Orascom Development Holding, the Swiss hotel operator company owned by Samih Sawiris, reported Tuesday that their net profit has registered CHF 31.5m ($34.4m), which is deemed the first biannual net profit since 2010.
In the corresponding period in 2013, the company has recorded CHF 48m ($52.4m) in net loss, blaming the political events and saying that it had affected the group’s operations.
The net profit was attributed to the company’s savings of $21.8m compared to the cost base of 2012 and strong real estate and construction revenues, which compensated for a weaker hotel performance and the deconsolidation of Orascom Housing Communities (OHC).
“The successful carve-out of the budget housing operations and construction segment in Egypt marks an important milestone in further reducing the group’s cost base,” the company said in a Monday statement.
In the first half of 2014, the company’s revenues increased by 2% registering $131.1m compared to $129.2m in the same period in 2013, the statement said, adding that the real estate and construction segment has doubled its revenues.
The company is expecting an improvement in the hotel performance during the second half of 2014 after it has suffered from travel bans to the Sinai Peninsula and general travel warnings on the Red Sea area imposed by several European countries since 2013, following the ouster of former Islamist President Mohamed Morsi.
On Tuesday, the Egyptian Resorts Company (ERC) announced that the cancellation of a plan to acquire a group of assets from Orascom Hotels Development (OHD), part of the mother company Orascom Development Holding, as a result of the inability to reach a “final agreement to finalise the deal”.
The two companies have signed earlier this year a Memorandum of Understanding allowing ERC to initially acquire a majority stake in OHD, which is comprised of around 4 hotels and an underdeveloped bank in Sahl Hasheesh, worth EGP 0.9bn-1bn.
However, the board members said that they will look for other opportunities to maximise their revenues over the coming period.
ERC noted on Tuesday that they have registered a net loss of EGP 21.3m in the first half of 2014, compared to an EGP 10.7m net loss in the corresponding period last year.