Orascom Construction PLC Annual Report 2023 PDF

2023 AN NUAL RE P O RT  Introduction ESG...

2023 AN NUAL RE P O RT  Introduction ESG Analysis Management Discussion & Table of Contents 01 Orascom Construction at a Glance 06 04 Our Environmental Impact 90 05 Management Discussion & Note from the CEO 08 Our Social Impact 96 Analysis 180 Highlights of 2023 10 Corporate Governance 162 Operational Review Group Overview Financial Statements & Auditor’s Report 02 Our History 16 03 MENA 46 06 Auditor’s Report 188 Our Strategy 18 USA 72 Financial Statements 196 Our Brands 20 BESIX 82 Our Footprint 28 Our Business Lines 30  INTRODUCTION Orascom Construction PLC is a leading global engineering and construction contractor with a footprint spanning the Middle East, Africa, and the United States. Its operations cover the infrastructure, industrial, and commercial sectors. +70 years in construction 4 Orascom Construction PLC Annual Report 2023 Annual Report 2023 Orascom Construction PLC 5  Introduction At a Glance Since its inception in 1950, Orascom Construction PLC (Orascom or “the Group”) has transformed itself from a local contractor based in Upper Egypt into a leading global engineering and Orascom Construction PLC is a leading construction group with a reputation for excellence across its global engineering and construction footprint. With core operations covering infrastructure, industrial contractor primarily focused on and high-end commercial projects, the Group operates through Orascom Construction in the MEA region and a consolidated infrastructure, industrial, and high- management arm of its two operational subsidiaries – Contrack end commercial projects in the Middle Watts and The Weitz Company – in the United States. East, Africa, and the United States. The Group also develops and invests in infrastructure op- The Group also develops and invests portunities, and holds a portfolio of subsidiaries across con- in concessions, owns 50% of BESIX struction materials, facility management, industrial parks, and Group, and holds a building materials, equipment services. facility management and equipment Furthermore, Orascom Construction owns 50% of Belgium- services portfolio. based BESIX Group, one of the world’s leading international contractors with operations across construction, conces- sions, and property development. The Group is dual-listed on Nasdaq Dubai and the EGX. 70+ 10+ 51+ K Years of contracting Countries where Employees Orascom has executed operations 10.9 7.4 3.4 USD/ BN USD/ BN USD/ BN pro forma backlog pro forma new Revenues in FY23 as of FY23 awards FY23 6 Orascom Construction PLC Annual Report 2023 Annual Report 2023 Orascom Construction PLC 7  Introduction Note from the CEO Dear Shareholders and Partners, As we come to the end of another challenging year, our U.S. business continues to steadily grow In addition, we were able to extract value during we should reflect on our achievements and the its specialized activities and we are pleased the year by divesting two matured building mate- challenges. This year brought another geopolitical with our progress especially in aviation and rial assets for reallocation to growth and value- conflict in the MENA region, where the largest of data centers. accretive areas. That said, we are also focused on Orascom Construction’s activities are, in addition maintaining growth of our remaining portfolio of to economic challenges specifically in Egypt. Our operations across both of our regions contin- subsidiaries across building materials, operation ued to focus on execution efficiency across trans- and maintenance (O&M), and equipment services, Nevertheless, I am pleased to report that we portation, water, renewables, aviation, and data such as capitalizing on the exporting capabilities have achieved significant milestones and fi- centers, while our HSE KPIs continue to improve. of our steel fabrication business. nancial targets. This reflects the hard work and dedication of Orascom Construction’s entire In Egypt, we delivered all packages of Greater BESIX maintained profitability this year, reflect- team across our regions. This is also a testa- Cairo Metro Line 3 Phase 4B stretching over 11km, ing the diversified nature of its business across ment to the solid fundamentals that were estab- achieved extensive progress on the world’s lon- concessions, real estate, and construction, lished by implementing our long-term strategy, gest monorail project in Egypt with a total length while backlog remains at a healthy level of EUR both operational and financial. of 96 km, and commenced works on Phase 1 of 5.1 billion. Pro-forma backlog including BESIX High-Speed Rail from Sokhna to Marsa Matrouh. increased 30.3% y-o-y to USD 10.1 billion. BESIX Throughout the year, we continued to sign We also reached significant milestones across also maintained its annual dividend and we re- quality, internationally funded new projects other large projects, completing the construction ceived EUR 10 million in June for our 50% share. in Egypt, further diversified our regional pres- of the largest Water Treatment Plant in the world Returning value to Shareholders ence in the UAE, and strengthened our U.S. in Egypt, with a capacity of 7.5 million m3/day, and We returned a total of USD 71.5 million to share- business across growth sectors data cen- of social infrastructure projects such as the Grand Financials holders in FY 2023 through two dividends and a ters and aviation. Our concessions portfolio Egyptian Museum. We are also pleased with Consolidated revenue decreased 10.9% y-o-y share buyback of 5.6%. We are pleased to main- continues to grow, and we extracted value progress on our existing projects in the Middle to USD 1,002.3 million in Q4 2023 and 19.4% y- tain this consistent track record, which reiterates across matured assets to reallocate capital East and Africa outside of Egypt. o-y to USD 3,367.5 million in FY 2023. The MEA our continued commitment to our shareholders. to value-accretive areas. We also ended the operations comprised 54% of total revenue in FY year with a healthy backlog level, driven by In the US, we are migrating to focus on a better 2023, while the USA operations accounted for Looking ahead another strong year of new awards. New quality of projects mix, mainly across aviation, the balance. Revenue in Egypt was impacted by In 2023, we achieved significant milestones as we awards increased 58.8% y-o-y to USD 5.8 data centers and industrial projects. the devaluation of the Egyptian pound while the navigated a challenging yet rewarding journey. As billion, leading to backlog growth of 45.7% increase in revenue in the U.S. reflects project we look ahead, we remain focused on expand- y-o-y to USD 8.1 billion. Egypt and the UAE In addition, this year marks a major step to- execution and new awards growth. ing our construction activities and infrastructure accounted for 55% and 11% of new awards, wards our goal of geographic diversification investments across our core sectors and geogra- respectively, with the USA accounting for the in the MENA region, through our award of the Consolidated EBITDA and net income stood at phies, and we are well positioned for the opportu- remaining 34%. 