SOURCE: Orascom Construction Inds, S.A.E.

April 30, 2013 10:23 ET

OCI Announces FY 2012 Results

AMSTERDAM, THE NETHERLANDS--(Marketwired - Apr 30, 2013) -

Results as at 31 December 2012

  OCI Agrees to Payments in Settlement of Tax Claims with Egyptian Tax
 Authority, Reports EBITDA of USD 290.2 million and Net Loss of USD
 81.2 million During the Fourth Quarter Including Extraordinary Charges
                          of USD 181.2 million

Summary of Consolidated Results for Q4 2012:

* Consolidated revenues increased 5.3% to USD 1,492.9 million (EGP
9,088.2 million) versus USD 1,418.4 million (EGP 8,484.9 million) in Q4

* EBITDA decreased 14.9% to USD 290.2 million (EGP 1,767.6 million)
versus USD 341.0 million (EGP 2,041.0 million) in Q4 2011

* Consolidated EBITDA margin of 19.4% and Construction Group EBITDA
margin of 8.2% duringQ4 2012

* Net income decreased 165.3% to a loss of USD 81.2 million (a loss
of EGP 487.4 million) versus USD 124.4 million (EGP 746.9 million) in
Q4 2011 and was impacted by extraordinary charges of USD 181.2 million
(EGP 1,087.2 million). These charges included:

    - a one-off USD 82.0 million in additional interest expense
      related to delayed interest payments on the agreed to tax
      settlement with the Egyptian Tax Authority (ETA) for the years

    - a one-off USD 99.2 million goodwill impairment for Egyptian
      Fertilizer Company (EFC) in light of the natural gas supply
      environment in Egypt

* Net income excluding the extraordinary charges decreased 22.4% to
USD 96.5 million (EGP 587.5 million) versus USD 124.4 million (EGP
746.9 million in Q4 2011) and was adversely affected by the following

    - a production loss at EFC and Egypt Basic Industries Corporation
      (EBIC) due to low natural gas supply experienced during the

    - a drop in the Construction Group's margin to 8.2% during the
      fourth quarter of 2012 due to construction cost overruns at
      Sorfert Algeria

Summary of Consolidated Results for FY 2012:

* Consolidated revenues decreased 0.4% to USD 5,492.0 million (EGP
33,262.5 million) versus USD 5,511.3 million (EGP 32,722.0 million) in
FY 2011

* EBITDA decreased 19.1% to USD 1,138.4 million (EGP 6,894.7
million) versus USD 1,407.0 million (EGP 8,353.7 million) in FY 2011

* Consolidated EBITDA margin of 20.7% and Construction Group EBITDA
margin of 9.8% duringFY 2012

* Net income decreased 61.7% to USD 259.5 million (EGP 1,571.6
million) versus USD 678.4 million (EGP 4,028.9 million) in FY 2011

Consolidated Construction Group Backlog

* Consolidated backlog as at 31 December 2012 stood at USD 7.04
billion reflecting an increase of 24.9% over the backlog as at 30
September 2012 and an increase of 10.0% over the same period last year

* New awards totaled USD 1.84 billion during the quarter

* Infrastructure and industrial work constitute 73.5% of the
Construction Group backlog as at 31 December 2012

Statement from the Chairman and Chief Executive Officer - Nassef

During the fourth quarter and in recent months, OCI has been focused on
repositioning the business for the future and managing some serious
challenges in the process.

Share Exchange Offer & Listing of OCI N.V. on NYSE Euronext

On 18 January 2013, OCI N.V. launched an exchange offer to acquire all
of the outstanding Regulation S global depositary receipts (GDRs) of
Orascom Construction Industries S.A.E. (OCI) in exchange for ordinary
shares in OCI N.V. At the close of the offer on 21 February 2013, GDR
holders holding a total of 156,722,280 GDRs (being 99.0% of OCI's GDRs
and representing 75.7% of total shares outstanding) accepted to
exchange their GDRs for OCI N.V. shares. The transaction positioned OCI
N.V. as the parent company to OCI with a current ownership of 75.7%.
OCI N.V. also filed the necessary documentation with the Egyptian
Financial Supervisory Authority (EFSA) to acquire all of the
outstanding ordinary shares in OCI in exchange for OCI N.V. shares (or,
at the election of the relevant holder, a cash amount of EGP 280 per
share). The Company remains committed to launching a tender offer for
the remaining ordinary shares with final terms including the cash
alternative to be imminently announced.

