Egypt-based Orascom Construction reported a 16 per cent fall in profit for 2019 despite an increase in revenue.
Net profit to shareholders fell to $121.3 million (Dh445.5m) due to higher financing costs in Egypt and the performance of Besix (a contractor in which it has a 50 per cent share) in the fourth quarter. Revenue for the year was 5.7 per cent higher at $3.18 billion, due largely to growth in its Middle East operations.
New awards grew by 51 per cent year-on-year during 2019 "through the addition of quality, well-funded projects”, Orascom Construction’s chief executive Osama Bishai said in a statement.
“In Egypt, we reinforced our position as a leading player in the development of Egypt’s infrastructure and are executing important projects across all major construction segments such as water, transportation, new cities and healthcare. We also remain focused on pursuing new opportunities within the region across sectors in which we hold a competitive edge.”
Revenue in the company’s Middle East and Africa business grew 7.4 per cent to $2.18bn, or about 69 per cent of the total. Revenue from its US operations grew by 2.1 per cent.
The company reduced its total debt pile by 75 per cent to $95.7m at the end of 2019, contributing to a 24 per cent increase in net equity to $585.7m at year end. It is proposing a dividend of $0.21 per share - a conservative dividend payout given potential uncertainties due to the Covid-19 outbreak.
“While our 2019 financial results and current financial position allow us to distribute a higher dividend, we elected to take a more prudent approach given the potential uncertainty related to Covid-19,” Mr Bishai said in his statement.
The company said the “safety of our people remains our top priority and we have implemented a proactive plan that is driving us through the upcoming period”.
It also said it was communicating with clients to address events and mitigate any potential challenges, as well as monitoring subcontractors and supply chains to detect any bottlenecks.
The increase in new awards meant the company’s overall backlog (including its 50 per cent share in Besix) grew 15 per cent to $8.13bn at the end of 2019.
Orascom Construction is listed on both the Nasdaq Dubai and the Egyptian Exchange bourses.