Results as at 30 September 2008 Cairo, Egypt / November 18, 2008, 09:30 AM CONSTRUCTION BACKLOG GROWS to RECORD VALUE of USD 7.6 billion on BACK of REGIONAL INFRASTRUCTURE SPENDING Summary of Consolidated Results for the 9M 2008 Ended 30 September 2008: - Consolidated revenue grew 54.4% to USD 2,713.3 million (LE 14,723.6 million) versus USD 1,756.9 million (LE 10,005.1 million) in 9M 2007 which excludes the divested cement operations* - EBITDA rose 129.4% to USD 733.8 million (LE 3,982.0 million) versus USD 319.9 million (LE 1,821.9 million) in 9M 2007 - Net income from continued operations increased 230.6% to USD 647.9 million (LE 3,515.8 million) versus USD 196.0 million (LE 1,115.9 million) in 9M 2007 - Net Income including discontinued operations was USD 913.0 (LE 4,954.2 million) - Consolidated EBITDA margin of 27.0% Summary of Consolidated Results for the Third Quarter: - Consolidated revenue grew 74.9% to USD 991.9 million (LE 5,382.6 million) versus USD 567.3 million (LE 3,230.4 million) in Q3 2007 - EBITDA rose 152.0% to USD 307.2 million (LE 1,667.0 million) versus USD 121.9 million (LE 694.1 million) in Q3 2007 - Consolidated EBITDA margin increased by 950bps to 31.0% versus 21.5% in Q3 2007 - Consolidated backlog reached a record USD 7.61 billion, reflecting growth of 60.5% over the backlog as at December 31 2007 and 8.8% higher than the previous quarter - Net Income grew 293.3% to USD 205.1 million (LE 1,113.4 million) versus USD 52.2 million (LE 297.0 million) in Q3 2007 *All 2007 comparison figures are excluding the divested cement operations Statement from the Chief Executive Officer - Nassef Sawiris Orascom Construction Industries (OCI) continues to generate strong results during 2008. Amid the current turbulent conditions in global financial markets OCI continues to create value for its shareholders and record solid returns with a reported annualized Return on Equity (ROE) of 38% for the year-to-date. The Construction Group reported a robust third quarter. The consolidated construction work backlog reached a record USD 7.6 billion as at 30 September 2008 reflecting a net USD 0.6 billion rise from the previous quarter and more than double the backlog reported during the same time last year. During the third quarter, new awards totaled USD 1.2 billion bringing the total year-to-date figure to a record USD 5 billion of which 71% is infrastructure and large-scale industrial projects. We continue to expect growth in infrastructure work in the MENA region reflecting new fiscal stimulus packages by regional governments which predominantly target acceleration in infrastructure spending. The Construction Group is well-positioned to benefit from such infrastructure focus and already has approximately USD 650 million of new infrastructure work under final negotiations that have not been reflected in the construction backlog. The Construction Group reported a steady EBITDA margin of 13.2% for the nine months ended 30 September 2008 on the backdrop of a peak inflationary climate during the reported period, which have since receded on the back of a global decline in commodity and material prices. This bodes well for the profitability of our Construction Group backlog. The Fertilizer Group continues to benefit form being one the most efficient and lowest cost producers in the world. Our competitive cost structure has enabled us to weather severe volatility in selling prices. During the third quarter, the Group witnessed exceptionally high fertilizer prices and reported an average selling price which is 60% higher than the first half of 2008. As a result of tight credit availability, fertilizer prices have come off their all-time peaks in recent months and have declined to their Q1 2008 levels. During the last few weeks, several major producers announced the shut- down of plants with high production costs in Italy, Netherlands, France, and several Eastern European countries, which will positively impact the future demand/supply dynamics. The market continues to witness tough credit conditions for both international traders and farmers which are affecting fertilizer buying patterns. Nevertheless, we are still positive about the long-term fundamentals of this sector and the need to sustain high crop yields and plantings as per repeat warnings of the United Nation's Food & Agricultural Organization in regard to dangerous drops in global food stock in 2009. Our commissioning pipeline remains on track. Egypt Basic Industries Corporation (EBIC) is in the process of commissioning its 0.7 mtpa greenfield ammonia plant during Q4 2008. The Kellog Brown & Root (KBR) / OCI construction team has completed their demobilization. Sorfert Algeria continues to make milestone progress with construction well underway of its 2 mtpa nitrogen-based fertilizer complex. Notore Chemical Industries Ltd (NCIL) in Nigeria expects to enter the commissioning phase of its 0.5 mtpa nitrogen-based fertilizer plant in southeast Nigeria during Q4 2008. Beyond our commitments to the Algerian ammonia / urea greenfield, we are limiting our 2009 new capital expenditure plans for the Fertilizer Group in order to focus on potential acquisition opportunities in the sector. We intend to intelligently execute phased product diversification including the introduction of Urea Ammonium Nitrates (UAN) and non-integrated Di-Ammonium Phosphates (DAP) at an estimated capital expenditure of approximately USUSD 60 million. These investments can be a platform for larger scale expansions in the future in both product groups but offer a larger range of products to our client base as soon as possible. Discussions on phosphate mining continue to progress in Egypt and Algeria. We believe OCI's cash-strong balance sheet uniquely positions us to pursue a wide range of potential investment opportunities. We have been able to secure a USD 736.5 million loan facility at an extremely competitive cost, which brings our cash position to over a USD 1 billion earmarked for new potential investments. We intend to subject new investment opportunities in both existing core activities and potential new sectors to strict investment criteria. Given the current investment climate characterized by scarce availability of capital, we are targeting investment opportunities that will achieve returns to shareholders that significantly exceed our historical ROE. Additionally, we have decided to extend the share buyback program till end of 2009 to allow for flexible allocation of cash towards attractive investments. For additional information contact: OCI Investor Relations Department: For additional information on OCI: Omar Darwazah Orascom Construction Industries Email: omar.darwazah@orascomci.com (OCI) Nile City Towers - South Tower 2005A Corniche El Nil Ahmed Sultan Cairo, Egypt Email: ahmed.sultan@orascomci.com www.orascomci.com Tel: +202 2461 1036/0727/0914 Fax: +202 2461 9409 OCI stock symbols: OCIC.CA / ORCI EY / OCICqL / ORSD This information is provided by RNS The company news service from the London Stock Exchange END
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