Orascom Construction Ltd (OC), spun off from OCI NV in March, is banking on Egypt’s need to expand power generation and orders for new transport infrastructure to drive its growth in the next few years.
The company, dual-listed in Cairo and Dubai, posted third-quarter net income of $24.5 million on Monday and said it would pay a dividend for the first time next year totalling $0.36 per share.
No comparative year-ago figures are available because of its recent spin-off, although the company posted net income of $35.2 million in the second quarter.
Chief Executive Osama Bishai pointed to a record order backlog as a sign of growth. The backlog stood at $6.7 billion in September with the power business accounting for about 30 percent of that. The company reported revenues of $1.145 billion in the third quarter.
Forty-six percent of the order backlog is for work in Egypt and 38 percent in the United States, where the company has a subsidiary.
Bishai said power was the company’s largest growth area in Egypt in 2015.
“Our strategy in the power generation business is paying back. In Egypt, due to the power crunch, the opportunity came up for us to take a chunk of the (Engineering Procurement Construction) business as a contractor,” he told Reuters in an interview.
Egypt’s government has tried to tackle power shortages by cutting subsidies, importing natural gas, and boosting its power output.
Orascom Construction said in June it would construct in consortium with Siemens two combined cycle plants with a total generation capacity of 9.6 GW.
The plants are part of an 8 billion euro deal between Siemens and Egypt to supply gas and wind power plants, 1.6 billion of which is Orascom Construction’s share.
Bishai expects transport to be the main area of growth in 2016 and 2017, pointing to his company being awarded a portion of a project to expand the Cairo metro by building a third line.
The engineering and building business controlled by a billionaire member of Egypt’s prominent Sawiris family was once the biggest blue-chip stock on the Egyptian exchange.
It effectively pulled out of the bourse in 2013 when another Sawiris company, Amsterdam-listed OCI NV, bought out the vast majority of its shares. OCI moved the primary listing of its construction assets back to Cairo in March.
Source: Reuters
