Corona crisis continues to weigh on Orascom

Orascom Development Holding (ODH) reports a decline in sales of almost 20% to CHF 260.4 million (PY: 325.2 million) for the first nine months of 2020. Gross profit decreased from 84.4 to 65.3 million in the same period. Adjusted EBITDA decreased by 293% to 40.5 million (previous year: 57.3 million).

Overall, the developer posted a net loss of 26.6 million in the period, compared with a loss of 7.9 million in the first nine months of 2019. ODH said it recorded foreign exchange gains of 10.2 million in the previous year, and foreign exchange gains of 0.7 million in the period.

Real estate sales increase in the third quarter

ODH further reports that the monthly pace of property sales accelerated from July to September 2020 compared to the same period last year: Q3 property sales increased by 19% to 59.7 million (PY: 50.1 million). Over the first nine months of 2020, property sales decreased by 10% to 149.5 million.

Net real estate sales increased by 6% to 102.6 million in the third quarter, compared with 96.8 million a year earlier. Overall, net real estate sales in the first nine months decreased by 23% year-on-year to 294.4 million (previous year: 381.3 million).

EBITDA for the segment decreased by 8% to 44.3 million (previous year: 48.2 million). This was due to the fact that more apartments than villas were sold this year. According to ODH, total revenue from property sales, which is yet to be recognized until 2024, increased by 25% to 535.8 million in the first nine months from 428 million a year ago. Total receivables from the real estate portfolio increased by 24% to 704.2 million at the end of the period.

Due to uncertainties related to the Covid 19 pandemic, ODH still does not want to provide guidance for the full year 2020. However, the Group considers itself well positioned due to its diversified business model with multiple revenue streams, a strong balance sheet and a solid liquidity position. (ah)