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

September 06, 2012 04:45 ET

OCI Announces H1 2012 Results

CAIRO, EGYPT--(Marketwire - Sep 6, 2012) -

Results as at 30 June 2012      Cairo, Egypt / 6 September, 2012 8:00 AM

OCI Beaumont Starts Methanol Production and Fertilizer Group Announces
              Greenfield Expansion in North America

Summary of Consolidated Results for Q2 2012:

* Consolidated revenues decreased 8.5% to US$ 1,348.5 million (EGP
8,147.8 million) versus US$ 1,473.5 million (EGP 8,760.1 million) in Q2

* EBITDA decreased 19.2% to US$ 291.5 million (EGP 1,762.8
million) versus US$ 360.7 million (EGP 2,145.1 million) in Q2 2011

* Consolidated EBITDA margin of 21.6% and Construction Group EBITDA
margin of 11.0% duringQ2 2012

* Net income decreased 27.7% to US$ 119.4 million (EGP 722.7
million) versus US$ 165.2 million (EGP 985.4 million) in Q2 2011

Summary of Consolidated Results for H1 2012:

* Consolidated revenues decreased 3.9% to US$ 2,627.9 million (EGP
15,869.1 million) versus US$ 2,735.1 million (EGP 16,143.4 million) in
H1 2011

* EBITDA decreased 21.3% to US$ 547.3 million (EGP 3,306.0
million) versus US$ 695.3 million (EGP 4,104.0 million) in H1 2011

* Consolidated EBITDA margin of 20.8% and Construction Group EBITDA
margin of 11.0% duringH1 2012

* Net income decreased 42.6% to US$ 213.3 million (EGP 1,289.9
million) versus US$ 371.3 million (EGP 2,191.7 million) in H1 2011

Consolidated Construction Group Backlog

* Consolidated backlog as at 30 June 2012 stood at US$ 5.89 billion
reflecting a decrease of 9.2% over the backlog as at 31 March 2012 and
an increase of 12.6% over the same period last year

* New awards totaled US$ 285 million during the quarter

* Infrastructure and industrial work constitute 69.6% of the
Construction Group backlog as at 30 June 2012

Statement from the Chairman and Chief Executive Officer - Nassef

Our second quarter results have shown improvement over the previous
quarter. EBITDA and net income grew 14.0% and 27.0% respectively on the
back of higher selling prices for ammonia which increased 33.4% over
the previous quarter. However, during the quarter net income was
impacted by a high effective tax rate due to higher contribution from
our European operations. In addition, we continue to incur startup
costs on Sorfert Algeria and OCI Beaumont with no corresponding
contribution to the bottom line in the second quarter. Also, net income
did not reflect investment income from the Gavilon Group, LLC as the
business has been reclassified as an investment held for sale.

Droughts in the United States have reduced yields of all major crops
resulting in tight inventory levels for corn and wheat which has led to
higher prices. As a result of the drop in yields and the need to
increase acreage, we expect strong demand for fertilizer products in
the upcoming harvesting season and we expect prices to remain firm for
the remainder part of the year.

The Fertilizer Group has made good progress on the commissioning of its
capacity expansions in the United States and Algeria and continues
on-track with its debottlenecking initiatives in Egypt and the

In the United States, OCI Beaumont's ammonia and methanol lines are now
fully operational and the plant is producing ammonia at the designed
capacity of 250 thousand tons per annum. The methanol line was started
late July and is now producing at a stable rate. The plant has a design
capacity of 750 thousand tons per annum and produced and sold 63
thousand tons of ammonia during the second quarter.

In Egypt, Egyptian Fertilizer Company (EFC) completed the necessary
stoppage required for its debottlenecking initiative. EFC's Line II has
been successfully commissioned post-upgrade and has generated a 20%
increase in production capacity.

In Algeria, Sorfert Algeria has successfully produced 48 thousand tons
of urea from Line I and expects to start exporting later this month.
Line II will enter testing phases in October after various mechanical
works are completed. We expect both lines to achieve full production by
the end of Q4 2012 and the plant is slated to achieve commercial
potential starting the first quarter of 2013.

As part of our strategy to grow our presence in North America, we
announced that the Fertilizer Group will build a new Greenfield
nitrogen fertilizer production plant in southeast Iowa to supply
customers in the U.S. corn belt. The new plant will be located in
Wever, within Lee County near the Mississippi River. The total
investment cost is estimated to be US$ 1.4 billion and will be funded
with a combination of equity and a tax-exempt bond issuance.

Iowa Fertilizer Company (IFCo), the new wholly owned subsidiary of the
Fertilizer Group, will be the first world scale natural gas-based
fertilizer plant built in the United States in nearly 25 years and will
help reduce the country's dependence on imported fertilizers which
exceeds 15 million metric tons of ammonia, urea and urea ammonium
nitrate (UAN) annually.The Iowa Economic Development Authority (IEDA)
unanimously approved a comprehensive state financial incentive package
expected to provide tax relief in the order of US$ 100 million for the

In addition,the OCI Construction Group yesterday announced that it
will acquire the Weitz Company a general construction contractor based
 in Des Moines,Iowa. The acquisition of Weitz will allow the OCI
 Construction Group to be strategically positioned to undertake a
 variety of commercial,industrial and infrastructure opportunities in
 the United States.

Weitz will also provide the OCI Construction Group with a solid base to
play a major role in the construction of greenfield industrial projects
developed by OCI. In addition, the federal business line of Weitz will
be combined with Contrack International to expand its geographical
reach into the Pacific Rim and Guam resulting in valuable synergies.
Weitz is ranked among the top 50 in Engineering News Record's (ENR) Top
400 Contractors list. The company generated US$ 681.5 million of
revenue in 2011 and prior to the recent economic downturn generated
revenues in excess of US$ 1.5 billion. The company reported a backlog
of US$ 787.7 million as at 30 June 2012.

The Construction Group reported a 9.2% decline in backlog over the
previous quarter and the backlog as at the end of the second quarter
stood at US$ 5.89 billion. New work secured during the second quarter
totaled US$ 285.3 million and US$ 1.13 billion during the first half.
The Group is increasing its focus on Saudi Arabia and Iraq's
infrastructure programs and expects to book several awards from these
markets later this year.

On the corporate level, we continue to work closely with the General
Authority for Investment (GAFI) on the planned demerger of the
company's construction business from its fertilizer business. GAFI has
finalized its independent audit of the valuation methodology used to
determine the split of assets and liabilities between the Construction
and Fertilizer Groups. At present, all major regulatory approvals have
been achieved and we expect to complete the demerger during the fourth

For additional information contact:   For additional information on OCI:

OCI Investor Relations Department: 

Omar Darwazah                          OCI stock symbols:OCIC.CA / OCIC
Email:      EY / OCICqL / ORSD / ORSCY

Erika Wakid                            Orascom Construction Industries
Email:        (OCI)
                                       Nile City Towers - South Tower
                                       2005A Corniche El Nil
                                       Cairo, Egypt

Hassan Badrawi

Tel: +202 2461 1036/0727/0917
Fax: +202 2461 9409

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


Contact Information