Beltone Egypt Orascom Construction Industries Valuation Update 13 April 2011

s

April 13th 2011 Recommendation

Hold*

Upside/Downside

9.4% Target Price

E£262.71 Current Price

E£240.05

EPS FY11f E£21.04 Reuters Code OCIC.CA Bloomberg Code OCIC EY Market Cap E£49.7 billion US$8.9 billion Enterprise Value E£60.1 billion US$10.9 billion Number of Shares Outstanding 206.9 million shares Average Daily Turnover E£53.3 million 52-Week high/ low E£291.81/204.37 Shareholder Structure 55%|Sawiris Family 45%|Free Float

* Refer to back cover for investment rating ** Closing as of April 12h 2011

Orascom Construction Industries (OCI)

Valuation Update: Bumps won’t break stride

Construction story intact for the long term…short term weakness to creep up

While government expenditure will be a key priority to kick-start the economy, we remain skeptical about the resiliency the Egyptian government will show in tendering big ticket projects this year, amidst the instability. Elsewhere in the MENA region, infrastructure plans remain strong for markets such as Qatar, Abu Dhabi, and Saudi Arabia, which OCI have highlighted as its main target markets. While management is optimistic that construction activity in 2011 will be strong, reinforcing both, revenue and backlog growth during FY2011, we are inclined to be less optimistic. In the absence of a strong year on the awards side, revenue growth will be limited to OCI’s current US$5.6 billion, its lowest backlog in three years, and 15% lower than the US$6.7 billion recorded in December 2009. We expect construction’s EBITDA to decline by c.11% in FY2011, with backlog awards falling by 5%. We do not believe construction growth will rebound before FY2013.

Excitement driven by fertilisers, EBITDA of US$1 billion by 2012

Our optimism is derived from capacity additions at Sorfert, EFC, and a full year’s consolidation at DSM, coupled with continued y-o-y price improvements for fertilisers, on the back of stretched grains supply / demand dynamics. We expect OCI’s fertiliser’s EBITDA to grow at a CAGR of 30% over the next three years. Through an increased contribution from the fertilisers’ portfolio, consolidated EBITDA margins are to reach 28% in FY2011, from the 22% achieved in FY2010. By FY2012, we expect OCI to command US$1 billion in fertilisers’ EBITDA (with Sorfert contributing 25%), almost double the US$500 million achieved in FY2010.

Lowering our FY2011 numbers, mainly due to construction

Our top line estimates of E£28.8 and E£28.5 billion for FY2011f and FY2012f, are 2% and 12%, respectively, lower than our pre-crisis estimates, mainly due to the weak level of awards booked in FY2010, and because of the time lag of PPP infrastructure awards in Egypt. This has culminated into an EPS of E£21.04 (10% higher than consensus) and E£24.47 (2% lower than consensus) for FY2011 and FY2012, 8% and 13%, respectively, lower than our pre-January 27th estimates.

Natural gas concessions to hold firm, in our view

“Water tight” agreements with the government over favourable natural gas concessions should withstand the recent re-shuffle in government, in our opinion. Reneging on an agreement with an established private sector employer of 80,000 people, would probably not be in the best interest of the government, looking to attract FDI into Egypt. Assuming the scenario of an upward renegotiation of the agreement price in Egypt, to US$3.00 (what other energy intensive producers pay) our DCF valuation is E£234, a drop of 9%.

We remain bullish on the OCI story, but see limited upside potential at current levels

The stock has recently rebounded strongly from its low of E£203, rising by 20% to E£244, which is 12% lower than the stock’s price of E£273 on January 24th. Our views on the company have not changed much because of the turmoil in the MENA region, aside from a 200bps increase in the cost of equity used for construction and Egyptian fertilisers operations. The company has recently announced an MOU to explore fertiliser opportunities in Sub-Saharan Africa, along with bidding for BASF European fertiliser assets. We recommend a ‘Hold’ for OCI, until we get more color on the upcoming expansion plans.

