Egyptian group Ezz Steel said on Wednesday first-quarter net profit surged 78 percent and strong domestic demand and a recovery in global flat steel prices would continue to boost margins. Egypt's largest steel producer said net profit was LE 105 million ($18.53 million), compared with LE 59 million in the same quarter last year, as strong domestic demand and a recovery in global flat steel prices boosted margins. A Reuters poll of four analysts had forecast LE 88.54 million. Ezz Steel said an improvement in demand and steel prices boosted margins in the quarter. It also said its new production facilities and a robust domestic market would boost results going forward. "We are confident about the strength of the Egyptian market, with long product demand expected to continue to be strong, due to the private housing market and local real estate activity," the company said in a statement. "We are now seeing a step up in the demand for flat steel as conditions in the global flat steel market improve, and seeing sustained improvement evidenced by the increase in flat steel prices." Analysts said steel rebar demand had remained relatively resilient in Egypt because of the need for housing and government infrastructure spending. Investment bank Beltone Financial said Ezz Steel would continue to show signs of improvement quarter by quarter, mainly due to resumption of production at Ezz flat steel and rising steel prices. Analysts expect steel prices to increase in 2010 on rising raw material costs as global demand improves. Net sales for the quarter were flat year-on-year at LE 3.4 billion, missing consensus forecast of LE 3.65 billion.
