Good afternoon and good morning, everyone. Welcome to the Orascom Construction full year 2025 results call. This is Hesham El Halaby , Investor Relations VP. We are also joined by Osama Bishai, our CEO, and Reham ElBeltagy, our CFO. We will start with opening remarks, followed by a Q&A session afterwards. I will now hand over the line to Osama.
Thank you, Hesham. Good afternoon, everybody. There is no dull moment, I have to say. For last year or 2025, it is obvious we have delivered a very strong performance on the overall year, highlighted by healthy backlog, healthy revenue. We have delivered the bottom lines with the same levels that we have indicated almost a year ago, which reflects the effort that was done on the selection of our projects, plus the focus on operational excellence and governance and controls. Also on the concession side, we have delivered the wind concessions earlier. They started kicking in on the revenue towards the last quarter of the year. Everybody has seen the announcement that we have signed the PPA for the 900 megawatts, continuing growing our concession portfolio. We cannot be oblivious of the current geopolitical situation.
There is physically a war on the other side of the Middle East. It will have an impact on the supply chain, it will have an impact on certain price levels. I have to say that I am very appreciative of our team. Our team on Project Wave in Abu Dhabi has been working almost every day, continuing to work with the challenges of shipping and supply chain and some delays. The same goes for the power plant in Saudi. I think it has not affected, let us say, in a big way, the efficiency and performance so far. We are assessing the long-term impact of these events. We are covered in most of our contracts, if not all, with a very clear force majeure clause that protects the company vis-à-vis delays and certain level of costs, particularly due to war or civil unrest.
We are really collaborating closely with our clients in a partnership fashion so that we are managing this jointly to be able to continue to perform, and also until we reach the level where we can say that this force majeure event is complete. We do not believe that the force majeure event, once the war ended, it will be done, because we believe there will be some consequential impact, going beyond the current dispute. We are happy to respond to any queries in that regard. I expect that a lot of questions will be directed towards this issue. On the other hand, we are very proud of our U.S. operation. They have grown exponentially compared to last year. Our success in the strategy towards data center is paying off. Number one, we have been adamant on excellent performance.
Number two, we have created an ability to self-perform electrical works through the partnership with a specialized partner. That has created an improvement in the bottom line. It has created an edge vis-à-vis other contractors in the data center space. We believe that this strategy is paying back. Our backlog in data center is growing. The U.S., 40% of its revenue is derived from data center, and we believe that more than 40% of the current backlog is attributed to data centers for the U.S. I would say that the team in the U.S. have succeeded to create a diversification in the portfolio of clients between hyperscalers and developers, which creates, let's say, a spread of the risk of whether a developer could stop the work or not.
What we believe is that the data center story is still in full throttle in the U.S., and we can see a very healthy pipeline as we speak. Going back to our performance, we are proud to say that our strategy to diversify our concentration has been paying back. While Egypt is growing and performing well, we are growing outside of Egypt in order to have a balanced portfolio of business between different geographical locations. We're seeing that the U.S. is going to be, let's say, a little bit more than 30% of our backlog. Egypt is slightly more than 50%, and the balance is the Middle East. We believe that our Middle East portfolio will grow. There may be some delays in some awards, but I don't believe that it will be really affected.
We feel the will within the UAE government, I wouldn't say the word double down, but they're focused on performing their plans. I believe that we are in the right space, which is the infrastructure. This is a type of sector that, particularly in the Middle East, will never stop because of the demography and the age level of the population of the Arab world, and the fact that this is a crucial element for the quality of life for the people, particularly in Saudi and the Emirates. We are quite comfortable that the pipeline will continue. Obviously, we are extremely diligent on the impact of the current geopolitical dispute on our operation, whether from a schedule point of view and also from a cost impact. We are working with this, again, as I previously mentioned, closely with our clients on that.
Our subsidiaries have performed extremely well. Between the subsidiaries and the concessions, which we believe this could be defined as reoccurring revenue. We are reaching close to 20% of the bottom line from those two activities. We will continue to drive. We are quite bullish about our 900 megawatt wind farm. While we sign the PPA, we believe we'll reach financial close, if not by end of Q3, sometime in Q4 of this year. Again, we are hopeful that our performance would allow us of an early completion and early generation of revenues. I believe that it's due for the numbers to look at it in detail, and I leave the floor to Reham to go ahead.