Omar Taha [email protected] Tel: +20 (0) 3531 0316 Allen Sandeep [email protected] Tel: +20 (0) 3531 0329 Please see the important disclosures contained on the last page of this report.

Selected Indicators

FY end December 2009a 2010a 2011f 2012f 2013f 2014f

Revenues (E£ mil.) 21,294 27,907 28,823 28,451 32,836 34,469

EBITDA (E£ mil.) 4,276 6,177 7,152 8,098 9,054 8,892

EBITDA Margin (%) 20.1 22.1 24.8 28.5 27.6 25.8

Net Income (E£ mil.) 2,476 3,370 4,354 5,062 5,982 5,954

EPS after Approp. (E£) 11.97 16.29 21.04 24.47 28.91 28.77

P/E (x) 20.1 14.7 11.4 9.8 8.3 8.3

P/B (x) 3.0 2.8 2.6 2.4 2.2 2.0

EV/EBITDA (x) 14.2 9.8 8.5 7.5 6.7 6.8

Net Debt/EBITDA (x) 1.8 1.9 1.6 1.1 0.6 0.2

Total Debt/Equity 0.8 1.0 0.9 0.7 0.6 0.3

DPS (E£) 10.08 11.80 15.00 16.25 16.50 17.70

Dividend Yield (%) 4.2 4.9 6.2 6.8 6.9 7.4 Source: OCI, Beltone Financial estimates

175.0

195.0

215.0

235.0

255.0

275.0

295.0

315.0E£ OCI EGX30


Beltone Financial Research 2

Key Financial Figures FY End December (E₤ million) 2009a 2010a 2011f 2012f 2013f 2014f

Construction Revenues 18,733 18,967 18,416 16,335 19,975 21,796

Fertilisers Revenues 2,561 6,893 10,407 12,116 12,862 12,673

OCI Revenue 21,294 25,861 28,823 28,451 32,836 34,469

Revenue Growth (%) 5.1 31.1 3.3 (1.3) 15.4 5.0

Construction EBITDA 2,776 2,997 2,762 2,369 2,796 3,051

Fertilisers EBITDA 1,589 2,988 4,696 5,990 6,591 6,209

OCI EBITDA 4,276 6,177 7,152 8,098 9,054 8,892

EBITDA Margin (%) 20.1 22.1 24.8 28.5 27.6 25.8

EBITDA Growth (%) (10.9) 44.5 15.8 13.2 11.8 (1.8)

Net Income 2,476 3,370 4,354 5,062 5,982 5,954

Net Profit Growth (%) (34.6) 36.1 29.2 16.3 18.2 (0.5)

ROA (%) 5.3 6.2 7.9 9.3 10.2 10.8

ROE (%) 15.1 19.2 23.2 24.7 25.9 23.5

Total Debt/Equity (x) 0.8 1.0 0.9 0.7 0.6 0.3

Net Debt/EBITDA (x) 1.8 1.9 1.6 1.1 0.6 0.2

Times Interest Earned (x) 5.8 6.9 9.3 11.4 17.2 18.7

DPS (E£) 10.1 11.8 15.0 16.3 16.5 17.7

Dividend Yield% 4.2 4.9 6.2 6.8 6.9 7.4

P/E (x) 20.1 14.7 11.4 9.8 8.3 8.3

P/BV (x) 3.0 2.8 2.6 2.4 2.2 2.0 Source: OCI and Beltone Financial estimates



We see limited upside beyond the current price, and recommend a ‘Hold’ until we get more color on the upcoming expansion plans Possible deal on the horizon might act as a trigger OCI talking to BASF for a nitrogen fertilisers portfolio, with competition from Yara, EuroChem and K+S AG

Valuation

The stock is currently trading 12% lower than the price of E£273 on January 24th. Our views on the company have not changed much because of the turmoil in the MENA region, aside from a 200bps increase in the cost of equity used for construction and Egyptian fertilisers operations. We value OCI at E£262.71, assigning 100% to our three-stage DCF valuation, and removing our peers multiples valuation, which stood at E£307.78.