30-year seawater treatment and transportation USD 232.6 million and USD 158.6 million, reflect- nities and challenges in 2024. project in Abu Dhabi with ADNOC. ing solid performance across our business seg- Most of our new and existing projects in ments and divestments. Egypt are funded by internal institutions. We In renewable energy, we have achieved financial also successfully leveraged our expertise in close of our second 500 MW Wind Farm, with We also maintained a net cash position of the water sector to expand in the UAE and construction underway full speed in order to USD 696.6 million and generated operating were awarded a large-scale 30-year seawater operate 250 MW by end of this year, and the cash flow of USD 211.6 million in FY 2023, treatment and transportation project. Lastly, second 250 MW by mid-2025. driven by our focus on collections, and cash Osama Bishai and debt management. Chief Executive Officer 8 Orascom Construction PLC Annual Report 2023 Annual Report 2023 Orascom Construction PLC 9  Dammam Wastewater Treatment Plant Introduction Highlights of 2023 Orascom Construction PLC continued to strengthen its leading position in its key construction and infrastruc- ture markets, while executing other parts of its strategy such as infrastructure investments and concessions. Backlog and Project Execution, Orascom Construction PLC achieved a record The Group reached several important milestones consolidated backlog level in 2023 of USD across its large-scale projects in the Middle East, 8.1 billion and pro forma backlog of USD 10.9 Africa and USA. billion, including the Group’s 50% in BESIX. The Group continued to capitalize on its leading New Awards position across all major construction market Orascom Construction PLC achieved strong segments including transportation, water treatment, new awards of USD 5.8 billion in 2023, mainly renewable energy and social infrastructure. driven by a strong focus on key sectors including transportation, water treatment, data centers Notable milestones include delivering all and aviation. packages for Greater Cairo Metro Line 3 Phase 4B, extensive progress on the world’s longest In Egypt, the Group reinforced its leading monorail project in Egypt, and completion of position across the transportation sector, by construction of two large wastewater treatment signing major contracts including a new regional plants in Egypt and Saudi Arabia with a metro system in Alexandria, all civil for Greater combined capacity of 7.7 million m3/day. Cairo Metro Line 4 (Package CP402), and the upgrade of a railway corridor in Egypt. These The Group also successfully expanded its new awards add to the Group’s existing high- presence in the UAE and was part of a consortium profile projects in this sector in Egypt, including that will develop a large-scale water treatment the 96 km monorail, the 2,000 km high-speed and transportation project in Abu Dhabi that will rail system, and the railway systems and track play a key role in the sustainable development of works for all of Greater Cairo Metro Line 4. the oil and gas sector. In addition, the Group’s new projects in Egypt In the US, the Group continued to grow its backlog included its own 500 MW Build-Own-Operate across key sectors such as data centers and wind farm in Ras Ghareb, a fertilizer complex, aviation while achieving strong progress across and commercial projects on the Norh Coast existing projects. In aviation in particular, the of Egypt led by Eagle Hills Properties, Emaar Group’s subsidiary, The Weitz Company, delivered Properties and Ora Developers. the new terminal at Kansas City International Airport and broke ground on the terminal expansion at Des Moines International Airport in Iowa. 10 Orascom Construction PLC Annual Report 2023 Annual Report 2023 Orascom Construction PLC 11  Introduction In the UAE, Orascom Construction consortium OC is currently finalizing the remaining checklist expected to reach completion in 2025 for both achieved in September which paved the way was awarded a contract to develop, own, and for the preparation of the inauguration of the lines. The Group also commenced work on for EPC activities. This $2.2 billion project is operate a large-scale seawater treatment and Grand Egyptian Museum (GEM), a landmark the first phase of the 2,000km high-speed rail executed on as 30-year Built-Own-Operate- water transportation project worth a total of $2.2 museum and cultural center that will showcase system in Egypt, which is expected to be the Transfer (BOOT) basis. billion in Abu Dhabi for ADNOC. This project Egypt’s ancient civilization to the world. This sixth longest project of its kind worldwide. In emphasizes the Group’s ability to target strategic is in addition to being in the final testing and Tunisia, Orascom Construction continued its These concessions in renewable energy add to projects in the region across sectors in which the commissioning phase of the new world-class EPC works on the Sfax Seawater Desalination the Group’s existing investments in wastewater Group has developed strong expertise. Olympic Stadium in Egypt’s International City Plant with a capacity of 100,000 m3/day, treatment plants in Egypt and Saudi Arabia, and of Olympic Games. This world-class stadium is extendable to 200,000 m3/day. to other projects under development across 2023 also saw OC awarded the Abu Qir Metro the largest in the Middle East and will have a hydrogen and logistics. project, a new regional metro system and the seating capacity of over 93,000 spectators. Meanwhile, works on the Magdi Yacoub Global first modernization of a transportation system Heart Centre, a state-of-the-art hospital and In building materials, the Group’s subsidiary in Alexandria, Egypt. In Saudi Arabia, an Orascom Construction research center and the first of its kind in the National Steel Fabrication