On 25 January 2013, OCI N.V. was admitted to trading on the NYSE
Euronext stock exchange in Amsterdam.By listing on the NYSE Euronext
Amsterdam, we sought to enhance the Company's international credit profile,
attract a wider investor base, increase share liquidity, raise the
Company's profile in the international investment and banking communities
and create more growth opportunities.

In addition, OCI N.V. launched a level 1 over-the-counter American
Depository Receipts (ADRs) program on 15 April 2013. Pricing of the
security is currently in progress with the Bank of New York Mellon
filing the necessary documentation with the Financial Industry
Regulatory Authority (FINRA) and International Trading acting as the
sponsor broker. OCI N.V. is also filing to upgrade the ADR program to
OTCQX Premier status to increase liquidity.

Settlement with Egyptian Tax Authority (ETA)

OCI has been in a tax dispute with the ETA for almost a year for taxes
pertaining to years 2007 to 2010. In particular the ETA claims that OCI
owes taxes related to the sale of its cement listed subsidiary Orascom
Building Materials Holding (OBMH) in 2007. OCI continues to hold its
position that it did not violate any laws. The settlement amount was
reached following months of challenging negotiations. In conjunction
with this agreement, the ETA has determined that there was no tax
evasion by the Company and is exonerating management and the Company
from any wrongdoing related to the transaction.

OCI N.V.'s Board of Directors and management were faced with two
choices: 1) enter in to a prolonged legal battle with unpredictable
outcomes due to the prevailing political environment in Egypt; or 2)
make the payment to the government, despite the unified view by the
board, management and auditors KPMG that all laws and regulations were
soundly applied and followed at all times. The Board and management
concluded that a prolonged legal process would not serve the interests
of the Company's stakeholders, including its approximately 45,000
employees in Egypt, who represent 50% of the Company's employee base.

Consequently, OCI reached a settlement with the ETA whereby the Company
will pay EGP 7.1 billion over a 5-year period starting with an initial
payment of EGP 2.5 billion by mid May 2013, EGP 900 million by December
2013 and six equal instalments of EGP 450 million and two final
instalments of EGP 500 million in 2017. Currently, OCI has EGP 182
million of tax credits with the ETA that will be set off against future
tax payments. OCI N.V. will loan OCI the necessary funds in foreign
currency to finance the initial payment. Funds in foreign currency will
be channelled into the country through the Central Bank of Egypt. The
agreed to tax settlement has been accounted for in the following

     a. EGP 6.0 billion reduction in retained earnings for the years

     b. EGP 498.0 million increase in Q4 2012 interest expense to
        account for delayed interest payments on the agreed-to tax

     c. EGP 166.0 million to be booked in Q1 2013's interest expense to
        account for delayed interest payments on the agreed-to tax

     d. EGP 18.9 million to be booked per quarter between Q2 2013 and Q4
        2017 to account for delayed interest payments on the agreed-to-
        tax settlement

With the settlement of the tax claim, OCI N.V. expects to proceed with
its filing for the tender offer for the ordinary shares of OCI with
details to be announced in due course.

North American Operations & Expansions

Iowa Fertilizer Company (Iowa Fertilizer), our new Greenfield plant in
Wever, Iowa, has received all critical permits required to begin
construction of the plant. Iowa Fertilizer is currently in the process
of placing USD 1.194 billion of the Midwest Disaster Area Bonds (MDAB)
for the project. The bond was given a credit rating of BB- by both
Standard & Poors (S&P) and Fitch. The roadshow to potential third party
investors was conducted in April and pricing/allocation for the USD
1.194 billion bond in addition to full funding of the US USD 600 million
equity portion is expected during May. The plant will produce 1.5 - 2.0
million metric tons of urea, urea ammonium nitrate (UAN), ammonia and
diesel exhaust fluid (DEF) upon completion. The project has a total
investment cost of USD 1.8 billion and is expected to begin production
of all products during Q4 2015.

Our plant in Texas, OCI Beaumont, achieved optimal production levels on
its ammonia and methanol lines and has maintained production levels
during the first quarter of 2013 which we expect to positively reflect
on profitability. The Company is planning a USD 100 million
debottlenecking initiative on both its methanol and ammonia lines which
are scheduled for completion during the second half of 2014 with full
financial impact during 2015. The debottlenecking initiative is
expected to increase methanol capacity by approximately 25% to 875
thousand tons per annum and ammonia capacity by approximately 15% to
292 thousand tons per annum. The Company continues to adhere to the
highest safety standards in the industry in managing its existing and
expansion operations.