Figure 1| OCI SOTP valuation

Source: OCI and Beltone Financial estimates

Possible expansion announcement coming soon…

Although we are bullish on the OCI story, we find limited upside potential from the current price. A potential deal on the fertiliser front is possible, as management has previously emphasised its interest in the sector. The company has recently announced an MOU to form a 50/50 partnership with Maire Technimont to explore fertiliser opportunities in Sub – Saharan Africa, which, depending on the opportunity, might represent an upside to our valuation. In addition, we know that the company is currently involved in negotiations with BASF for a portfolio of 2.5 million tonnes of nitrates fertilisers. Other companies also bidding for the assets include Yara, EuroChem, and K+S AG (Germany’s potash producer that already has an agreement to market BASF’s products). This acquisition would mimic OCI’s previous venture into Europe, with the OCI Nitrogen assets (previously DSM). Our main justification surrounding the DSM deal was its cheap acquisition price at EUR310 million, a 2.2x EV/EBITDA multiple on the subsidiary’s FY2010 results. We would be wary of OCI overpaying for such an asset, amidst the stern competition it is facing in the bidding process.

Figure 2| Implied valuation

Source: OCI, Bloomberg and Beltone Financial estimates

Operation Country Cost of equity EV Stake OCI EV

Per share

% of total

value

Construction MENA 17.8% 25,063 100.0% 25,063 121 38%

EFC Egypt 18.5% 14,176 100.0% 14,176 69 22%

EBIC Egypt 18.5% 10,790 60.0% 6,474 31 10%

Sorfert Algeria 19.0% 29,918 37.5% 11,219 54 17%

OCI Nitrogen Netherlands 17.0% 4,826 100.0% 4,826 23 7%

Notore Nigeria 20.0% 6,773 13.5% 914 4 1%

Other equity investments

2,813 2,813 14 4%

Enterprise Value 65,486 Latest net debt (as of FY2010) (11,126)

Equity Value 54,359

Fair value per share 262.71

2011 2012 2013

Current market price PE (x) 11.4 9.8 8.3 EV/EBITDA (x) 8.5 7.5 6.7 P/B (x) 2.6 2.4 2.2 ROE (%) 23.2 24.7 25.9 Implied from our target price PE (x) 12.5 10.7 9.1 EV/EBITDA (x) 9.2 8.1 7.2 P/B (x) 2.9 2.7 2.4 Construction peers PE (x) 13.9 11.6 10.2 EV/EBITDA (x) 9.5 7.9 7.0 P/B (x) 2.0 - - ROE (%) 11.2 12.5 13.2 PEG (x) 1.1 0.9 0.7

Fertilisers peers PE (x) 14.5 12.8 11.8 EV/EBITDA (x) 9.1 8.1 8.1 P/B (x) 4.1 - - ROE (%) 27.1 25.8 25.7 PEG (x) 1.1 1.0 0.9



We retain our bullish view on the MENA region construction story A lag is expected in Egypt for infrastructure spending, due to the nature of the interim government We forecast a range of US$3.0 – 3.2 billion, a drop of 8%, y-o-y

Construction story intact for the long term…

The recent political turmoil in the MENA region does not change our bullish view on the construction space, in view of the protestors’ demands of improved standards of living and eradication of corruption, vying for increased government expenditure. With an excess of c.US$800 billion outlined in infrastructure expenditure throughout the region, and budget surplus in the GCC economies, we believe OCI’s prospects as an experienced contractor in the region, will allow the company to benefit from a vibrant sector.

Management is of the view that the company will be able to record revenue growth, alongside an increase in its backlog during FY2011; we view this with some skepticism. Public expenditure will undoubtedly be a means for the Egyptian government to kick-start the economy, but we believe that the PPP tendering pipeline will be facing a c.12 – 16 months time lag, due to the nature of the current interim government. Elsewhere in the MENA region, infrastructure plans remain strong for markets such as Qatar, Abu Dhabi, and Saudi Arabia, which OCI have highlighted as its main target markets.