continues to expand its consortium completed the EPC works of region, are ongoing. position as a supplier and exporter for industrial The Group also signed sizable new projects the Dammam West Independent Sewage projects, with 85% of the company’s projects in the USA. The Group expanded its presence Treatment Plant (ISTP), the first ISTP project in In the US, work progressed on four data dedicated to exports including to USA and Europe. in the data center sector, adding new projects the Kingdom. The project was executed on a centers across the country and commenced with a total capacity of 144 MW. In addition, the build-own-operate-transfer basis. Meanwhile in on the Orlando International Airport – Terminal Environmental Impact Group built on its recent success in the aviation the UAE, the Company completed construction C Multi-Modal Connector Pedestrian Bridge & Orascom Construction understands its sector and was awarded a new terminal at Des works at Fujairah International Airport. Rental Car Lobby project. responsibility to minimize the environmental Moines International Airport in Iowa, set to impact of its work. Since 2021, our HSE increase the airport’s aircraft capacity by 50%, Meanwhile, in the US, The Weitz Company Infrastructure Investments, Department has conducted carbon footprint and additional work at Orlando and Phoenix successfully completed construction works Building Materials and assessments to track and reduce emissions International Airports. at the new Kansas City International Airport Subsidiaries across our projects. terminal, which received the LEED Gold In 2023, the Group made tangible progress We are committed to projects that benefit the Completed Projects in 2023 certification and is the largest all-glass facility in across its growing infrastructure investments communities we serve. Our 2,000 km High- 2023 saw Orascom Construction complete USA. The new terminal can serve approximately and concessions portfolio. Speed Rail system and 96 km Monorail will number of key projects, including the 16 million people and has 39 gates. The significantly reduce carbon emissions – the commissioning of New Delta Agricultural company also completed several data center The Group is ahead of schedule on the High-Speed Rail alone cuts emissions by 70% Wastewater Treatment Plant. Located in the projects with a total capacity exceeding 300 construction of the new 500 MW BOO wind farm in compared to cars and buses currently in use. North Coast of Egypt and at 7.5 million m3/day, MW and commercial projects including parts of Ras Ghareb. Orascom Construction is executing the project is the world’s largest water treatment University of Florida’s new residential complex. the construction and owns a 25% stake in the 25- Our Green Hydrogen Production Facility in Ain plant and follows the Group’s completion of the year project. This project builds on the resounding Sokhna advances renewable energy and creates largest water treatment plant in the world at the Ongoing Projects success of the 263 MW wind farm completed in a sustainable new industry in Egypt. We’re also time in 2018. Throughout 2023, Orascom Construction 2019, and triples Orascom Construction’s wind actively promoting sustainable construction progressed on a number of key projects across energy production capacity to 763 MW. materials like the “green concrete” used in the Furthermore, the Group completed construction various sectors in Egypt. Central Bank of Egypt’s new headquarters, which works at the City of Arts and Culture, a large In addition, the Group in a consortium was boasts numerous benefits such as durability, complex with a total footprint area of 504,000 The Company continued with its execution of awarded a new mega water treatment and decreased shrinkage, and lower carbon emissions m2 including one of the largest opera houses in the world’s longest Monorail project in Egypt, transportation project in Abu Dhabi (referenced during production. the world and total capacity of 4,723 seats. consisting of two lines spanning 96 km, and above) in May 2023. Financial close was 12 Orascom Construction PLC Annual Report 2023 Annual Report 2023 Orascom Construction PLC 13  GROUP OVERVIEW From 1950 to today, Orascom Construction PLC has grown from a family-owned local contractor to an industry leader with a worldwide footprint. +10 countries where we operate 14 Orascom Construction PLC Annual Report 2023 Annual Report 2023 Orascom Construction PLC 15  Group Overview Our History 2020 –2021 2020: Orascom Construction PLC achieves health and safety and operational Grand Egyptian Museum Orascom Construction PLC has built a longstanding reputation of excellence in the markets milestones across the Group. Despite a challenging environment impacted by in which it operates, growing from a family owned local contractor operating in one country to COVID-19, projects remained active with having operations in over 10 countries. enhanced safety precautions. 2021: Orascom Construction PLC cements its position as a leader in the water and transportation sectors by 2004 – 2010 building the largest water treatment plant in the world and signing an EPC 2004: OCI S.A.E. acquires 50% of and O&M contract to build Phase I of the BESIX Group, adding significant Egypt’s first high-speed rail system. 1950 – 2002 exposure to the European and GCC construction markets. 1950: Onsi Sawiris establishes a construction company in Upper Egypt. 2007: OCI S.A.E. divests its cement 2022 – 2023 group to Lafarge SA at an enterprise 1976: Orascom Onsi Sawiris & Co. value of USD 15 billion. 2017 – 2019 2022: The Group acquires a leading equipment services distribution and (OOSC) is founded as a general 2017: The Group builds on its strategy maintenance company and establishes contractor and trading company. 2008: Proceeds from the cement a new industrial park in Egypt. of expanding in the concession divestment are distributed to business and begins developing the first 1985: OOSC establishes its first overseas shareholders and allocated to grow The Group reinforces its position as a BOO wind farm of its size in Egypt company, Contrack International LLC OCI’s fertilizer investments. leading player in the renewable energy (Contrack) in Virginia, US. 2018: Orascom Construction PLC sector in Egypt, breaking ground 2010: OCI S.A.E. expands into Saudi on another 500 MW wind farm and consolidates its position in the US 1998: OOSC is converted from a limited Arabia and targets infrastructure and starting O&M operations at water and market with the merger of its two partnership into a joint-stock company industrial projects. wastewater treatment plants with a total US-based subsidiaries The Weitz and renamed Orascom Construction Company and Contrack Watts as well capacity of 7.2 million m2/day. Industries S.A.E. (OCI S.A.E.). 