On the construction side, The Weitz Company, a general Iowa-based
contractor, was acquired in December 2012 and its balance sheet and
backlog were consolidated in to the Construction Group during the
fourth quarter 2012. Weitz contributed USD 449.6 million to the group
backlog and we expect to consolidate it fully during the first quarter
2013. Weitz has already mobilized on Iowa Fertilizer's construction
site and will be a key EPC contractor on-site in partnership with
Orascom Construction. Weitz's wholly owned subsidiary, Watts
Contractors, which provides institutional construction services in the
United States and the Pacific Rim, has been fully integrated into
Contrack International to form a larger platform to pursue more
projects with greater geographic reach. At present, Weitz is expanding
its core competencies to include ability to pursue larger concessions
projects including Public Private Partnerships (PPP) and Design Build
Finance Maintain (DBMF).

Sorfert Algeria Update

In Algeria, OCI expects to receive final regulatory approvals from the
Algerian government to commence testing on Sorfert during the second
quarter and enter in to commercial production and commence exports
within the coming weeks. All construction on both lines is now
complete. Sorfert is expected to contribute to consolidated earnings
during the second half of 2013.

Construction Group Update

The Construction Group reported a 24.9% increase in backlog over the
previous quarter and the backlog as at the end of the fourth quarter
stood at USD 7.04 billion. The Group's backlog grew by USD 1.41
billion during the fourth quarter including Iowa Fertilizer's EPC
contract valued at USD 1.22 billion. New work secured during the
fourth quarter totaled USD 1.84 billion and USD 3.33 billion during
the year. The Group continues to increase its presence and work in
Saudi Arabia and Iraq and is focusing on the United States'
infrastructure program and petrochemical construction market through
its newly expanded US platform.

Divestment of Non-Core Assets

During 2012, we announced a divestiture program for our non-core assets
which include our 16.8% stake in the Gavilon Group (Gavilon) and our
13.5% stake in Notore Chemical Industries (Notore).

Full Year Results

The full year results reported for OCI have been prepared in accordance
with Egyptian general accounting standards. Going forward, OCI N.V.
will publish quarterly, semi-annual and annual results in accordance
with IFRS standards as adopted by the European Union.

We reported weaker results during FY2012 as compared to the previous
year. During the year, consolidated EBITDA and net income declined
19.1% and 61.7%, respectively and during the fourth quarter, our
consolidated EBITDA and net income declined 14.9% and 165.3%
respectively compared to the same quarter last year. EBITDA and net
income declined during the quarter as compared to the same quarter last
year on the back of natural gas supply cuts at both our plants in
Egypt. Total lost time for both plants resulted in a production loss of
188 thousand tons of urea and 87 thousand tons of ammonia during the

In addition, consolidated EBITDA and net income declined during the
quarter as compared to the same period last year due to a drop in the
Construction Group's margin from 12.0% during the fourth quarter of
2011 to 8.2% during the fourth quarter of 2012 due to cost overruns at
Sorfert Algeria. Net income during the fourth quarter was further
impacted by extraordinary charges of USD 181.2 million. These charges
included a one-off goodwill impairment for EFC of USD 99.2 million in
light of the natural gas supply environment in Egypt. In addition,
these charges also included a one-off USD 82.0 million in additional
interest expense related to delayed interest payments on the agreed to
tax settlement with the ETA for the years 2007-2010.Overall, net income
decreased from USD 127.0 million in the third quarter to a loss of
USD 81.2 million in the fourth quarter.

For additional information contact:

OCI Investor Relations Department:    For additional information on OCI:
Omar Darwazah
Erika Wakid                           OCI stock symbols: OCIC.CA / OCIC
Email:       EY / OCICqL / ORSD / ORSCY

                                      Orascom Construction Industries
                                      (OCI) Nile City Towers - South
Hassan Badrawi                        Tower 2005A Corniche El Nil
Director                              Cairo, Egypt
Tel: +202 2461 1036/0727/0917
Fax: +202 2461 9409

1 Consolidated financial figures presented in this press release are

                    This information is provided by RNS
          The company news service from the London Stock Exchange


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