Orascom Construction has announced its results for the second quarter (Q2) of 2020, reporting that while profitability fell short, the group fared well on other key performance indicators, including sales, new awards, backlog, and working capital.
The company’s revenue increased 8.2% year-on-year (y-o-y) to $1.6m in the first half (H1) of 2020. Its consolidated earnings before interest, taxes, depreciation, and amortization (EBITDA) decreased 30.3% y-o-y to $99.3m in H1 of 2020.
Orascom Construction CEO Osama Bishai noted that the group has demonstrated resilience in Q2 of 2020, as it delivered an encouraging performance despite the challenges of the novel coronavirus (COVID-19).
“We had indicated earlier this year that maintaining our project pipeline and backlog would be one of our key challenges,” Bishai said, “That said, we succeeded in sustaining our consolidated backlog at $5.4bn, in-line with the previous quarter, and reflecting an increase y-o-y despite solid project execution, as new awards increased 21.0% quarter-on-quarter (q-o-q) to $724.9m in Q2 of 2020.”
Bishai added, “We also remain confident in the long-term fundamentals of our core markets and continue to selectively pursue new work in key sectors such as infrastructure, water, transportation and data centres.”
He also noted that Orascom Construction will continue to focus on collections and its cash position as stated previously.
“Our operating cash flow turned positive during the quarter, amounting to $53.2m in H1 of 2020, while our net cash position increased significantly to $309.4m as of 30 June,” he said
The company’s revenues during Q2 of 2020 were flat y-o-y, indicating a healthy rate of execution across its projects and despite the operational challenges related to the current environment.
Orascom Construction saw some pressure on gross margins in Q2 of 2020, which were particularly pronounced in May during a nationwide slowdown. Bishai noted, however, that it maintains its focus on important elements of business, such as project controls, cost optimisation and cash flow.