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Orascom Construction targets restructuring its US business to reduce unnecessary costs - Daily News Egypt

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Orascom Construction targets restructuring its US business to reduce unnecessary costs

Group’s US subsidiaries signed new contracts during 9 months 2017, amounting to approximately USD 500 m

Orascom Construction is planning to restructure its US operations in order to reduce unnecessary costs, a senior company official told Daily News Egypt on Saturday.

“We have plans to improve our costs, specifically our US operation. Restructuring our business, there is a main goal on which we are focusing in the current stage,” the source, who preferred to remain anonymous on account of not being authorised to speak to media, added.

Orascom Construction owns two subsidiaries in the United States.

The Group’s US subsidiaries, Weitz and Contrack Watts, signed new contracts during the first nine months (9M) of 2017, amounting to approximately $500m.

Both subsidiaries capitalised on improved activity in their respective markets during the third quarter.

Weitz signed private sector contracts in the commercial and light industrial sectors while Contrack

Watts added new federal infrastructure projects, mainly in the Pacific Rim and USA.

The company signed a total of $ 1.54bn in contracts across the Middle East and North Africa (MENA) region, and the US during the first nine months of 2017.

Following the addition of Besix’s stake, Orascom Construction’s projects totalled $ 2.5bn in 9M 2017.

Contracts worth a total of $788.7m were signed in the third quarter (Q3) of fiscal year 2017, in addition to sealing deals worth $747.3m in the first half of 2017, according to an Egyptian bourse statement.

Orascom Construction has played an effective role in developing infrastructure in new cities across Egypt, the statement noted.

Projects under execution were valued at $ 4.8bn in Q3 2017, however, the projects were worth a total of $ 6.7bn after adding 50% of Besix’s share.

The company reported a 19% year-over-year drop in its consolidated profit for the third quarter of 2017 due to lower revenues.

Net profit amounted to $23.5m in the three months ending September 2017, compared to profits of  $29.2m in the prior year-period, the company highlighted in a filing to the Egyptian Exchange (EGX).

Revenues stood at $805.4m in Q3 2017 from $962.1m in Q3 2016.

In the first nine months of 2017, the company’s consolidated profits rose 6% to $82.3m, up from $77.7m in the corresponding period of 2016.

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