net income, despite the slowdown in the Egyptian economy. The key factor in the company's performance has been the rapid rise of production from its affiliate, Egyptian Cement Company (ECC), which accounts for 58 per cent of EBITDA.
OCI's net income for the first nine months of 2001 rose by 14 per cent year-on-year to £E 232.7 million ($55.4 million). Underlying growth in net income was 26 per cent, because the previous period included a one-off capital gain of £E 20.4 ($4.9) million from OCI's sale of its stake in City Gas. Consolidated revenues for January-September 2001 rose by 22 per cent to £E 1,769 million ($422 million), and EBITDA rose by 33 per cent to £E 626 million ($149 million).
The 2001 earnings have been boosted by the start-up of ECC's third line, and the company is also planning to bring on stream its fourth line by the end of the year, four months ahead of schedule. In 2002, ECC's capacity will reach about 7 million tonnes a year. The company has recently completed its first export shipment, involving the supply of 25,000 tonnes of cement to Sudan. OCI is seeking to replicate the success of ECC's business model in Algeria, where work is set to start soon on a new plant to be built by OCI affiliate Algerian Cement Company.
OCI has been able to realise a £E 32.2 million ($7.7 million) net foreign exchange gain so far this year, partly thanks to the fact that its construction division derives significant revenues in foreign currencies.
OCI was trading at about £E 34 ($8) a share after the results announcement, giving it an annualised price earnings ratio of 8.2. This compares with 10.4 in 2000 and 22.3 the previous year.
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