Orascom Construction PLC (ORAS.CA) Posts 16% Decline in FY2019 Consolidated net Profit
Orascom Construction PLC (ORAS.CA) posted a consolidated net profit (attributable to shareholders) of USD 121.3mn in FY2019 marking a 16% decline compared to USD 144.7mn in FY2018. On a quarterly basis, ORAS posted a net profit attributable to shareholders of USD 27.6mn in 4Q2019 marking a 17% decline compared to USD 33.1mn in 4Q2018.
It is worth noting that ORAS has posted a net profit attributable to shareholders of USD 30.3mn, USD 31.3mn, USD 32.2mn and USD 27.6mn in 1Q2019, 2Q2019, 3Q2019 and 4Q2019, respectively compared to USD 31.9mn, USD 50.6mn, USD 29.1mn and USD 33.1mn in 1Q2018, 2Q2018, 3Q2018 and 4Q2018, respectively.
It is also worth mentioning that if the other comprehensive income has been considered, ORAS’s total comprehensive income attributable to shareholders will be USD 152.3mn in FY2019 marking a 19% increase compared to USD 127.9mn in FY2018.
The decline in the company’s net profit in FY2019 was due to:
• A 14-fold increase in the net finance cost which recorded USD 73.3mn in FY2019 compared to USD 5.1mn in FY2018.
• A 52% decline in the income from equity accounted investees which recorded USD 27.1mn in FY2019 versus USD 56.3mn in FY2018.
The decline in the company’s net profit in FY2019 came despite:
• A 6% increase in the consolidated operating revenue which led to a 7% increase in the gross profit albeit the company’s gross profit margin remained flat at 11% in FY2019 and FY2018. ORAS posted a consolidated operating revenue of USD 3,184mn in FY2019 compared to USD 3,013.5mn in FY2018. ORAS posted a gross profit of USD 363.5mn in FY2019 versus USD 340.1mn in FY2018.
• An 11% decline in in the selling, general and administrative expenses which recorded USD 162.1mn in FY2019 versus USD 181.3mn in FY2018.
• A 38.5% decline in the income tax expense which recorded USD 39.1mn in FY2019 compared to USD 63.6mn in FY2018.
ORAS’s before tax income in FY2019 according to geographical distribution:
• MENA region’s projects posted a pretax profit of USD 163.1mn in FY2019 marking an 18% decline compared to USD 199.6mn in FY2018.
• Projects implemented in USA posted pretax loss of USD 15.8mn in FY2019 versus a pretax loss of USD 36mn in FY2018.
• ORAS’s stake in BESIX posted a pretax net profit of USD 22.9mn in FY2019 marking a 58% decline compared to USD 54.7mn in FY2018.
ORAS’s Key Indicators in FY2019:
• Consolidated EBITDA increased 29.5% y-o-y to USD 268.2 million and pro forma EBITDA including 50% in BESIX increased 12.7% y-o-y to USD 318.9 million FY 2019
• Net income attributable to shareholders of USD 27.6 million in Q4 2019 and USD 121.3 million in FY 2019
• Net cash position of USD 279.1 million as of 31 December 2019 and positive operating cash flow of USD 319.9 million in FY 2019
• Consolidated backlog grew 25.8% y-o-y to USD 5.4 billion and pro forma backlog including 50% share in BESIX increased 15.4% y-o-y to USD 8.1 billion as of 31 December 2019
• Consolidated new awards increased 51.1% y-o-y to USD 3.6 billion and pro forma new awards including 50% share in BESIX increased 26.0% y-o-y to USD 5.4 billion in FY 2019
• BESIX reported a standalone backlog of EUR 4.8 billion and new awards of EUR 3.3 billion in FY 2019
• The Board of Directors proposes a dividend distribution of USD 0.21 per share
ORAS’s share is currently trading at a P/E of 4x for FY2019 based on a current market price of EGP 64.88/share and the EGP/USD exchange rate of EGP 15.79.
BOD of Orascom Construction PLC (ORAS.CA) Proposes Distributing Cash Dividend of USD 0.21/Share for FY2019
The BOD of Orascom Construction PLC (ORAS.CA) proposed distributing a cash dividend of USD 0.21/share for FY2019, implying an annual dividend yield of 5% according to a current market price of EGP 64.88/share and the EGP/USD exchange rate of EGP 15.69/15.79.
WB, IMF Call for Suspension of Debt Repayments to Poorer Countries
The World Bank and the International Monetary Fund (IMF) are calling for a suspension of debt payments to poorer countries amid the new outbreak of the coronavirus, World Bank Group President David Malpass said Wednesday. "The World Bank and the IMF are calling for positive signals for the financial markets," Malpass told Reuters. (Source: Al Mal)
Senate Approves $2
Trillion Stimulus After Bipartisan Deal
The plan would provide direct payments to taxpayers, jobless benefits and a $500
billion fund to assist distressed businesses, with oversight requirements demanded by Democrats. The $2
trillion economic stabilization package agreed to by Congress and the Trump administration early Wednesday morning is the largest of its kind in modern American history, intended to respond to the coronavirus pandemic and provide direct payments and jobless benefits for individuals, money for states and a huge bailout fund for businesses. The measure, which the Senate approved unanimously just before midnight on Wednesday, amounts to a government aid plan unprecedented in its sheer scope and size, touching on every facet of American life with the goal of salvaging and ultimately reviving a battered economy. Its cost is hundreds of billions of dollars more than Congress provides for the entire United States federal budget for a single year, outside of social safety net programs. Administration officials said they hoped that its effect on a battered economy would be exponentially greater, as much as $4
trillion. The legislation would send direct payments of $1,200
to millions of Americans, including those earning up to $75,000,
and an additional $500
per child. It would substantially expand jobless aid, providing an additional 13 weeks and a four-month enhancement of benefits, and would extend the payments for the first time to freelancers and gig workers. (Source: NY TIMS)
U.S. Treasury Secretary: USD 550bn Earmarked To Support Companies Against Corona
U.S. Treasury Secretary Steven Mnuchin said that USD 550bn have been allocated to support U.S. companies to counter the coronavirus. Mnuchin said during a daily meeting of the U.S. Crisis Cell to address the Coronavirus virus that the amounts approved by Congress today to address the coronavirus outbreak crisis include allocating USD 150bn to the states most affected by the spread of the virus. (Source: Alborsaanews)
Egypt to Pay EGP 500/Irregular Worker to Support 250K Irregular Workers Against Economic Repercussions of Covid-19
Chancellor Nader Saad, spokesman for the Cabinet, said on a TV interview, that the Ministry of Manpower has registered 130K irregular workers in the past two days to curb the negative effects of Coronavirus. He added that the total registered workers reached 250K to get a monthly grant of EGP 500. (Source: Alborsaanews)
Egypt Directs EGP 3.8bn to Healthcare Against COVID-19
The Egyptian Ministry of Finance has dedicated EGP 3.8bn to support the healthcare sector since the beginning of March, in line with the government’s efforts to combat the outbreak of the coronavirus (COVID-19), minister Mohamed Maait, said on Wednesday. EGP 2.583bn were directed to the Ministry of Health, while EGP 427mn were allocated for the following public hospitals and medical and mental health centers. Similarly, EGP 688.5mn were provided for university hospitals, the minister noted. (Source: Mubasher)