Reuters reported that Egypt's largest steel producer, Ezz Steel swung to a profit in the Q1 as prices rose and a buoyant housing construction market absorbed growing volumes of long steel.

The company said that the results suggest the company has weathered a chaotic political and economic backdrop since the overthrow of President Mr Hosni Mubarak in February 2011.

Its founder Mr Ahmed Ezz was hit with corruption charges as prosecutors probed the dealings of figures closely associated with the ousted government.

Mr Ezz was a top official in Mubarak's now disbanded political party. He quit the board of Ezz Steel and its subsidiary Ezz Dekheila last year to fight the charges against him. A court jailed him in September.

Ezzsteel said that net income was EGP 18 million compared to a net loss of EGP 10 million in the year earlier quarter. Turnover was up 18% reflecting 20% increase in the volume of long steel sold and a 6 per cent increase in both long and flat steel prices.

The company said that long product exports accounted for 2% of total long sales, reflecting the continued strong domestic market demand for Ezz Steel's long products, mainly from private house building activity. Ezz shares were up 4.4% at 1000 GMT. Reduced activity in the global flat steel market meant the company exported 47% of its flat steel, the same as a year earlier.

Mr Paul Chekaiban chairman of Ezz Steel said that he expected the company to maintain a "strong operational performance in 2012 after achieving record sales volumes in the Q1. With a predominantly young population crying out for affordable housing construction of homes was less affected by the economic turmoil that followed the ousting of Mubarak.

Demand for high end developments slumped but the building of cheaper homes much of it in the informal sector appears to have continued apace.

Source - Reuters

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