Figure 3| Backlog shrinks by 15%, y-o-y Figure 4| Diversified exposure of backlog


…while we expect short-term weakness to creep up

OCI enters FY2011 with its lowest backlog value in three years, standing at US$5.62, with revenue outpacing new project awards in each of the last six quarters. The company has guided for construction revenue of US$3.6 – 4 billion, which would require the same number of new awards to at least maintain its level of backlog. We forecast a range of US$3.0 – 3.2 billion for construction revenue, with our base case scenario incorporating a 5% drop in new awards, from the US$2.6 billion booked in FY2010. We forecast OCI’s EBITDA to drop by c.11% in FY2011, and another 9% decline in FY2012, stemming from a backlog of US$5.3 billion by year – end 2011.

During the results call, Mr. Nassef Sawiris, OCI’s CEO, assured investors that the infrastructure portion of the backlog, (60% of the value as of 4Q10), does not expose the receivables on the company’s balance sheet to a default from sovereign clients, as the value of the contract is usually locked up in a fund until the project is complete. Nevertheless, we would not rule out a minor stretch in the working capital for FY2011, on the back of the increasing presence of sovereign entities in the company’s client list. However, this does not raise much concern.

Figure 5| Construction awards recovery to be slow, in our opinion


2009a 2010a 2011f 2012f 2013f 2014f

Beginning Backlog 6,930 6,650 5,620 5,076 5,729 5,780

% Revenue Growth 6% 2% -8% -11% 22% 9%

Construction Revenue 3,351 3,411 3,121 2,769 3,386 3,694

Backlog Additions 3,200 2,620 2,470 3,300 3,300 3,700

Ending Backlog 6,650 5,620 5,076 5,729 5,780 5,938

EBITDA 497 539 468 401 474 517

EBITDA Margin (%) 14.8 15.8 15.0 14.5 14.0 14.0

Egypt, 27.50%

Algeria, 13.80%

Qatar, 20.30%

Abu Dhabi, 15.00%

Dubai, 2.60%

Europe, 11.00%

Asia, 3.90%

Africa Other, 1.10%

MENA Other, 1.70%

GCC, 3.20%

6.87 7.00

7.61

6.937.20 7.21 7.21

6.65 6.506.28

6.025.62

2.90

0.97 1.16

0.450.93 1.17

0.710.36

0.79 0.68 0.60 0.55

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10

US$ billion

Backlog New awards

-15% y-o-y



Bullish scenario for construction would increase our valuation by 18%, and above the current price by 25% We expect OCI’s fertilisers’ EBITDA to grow by 57% in FY11f, driven by a 25% increase in volumes… …and 11% increases for ammonia and urea prices Sorfert to account for 24% of fertilisers’ EBITDA by FY2012f We only include 37.5% of Sorfert’s valuation to OCI OCI Nitrogen realises an acquisition multiple of 2.2x EV/EBITDA

Analysing the two scenarios for construction

We do not rule out the possibility of the governments taking extraordinary measures to provide an impetus for economic activity in 2011. Infrastructure projects tendering would be at the forefront of such measures, aiming to provide jobs and fulfill the protestors’ demands of better standards of living. We examine two scenarios for OCI, in terms of new project awards, over the coming three years.

Figure 6| Construction awards recovery will be the catalyst

Source: Beltone Financial estimates

Excitement driven by fertilisers

Fertilisers’ EBITDA during FY2010 grew by 94%, y-o-y, mainly driven by the ramp-up at EBIC, the three quarters consolidation of OCI Nitrogen, price rebounds of 18% for urea, and 32% for ammonia, y-o-y. Consolidated volumes grew by c.80% in 2010, versus 2009. The main catalyst we see in 2011 is the commencement of production in Algeria, expected sometime between 3Q and 4Q 2011, and to a less extent, the first full year of consolidation of OCI Nitrogen. We forecast a 23% increase in volumes in 2011, accompanied by another 25% increase in 2012, to reach 5 million tonnes by 2012, against the c.3.5 million tonnes sold in 2010.

