Orascom Development Egypt’s (ODE) revenues decreased by 10.5% to record EGP 903.8m in the first quarter (1Q) of 2020, compared to EGP 1bn in 1Q 2019.
ODE also reported that gross profits reached EGP 227.3m, a significant decline on the EGP 332.7m reported in 1Q 2019.
Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) stood at EGP 217.4m in 1Q 2020, compared to EGP 336.6m in the same period of 2019. The EBITDA figures reached EGP 252.7m in 1Q 2020.
ODE said that its operating margins were significantly hampered by the complete shutdown of its hotels business, due to a government-instructed closure of all hotels at Egypt’s tourism destinations.
Hotels were also significantly affected by the suspension of international flights to and from Egypt’s airports, effective as of 19 March, and which has yet to be lifted.
Because of the group’s diversified business portfolio, ODE noted that it was still able to record a net profit of EGP 91.9m, compared to the EGP 188.6m recorded in 1Q 2019.
The group was able to generate more savings in its finance costs in 1Q 2020, with interest costs decreasing by 33.1% to EGP 79.6m. This compared to EGP 118.9m in 1Q 2019.
It continued to generate positive cash flows from operations, recording a 43.8% increase to EGP 312m in 1Q 2020.
However, net real estate sales for 1Q 2020 remained stable with a 0.6% increase y-o-y to reach EGP 1.53bn in 1Q 2020. This compared to the EGP 1.52bn recorded in 1Q 2019, despite the daring impacts brought on by the coronavirus (COVID-19) pandemic.
“Our hotels started 2020 on a positive note, recording higher revenues and occupancy rates for the months of January and February. However, starting in early-March,the COVID-19 pandemic began to affect our hotels operations significantly, as governments globally took action to encourage social distancing by imposing travel restrictions and flight suspensions around the world,” ODE said. “Total hotels revenue decreased by 25.8% to EGP 265m in 1Q 2020, compared to EGP 357.3m in 1Q 2019. On the other hand, our net real estate sales increased by 3.3% to EGP 448.9m in 1Q 2020, compared to EGP 434.7m in 1Q 2019.”
