By Adam Tanner
Property developer with extensive Egyptian interests remains upbeat about future.
Property developer Orascom Development Holding expects 2009 profit to increase by more than the 13 percent gain it posted last year, the company's chairman said on Wednesday.
The Swiss-based company, which operates mainly in Egypt, said earlier on Wednesday that 2008 profit rose 13 percent to 115.6 million Swiss francs ($102.5 million).
Profit attributable to equity shareholders rose 14 percent to 96.3 million Swiss francs.
"We are much more comfortable about 2009 than 2008," Samih Sawiris (who owns 60 percent of Orascom Development's shares and is its chairman and CEO) told Reuters in a telephone interview.
Asked for his 2009 profit projections he said: "We don't have an exact number but let's say much more....We have more destinations contributing to the bottom line and we have more deliveries of houses that we built in 2007 and 2008."
Orascom has hotels and resort and apartment development sites in Egypt, Jordan, Oman, Morocco, the United Arab Emirates and Switzerland, where it is building hotels, a golf course, spa, artificial beach and other amenities in the ski resort of Andermatt.
"I'm a little bit arrogant now that I have been proved right about my choices of destinations to invest in," Sawiris said. "We did not fall into the trap of easy fast money that now looks unattainable."
The CEO said his firm had avoided the heavy debt that is weighing down many other developers.
"We practically have no debt if you take all of our cash reserves and cash in the bank and put it against the debt, it is zero," he said. "We own all of our hotels, we don't lease anything.
Orascom Development raised 200 million Swiss francs in 2008 by listing on the Swiss SWX stock exchange, and has a secondary listing on the Egypt Stock Exchange.
"We have banks knocking at our doors now to give us money because they see that in these times, they need to put their money with companies that are risk-free."
Despite his upbeat outlook, Sawiris sees sharply lower hotel profits across the industry. Orascom hotels recorded an occupancy rate of 81 percent, up from 78 percent in 2007.
"No way that people who are so scared about their jobs will be spending as unwisely as they used to," Sawiris said.
"We are all going to lose maybe 20, 30 percent of our profits from hotels last year," he said. "Compensate those by 10, 15 percent by the new hotel rooms that we have added, because we are adding new hotel rooms every year."
New developments to open in 2009 including those in Oman, Egypt and the UAE, will help boost the overall Orascom bottom line, he said. (Reuters)