Samih Sawiris,chairman and chief executive of Orascom Development Holding (Photo:Reuters/Arnd Wiegmann)
Real estate and hotels firm Orascom Development Holding reported a slump in first-quarter net profit, hit by Egypt's political turmoil.
The Swiss-listed company, known mostly for building luxury resorts in Egypt, said on Monday net profit fell to 0.6 million Swiss francs (LE4,257,733) from 26.5 million (LE188m) a year earlier -- a drop of 98 per cent.
Revenues also declined 55 per cent to 52.9 million francs (LE375.3m) compared to 116.6m francs (LE791.8m) in 1Q2010. The decline in revenue and earnings was primarily attributed to the extraordinary events in Egypt, resulting in construction delays and lower tourism during that period.
Although the company received 50 million francs (LE353m) in new reservations during the quarter, it was not able to book them due to difficulties in administrative activities required to convert these reservations into contracted units in 1Q2011. These new reservations will be booked during 2Q2011.
Hotel revenues dropped by 40 per cent to 28 million francs (LE198.8m), as first quarter occupancy rates in Egypt fell 42 per cent year-on-year
However, according to the company’s management, occupancy rates have gradually improved during 2Q2011 as most countries have lifted travel bans.
Real estate and construction revenues decreased by 71 per cent from after construction activities were halted for 50 days.