Thank you, Osama. Good morning, good afternoon, everyone, and thank you for joining us today. Building on the notes that Osama gave, 2025 was a strong and commendable year for the group. It is actually marked by several milestones and a continuation of our positive trajectory over the past couple of years. At a high level, we would like to flag four or five points. We selectively secured new awards across multiple markets, making steady progress towards diversification, as highlighted by Osama, resulting in a well-diversified backlog where 54% of it is denominated in Egypt, 32% in the U.S., and the delta 14% is other Middle East, mainly GCC being UAE and Saudi. Revenue grew by 55% year-on-year, alongside an improved EBITDA margin of 6%.
We also achieved favorable resolution of the legal legacy matters, including KSA Airport project, as well as positive arbitral award on Sidra Medicine in Qatar. Healthy income streams from our concessions and building material subsidiaries, contributing 19.6% of the group's net income in full year of 2025. Finally, we closed the year with a net cash position of $1.05 billion, supported by strong operational cash flow of $462 million. With that, we will now move on to a more detailed review of our Q4 2025 and full year 2025 results. The group concluded the year with a healthy backlog of $9 billion, representing an 18.9% increase year-on-year, driven by another strong year of new awards, totaling $5.6 billion in 2025, up by 86.6% year-on-year.
Revenue grew by 73.4% year-on-year to $1.6 billion in Q4 of 2025, and by 55.1% year-on-year to $5 billion in full year 2025. MEA Q4 revenue displayed a consistent increase of 53.4% year-on-year, boosted by accelerated progress of high-profile projects from the current backlog across all main markets, demonstrating the ongoing success of the group's geographical diversification strategy. In Q4 of 2025, U.S.A. revenue doubled year-on-year, primarily attributable to the contribution from newly awarded data center projects. In Q4 of 2025, EBITDA doubled year-on-year to $81 million, with a margin of 5%, up from 4.2% in Q4 of 2024. The increase in Q4 2025 EBITDA is driven by improved operational performance across both MEA and U.S.A. Full year 2025 EBITDA reached $305 million with a 6% margin.
Full year 2025 EBITDA incorporates $29 million net gain from favorable legal case outcome in Saudi and Qatar, that we have mentioned earlier. Excluding this one-off, adjusted consolidated EBITDA would have stood at $276 million, with a margin of 5.5% for the full year, compared to $151 million, with a 4.7% margin in full year 2024. This marks an 82.2% year-on-year increase of our adjusted EBITDA. Full year adjusted MEA margin would also have reached 7.3%, compared to the 5.9% last year in 2024. BESIX contribution to our net profit increased by $24.7 million for 2025, compared to $22.6 million in 2024. Our concessions across wind farms and wastewater treatment accounted for a total of 6.5% of our net profit in full year 2025, reflecting sixfold increase year-on-year, highlighting the early commissioning of the 650 megawatt wind farm in Egypt.
Our subsidiaries across building materials, equipment services, and facility management, on the other hand, accounted for 13.1% of our net profit for 2025. Q4 2025 net profit doubled year-on-year, reaching $61.5 million, with a margin of 3.8%, compared to a 3.3% margin in Q4 of 2024. Full year 2025 net profit increased by 65% year-on-year to $194.8 million, compared to $118 million in 2024. Moving on to the balance sheet side. Equity accounted investees amounted to $540 million, of which $459.9 million relates to BESIX, and $49.8 million relates to wind farm investments in Egypt. The group's total equity increased to $900.7 million as of December of 2025, up from $647.5 million closing of 2024, primarily driven by net profit, despite the $51.8 million of distributions that took place. Trade and other receivables increased to $1.9 billion from $1.4 billion in December of last year.
