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Orascom Construction acquires ammonia-methanol plant in Texas Incremental earnings from the overseas transaction will climb less than 5 per cent and won't take effect until 2012, says investment analyst
Orascom Construction Industries (OCIC)has announced that its Dutch subsidiary has acquired an ammonia-methanol plant in Texas. The purchase was completed through a joint venture with Janus Methanol AG, of which Orascom's Dutch unit OCI Nitrogen BV owns 51 per cent. Through the acquisition, OCI has gained 250 ktpa of ammonia, 750 ktpa of methanol and complementary assets in the form of an ammonia tank with a capacity of 18,000 tonnes and two methanol tanks with a capacity of 22,000 tonnes each. The plant currently needs to be rehabilitated, which OCI Nitrogen and Janus will do together. The subsidiary's gains will not contribute to current year earnings as ammonia production is not expected until the 4th quarter of 2011 (4Q2011), with methanol production due to start at the beginning of 2012, said investment bank Beltone Financial. Beltone suggests incremental EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) for OCI of US$46 million for the 2012 fiscal year. "This does not have a significant impact on our consolidated estimates for the year. We had estimated OCI to record EBITDA of $1.4 billion for the same year," said the investment bank in a note today. On Monday shares of Orascom climbed 3.3 per cent, their biggest rise since 29 March, to close at LE252.96. They continued to climb Tuesday reaching LE255.23 per share before midday.
