Egyptian oil support provider Maridive saw profits grow 19 per cent year-on-year for the first quarter of 2011 but still sparked concern about the company’s dip in profitability.

Mardive net profits reached US$14.8 million, with revenues growing 69 per cent year-on-year to reach $109.2 million. Despite the seemingly healthy annual gains, profits were down from a consensus estimate of $16 million.

A note from investment bank Beltone Financial welcomes the growth in revenues but was “disappointed” in Maridive’s profitability, with a 1Q2011 profit margin of 13.6 per cent showing a significant fall from the 25.3 per cent average over the past four years.

Mardivie blamed “some technical difficulties” in one of its India contracts, as it did for the last quarter of 2010, but the disclosure did not describe the problems nor hint whether they would be resolved. Tax expenses — up 4.1 per cent year-on-year — were also a factor.

Beltone predicted the trend will continue in 2011 but suggested Mardivie needs to win new and profitable contracts. The company’s backlog dropped by a third between mid-2009 and early 2011 and stands at $449 million, indicating significant deterioration in revenues and earnings visibility, Beltone said.

Source: Ahram Online