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Egypt's Orascom sees 20 per cent quarterly drop in earnings, but hope in construction Industrial giant sees its bottom line for 2Q2011 fall to $165 million on higher financing costs and deferred taxes
Egypt's Orascom Construction Industries (OCI) saw its bottom line contract an annual 15 per cent in the second quarter of 2011 to reach US$165 million, significantly below consensus estimates. Profits for the country's biggest publicly traded builder also fell 20 per cent quarter-on-quarter on higher financing costs, lower FX gains and investment income and the application of deferred taxes, the company announced on Tuesday. Revenue came in $1.47 billion -- up 17 percent quarter-on-quarter, and 10 per cent year-on-year -- while earnings before interest, taxes, depreciation and amortization (EBITDA) was $361m. An uptick in construction activity led the quarterly climb in total revenue, with income from the sector increasing 25 per cent to $868m. Profitability, however, was weak, with an earnings margin of 13 per cent, causing EBITDA for the segment to decline 1 per cent quarter-on-quarter to $113m. There was room for optimism, though, in the construction backlog which added $1bn worth of projects, the highest level of additions since the second quarter of 2009. The fertilisers segment continued to perform well, with revenue and EBITDA growing during the quarter, through what looks like a combination of volumes and prices. Revenue for the segment came in at $605m -- a 39 per cent year-on-year rise -- while EBITDA came in at $248m.