2012 –2016 as the commissioning of the world’s largest methanol production facility in 2023: Orascom Construction PLC 1999: OCI S.A.E. IPOs on the Egyptian 2012: OCI S.A.E. acquires The Weitz Beaumont, Texas. continues to grow its concessions Exchange (EGX) and becomes the Company (Weitz) and expands in the business with a new concession in Abu largest company on the EGX. US construction market. Orascom inaugurates ahead of Dhabi. schedule two of the largest power OCI S.A.E.’s first cement subsidiary, 2013: Watts Constructors, a former plants in the world, each with a The Group solidifies its leadership and the Egyptian Cement Company (ECC), Weitz wholly owned subsidiary, is generation capacity of 4,800 MW. expertise in the transportation sector commences operations with a total consolidated into Contrack, forming with the award of several new projects, annual capacity of 1.5 million tons. Contrack Watts. 2019: The Group further diversifies its including the new regional metro system revenue streams by expanding its O&M in Alexandria, Egypt and new scope for 2002: OCI S.A.E. announces the 50-05 2015: Orascom Construction PLC is business. the Greater Cairo Metro. Action Plan aimed at having 50% of demerged from OCI N.V. and dual-listed consolidated revenue generated from on NASDAQ Dubai and the EGX. Orascom Construction solidifies its Orascom Construction PLC divests two outside Egypt by 2005. status as a renewable energy leader by building material subsidiaries. 2016: Sets the global benchmark for completing 45 days ahead of schedule fast-tracked execution of power projects. the largest windfarm in Egypt with a 262.5 MW capacity. 16 Orascom Construction PLC Annual Report 2023 Annual Report 2023 Orascom Construction PLC 17  Group Overview Our Strategy Delivering Shareholder Value Orascom Construction PLC has al- ways been dedicated to delivering shareholder value, in line with its stra- tegic pillars. Our founding sharehold- ers and current management embody Since its inception, Orascom Construction PLC has been committed to a four- this commitment as they navigate the pronged strategy built on the core pillars of the Group’s focus: strengthening its Group’s sustainable growth journey. construction market leadership, leveraging strategic partnerships, growing its investments and O&M portfolio, and furthering its commitment to excellence, health, safety, and the environment as it seeks to deliver shareholder value. Strengthen Construction Magdi Yacoub Hospital Market Leadership The Group continues to expand its market pres- ence by pursuing key infrastructure, industrial, and commercial sectors. Its competitive edge in power, water, and transportation, in addition New Alamein Towers to its track record of securing funding, have al- ways guaranteed the Company’s growth across existing and new geographic markets. Moreover, these factors have contributed to the Group’s reputation for timely project delivery. Grow Investments and O&M Commitment to Excellence, Portfolio Health, Safety and the Orascom Construction PLC continues to invest in Environment infrastructure assets, as well as complementary We are firm believers in the importance of inte- and new contracts that entail Operation and grating quality, health, safety, the environment, Maintenance (O&M) scopes, as part of its strategy and ethical business practices into every aspect Leverage Strategic to increase income streams and build a long- of our business model. Our strong commitment Partnerships term relationship with shareholders. Its previous to excellence and our aspiration to become the Orascom Construction PLC is a key partner to historically enabled the Group to participate investments in specific industries, including leading private sector contractor continue to drive a number of internationally renowned global in some of the largest construction projects cement, ports, fertilizers, and building materials, our pursuit of further positive impact. As a result, players and Original Equipment Manufactur- in the MENA region. Orascom Construction provide the Group with opportunities to explore corporate social responsibility is a core area of ers (OEMs). The Group aims to develop more PLC’s goal of continuously strengthening and excel in new sectors such as wastewater, wind focus for the Group. We strive to have a tangible strategic partnerships with repeat clients relationships with repeat clients has been energy concessions, and equipment distribution positive impact on the areas in which we operate, and industry leaders to increase their current an essential part of maintaining its large and services. The Group’s O&M diverse portfolio leaving our communities better than when we capabilities and expand their reach. This has diverse portfolio. comprises transportation, water, renewable entered them. energy, and facilities management. 18 Orascom Construction PLC Annual Report 2023 Annual Report 2023 Orascom Construction PLC 19  Group Overview Our Brands Orascom Construction’s engineering and construction business operates across multiple geographic markets through two main brands: Orascom Construction operates in the Middle East and Africa, while Orascom Construction USA, a consolidation of The Weitz Company and Contrack Watts and, operates in the US market. In addition to a 50% stake in Belgium- based BESIX Group, both companies possess extensive experience in the construction and concessions industry worldwide. 100% 100% 50% Ownership Ownership Ownership Core Markets Core Markets Core Markets Egypt, the Middle East, and Africa USA (including the Pacific Rim) Europe and MENA Expertise Expertise Expertise Infrastructure, industrial, and Infrastructure, including EPC Infrastructure, marine and high-end commercial projects. services and facilities maintenance commercial projects for federal projects, and commercial and industrial projects. Registered in all 50 states and Washington DC. 20 Orascom Construction PLC Annual Report 2023 Annual Report 2023 Orascom Construction PLC 21  Group Overview / Our Brands 2023 Backlog by Region Orascom Construction’s solid Leveraging over 70 years of reputation as a leading turnkey MEA...................... 100% experience in the industry, contractor has enabled the company to attract a wide range Orascom Construction is a of large public and private sector leading EPC contractor in the clients to work on large-scale Middle East and Africa with infrastructure, industrial, and commercial projects. With a proven Monorail Monorail Transit Transit diversified operations spanning track record of on-schedule delivery the infrastructure, industrial, of premium work across various and commercial sectors. 