Egypt’s SUMED oil pipeline approaches traders hit by Suez blockage

Egypt’s SUMED oil pipeline approaches traders hit by Suez blockage
Egypt’s SUMED oil pipeline approaches traders hit by Suez blockage

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Jeddah - Yasmine El Tohamy - RIYADH: Problem projects, a stronger Egyptian pound and the pandemic all contributed to a decline in Orascom Construction profits, Asharq Business reported.

The Egyptian builder earlier reported a 25 percent drop in net profit to $90.9 million last year, the newspaper said, citing CEO Osama Beshai.

An investment in Belgian’s Besix construction company, now half-owned by Orascom, encountered challenging trading conditions last year with some projects missing profitability targets, he said.

An increase in some raw materials prices, as well as the appreciation of the Egyptian pound against the dollar also had an impact. A stronger pound means that Orascom earns less in local currency terms for projects where it is paid in dollars.

Still, the builder made some headway in the renewables sector, partnering with the French group ENGIE, and the two Japanese companies Eurus Energy and Toyota Tsusho, to develop the Ras Ghareb wind power plant.

The project achieved 14 percent internal return on investment during its first year of operation with a capacity to produce 262.5 megawatts of wind power, Beshai said.

Orascom Construction has increased its projects under implementation to $5.4 billion, 70 percent of which are in the Egypt market, and the rest overseas, including the US.

Beshai said the builder would be more selective in choosing new projects throughout the year.

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