Orascom Development Egypt Reports Exceptional Q1 Growth Amid Market Challenges
In an inspiring start to 2025, Orascom Development Egypt (ODE) has unveiled remarkable financial results, signaling resilience and robust growth in a competitive landscape. Total revenues surged by an impressive 54.3% year-on-year, reaching EGP 6.4 billion in the first quarter (Q1), while gross profit more than doubled, climbing 130.2% to EGP 3.3 billion. This has pushed the gross profit margin to a commendable 50.7%, a notable increase from 34.0% in Q1 2024. The numbers reflect ODE’s successful strategies in its recurring income segments, particularly in hotels and commercial properties, which together generated revenues of EGP 2.1 billion—a significant 58.9% increase from last year.
Adjusted EBITDA soared by 115.5%, hitting EGP 3.4 billion, with an EBITDA margin improving to 52.7%, up from 37.7% in the same quarter last year. Furthermore, the company’s net profit rebounded to EGP 2 billion, recovering from a net loss of EGP 1 billion reported in Q1 2024. These figures signify a strong turnaround and solidify ODE’s position in the Egyptian market.
In the real estate segment, ODE sold 131 units this quarter, generating EGP 4.1 billion in net contracted sales—a decline from the EGP 8.8 billion seen in Q1 2024, primarily due to a strategic decision to prioritize timely deliveries in its key developments, O West and Makadi Heights. Interestingly, El Gouna remains the crown jewel, contributing 74% of total sales. Despite the dip in unit sales, deferred revenue in this segment showed a robust increase, rising by 38% year-on-year to EGP 38.6 billion, which strengthens visibility into future earnings.
Although real estate revenues experienced a slight decline of 2.7% to EGP 2.8 billion, driven mainly by reduced contributions from O West, ODE is optimistic about revenue growth in the upcoming quarters as construction activity accelerates. This segment reported adjusted EBITDA of EGP 1.2 billion, marking a healthy margin of 43.2%.
ODE’s hotels achieved record-breaking performance, showcasing a year-on-year revenue increase of 68% to EGP 1.2 billion, the highest Q1 figure in the company’s history. Notably, high occupancy rates and improved average room rates have fueled this success, even as global economic challenges persist.
The commercial assets sector also showcased a commendable trajectory, with a revenue boost of 49% to EGP 1 billion, reflecting enhanced operational efficiency and a commitment to profitability.
Notably, El Gouna reported Q1 real estate sales of EGP 3 billion, despite a 26.2% decrease in unit launches. The average selling price, however, surged by 56%, advancing to EGP 279,416 per square meter. The overall revenues from El Gouna doubled to EGP 5.5 billion, underscoring its significant growth potential.
At Makadi Heights, while real estate sales fell 63.3% to EGP 463.7 million, the average selling prices witnessed a remarkable increase. Taba Heights also showcased positive momentum with a 161.1% revenue increase, despite operating just one hotel.
While O West experienced an 82% drop in real estate sales due to the absence of new launches, the uplift in average selling prices offers a glimmer of hope. Looking ahead, ODE anticipates a resurgence in sales as they ramp up construction efforts and plan for a capital increase later this year.
As ODE continues to navigate the evolving dynamics of the tourism and real estate sectors in Egypt, its performance stands as a testament to its strategic foresight and operational excellence in a promising market backdrop.
—
#Egypt #WorldNews #BusinessNews #Tourism
