* Future earnings seen rising on fertiliser price rebound
* EBITDA drops 23.6 percent to $255.8 mln
* Consolidated revenue gains 1.4 percent to $1.28 billion
* OCI looking at opportunities in Iraq, Saudi, Morocco
(Adds quotes from Sawiris, details)
CAIRO, June 11 (Reuters) - Orascom Construction (OCI)
expects a surge in fertiliser prices to spur a rebound
in earnings this year after Egypt's biggest company by market
value reported a fall in first quarter net income.
OCI, which plans to split its construction and fertiliser
businesses into two new companies, has benefited from
infrastructure growth across the Middle East despite economic
turmoil at home.
But lower sales volumes and a drop in prices at its
fertiliser business contributed to a 54 percent fall in first
quarter net income.
"Our first quarter results have been impacted by lower
selling prices for ammonia and melamine," Chairman and Chief
Executive Officer Nassef Sawiris said, referring to the
"We think this is a temporary matter because in April and
May, prices recovered. Today in June, ammonia prices are about
50 percent higher than what they were in February," he told
Reuters in an interview.
Sawiris said that the rebound would benefit second quarter
net income and that the firm expected an improvement in earnings
for the rest of the year.
The fertiliser business is expanding its projects in the
United States and Algeria. The group's OCI Beaumont plant in
Texas in the United States sold 38 thousand tonnes of ammonia
during the quarter and is on track to produce 250 thousand
tonnes per year. The Beaumont plant's methanol line is due to
start production in June.
OCI's Sorfert plant in Algeria has also started production
runs for one of its urea and ammonia lines.
The company's shares were down 1.5 percent at 1026 GMT,
roughly in line with the benchmark index's 1.4 percent
CONSTRUCTION ORDERS UP
The construction business's consolidated order backlog at
end-March grew to $6.5 billion, a 1.4 percent increase from the
end-December figure and a 15.5 percent jump from the same period
a year earlier.
The company had new orders worth $841 million during the
quarter, with infrastructure and industrial work making up 61
percent of the construction group's backlog.
OCI has been able to attract projects from across the Middle
East to offset a slow-down at home since Hosni Mubarak was
ousted in 2011. A run-off presidential vote to replace him is
scheduled for June 16-17.
"Everything is on hold. It has been on hold for 18 months.
We hope that investment freeze comes to an end after the
election," Sawiris said. He said any economic rebound at home
"would depend on the outcome of the election."
In the meantime, the group is looking at new projects in the
region, particularly Saudi Arabia, Morocco and Iraq, where OCI
secured a $363 million contract to build a power plant in the
"In Iraq, we are continuing to look at more power projects
and infrastructure in general," Sawiris said.
OCI's first quarter net profit fell to $94 million from
$206.3 million in the same period a year earlier. That compares
with a consensus estimate by 14 analysts of $129.5 million.
Consolidated revenue rose by 1.4 percent to $1.28 billion
from $1.26 billion while earnings before interest, tax,
depreciation and amortisation dropped 24 percent to $255.8
million from $334.8 million in the same period a year earlier.
The firm said its net profits were also affected by the sale
of a 16.8 percent stake in U .S. grains merchant Gavilon to
Japanese trading house Marubeni.
OCI said in May it would earn $605 million from the deal,
which is part of a $3.6 billion takeover by Marubeni of Gavilon.
The firm expects to use the proceeds to finance its
expansion in North America and invest in other opportunities
under review. Part of the proceeds would be paid as dividends.
The investment income related to the Gavilon stake was taken
out during the quarter and reclassified as an investment held
for sale, OCI said.
(Editing by Jane Merriman)