Orascom Construction (ORAS) Q3 2024 earnings summary

Executive summary

• 9M 2024 revenue declined 1.9% YoY to $2,319.9m; adjusted EBITDA rose 31.4% to $119.4m and adjusted net income to shareholders increased 18.2% to $86.3m.

• Consolidated backlog reached a record $8.0bn, up 14.7% YoY; pro forma backlog including 50% of BESIX was $12.5bn.

• Positive operating cash flow, stronger margins and progress across construction and concessions supported performance.

Financial highlights

• Q3 revenue rose 5.1% YoY to $842.5m; adjusted EBITDA increased 34.7% to $44.6m and adjusted net income to shareholders rose 34.2% to $21.6m.

• 9M gross profit was $214.8m versus $195.2m; operating profit was $89.4m versus $162.0m, and net profit was $96.0m versus $150.8m.

• 9M net profit attributable to owners was $87.0m, down from $114.8m; adjusted net income was $86.3m versus $73.0m.

• 9M operating cash flow was $254.2m, compared with a $90.7m outflow in 9M 2023.

Outlook and guidance

• 2024 backlog is expected to end near current levels; 2025 backlog is targeted within ~10% of that level, with revenue flat to up 5%-10%.

• Further bottom-line improvement is expected, though potential Egyptian pound devaluation makes specific guidance difficult.

• U.S. awards are expected at $1.8-$1.9bn for 2024, led by data centers and aviation; U.S. backlog is expected to grow slightly by end-2025.

• Current MEA and U.S. margins are considered suitable as 2025 guidance, with scope for improvement; winter seasonality may affect U.S. results.

• BESIX is expected to deliver year-end results in line with expectations and improve in 2025; Australian operations are expected to contribute more in 2025 and 2026.