Orascom posts 84% profit rise on new project wins

Egyptian contractor signed around $1.5bn of Mena awards in full-year 2018

Orascom Construction's estimated consolidated project backlog stood at $5.2bn at the end of last year. Dana Smillie for The National
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Egyptian contractor Orascom Construction grew its profits by 84 per cent in 2018 compared to the previous year, owing to a series of new contract awards, primarily in the Middle East and Africa, and a continued focus on cost controls globally, it said on Wednesday.

Net income attributable to shareholders grew to $144.7 million for the full-year 2018, while consolidated revenue grew 18 per cent to $3 billion, according to Orascom.

“Our consolidated fourth-quarter earnings round up a consistent ending to the year and reflect our continuous focus on operational excellence and project controls,” said Orascom’s chief executive Osama Bishai.

“We continue to play a leadership role in the development of Egypt’s infrastructure across all major segments of the industry."

The board of directors proposed a dividend distribution of $0.30 cents per share to shareholders, marking the second consecutive annual dividend.

The group signed about $1.5bn of new awards in the Middle East and Africa in 2018, of which $520m were added in the fourth quarter. New projects in Egypt spanned several market segments including water desalination treatment, Al Alamein and the New Administrative Capital.

Orascom also signed a deal to build two hydropower plants in Burundi, West Africa, to be funded by the World Bank, European Investment Bank and African Development Bank. The contract win “highlights Orascom’s strategy to pursue quality projects in the Middle East and Africa with credible funding”.

MEA operations accounted for 67 per cent of Orascom's total revenues in 2018, while the US accounted for the balance. Revenues from the US declined 36.6 per cent year-on-year, mainly due to the completion of two large chemical plants in Iowa and Texas.

“We are pleased with the progress of the integration of our US businesses under one consolidated management and streamlined operation,” a statement said.

Meanwhile, Orascom’s wholly owned subsidiary Besix delivered strong results while growing its overall backlog, according to Orascom.

“We see a healthy addition of new projects as the group currently pursues an active bidding pipeline across existing and new markets,” Mr Bishai said.