Orascom Development sees 2011 loss on Egypt unrest

Orascom Development Holding blames unrest in Egypt for significant drops in its revenues and real estates sectors

Orascom Development Holding (ODH) realized a net loss of CHF70 million ($77 million) in 2011 a drop from a net profit of CHF95 million a year earlier, the company announced on Thursday.
OHD justified the large drop in bottom-line to "political events in the MENA region (Middle East and North Africa) and extraordinary transactions".
Total revenues saw a sharp 50 per cent drop to CHF256 million. OHD's hotel segment, making up 53 per cent of the group's total income, remained profitable in 2011, but witnessed a 29 per cent decline in revenues. The segment's EBITDA dropped by a half to reach CHF31 million.
The reason behind the drop, according to the OHD, is a month with virtually zero occupancy in El-Gouna and Taba Heights projects in Egypt as well as a shift of hotel guests from five start hotels into four star hotels.
The group's occupancy rates reached 56 per cent down from 76 per cent in 2010. This was mainly caused by the drop in room occupancies in
Egypt following the unrest the country saw in 2011.
Similarly, the group's real estate and constructions segment, contributing 26 per cent of total proceeds, witnessed a sharp 71 per cent drop in revenues. ODH attributes the drop in this segment's income to a 50 days halt in construction activities in Egypt and a slowdown in demand for homes in the MENA region.
ODH incurred extraordinary items totaling CHF83 million in 2011, including provisions (CHF 57 million), revaluations of investment properties (CHF 9 million), as well as currency revaluations from the appreciation of the Swiss Franc (CHF 12 million).
Accordingly, when normalizing earnings before interest, taxes depreciation and amortization (EBITDA) for unusual items it increases to CHF43 million up from CHF40 million in losses.
ODH share closed at LE6.05 on Thursday trade.