2023 Backlog by sectors, ranging from power to water treatment, petrochemicals, Sector industrial, transportation, and ZedZed Towers Towers complex commercial structures, the Company strictly adheres to international health and safety Infrastructure..........89.5% standards. Commercial...............6.3% Industrial...................4.2% 100% 6.3 USD/ MN Ownership FY 2023 Backlog 2023 Backlog by Client 38,991 0.429 Public................ 84.4% Private............... 15.6% Employees LTIR 22 Orascom Construction PLC Annual Report 2023 Annual Report 2023 Orascom Construction PLC 23  Group Overview / Our Brands 2023 Backlog by Region With a combined track record span- With the integrated capabilities ning 168 years, OC USA serves key of its operating subsidiaries, growing markets, including mission USA....................... 97.1% critical, aviation, industrial, transpor- The Weitz Company MEA (incl. Japan).. 2.9% tation, senior living, student housing, and Contrack Watts, and additional commercial construc- Orascom Construction USA tion. The group also encompasses a successfully operates across full-service electrical contractor, EPI DSM DSM Airport Airport Power, which specializes in complex the United States and Mexico mission critical data center work. as a full-service construction 2023 Backlog by company, general contractor, As a leading, competitive player in Kansas Kansas CityCity International International Sector the market, OC USA continues to design builder, and Airport Airport contribute to the Group’s profound construction manager. success. To reinforce our reputa- tion, we constantly pursue the latest construction innovations and tech- Infrastructure..........9.7% nologies to provide our clients with Commercial.............43.2% predictable, reliable, and collabora- Industrial.................47.1% tive services. www.weitz.com www.contrackwatts.com www.epipower.com 100% 1.8 USD/ MN 2023 Backlog by Client Ownership FY 2023 Backlog Public................ 16.9% Private............... 83.1% 2,201 0.00 Employees LTIR 24 Orascom Construction PLC Annual Report 2023 Annual Report 2023 Orascom Construction PLC 25  Group Overview / Our Brands 2023 Backlog by Region BESIX has a geographic footprint BESIX Group is a leading covering 25 countries and is an ac- Belgian industrial group, tive real estate developer in Western Europe managing concessions Europe....................................... 61.9% based in Brussels, operating through public-private partnerships Egypt......................................... 0.3% in the construction, real estate in Europe and the Middle East. UAE........................................... 7.8% development and concessions Since its establishment in 1909, BE- KSA........................................... 3.0% sectors. Active in 25 countries SIX has become a leading contrac- Other MEA................................ 8.1% tor with a wide variety of projects, Australia.................................... 13.6% and on 5 continents, BESIX varying from high-end commercial Other......................................... 5.3% is able to take on projects of infrastructures to marine structures, all sizes and complexity and environmental works, sports and leisure facilities, and industrial draws its strength from its projects. The Group’s engineering entrepreneurial roots. department enables BESIX to carry out complex and unique projects, 2023 Backlog by especially in terms of technical and Sector environmental aspects. Infrastructure............................ 49.8% 50% 2.8 USD/ MN Commercial & Industrial........... 50.2% Ownership FY 2023 Backlog 10,382 0.68 2023 Backlog by Client Employees LTIR Office building in Belval ICONE office building in Belval (Luxembourg) Public........................................ 58.3% Private....................................... 41.7% 26 Orascom Construction PLC Annual Report 2023 Annual Report 2023 Orascom Construction PLC 27  Group Overview Our Footprint * This map depicts the main countries of operation. The breakdown of backlog figures is based on Orascom Construction PLC’s pro forma backlog, which includes the Group’s 50% stake in BESIX. On the Group’s statutory financial statements, BESIX is accounted for under the equity method. Orascom Construction has a wide- spanning global footprint through its main subsidiaries and 50% stake in BESIX Group. Backlog by 2023 Entity Orascom Construction............. 74% BESIX........................................ 26% Egypt........................................ 50.7% UAE........................................... 7.9% Other MEA................................ 4.4% Europe....................................... 16.0% Australia.................................... 3.5% Backlog by 2023 USA........................................... 16.0% Geography Other......................................... 1.5% 28 Orascom Construction PLC Annual Report 2023 Annual Report 2023 Orascom Construction PLC 29  Group Overview Our Business Lines Engineering and Investments and Construction Recurring Income With its expansive product and service offer- At the core of our operational excellence is ing, Orascom Construction PLC has positioned our adherence to and implementation of com- Concessions itself as a leading global engineering and con- prehensive quality control and environmental, The Group develops and invests in infrastructure pride in capitalizing on our previous investments struction contractor. health, and safety standards and programs for assets, creating new construction opportunities and our proven track record in helping finance both our employees and subcontractors. and long-term shareholder returns. We take various sectors. The Group has a proven three-decade track record of successful delivery of challenging To ensure our positive impact, Orascom Con- projects across various sectors. Through these struction PLC is determined to target projects projects, Orascom Construction PLC has that are vital to the economic development and developed a broad range of niche core compe- social progress of communities and has been Orascom Construction PLC’s Concession