This reflects the growth in revenue and progress on billing and advance payment to suppliers and subcontractor on our large projects in MEA. Trade and other payable balance increased to $2.2 billion, up from $1.5 billion in December of last year, reflecting an increased volume of work and effective working capital management. Gross debt stood at $314.9 million in December 2025, in line with December 2024 level. Gross debt was reduced in Q4 of 2025, and is $135.8 million lower than the level in September of 2025. Finally, the group generated a healthy operating cash flow this quarter, higher than the amount generated over the preceding nine months, enhancing the net cash position to $1.05 billion in December of 2025, compared to $728.1 million in December of 2024 and $839 million as of September of 2025. I believe that concludes our review, and we will now open the Q&A session.
Hesham, back to you.
Thank you, Reham. Ally, I would ask you please to provide us with instructions to ask questions.
Thank you. We are now opening the floor for question and answer session. If you dialed in, for you to ask a question, please press star followed by one on your telephone keypad. Again, that's star followed by one on your telephone keypad. For our attendees in the webcast, you can ask a question by clicking the Q&A button on your screen. Again, for our attendees in the conference line, please press star and then one if you'd like to ask a question. We will pause for a brief moment to wait for the questions to come in. Again, if you'd like to ask a question, please press star followed by one on your telephone keypad. Thank you.
We'll start with the questions from the-
We don't have any questions in the conference line.
Thank you, Ally, for the confirmation. I will start with the first question on the webcast. Dear Orascom Construction management team, in the 2025 annual report, it is noted that Orascom continues to pursue a deal with OCI Global. Revising this transaction, has the board been fully apprised of the potential risks associated with the escrow agreement between OCI and ADNOC? Specifically, we are concerned about the maximum potential liability, which is estimated at $680 million or more. We would appreciate clarification on how this liability was factored into the board's decision-making process, and what measures are in place to mitigate this exposure.
Okay. Let me remind everybody that there has been a due diligence performed by a third-party advisor to OC on OCI. That included all and related matters to the Fertiglobe deal, and in that report, everything was stipulated there. What also was stipulated, not only the risk, but also stipulated the dollar amount in escrow to cover a portion of that risk. Also, this issue has been part of the valuation of OCI. The board had access to the due diligence, had access to the details of the valuation of both OCI and its related reps and warranties. These were reflected in the conversion ratio and in the numbers that reflected the proposed transaction.
Our next question. You previously mentioned a new dividend policy would be announced post-merger. Given that the deal is taking more time than previously anticipated, do you have an update on dividends?
That's a very good question. I think we are obliged to wait till end of June due to the fact that our agreement with OCI is valid till that date. Any dividends that will take place could affect the conversion ratio that has been established. We have committed to our shareholders in another call and in the general assembly that we are going to stick to that conversion ratio for the benefit of our shareholders. At this moment, we would rather hold on any announcement of any dividend plans at this stage. Obviously, if the merger takes place, there will be a combined dividend policy that will be announced. If this aborted by end of June or at any time before or after, we will continue with our dividend policy, and we will announce our plan moving forward.
We've received now. We've answered all the questions through to the webcast. Ally, can you please confirm whether any have received by phone?
As of right now, we don't have any questions in the conference line.
Back to the webcast. In the proposed new structure, it was mentioned that one of the pillars would focus on concessions. Given the sizable cash balance, would you expect to deploy new investments until the merger is completed or canceled?
We are continuing business as usual until there is clarity on the combination. As you can see, a couple of weeks ago, we have concluded the power purchase agreement for the 900 megawatt. Obviously, Wave is the next coming deployment of cash. Once it's completed, there will be certain delays due to the force majeure event in the U.A.E., but that's also another commitment that we have. We are continuing to pursue opportunities whether in the region or in Africa or even in the U.S., as Orascom Construction standalone, and we will not, as long as it's within our mandate and it's in the infrastructure space and provides the level of returns that we would like to provide to our shareholders, we are going to continue to invest. Once we have clarity, then, as I said just two minutes ago, we will announce our dividend policies.
That concludes all of the questions received through the webcast. Ally, can you provide us with your final confirmation, please, on the phone?
As of right now, we don't have any pending questions in the conference line. I'd now like to hand back to the management for the closing remarks.
Well, we would like to thank you very much for your time, and we appreciate your interest.
Osama, I apologize to cut you off. We received a few questions that came through.
Go ahead.