We expect fertiliser prices to continue growing in 2011, albeit at a slower pace than 2010. We forecast an 11% increase for both ammonia and urea in 2011, averaging US$367 and US$347, respectively. We do not expect grain supply / demand dynamics to improve much during the year, as weather conditions continue to constrain the harvesting season, against the ever-growing demand for food. Oil prices have increased by c.25% since September 2010, on the back of instability in the MENA region, which will provide for an upswing in fertiliser demand, increasing the use of agricultural produce to obtain biofuels. The seasonal upswing witnessed in fertiliser prices over the last two months was expected, as farmers and traders re-stocked their inventories prior to the spring application season.

Sorfert as the catalyst to earnings

The inclusion of the 51% owned Sorfert, with an annual capacity of 1.2 million tonnes of urea and 0.8 million tonnes of ammonia, is the major driver we foresee for the stock. Gradually ramping up capacity at the plant, we expect Sorfert to account for 24% of OCI’s consolidated fertiliser EBITDA by FY2012f, operating at a c.75% EBITDA margin. For FY2011f we expect Sorfert to operate at 25% utilisation. Ramp-up at the plant should take c.18 months, as demonstrated by the recent experience at EBIC. Clear benefits to Sonatrach, owning 49% of the plant and entitled to an extra 13.5% of the dividends above a certain level of urea pricing (which management has indicated is currently implementable), reassures us that OCI will be able to continue managing the plant with little hassle from the Algerian authorities. For an added measure of scrutiny, we have only added 37.5% (post the extra dividend payment) of the plant’s valuation to OCI’s fair value. Operational uncertainties that might arise from the plant are mainly geared toward any possible repatriation of dividends issues, or any extraordinary tax, but in reality:

− The company has not experienced any problems yet with the Algerian government, with respect to repatriating dividends

− Substituting for the tax holiday, a 19% of net income re-investment clause, to be spent over four years time, is currently in place

OCI Nitrogen investment proves to be a profitable one

The subsidiary recorded an annualised EBITDA of US$184 million for FY2010, against an acquisition cost of US$400 million. At the time of the deal, we argued in favour of the deal because of the cheapness of the acquired assets, diversification into nitrates fertilisers, potential synergies with OCI’s plants in North Africa, and the proximity to European markets, allowing the company to better distribute its products. We expect OCI Nitrogen to continue reaping benefits, going forward, as the company moves away from its fixed gas contracts towards a spot rate, as the oversupply in the Natural Gas market continues to weaken spot prices.

Scenario 1 - Base case Scenario 2 - Bull case

Assumption Slow pickup in Egypt’s infrastructure spending

Strong acceleration in infrastructure expenditure

Normalised construction awards (US$ million) 3,150 4,250

Fair value of construction segment (E£ per share) 121 167

OCI fair value (E£ per share) 262.71 305.14



Natural Gas concessions to hold firm, in our view… In the scenario of a renegotiated price with the government (US$3.00), our DCF valuation comes to E£234 OCI fertilisers EBITDA to grow at a CAGR of 29% between 2011 - 2013 1Q2011 to show strong growth, on the back of seasonal upswing in fertiliser prices

Natural Gas concessions to hold firm, in our opinion

OCI’s favourable natural gas concessions, a major contributor to the company’s competitive advantage in the fertilisers industry, representing c.65% of cash costs for the plants in Egypt, will continue to be a risk the market factors in. We are of the belief that the Egyptian government will not want to renege on a contract with a strong private sector participant such as OCI, employing over 80,000 people, especially in view of the government’s plan to attract FDI back into Egypt. In the case of the government requesting to renegotiate the current contracts, international arbitration is a possible route for the company, as its strong contractual agreements are “water-tight”, and are backed up by strong international and local law firms. Examining the scenario of an upward renegotiation of the agreement price in Egypt, to US$3.00 (what other energy intensive producers pay), our DCF valuation comes to E£234, 5% lower than the current market price.