Portfolio tences that enhance its positioning in regional part of many critical and mega projects in that and international markets. regard. Additionally, the Group leverages its Company Ownership % 2023 Revenue (USD mn)* strong financing track record across several in- Our activities cover the infrastructure, industrial, dustries to help structure and arrange financing Orasqualia 50% 11.7 and commercial sectors, attracting public and packages on behalf of its clients to support the Ras Ghareb Wind Energy 20% 46.2 private clients, with a footprint spanning the launch of large infrastructure projects. Middle East, Africa, and the USA. *Revenue figures represent 100% of each unit’s revenue and before intercompany elimination. Orascom Construction PLC operates through The Group’s offering also encompasses a wide two main subsidiaries that penetrate a manifold range of strategic industries, including the of industries and markets. energy, water and utilities, transportation, com- mercial, healthcare, data centers, and industrial sectors. Orasqualia Established in 2009 by Orascom Construction of the 20-year PPP program. Completed in 2013, and FCC Aqualia, Orasqualia for Development the concession is currently under operation and Orascom Construction Orascom Construction USA of Wastewater Treatment Plant S.A.E acquired a maintenance, and will run until 2030. A leading EPC contractor in the Middle With the integrated capabilities of its two construct and operate contract in the New Cairo East and Africa, whose business span operating subsidiaries, The Weitz Company and Wastewater Treatment Plant concession, the Orasqualia’s success paved the way for Egypt’s over seven decades Contrack Watts, Orascom Construction USA first public-private partnership (PPP) project in PPP legislation, prompting the construction of (OC USA) is a full-service construction company, Egypt. With the capacity to produce 250,000 m3 many other projects under this partnership. In general contractor, design builder, and construc- of water per day, the project was engineered to 2010, the project was named Water Deal of the tion manager, whose business spans around 168 years combined, and is licensed to operate across treat wastewater in New Cairo, supplying clean Year by Global Water Intelligence, as well as the the United States. water to over one million people. The plant was PPP African Deal of the Year by Euromoney and initiated by the New Urban Communities Author- Project Finance Magazine. The plant has been ity (NUCA); tendered by the Egyptian Ministry of a milestone for Egypt’s infrastructure sector and Housing, Utilities, and Urban Development; and serves to showcase how financing can untap our coordinated with the Ministry of Finance as a part potential in this sector. 30 Orascom Construction PLC Annual Report 2023 Annual Report 2023 Orascom Construction PLC 31  Group Overview / Our Business Lines Ras Ghareb Wind Energy Red Sea Wind Energy 3GW Wind Farm In 2019, Orascom Construction collaborated After the success of the Ras Ghareb Wind Farm, In 4Q22, Orascom Construction, in consor- Orascom Construction’s consortium with Metito with ENGIE (France) and Toyota Tsusho Cor- the consortium formed between Orascom Con- tium with ENGIE (France) and Toyota Tsusho and MOWAH signed a sewage treatment agree- poration/Eurus Energy Holdings Corporation struction, ENGIE (France), and Toyota Tsusho Corporation (Japan), signed a memorandum of ment (STA) with the Saudi Water Partnership (Japan) on the development of a 262.5 MW wind Corporation/Eurus Energy Holdings Corporation understanding (MOU) with the Egyptian Electricity Company (SWPC) for 25 years. farm in Ras Ghareb, Egypt. The project was (Japan) is developing a 500 MW BOO wind farm Transmission Company (EETC) and the New and developed on a build-own-operate (BOO) basis also located in Ras Ghareb, Egypt. Renewable Energy Authority (NREA) to build, own, OC holds a 10% stake in the project, and the in collaboration with the Egyptian Electricity and operate a 3GW wind farm in Egypt. construction works were executed by a 50/50 JV Transmission Company and as part of a 20-year In March 2023, the consortium concluded the between OC and Metito. power purchase agreement (PPA). In addition to project’s financing and issued a notice to proceed A land access MOU was concluded in October executing construction work on the wind farm, to the contractors. OC owns a 25% stake in the 2023 for the assigned plot in East Sohag at the OC also owns a 20% stake on the project. project and is the main contractor of the wind farm. south of Egypt, and the initial studies are now underway. Operations began in October 2019, 45 days Construction is to be completed over two phases El Dammam West Independent Sewage Treatment Plant ahead of schedule, making it the first wind farm in 1Q25 and 3Q25. Once fully operational, the The new wind farm capitalizes on the consortium’s (ISTP) of its kind and size in Egypt. project will deliver clean power to more than past success and experience in developing similar 800,000 Egyptian households. Additionally, it will projects executed on a BOO basis in Egypt. The consortium currently operates and main- accelerate Egypt’s transition to renewable power tains the plant, which has saved over 735,000 generation, as well as reduce CO2 emissions by El Dammam West Independent tons of CO2 annually since inception. The con- approximately 1,000,000 tons annually under the Sewage Treatment Plant (ISTP) cession will run until October 2039. operation and maintenance for 25 years. in Saudi Arabia The Dammam Sewage Treatment Plant’s con- struction work was completed in April 2023, Ras Ghareb Wind Energy Red Sea Wind Energy and is currently operational. The project was executed on a build-own-operate-transfer (BOOT) basis and will have an initial capacity of 200,000 m3/day, expandable in the future to 350,000 m3/day. 32 Orascom Construction PLC Annual Report 2023 Annual Report 2023 Orascom Construction PLC 33  Group Overview / Our Business Lines Subsidiaries and Investments Orascom Services Orascom Construction PLC owns a diverse industry. These sectors include building materials, In 1Q2022, Orascom Construction acquired portfolio of subsidiaries and investments across facility management, industrial parks, equipment Integrated Façade Solutions Orascom Services, a leading equipment import, sectors that are complementary to the construction services, and long-term investments. distribution, and services business in Egypt. Founded by the late Eng. Onsi