By Shaima Youssef
EFG Hermes has lowered the value of Orascom Construction Industries’ (OCI) shares from $45 to $35 per share, while maintaining its neutrality regarding the recommendation of the stock.
The downgrade came as a result of a recent decrease in company revenues, experienced amid pressures in the form of an unstable gas supply, which has also led to an increase in prices. The company’s two factories make up a total of 31% of company earnings before taxes, depreciation and amortisation (EBTDA), and 35% of the company’s fair value.
EFG Hermes also stated that it expects the company’s profit margins to decrease, saying that the company’s EBTDA at 33% and 26%, reflect weak levels of production for the company’s cement factories, which reached their peak during the first quarter of the 2013 fiscal year, due to decreases in gas supplies, and the expectation for factory production rates to decrease to 25% of total capacity throughout 2013.