CAIRO: The country’s largest cement producer, Suez Cement Group, announced final consolidated 2006 results Thursday showing a 51 percent increase in net sales and a higher profit margin, but a 10 percent decline in net income. Suez captured 32 percent of the local market in 2006 with subsidiaries Helwan and Torah Cement producing nearly 61 percent of the total output. The group produced 9.4 million tons, up from 8.6 million tons in 2005. Exports, on the other hand, declined by 35 percent to 1.9 million tons, the company reported.
Suez and other major cement producers faced strong government and public criticism for skyrocketing prices which reached highs of LE 390 per ton in Q1 2006. The Ministry of Trade and Industry most recently imposed an export duty on the sector to keep prices in the LE 345 range after failing to enforce a LE 290 price cap late last year.
Despite increasing government regulation, the company took advantage of the awakening of the real estate sector, recording LE 3.5 billion in sales, up from LE 2.4 billion the previous year. Although net income declined to LE 703 million, the producer’s profit margin remained strong, climbing by 1.4 percent to 47 percent.
While it remains unclear how the export duty will affect future growth, 2006 saw Suez enter the quarry sector with the acquisition of 45 percent of Technogravel. The company has also announced plans to establish new production facilities to increase its output by 4 million tons a year.
About 60 percent of Egypt’s 38 million tons in annual production is controlled by Suez and Orascom Construction Industries. The National Cement Company, of which the government owns 95 percent, captured 9 percent market share in 2006.
Post-resolution: MoI defends reaction to Emaar Misr conflict
CAIRO: Minister of Investment Mahmoud Moheiddin praised Tuesday the government’s reaction to the conflicts surrounding the Sidi Abdel Rahman project resulting from the breakup of Artoc Group and Emaar Properties as partners in Emaar Misr.
Speaking to the People’s Assembly, the minister said the sale of the property to Emaar Misr for LE 1.2 billion in early March concluded a transparent process which saw the elimination of inferior offers. Moheiddin also spoke of the strength of the government’s position in initiating action on March 28 after the partners failed to conclude the sale of Artoc’s 60 percent share in Emaar Misr to Emaar Properties, as agreed upon two weeks earlier, on March 27.
Last week Emaar Properties acquired Artoc Group’s share in Emaar Misr for $142 million (LE 809 million), capping the much publicized conflict which began in the last quarter of 2006.
The deal came days after the Capital Market Authority (CMA) declined Emaar Misr’s application for share listing, citing the company’s failure to submit financial statements reflecting the company s activities over a one-year period.
The Cairo and Alexandria Stock Exchanges executed the transaction on April 1, according to Moheiddin, and the government has received assurances from Emaar Misr development plans for Sidi Abdel Rahman, with potential investments of $10 billion, set to continue as planned.