Sawiris over 30 years ago, the company was wholly owned by Orascom Construction PLC’s Investment Portfolio Integrated Façade Solutions the Sawiris Family and operated independently Integrated Façade Solutions (IFS) is a fully owned from Orascom Construction. Company Ownership % 2023 Revenue (USD mn) * Orascom Construction subsidiary, formerly National Steel Fabrication 100% 48.6 known as ALICO EGYPT. Founded in 1999, IFS Orascom Services operates an asset-light is one of the Middle East’s leading companies import, distribution, and maintenance business Integrated Façade Solutions 100% 19.6 in manufacturing and installing glass and alumi- model with leadership across multiple Orascom Services 100% 54.3 num façades and architectural metal work for industries including construction, marine, United Holding Company 56.5% 32.8 construction projects. The company partnered railway, and agriculture. As the sole agent National Pipe Company 40% 79.8 with leading global façade system suppliers for diverse, blue-chip Original Equipment SCIB Chemical 14.7% 44.8 like SCHUCO International-Germany and Manufacturers (OEMs) of highly demanded Contrack FM 100% 23.2 Wicona-Hydro Group, solidifying its position equipment in Egypt, the portfolio includes Orascom Industrial Parks 60.5% 16.4 as a market leader with worldclass solutions leading OEMs such as Grove, Volvo Penta, and high-quality products that offer durability, Hitachi, and Mitsubishi Heavy Industries. *Revenue figures represent 100% of each unit’s revenue and before intercompany elimination. safety, and impeccable design. Drawing on its extensive expertise in multiple Boasting a reputation of timely delivery, the vital sectors, Orascom Services continues to National Steel Fabrication suppliers in some of the largest international company offers a wide range of products expand in promising sectors by providing Established in 1995, National Steel Fabrication EPC companies. Its consistency in providing the that includes aluminum doors, windows, stick unparalleled sales and aftersales services. In (NSF) is a wholly owned subsidiary of Orascom highest levels of quality on precise and complex curtain walls, unitized curtain walls, skylights, 2023, Orascom Services played an important Construction PLC. NSF is a leading Egyptian steel projects is made possible by utilizing the latest handrails, standing seam roofs, and laminated role in the agriculture sector in Egypt by provid- fabricator and erector that serves the infrastruc- equipment and technologies, as well as leverag- stone products, in addition to architectural ing the market with Zimmatic’s leading irrigation ture and commercial building sectors in Africa, ing a highly experienced and skilled workforce. metal work such as aluminum, stainless steel, technology, pivot systems. Asia, Europe, the USA, and Latin America. NSF NSF operates in line with ISO, ASME, AISC, BS, expanded metal mesh, and perforated metal possesses a complex and specialized product EN, and Euronorm quality certificates. cladding. It also provides complete façade range, including steel structures, steel collector technical solutions and support during the pre- Orascom Services elements, plate works, pressure vessels, boilers, tender and design phases. heat recovery steam generators, heat exchang- National Steel Fabrication ers, piping, tanks, and packaged skids. It owns Located in the New Suez Industrial Area, the IFS and operates one major facility in Egypt, with a Ain Sokhna plant is equipped with top-of-the line total production capacity of 50,000 tons annually. production and fabrication facilities that produce all types of façade work. The six-hectare plant has NSF has built a reputation in delivering unwavering a BUA of 18,000 m2, as well as 32,000 m2 of land quality that meets international standards across for future expansion. It is equipped to produce all its products and services, which ultimately some of the finest façade materials, given the positioned it as one of the preferred worldwide facility’s unequalled quality control standards. 34 Orascom Construction PLC Annual Report 2023 Annual Report 2023 Orascom Construction PLC 35  Group Overview / Our Business Lines United Holding Company (UHC) National Pipe Company (NPC) Founded in 2000, UHC is a holding company Established in 1993, NPC is one of the with a 50% stake in Master Builders Solutions largest Egyptian manufacturers of precast (MBCC) and A-Build Egypt (A-Build). concrete pipes and pre-stressed concrete, primarily for infrastructure projects, serving Operating through four plants in Egypt and one in the Egyptian market. SCIB Chemical Algeria, UHC’s subsidiaries cater to the Egyptian and North African markets. Today, the company operates two plants in Egypt with a combined annual production MBCC is one of the largest producers of capacity of 86 kilometers of concrete piping SCIB Chemical CFM proudly provides hard services, specialty chemicals in Egypt and Algeria, namely ranging from 700 to 3,000 millimeters. Founded in 1981 and serving Egypt and including engineering, fit-outs, civil and admixtures and construction products. The North Africa, SCIB manufactures high-quality architectural repair, and maintenance company operates two production facilities, one decorative paints and industrial coatings for the services, as well as soft services including in Sadat City, Egypt, with a production capacity construction industry. Its two Egyptian plants housekeeping, soft janitorial services, and of 100,000 metric tons per shift, and one in Baba National Pipe Company have a combined annual production capacity of deep cleaning services, with specialties in Aly, Algeria, with a production capacity of 20,000 130,000 kiloliters of paint. façade cleaning, landscaping, pest control, metric tons per shift. The two facilities were waste management, and recycling. built in 2000 and 2006, respectively. As part of SCIB supplies the highest-level products in management’s strategy to extract value across the region renowned for variety and quality; Additionally, it leverages an impressive client matured assets for reallocation to growth areas from premium emulsion paints, special portfolio that covers most commercial property and maximizing shareholder value, UHC sold its effects décor paints, and exterior paints to types, including local and multinational stake in Master Builders Solutions in May 2023 for enamel paints and wood paints. corporations, and a variety of sectors such gross proceeds of EGP 1.8 billion. as industrial, banking, healthcare, retail, and