Orascom building- REUTERS- Mohamed Abd El-Ghany
CAIRO – 12 April 2020: Orascom Development Egypt (ORHD) announced undertaking several precautionary measures in light of the current global circumstances and economic downturn.
The company clarified in a statement that the purpose of these measures is to reduce spending and preserve cash to the longest period possible to ensure stability of the Group’s destinations, in order to enable the destinations to resume their operations and planned investments once the business is back to meet the Group’s planned strategic and financial targets.
According to the statement, these measures and initiatives include reduction in capex to keep only the necessary committed items, postponement and freezing of new hires, reduction in all expenses to the minimum required and reduction in all marketing expenses across all destinations, and postponement of some of the governments’ dues where possible to reflect governments’ initiatives to support companies.
In addition, the company decided to postpone debt service in Egypt for 6 months as per the Central Bank of Egypt (CBE) decrees, and studying how to benefit from the CBE’s initiative to support the tourism companies.
The company’s management believed that ODE’s is well positioned to weather the current dynamics of COVID-19 with the initiatives adapted, coupled by the significant enhancement of the Group’s operational performance over the past couple of years.
“We have a strong operating model, a solid cash position and balance sheet with a diversified revenue stream, to keep us comfortable for the coming period. As the duration and severity of the outbreak is unknown, we are suspending our financial outlook for the full year 2020,” it stated.
It added that the company has already taken and will continue to implement incremental actions to reduce expenses to mitigate the financial impact of COVID-19. “In addition, Management is and will continuously monitor all expenses on daily basis to ensure meeting the cost savings’ targets set. We anticipate providing further updates on our first quarter earnings call in June,” it said.
Meanwhile, ODE said it has takennumerous actions to safeguard its team members, including encouraging work from home, implementing precautionary measures in our offices, temporarily closing facilities, restricting business travel and providing mandatory training to educate all employees about COVID-19.
“All our destinations including El Gouna, O West, Makadi Heights, Taba Heights and Byoum are following the guidelines set by the Ministry of Health & Population and the World Health Organization,” the company said.
According to the statement, the company is adopting an extraordinary sterilization program, focusing on maintaining heightened level of hygiene for all staff and workers, disinfecting public surfaces frequently and availing hand sanitizers in public areas.
“We also coordinated with our business partners (hotels, restaurants and coffee shops & retail outlet’s management) to sanitize their outlets and apply all the official safety and hygiene procedures,” it stated.
According the performance of the company, it said that the first quarter performance in January, February was operating normally despite the impact from COVID-19. However, starting in early-March COVID-19 began to impact the company’s results significantly as global governments took actions to encourage social distancing and implement shelter in place directives.
“The deterioration accelerated toward the end of March as the pandemic spread further and the number of countries and localities adopting restrictive measures meaningfully increased, of which travel restrictions and flight suspensions around the world have been implemented,” the company noted, adding that the government also instructed the closure of hotels in the touristic destinations and imposed a partial curfew from 8 p.m. to 6 a.m effective March 25, 2020 till April 23, 2020 along with other measures to fight the spread of the COVID-19.
Orascom Development Egypt (ORHD) recorded a 41-percent- increase of its profits during 2019, hitting LE 705.19 million in 2019, compared to LE 500.19 million, including minority rights, in 2018.
Orascom Development Egypt operates within the consumer services sector focusing on hotels, resorts and cruise lines with 52 subsidiaries operating across Northern Africa, Middle East and southern Europe.
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