Swiss-listed Egyptian property and hotels group Orascom Development (OD) saw a partial recovery of revenues in the first half of 2012, helped by the slowly improving fortunes of Egypt's beleaguered tourism sector.
OD on Wednesday announced total revenues of CHF132.9 million ($138.5m) for the January to June period, 24.6 per cent higher than the year before. Net profits, however, continued to slump on higher tax and construction costs.
The company cited healthy sales growth for high-end hotels and accommodation in most of the nine countries in which it operates.
"The overall demand for holidays in Egypt picked up during the first half-year of 2012 which was beneficial for our tourist destinations on the Red Sea," the company said in a Wednesday statement. It reported a total of CHF15.9 million contracted sales for the last six months.
OD has three developments in Egypt, home country of its chairman Samih Sawiris; El Gouna in Hurghada, Taba Heights in South Sinai and Haram City, a mid-price housing project west of Cairo.
El-Gouna, a luxury waterfront resirt, performed well, the company said. But recent unrest on the Sinai peninsula -- including a spate of tourist kidnappings -- had a negative impact on occupany at its Taba Heights resort, close to the Israeli border.
OD gross profits fell to CHF12 million from CHF16.3 million in 2011, something management blamed on a recent wave of construction costs.
A combination of lower investment income and higher taxes brought net losses for January to June to CHF27.2 million, almost double the losses it recorded in 1H2011.
OD reported overall net losses of CHF69.7 million in 2011 due to ipolitical turmoil in Egypt and elsewhere in the Arab world. In addition to high-end projects in Oman, Jordan and Morocco, OD is also nearing completion of developments in Montenegro and Switzerland.
OD shares fell 4.03 per cent in Wednesday trade on Egypt's stock exchange, closing at LE4.76 apiece.