Wednesday, May 11, 2011
CAIRO (Zawya Dow Jones)--Bidding and project tendering in Egypt are almost back to normal despite political turmoil, far-reaching corruption investigations against business leaders and worsening communal tensions, Nassef Sawiris, the chief executive of Orascom Construction Industries (OCIC.CI), or OCI, said Tuesday.
"I would say that since April bidding activities and contract negotiations are almost back to normal," said Sawiris, who added OCI is the "preferred bidder" for about $1 billion in construction projects, about one-third of which are based in Egypt.
"Obviously, a lot of the big decisions were postponed... We lost about four to six weeks on bidding and tender awards," he said.
Earlier on Wednesday, the company reported a 77% jump in first quarter net profit to $206.1 million, from the same period one year ago.
Sawiris attributed much of the better-than-expected earnings to the company's global fertilizer operations, which have allowed Orascom to ride on the back of higher global commodity prices.
Strong demand from North America and Europe drove up prices for ammonia and calcium ammonium nitrate by 21.5% and 38.4%, respectively, according to the company's emailed statement.
The increasing price of coal in China has also benefited Orascom Construction, said Sawiris, by raising the price of Chinese-made urea, which is produced through a coal synthesis process.
The construction firm also plans to complete work on its Sorfert Algeria fertilizer plant by September.
Sawiris said he expects high agriculture commodity prices to persist for the rest of the year and into 2012.
"I think the group demonstrated during its first quarter earnings that it's diversity of earnings" was able to confront destabilizing political challenges in Egypt, said Sawiris.
"Our diversified presence in the Middle East, from Morocco to Qatar, gives shareholders a sense of security on the diversity of the sources of income," he added.
OCI shares last traded up 2.6% at EGP247.05 in a positive overall market.
-By Matt Bradley of Dow Jones; +201-8875 0572, matt.bradley@dowjones.com
Copyright (c) 2011 Dow Jones & Co.
(END) Dow Jones Newswires
11-05-11 1056GMT