Contrack Facilities Management real estate, as well as prominent business A-Build is a market-leading specialized (CFM) parks, such as Smart Village in Abu Rawash. contractor in Egypt operating in the construction Established in 2004, Contrack Facilities It also boasts long-term partners such as the protection and repair fields. Its expertise lies Management S.A.E. (CFM) is a leading Children’s Cancer Hospital, Cairo Festival in several domains, including waterproofing, integrated services company that provides a City Mall, Credit Agricole, the CBE, Emirates lining and geomembranes, thermal insulation, number of cleaning, security, and repair services NBD, Alshaya Group, and Dar El Handasa. concrete repair, injection and fire proofing, to commercial buildings through managing industrial coatings, and joints sealants. and operating high-value and technologically advanced machinery and equipment. Contrack Facilities Management United Paints & Chemicals (UPC) Since 1998, UPC owned and operated DryMix, Created to serve the two 34-story Nile City the largest manufacturer of cement-based and Towers buildings on Corniche El Nile, Ramlat ready-mixed mortars in powder form. In June Boulak, the company has since expanded 2023, the group sold its 56.5% stake in UPC to deliver first-class services to commercial as part of its strategy to extract value across buildings around Egypt, adding value to its assets for allocation to growth and value- clients and facilitating the lease of their spaces accretive areas including concessions. at prime rents to international organizations like the European Union. It currently controls the largest market share in Egypt’s facilities management industry. 36 Orascom Construction PLC Annual Report 2023 Annual Report 2023 Orascom Construction PLC 37  Group Overview / Our Business Lines Orascom Industrial Parks (OIP) Abu Rawash Industrial Park OIP is a leading Egyptian private sector company With a track record of over 60 projects and over This 2 million m2 ECO industrial park is located Abu Rawash Industrial Park that has been managing industrial zones in Egypt 100 clients, Sokhna Industrial Park develops in Abu Rawash, Giza, Egypt, in proximity to since 1998. It developed two industrial parks, industrial land and provides utility services for key transport infrastructure, including high- Sokhna Industrial Park and Abu Rawash In- light, medium, and heavy industrial users in Ain ways, airports, ports and railways. The park is dustrial Park, spanning over 12 million m2. Sokhna. Its industrial park proudly operates a perfectly designed to utilize the space, while large network, providing a wide range of products considering sustainability and cross-industry Sokhna Industrial Park and services, including power, water, firefighting, and community collaboration. Since 1998, OIP has been the developer, sewage treatment, and telecommunications operator, and utility facilitator of a 10 million m2 connections. Other services include flood control It will offer industrial land, plug & play, build to industrial park in Ain Sokhna on Egypt’s Red Sea protection, solid waste disposal, and access to suite, warehousing, and storage facilities. It will coast. Located 40 kilometers south of the Suez roads and railways. also provide other amenities, including logistic Canal and at the crossing of the Cairo-Sokhna support, office spaces, a training center, and and Suez-Hurghada highways, Sokhna Industrial retail showrooms, while simultaneously ensuring Park benefits from one of the most attractive that all activities collaborate to minimize waste locations for industrial projects in Egypt. and maximize industrial park efficiency. 3D Printing Construction In 4Q22, Orascom Construction formed an exclusive partnership with Denmark-based 3D Printing Construction COBOD to bring state-of-the-art 3D printing construction (3DPC) technology to Egypt for the Sokhna Industrial Park first time. This partnership will explore various opportunities in the Egyptian market that utilize 3DPC technology in printing entire buildings. It is expected to lead the technological advancement of the construction sector in Egypt, given this new technology is more cost and time effective compared to traditional methods of construction. It is also more environmentally sustainable, as it reduces material consumption, construction waste, and carbon footprint. 38 Orascom Construction PLC Annual Report 2023 Annual Report 2023 Orascom Construction PLC 39  Group Overview / Our Business Lines Abu Rawash Wastewater Treatment Plant Al Hammam Agricultural Wastewater Treatment Plant Operation and Maintenance Contracts Future O&M projects following of its kind in the world. The plant will provide Orascom Construction PLC has a proven track m /day of primary and secondary treated sewage 3 the completion of construction treated water for the irrigation of up to 500,000 record in the O&M field, where it has secured water. The plant currently provides clean water to Al Hammam Agricultural feddans in the New Delta region, located west several multi-year O&M contracts for projects nine million people. Wastewater Treatment Plant of the Nile Delta. on which the Group is also the contractor. The (AAWWTP) – Egypt current O&M contracts span across several Bahr El Baqr Water Treatment Plant Al Hammam Agricultural Wastewater Treatment SFAX Seawater Desalination Plant sectors, such as water treatment, wastewater A 10-year O&M contract on Bahr El Baqr, a Plant’s commissioning was completed in 2023, OC (37.5% stake), in collaboration with Metito treatment, water desalination, and transportation, 5,600,000 m3/day plant with the purpose of and the plant is currently partially operational. (37.5% stake) and Cobra Installation Services including a 10-year O&M contract for the largest e x nhancing natural resource use in the Sinai This phase will remain in effect until the (25% stake), will lead the operation and water treatment plant in Egypt and a 30-year Peninsula, commenced in December 2021. completion of the upstream conveying system, maintenance of the SFAX Seawater Desalination O&M contract for the world’s longest monorail The plant will contribute to land reclamation which is expected to occur in 2H24. Plant for two years, upon the completion of project in Egypt. and cultivation east of the Suez Canal in Sinai, construction in 2024. The plant will have the where water will be sent from the plant to irrigate The scope of the O&M contract for the Al capacity to produce 100,000 m3/day, extendable Activ