Bloomberg News

Mota-Engil Sees Brazil Deal Soon as Exploration Studied

May 22, 2012

Mota-Engil SGPS SA (EGL), Portugal’s biggest construction company, said it may announce a deal in Brazil soon as ties to the South American country’s largest iron-ore producer may lead to a move into the mining industry.

An acquisition may be disclosed in “coming months,” and is unlikely to include “significant sums,” Chief Financial Officer Goncalo Martins said in an e-mailed response to questions late yesterday. Mota-Engil has set up a team to look at whether to expand into the mineral-exploration business in Africa and South America, he said.

With operations in 20 countries, Mota-Engil is making inroads into emerging markets to counter a recession at home as Portugal’s government struggles with a sovereign-debt crisis. Mota-Engil, which has its headquarters in Oporto, won a $703 million contract in February to build a railway line in Malawi for Rio de Janeiro-based Vale SA (VALE5), the world’s biggest iron-ore producer, and said it may expand on the partnership.

Mota-Engil Chief Executive Officer Jorge Coelho said in August that his company may make “small” purchases in Brazil and Colombia. Martins today declined to specify any targets in Brazil.

The construction company, whose businesses also include waste collection and treatment, said yesterday that first- quarter net income jumped 45 percent to 4.5 million euros ($5.7 million). Revenue rose 12 percent to 481.5 million euros, the company said in a regulatory filing.

The profit increase will enable Mota-Engil to continue to carry out a “stable” dividend payout policy, Martins said. The board proposed an unchanged dividend of 11 cents a share to shareholders on March 14.

“The sustainability of that policy is central for Mota- Engil,” Martins said.

Mota-Engil fell as much as 0.1 percent to 1.05 euros at 9:53 a.m. in Lisbon. The stock has gained 1.6 percent this year.

To contact the reporter on this story: Henrique Almeida in Lisbon at halmeida5@bloomberg.net

To contact the editor responsible for this story: Jerrold Colten at jcolten@bloomberg.net


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