Egypt: Orascom Construction's backlog expected to hit $8bln in 2025-2029: HC Brokerage

Zawya

19-06-2025

Arab Finance: Orascom Construction's backlog is expected to hit $8 billion over the period from 2025 to 2029, with average annual new awards of $4.16 billion, HC Brokerage highlighted in a recent report.
HC Brokerage released an update note on Egypt's construction sector, highlighting that Orascom Construction's adjusted margins improvement is expected to be sustained.
Nesrine Mamdouh, Industrials Analyst at HC, projected that the company's earnings before interest, taxes, depreciation and amortization (EBITDA) would grow at a compound annual growth rate (CAGR) of nearly 11% during 2025–2029.
Additionally, improved project execution is expected to lead a revenue CAGR of nearly 5.4% over the four-year period.
Mamdouh noted: 'We also see ORAS's broad-based adjusted margins improvement to be sustained, driven by high-quality projects, better contract terms, higher FX and FX-equivalent exposure, improved cash flow and working capital management, a positive bottom-line contribution from its existing pool of concessions, reaching $15 million by 2027, and enhanced contribution from Besix.'
'We forecast ORAS consolidated EBITDA and net income to grow at a 2025–29 CAGR of c11% and c6%, respectively. We also estimate EBITDA margin to average c5.9% and net profit margin to average c3.5%, excluding FX gains and losses, over 2025–29,' she added.
The analyst expected Egypt's construction spending to normalize, backed by a sharp moderation in public investment, equivalent to 36% of total investments during the first half (H1) of 2024/25. This marks a 22 bps drop from its three-year historical average.
'Nevertheless, we anticipate a baseline level of government investments to persist, particularly in strategic infrastructure projects and projects nearing completion in the transportation, water, and electricity interconnection sectors,' Mamdouh explained.
She affirmed: 'We remain positive on the outlook of local and foreign private investments in Egypt, particularly in mega-scale, renewable energy, and industrial projects.'
As for Ras El Hekma, the official noted that the development group is well-positioned to secure decent awards, with more clarity after Modon Holding finalizes the project's general master plan.
'We also expect improved collections for ORAS from its Egypt backlog by FY25/26, led by an improvement in the government's revenue-to-GDP ratio while containing expenditure-to-GDP, as per the International Monetary Fund's (IMF) April 2025 projections.'
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