Orascom Development Egypt (ODE) closed 2019 on a solid operational and financial standpoint, achieving FY 2019’s targets, and recording EGP 6.9 bn of net real estate sales, the highest value in ODE’s history, Invest-Gate reports.
The company achieved all of 2019’s targets such as increasing total revenue by 38.8% or EGP 4.7 bn vs. EGP 3.3 bn in FY of 2018. Meanwhile earnings before interest, taxes, depreciation, and amortization (EBITDA) was up 13.6% or EGP 1.65 bn. Furthermore, net profit increased by an impressive 41.1% up to EGP 705.6 mn, implying a net profit margin of 15.1%, according to a company statement.
Moreover, net real estate sales for 2019 recorded EGP 6.9 bn, with a growth of 202.5% year-over-year (y-o-y), and the real estate receivables portfolio increased by 115.9% to reach EGP 8.8 bn in FY 2019.
Additionally, in February 2020, ODE signed an agreement with Kent College to open its campus in O West, marking its first entrance in Egypt. Further to this in March 2020, ODE signed another agreement with Cairo for Investment and Real Estate Development (CIRA) for the development of two new international schools in O West. This signing of these three school development agreements secured EGP 317 mn of cash inflows into ODE.
On the other hand, margins were affected by O West, ODE’s first home project in Egypt, due to the upfront sales and marketing expenses incurred during the period. This is in addition to the appreciation of the EGP against the USD and Euro, which also affected ODE’s hotels sector’s profitability margins in 2019. Nevertheless, the appreciation of the EGP against the USD has had a net positive impact on the company’s P&L since 80% of its debts are in foreign currency. ODE’s debt balance decreased by 22.5% to reach EGP 3.3 bn in FY 2019 vs. EGP 4.2 bn in FY 2018. The Group was able to generate more savings in its finance costs in Q4 of 2019, whereby interest costs decreased by 16.4% to EGP 422.2 mn in FY 2019 vs. EGP 505.3 mn in FY 2018 and ODE continued to generate positive cash flows from operations, recording a 48.8% increase to EGP 1.2 bn vs. EGP 826 mn in FY 2018.
Noteworthy, FY 2018 figures included Tamweel Group, Royal, and Club Azur Hotels which were disposed of in Q4 of 2018. When figures for FY 2018 are normalized, revenues increased by 53.8% to EGP 4.7 bn in FY 2019 vs. EGP 3.0 bn in FY 2018.
Regarding the Group’s hotel sector, it achieved substantial growth in revenues and operating profits. In FY 2019, revenues increased by 8.5%, or EGP 1.5 bn vs. EGP 1.4 bn in FY 2018.
Plus, the hotel sector reported a 4.2% growth in GOP y-o-y, from EGP 593.9 mn in FY 2018 up to EGP 619.0 mn in FY 2019, with the sector’s EBITDA reaching EGP 488.2 mn in FY 2019.