Figure 7| Fertiliser forecasts

Source: OCI and Beltone Financial estimates * FY2010 figures are for the last three quarters only

1Q2011 estimates

We expect a strong set of results from OCI, as fertiliser prices continued their strong seasonal upswing during the quarter. Ammonia prices rose by 15%, while CAN prices strengthened by 14%, while urea (consumed less during a wet season), remained flat. We do not expect much repercussion on construction from the recent events in Egypt, with only c.10 days of idle activity.

Figure 8| Expecting a strong 1Q2011


2009 2010 2011 2012 2013 2014

Price assumptions (US$ per tonne)

Urea 266 313 351 365 376 368

Ammonia 251 331 371 389 405 397

CAN 236 287 286 291 282

EFC (Egypt)

Urea (000 tonnes) 1,359 1,323 1,323 1,425 1,440 1,455

Revenues (US$ million) 361 414 464 520 541 535

EBITDA (US$ million) 216 270 317 361 379 347

EBIC (Egypt)

Ammonia (000 tonnes) 385 630 665 672 679 679



Sorfert (Algeria) at proportionate consolidation

Urea (000 tonnes) 0 0 153 490 563 581

Ammonia (000 tonnes) 0 0 102 326 408 408



OCI Nitrogen *

Ammonia ('000 tonnes) 0 296 462 397 397 397

CAN ('000 tonnes) 0 906 1,167 1,410 1,410 1,410

UAN ('000 tonnes) 0 133 100 0 0 0

Melamine ('000 tonnes) 0 147 168 169 169 169

Total Revenues (US$ million) 0 870 917 920 940 920

Total EBITDA (US$ million) 0 145 193 186 199 177

OCI Revenues (US$ million) 444 1,168 1,764 2,054 2,180 2,148

OCI EBITDA (US$ million) 269 507 796 1,015 1,117 1,052

1Q10a 2Q10a 3Q10a 4Q10a Beltone 1Q11e

Consensus 1Q11e

Beltone FY11e

Consensus FY11e

Revenue 986 1,342 1,250 1,319 1,300 1,214 4,885 5,147

EBITDA 234 269 266 318 351 1,212

Net Income 117 144 148 186 200 145 740 672



Income Statement FY End December (E₤ million) 2009a 2010a 2011f 2012f 2013f 2014f

Construction Revenues 18,733 18,967 18,416 16,335 19,975 21,796

Fertilisers Revenues 2,561 6,893 10,407 12,116 12,862 12,673

Total Revenues 21,294 27,907 28,823 28,451 32,836 34,469

Construction Costs (14,594) (15,401) (15,101) (13,477) (16,579) (18,091)

Fertilisers Costs (903) (3,534) (5,129) (5,454) (5,562) (5,762)

Gross Profit 5,797 8,301 8,593 9,521 10,695 10,616

Selling and General Administrative Expenses (1,283) (1,646) (1,441) (1,423) (1,642) (1,723)

Depreciation (1,015) (1,475) (1,218) (1,320) (1,302) (1,258)

EBITDA 4,276 6,177 7,152 8,098 9,054 8,892

EBIT 3,449 4,702 5,934 6,778 7,752 7,635

Net Financing Cost (450) (613) (556) (516) (354) (283)

EBT 3,093 4,524 5,614 6,498 7,633 7,587

Income Tax (479) (846) (954) (1,105) (1,298) (1,290) Net Income from continuing operations 2,614 3,678 4,660 5,393 6,336 6,298

Gain on sale of discountinued operations 1,445 - - - - -

Net Profit for the period 5,444 2,614 3,678 4,660 5,393 6,336

Investment Income 2 93 434 236 236 236

Minority Interest (77) (138) (308) (306) (331) (353)

