View of Red Sea resorts of El-Gouna (Photo: Fouad Mansour)
Orascom Development Holding AD (ODHN) posted net profits of 31.5 million Swiss francs ($34.45 million) during the first half of 2014, compared to a loss of 48 million Swiss francs ($52.5 million) during the same period of the previous year.
The Swiss-listed company attributes its first profits since 2010 to significant overhead savings of 20 million Swiss francs ($21.8 million) and strong revenues in real estate and construction that compensated for a weaker performance in the hotel sector.
"The increase is mainly a result of the accelerated delivery of real estate units in Egypt," the company said in a press release, referring specifically to properties in the Red Sea resorts of Gouna, Ancient Sands and Makadi.
In general, the company's revenues in real estate and construction more than doubled compared to the previous year.
However, the company said its "hotel segment continued to suffer from travel bans to the Sinai Peninsula and general travel warnings on the Red Sea area issued by most western European countries at the beginning of the year."
Many key European countries – including Germany, Spain, Italy and France – issued warnings against travel to popular Red Sea resorts in South Sinai after a tour bus was bombed near the coastal town of Taba in February, killing three South Koreans and their Egyptian bus driver.
The travel restrictions have since been mostly lifted as security conditions have improved.
Flooding from heavy rainfall in May resulted in a 29 percent loss in room capacity in Taba Heights in South Sinai.
Despite the positive news of gains, ODHN's shares lost 1.56 percent to LE7.58 ($1.1) by Tuesday midday in the Egyptian stock exchange. The shares went up 1.55 percent in the Swiss exchange.
Orascom is run by Egyptian billionaire Samih Sawiris, a member of Egypt's richest family.
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