Cairo based Chemical Industries Holding Company's net profit for the financial year ending June 30th 2011 may decline by 20.85% from the previous year's EGP 815 million to EGP 645 million. Gross profit for the year ended June 30th 2011 amounted to EGP 705 million as compared to around EGP 626 million in the previous year.
CIHC is a 100% state owned company with shareholding in 18 affiliate companies. The group operates in the chemicals, fertilizers, mining, basic materials and industrial products sectors.
In a meeting on December 22nd 2011, the CIHC board headed by Mr Mohamed Adel Al Mouzi, Commissioner General of the Public Business Sector Companies, approved the financial statements for the financial year ended June 30th 2011 as well as the statements and consolidated results of CIHC and its affiliates.
According to the person, several factors were responsible for the decline in net profit. Among them are around EGP 180 million in losses incurred and staff bonuses at loss making units and the cost of early retirement payouts in some companies.
If these extraordinary items were not accounted for, the net profit would have been about EGP 860 million, an increase over the previous year's EGP 815 million. CIHC contributed EGP 14.5 billion to the Public Treasury in the year ending June 30, 2011, compared to EGP 9 billion during the previous year.
The board also reviewed the position of ongoing projects in affiliate companies. Among these are:
1. Upgrading KIMA's production facilities to operate on natural gas instead of electricity:
Objective: Production of 1,200 tonnes of ammonia per day, 530,000 tonnes of urea per year and 220,000 tonnes of ammonium nitrate per year.
Status: The main contract was awarded to and signed with Tecnimont, an Italian company, on October 30th 2011.
Financing: The total investment cost of the project is USD 750 million, 65% of which will be funded by loans and 35% by self financing through the increase of KIMA capital to around EGP 1.2 billion from EGP 40 million. The project's implementation period is three years.
2. Development of Delta Company for Fertilizers:
Objective: Production of 1,200 tonnes of ammonia per day, 620,000 tonnes of urea per year and 650,000 tonnes of nitrate per year. After completion, the company's share of domestic fertilizer production will be around 45%.
Financing: The investment cost of the project is USD 560 million, 40% of which will be funded by self financing and 60% by loans. The total amount to be borne by CIHC would be around EGP 680 million. The implementation period is three years and the contract will be awarded in January 2012.
3. Rehabilitation of El Nasr Fertilizers in Suez:
Objective: Reaching production capacity of 600 tons of ammonium nitrate per day, 240 tonnes of ammonium sulfate per day, and 135 tonnes of calcium nitrate per day. The last stages of the work were completed and the gradual loading of equipment began during the last week of December 2011.
Financing: Total cost is estimated at EGP 180 million.
The CIHC board also reviewed the investments of EGP 1,090 million made in affiliate companies during the year.
(Sourced from www.zawya.com)
