2019 contract awards at Egypt's Orascom spikes 51.1% to $3.6bn

Backlog in 2019 jumped by 25.8% to $5.4bn, but net income attributable to shareholders dropped by 16.2%

Orascom Construction is building the Grand Egyptian Museum alongside BESIX.
Orascom Construction/ LinkedIn
Orascom Construction is building the Grand Egyptian Museum alongside BESIX.

Egyptian Stock Exchange- and Nasdaq Dubai-listed contacting heavyweight, Orascom Construction, has reported a YOY 51.1% spike in 2019 contract awards to reach $3.6bn, as the company’s backlog for the year jumped by 25.8% to $5.4bn.

In a stock market filing, the company said that its earnings before interest, taxes, depreciation, and amortisation (EBITDA) increased 29.5% YOY to $268.2m and pro forma EBITDA including 50% in BESIX increased 12.7% to $318.9m in 2019.

Meanwhile, net income attributable to shareholders dropped by 16.2% to $121.3m in 2019, compared to $144.7m in 2018. While the same figure for Q4 2019 stood at $27.6m.

Consolidated revenue increased 15.5% YOY to $898.7m in Q4 2019 and 5.7% to $3.2bn in 2019. The company’s Middle East & Africa operations comprised 61% and 69% of total revenue in Q4 2019 and 2019, respectively, while the US operations accounted for the remaining 39% and 31%.

Orascom said in the missive: “The group’s strict collection, cash, and debt management efforts are reflected by the increase in net cash position and operating cash flow.”

Net cash position at the company grew to $279.1m compared to $27.2m as of 31 December 2018 and $63.4m as of 30 September 2019. Meanwhile, operating cash flow increased to $319.9m in 2019, compared to $53.9m in 2018.

Commenting on the global effects of the coronavirus (COVID-19) on the business, Orascom CEO, Osama Bishai, said: “While the markets in which we operate are vulnerable to global events related to COVID-19, the safety of our people remains our top priority and we have implemented a proactive plan that is driving us through the upcoming period.”

“We are also monitoring our subcontractors and supply chain to detect any bottlenecks.”

Bishai added: “Alongside our core EPC activities, 2019 saw marked development of our recurring income business as we commissioned Egypt’s first and largest renewable energy IPP project 45 days ahead of schedule and added sizable operation & maintenance (O&M) contracts across transportation, water treatment, and facilities management.”

In MEA, Orascom Construction signed approximately $2.4bn of new awards in 2019, which $540m accounted to the contracts that were secured in Q4 2019. These included projects across sectors such as infrastructure, healthcare, logistics, and roads.

Meanwhile, in the US, the group’s subsidiaries signed $1.2bn new contract awards in 2019, marking a 25% YOY increase.

In Q4 2019, new awards in the US reached $250m, with contracts being secured for projects including student housing, commercial, and data centers.

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