Orascom Development Egypt (ORHD) – Strong Growth in Sales and Revenues | Diversified Revenue Streams and a Strong Financial Position Support Performance
Orascom Development Egypt reported revenues of approximately EGP 23.3 billion during the first nine months of 2026, representing a 35.4% year-on-year increase. Meanwhile, net profit attributable to shareholders increased to approximately EGP 4.3 billion, compared to EGP 4.1 billion in the same period last year, marking growth of more than 6%. This reflects the continued expansion of the company's operating activities, alongside varying growth rates in revenues and earnings during the period.
At the real estate level, sales reached approximately EGP 21.2 billion, representing a 31% year-on-year increase, primarily driven by the contributions of O-West and El Gouna, which accounted for approximately 37% and 36% of total sales, respectively. This growth was supported by a 29% increase in the number of contracted units, reaching 918 units, in addition to an improvement in the average selling price per square meter, which increased by 37.9% in Makadi Heights, 3.6% in O-West, and 1.5% in El Gouna. This reflects continued strong demand for the company's projects, with varying price growth rates across locations.
In the hospitality segment, revenues increased by approximately 19% to EGP 4.8 billion, compared to EGP 4.1 billion in the same period last year. This was supported by maintaining good occupancy levels and continued strength in tourism performance, with El Gouna accounting for approximately 97% of the segment's total revenues. This highlights the destination's strategic importance within the company's portfolio and its primary role in supporting hospitality revenues.
Regarding operating profitability, net profit before tax (EBT) increased by approximately 12% to reach EGP 6.3 billion, compared to EGP 5.6 billion in the same period last year. Meanwhile, basic earnings per share (Basic EPS) increased by more than 6% to EGP 3.84, compared to EGP 3.61. This indicates continued improvement in operating earnings, albeit at a slower pace than revenue growth, warranting close monitoring of profitability margins and operating costs in the coming periods.
Regarding the financial position, we believe that strong liquidity and low leverage represent key factors supporting the company's outlook. Cash and cash equivalents stood at approximately EGP 11.2 billion as of the end of September 2026, while net debt amounted to only EGP 1.9 billion. Net Debt to LTM EBITDA stood at approximately 0.17x, reflecting the strength of the company's financial position and the limited debt burden relative to its operating capacity, while providing financial flexibility to support expansion plans and the completion of ongoing projects.
Overall, we believe that continued growth in real estate sales, alongside the hospitality segment's contribution to revenue diversification, as well as the strength of the company's financial position and improved solvency, represent key factors supporting Orascom Development Egypt's future performance. Nevertheless, the company's ability to convert revenue growth into sustainable growth in earnings and cash flows remains one of the key factors we will monitor in the coming periods.
From a valuation perspective, we see significant growth potential in Orascom Development Egypt's shares, which we believe are currently trading below their fair value based on our estimates. This presents an attractive investment opportunity to benefit from the company's future growth prospects. Accordingly, we set a 12-month target price of approximately EGP 14.77 per share, reflecting our positive outlook on the company's prospects and its potential to create additional value for shareholders.
Ali Eldegwi-Equity Analyst | Research at Prime Securities
AEldegwi@egy.primegroup.org
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