Egypt's Ezz Steel reported a 12 percent rise in its net profit for 2007 due to higher global steel prices.
Egypt's largest steel producer by sales said it made a net profit of 1.1 billion Egyptian pounds ($205.6 million) in 2007.
Net sales rose 40 percent to 16.2 billion pounds and core earnings were up 8 percent at 3.9 billion pounds. Total annual production capacity stood at 5.3 million tonnes.
These results should be viewed in the context of a highly dynamic global steel market, Managing Director Ahmed Ezz said in a statement. Internationally, steel prices rose considerably during 2007, and continue to do so.
Ezz Steel, which derived almost 74 percent of its sales in 2007 in Egypt, signed a deal to build a $750 million steel plant in Algeria in October, its first outside Egypt.
Construction companies, many from the Gulf Arab region, are pouring billions of dollars into projects in Egypt, where the economy grew at its fastest rate in at least two decades last fiscal year.
Demand for steel in Egypt jumped 15 percent in 2007, compared to 4 percent in 2006, on more real estate and infrastructure projects, Ezz said.
The outlook for steel demand remains robust and all indications are that local market demand will be sustained, Ezz said.
Government projects such as house building and road construction in Algeria should drive profit there, Ezz said. The North African country consumes 2.8 million tonnes of steel rebar annually but only produces locally about 600,000 tonnes.
Ezz has benefited from a surge in construction projects in the Middle East region as oil prices hit records. Demand in the Middle East and North Africa grew 12 percent to 38.1 million tonnes in 2007, Ezz said.
In the Gulf, the world's biggest oil-exporting region, more than $2 trillion of infrastructure projects have been announced or are under construction.
Egyptian investment bank Beltone Financial advised its clients to buy Ezz shares in May, citing a price target of 133 pounds.
Ezz shares last traded 1.31 percent up at 85.97 pounds. ($1=5.35 Egyptian pounds) (Writing by Will Rasmussen; Editing by Greg Mahlich)
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