Net Income 2,476 3,370 4,354 5,062 5,982 5,954 Source: OCI and Beltone Financial estimates

Balance Sheet

FY End December (E₤ million) 2009a 2010a 2011f 2012f 2013f 2014f

Cash 5,925 5,511 5,130 6,445 8,304 4,876

Receivables 9,750 11,283 11,857 10,070 12,039 11,943

Inventory 1,402 1,857 1,821 1,661 2,044 2,230

Other Current Assets 1,523 2,187 2,270 2,014 2,463 2,687

Total Current Assets 19,350 21,548 21,788 20,901 25,560 22,447

Net Fixed Assets 10,697 12,177 13,202 13,019 12,578 12,215

Other Long Term Assets 12,517 13,870 13,870 13,870 13,870 13,870

Total Long Term Assets 23,214 26,047 27,073 26,889 26,448 26,086

Total Assets 46,858 54,099 55,364 54,293 58,511 55,036

Short Term Debt 2,266 4,178 996 1,346 7,091 694

Payables 8,494 10,489 10,964 9,231 10,901 11,400

Provisions 650 888 361 361 361 361

Other Current Liabilities 4,019 3,301 3,706 3,142 3,905 4,157

Total Current Liabilities 15,429 18,856 16,026 14,079 22,258 16,611

Total Grey Area 750 1,020 1,326 1,657 2,010 2,354

Long Term Debt 11,219 12,816 15,260 13,915 6,823 6,130

Other LT Liabilities 3,066 3,853 3,948 4,138 4,347 4,578

Total LT Liabilities 14,285 16,669 19,208 18,052 11,171 10,707

Net Worth 16,393 17,554 18,804 20,504 23,072 25,364

Total Liabilities & Equity 46,858 54,099 55,364 54,293 58,511 55,036 Source: OCI and Beltone Financial estimates



Key Ratios 2009a 2010a 2011f 2012f 2013f 2014f

Revenue Growth (%) 5.1 31.1 3.3 (1.3) 15.4 5.0

EBITDA Growth (%) (10.9) 44.5 15.8 13.2 11.8 (1.8)

Net Profit Growth (%) (34.6) 36.1 29.2 16.3 18.2 (0.5)

EBITDA Margin (%) 20.1 22.1 24.8 28.5 27.6 25.8

Net Profit Margin (%) 12.3 13.2 16.2 19.0 19.3 18.3

EPS (E£) 12.0 16.3 21.0 24.5 28.9 28.8

ROA (%) 5.3 6.2 7.9 9.3 10.2 10.8

ROE (%) 15.1 19.2 23.2 24.7 25.9 23.5

Current Ratio (x) 1.3 1.1 1.4 1.5 1.1 1.4

Total Debt/Equity (x) 0.8 1.0 0.9 0.7 0.6 0.3

Net Debt/EBITDA (x) 1.8 1.9 1.6 1.1 0.6 0.2

Times Interest Earned 5.8 6.9 9.3 11.4 17.2 18.7

DPS (E£) 10.1 11.8 15.0 16.3 16.5 17.7

Dividend Payout (%) 84.2 72.5 71.3 66.4 57.1 61.5

Dividend Yield% 4.2 4.9 6.2 6.8 6.9 7.4

P/E (x) 20.1 14.7 11.4 9.8 8.3 8.3

P/BV (x) 3.0 2.8 2.6 2.4 2.2 2.0

EV/EBITDA (x) 14.2 9.8 8.5 7.5 6.7 6.8 Source: OCI and Beltone Financial estimates

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Karim Baghdady [email protected]

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*The Rating is flexible and is subject to analysts’ general outlook on the individual companies

Investment Rating

Upside

25%

5%

-5%

-25%

Downside

Buy

Significantly overweight vs. the Index

Add Overweight vs. the Index

Hold Maintain index weight

Reduce Underweight vs. the Index

Sell

Do not hold the stock

Documents

Beltone Egypt Orascom Construction Industries Valuation Update 13 April 2011