CAIRO: OCI posted a near-fourfold increase in third-quarter net profit on higher fertilizer revenue, but still missed analysts forecasts, sending the stock tumbling.
Egypt s largest builder by market value said it had made $205.1 million in the quarter, below forecasts ranging from $248 million to $285 million.
Revenue for the quarter rose 75 percent to $991.9 million, the Cairo-based group said in a statement.
The results were good, but not spectacular, said Ismail Sadek, analyst at Cairo-based investment bank Beltone Financial.
Results were below his expectation of $285 million because of a foreign exchange loss and slower-than-forecast construction revenue, he said.
The company sees construction revenue growing up to 50 percent in 2009 thanks to a boom in infrastructure projects, its chairman said on Tuesday.
The company also said it could spend more than $1 billion on buying construction or fertilizer companies in emerging markets, chairman Nassef Sawiris told Reuters.
Revenue growth for construction should be somewhere between 30 percent and 50 percent next year, he said. Governments, including in the Gulf and Egypt, are putting major infrastructure projects on a fast track.
Revenue from construction rose 37 percent in the third quarter from the same period last year, the company said. Revenue from the company s construction group reached $737 million, 18 percent below forecast, investment bank EFG-Hermes said in a note to clients.
Orascom Construction was also evaluating acquisition opportunities in construction or fertilizer industries after the global financial crisis reduced prices.
We are quite impressed by the number of opportunities that are being presented to us, Sawiris said. We are analyzing them diligently.
Any acquisitions would be in emerging markets, Sawiris said, declining to give further details.
The company would also start plants in fertilizer derivates as part of a previously announced $800 million plan to diversify its fertilizer business.
The $800 million will not be spent all at once, he said. We will start with small pilot projects that have capital expenditure of below $100 million.
Revenue from fertilizers was likely $255 million, 1 percent above forecast, EFG-Hermes said. The company did not give a separate figure for fertilizer revenue.
But it said the average fertilizer selling price from its Egyptian Fertilizer Co surged to $758 per ton of urea in the third quarter compared to $515 in the second quarter.
Orascom has said it would concentrate on fertilizers after selling its cement unit to French company Lafarge last year. It has fertilizer operations in Egypt, Nigeria, and Algeria.
