What
In the dynamic realm of infrastructure development, Orascom Construction (OC) navigated through FY 2023 with mixed results, facing headwinds in certain regions while strengthening its backlog for future growth opportunities.
- Claps Class: Picture Orascom Construction’s backlog as the crystal ball of the construction realm, offering a sneak peek into future projects and revenue streams. Just like a crystal ball reveals what’s to come, Orascom’s backlog represents the value of secured contracts awaiting completion, serving as a compass for future growth.
Revenue decline amidst currency fluctuations:
OC reported a revenue decline of 19.4% YoY, amounting to USD 3.4 billion for FY 2023. The decrease can be attributed largely to currency fluctuations, particularly in Egypt, impacting the company’s consolidated revenue. Despite this decline, OC demonstrated resilience, supported by a strengthened backlog and strategic diversification efforts.
What the backlog holds:
One of the highlights of OC’s fiscal performance is the robustness of its backlog, which reached USD 8.1 billion as of December 31, 2023. This substantial backlog indicates a pipeline of future projects, positioning OC for potential growth opportunities amidst evolving market conditions. Additionally, including its share in BESIX, OC’s pro forma backlog stands at USD 10.9 billion, reflecting a significant potential for future revenue generation.
Regional Dynamics:
OC faced challenges in certain regions, notably a 35.7% decline in revenue from the Middle East and Africa (MEA) region. Currency devaluation in Egypt contributed to this decline. However, the company demonstrated resilience in the USA, with a 14.2% increase in revenue, driven by project execution and growth in new awards. OC’s strategic focus on diversification across regions underscores its ability to navigate through regional challenges while seizing growth opportunities in diverse markets.
Navigating through uncertainties:
Looking ahead, OC remains focused on executing its long-term operational and financial strategies amidst uncertainties in global markets. CEO Osama Bishai highlighted the company’s commitment to maintaining operational excellence and capitalizing on emerging opportunities. With a cautious yet optimistic outlook, OC aims to leverage its strengthened backlog and diversified portfolio to drive sustainable growth and create value for shareholders.
OC Dividends:
The company distributed dividends of USD 0.2750 per share in October 2023, totaling USD 30.3 million, as part of its commitment to rewarding shareholders.
