Egypt's Orascom Construction adds $770m to its Q4 project backlog

Egypt accounted for 70 per cent of the company’s new awards during the last quarter of 2019

Egyptian infrastructure and engineering group Orascom Construction added $770 million (Dh2.83 billion) to its project backlog in fourth quarter of the last year, boosted by new project awards in its home market.

The estimated consolidated project backlog stood at $5.2bn at the end of last year, compared to $4.3bn reported for 2018, the company said in a statement on Tuesday. The value of Orascom’s new project awards at the end of 2019 climbed to $3.5bn, a 50 per cent year-on-year rise.

The figure underscores the group’s “success in adding wide-ranging, well-funded projects while maintaining its selective criteria”, it added.

Projects in Egypt – across infrastructure, healthcare, and logistic sectors – accounted for 70 per cent of the new awards during the last quarter of 2019. New projects in the US, which made up the balance, were mostly comprised of deals in the group’s core business areas of student housing, commercial and data centre sectors, it noted.

Orascom Construction is a global engineering and construction contractor primarily focused on infrastructure, industrial and high-end commercial projects in the Middle East, Africa and the US.

The company in November said it signed approximately $1.8bn of new awards in the Middle East during the first nine months of the year, of which $965m were added in the third quarter.

Orascom Construction reported a 10.7 per cent increase in its third quarter net profit to $32.2m. Revenue for the three months to the end of September jumped 8.3 per cent to $789.6m from a year earlier.

The company’s profit for the nine months of 2019, climbed to $93.7m compared to $111.6m during the same period last year. Its revenue during the period, however, fell 2.2 per cent year-on-year to $2.28bn. The group maintained its net cash position at $63.4m as of September 30, 2019, compared to a net cash position of $27.2m as of December 31, 2018.

“Our operations in the Middle East and Africa have been delivering consistent, healthy revenue and margins. In the US, we are pleased with the progress of our turnaround efforts and successful business development activities,” Orascom’s chief executive Osama Bishai said in a November 2019 statement. “We generated positive operating cash flow ... and have maintained our overall net cash position despite a challenging first quarter.”