Orascom Construction reports record second quarter results

28 August 2008
Orascom Construction Industries (OCI), Egypt’s largest construction firm by market value, has reported record second quarter results.

OCI’s net income from continuing operations was $239.5m in the latest three-month period, up by 220.2 per cent on the $74.8m it earned in the second quarter of 2007.

The company’s earnings before interest, tax, depreciation and amortisation (EBITDA) for the second quarter increased to $258.7m from $105.1 in the previous year, marking a 146.1 per cent change.

In a statement released on 28 August, OCI said the recent introduction of a 20 per cent income tax on free zone companies had affected profits at its Egyptian Fertiliser Company subsidiary.

By contrast, the Algerian government’s decision to decrease corporate income tax to 19 per cent from 25 per cent positively impacted profits.

The backlog of work at the group's construction division reached a record $7bn as of 30 June, up 3 per cent from three months earlier and up 103 per cent on the same point in 2007.

The fertiliser arm benefited from a rise in global nitrogen-based fertiliser prices. The average price for a tonne of urea sold by Egyptian Fertiliser Company rose by 26 per cent to $515 compared with the first quarter.

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