CAIRO: Egypt’s largest steel producer, Ezz Steel, said on Tuesday its third-quarter net income surged from a year earlier, when lower prices and soaring costs hammered profit margins.
An uprising ousted president Hosni Mubarak last February, and the turmoil rocked Ezz Steel, which gets much of its business from infrastructure and real estate sectors plunged into crisis.
Industry officials say Egyptian steel mills have been working at around half their capacity and turning to export markets to offset the slump in demand at home.
But Ezz Steel’s third-quarter figures painted a much more optimistic picture, with turnover up about 18 percent year-on-year to LE 4.8 billion ($796 million), and long steel sales volumes in the first nine months of 2011 were up 5 percent, it said in a statement.
"This increase over the previous year was to meet continued domestic demand for Ezz Steel’s long products, which has remained strong," it said.
The company said long product prices had risen 27 percent in both local and export markets, while flat steel prices rose by 17 percent domestically and by 22 percent at export.
"In the third quarter of 2010, margins were extremely depressed by higher raw material prices and lower selling prices," said EFG-Hermes analyst Rita Guindy.
Third-quarter net profit jumped to LE 128 million ($21.22 million) from LE 1.65 million in the same period of 2010, the company said.
Shares in the firm rose 2.8 percent to LE 5.53 by 1025 GMT, while Egypt’s main index was up 1.6 percent.
Company founder Ahmed Ezz was hit with corruption charges last year and the group’s share price slumped to as low as LE 3.28 from above LE 21 before the uprising.
Ezz, who was a top official in Mubarak’s now disbanded political party, quit the board of Ezz Steel and its Ezz Dekheila Steel unit in May to fight the charges against him. A court jailed him in September.
