Reuters reported that Ezz Steel, Egypt's biggest steelmaker posted 79% drop in H1 net profit as it set aside a potential tax liability to cover measures introduced by the government in the wake of Egypt's uprising.

Ezz said that its H1 net profit after tax and minority interest dropped to EGP 51 million from EGP 241 million the same time last year. Net sales climbed 24% to EGP 9.33 billion while earnings before interest, taxes, depreciation and amortization rose 3% to EGP 1.24 billion.

Ezz Steel set aside a deferred tax loss of EGP 158 million mainly recognized during the Q1 of the year which further pulled profits downwards. It also realized a foreign exchange loss of EGP 66 million.

Mr Omar Taha of Beltone Financial said that for a firm that spends more time in court than in the office and with a steel industry that had months of no work growth in their revenue and EBITDA profit is impressive and unexpected.

Beltone Financial said that the revenue miss was mainly caused by lower than expected volumes at Ezz Flat Steel resulting in a top line of EGP 0.7 billion versus our expected 1.8 billion.

The group has been rocked by the political and economic turmoil of the uprising that ousted Mr Hosni Mubarak in February. Egypt's public prosecutor jailed the company's chairman Mr Ahmed Ezz in February on charges of graft.

(Sourced from Reuters)