Devaluation of Egyptian pound hits Orascom’s revenue

Orascom’s overall revenue for the first quarter of 2024 dropped 4.8% to US$766.3 million, down from $804.9 million in the same period a year before.

Revenue within the Middle East and Africa slid by 19.7% in Q1 2024, which Orascom blamed on the devaluation of Egypt’s currency. Egypt delivered its biggest-ever interest rate increase in March this year, allowing its currency to weaken by 38% to pave the way for an $8 billion loan from the International Monetary Fund, in addition to a $35 billion deal with the United Arab Emirates as the country grapples with high inflation.

But a strong performance in the US, where revenue increased 13.9%, helped to compensate for that decline.

New orders during the period dropped by 29% to $609.5 million but Orascom’s consolidated backlog (excluding European contractor BESIX in which Orascom owns a 50% share), increased 33.1% year on year to $7.3 billion.

The company’s adjusted EBITDA increased by 6.5% overall. Within that, it declined 10.7% in the Middle East and Africa but increased by 81.9% in the US.

Orascom’s chief executive Osama Bishai said, “Reflecting the successful execution of our strategy, the majority of our projects in Egypt are funded by international financial institutions. This is complemented by our recent expansion in the UAE as well as the continued backlog and earnings growth in the US led by specialised sectors including data centres and aviation.”