Orascom Construction [ORAS]: BESIX – Back on Track Again
Overweight and 12M PT Maintained
Orascom Construction [ORAS]
Egypt / Industrials / Q3 2021 Results
12M PT: EGP146 (+109%)
set on 12 Apr 2021
Investment Rating: Overweight | Risk Rating: Medium
Steady growth: Orascom Construction’s [ORAS] Q3 2021 net income after minorities decreased by 6% y/y to USD28.4mn but was still ahead of our estimates. While the picture may look weaker on a y/y basis, sequential growth was driven by the recovery in BESIX. Also, we note that Q3 2020 was a strong base, the highest profitable quarter in 2020. On an annual basis, however, net profit was negatively affected by a lower MEA net income of USD16.1mn
(-15% y/y, 57% of total) in Q3 2021 and a lower BESIX attributable net income of USD6.5mn (-35% y/y, 23% of total). On the other hand, the U.S. posted a net income of USD5.8mn (+346% y/y, 20% of total) vs. only USD1.3mn in Q3 2020. Meanwhile, total revenues grew 4% y/y to USD858mn in Q3 2021 (+8% vs. PRe of USD792mn), driven by the strong performance of MEA (+20% y/y, which more than offset the 20% y/y drop in U.S. revenues to USD270.5mn.
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Dina Abdelbadie
Equity Analyst
T +202 3300 5716