Congratulations on the results. First, on the current geopolitical tensions, could you elaborate on the potential long-term structural implications for energy markets, supply chains, and infrastructure demand, and how these dynamics may impact Orascom Construction specifically?
Okay. First of all, as I mentioned before, this is something that we are currently monitoring very closely, not only internally, but also with our clients. Because it's not only a market event, it's a force majeure event. So basically, the client would accept, let's say, the impact or the consequences of such events on our contractual obligations. Having said that, we have to look at each market by itself. Number one, globally, we believe there will be certain impact due to shipping constraints. There has been some delays in shipping, and obviously, once the dispute is over, and we hope that sooner rather than later, there will be a queue for shipping and clearance in ports, whether in the Gulf or in Saudi.
That will happen or even in the source of supply, whether it's in Europe or other places, due to the fact that there is a disruption in the entire supply chain. That's one. The other issue that we are monitoring is the cost of shipping and the cost of insurance. Again, particularly to Saudi and the U.A.E. more than Egypt at this moment. On the other hand, there is also a local impact, which is the cost of fuel in certain countries. I mean, Egypt has seen a hike few days ago. We are covered by our adjustment formulas that are related to price changes, thanks to the events that took place over the last six to eight years that allowed all our contracts to have a provision for fuel adjustment.
The other thing that we are seeing is the, again, adjustment formulas that would reflect the inflation cost, plus the fact that we haven't changed our policy by maximizing a foreign currency portion in our contracts, and that we believe should be playing in our favor at this moment, not really creating a windfall, but I think hedging or protecting us against some of the fluctuation that could happen in the market due to the current events. I mean, we are quite vigilant. Unfortunately, the event has not ended yet. And I believe the day it ends, there will also be some time until the consequences also start to disappear. But that's the flavor we have today. We haven't seen any cancellation of our contracts, any delays.
Actually, on the contrary, we have some new contracts that we are looking at in the Middle East, and we're seeing the clients are very adamant on going ahead with these contracts without any particular delay. For us, I wouldn't say it's business as usual, but we are working normally, but with a lot of vigilance regarding the consequences of the current events.
We received a question that is similar to this, and it's: Have you witnessed any slowdown in awards momentum and bidding process in the UAE, Saudi Arabia, and Egypt owing to ongoing events? Could you please share with us your views on future awards pipeline?
Okay. We believe that the projects that were submitted prior to the dispute or to the war are ongoing. We are actually in the process of signing a new contract. We are not liberty of announcing that due to client restrictions, but once the client allows us to do that, we will do that in the UAE. We are also seeing some projects in Saudi going ahead. I think the slowdown will be maybe in the implementation but not in that. Maybe there will be slowdown in pipeline of projects coming in few months from today. I will not be surprised that we see some recalibration of direction of funds, but we are very much well-positioned because we see that the calibration of funding will probably go towards infrastructure and towards essential projects, where this is our space. We will be well positioned for that.
I believe also that these projects will be focused on maybe oil and gas, defense, infrastructure for defense. Plus the fact that our subsidiary, BESIX, has been awarded the marine work for the LNG in Mozambique. I believe that project suddenly became one of the most important projects in the oil and gas in the region at this moment, because that could be looked at as a geopolitical replacement of LNG source other than the Persian Gulf. Again, we are an indirect beneficiary of that opportunity. While we are very vigilant about where we are, and we are quite concerned on every day, but we feel that we are in the right position to mitigate the impact and maybe to benefit from projects that are created due to the current events.
Our next question. With a strong momentum in U.S. data center investments and a tighter global energy supply, do you view this as a sustainable growth driver? How do you see the energy constraints shaping future infrastructure demand?
First of all, the drive of data centers, honestly speaking, is driven by much larger organizations than ours. The Microsofts and the Apples and the Amazons and the Oracles of the world are driving this AI and data center movement. The power issue is correct. It is something that is of concern. I believe that what we are seeing in the U.S. is that the U.S. has its own capacity of generating oil and gas. I am sure that will be made available for their own growth. I think the critical will be in a few years from now, when a lot of those data centers are coming into operation. I think there will be a surge in the consumption. That will be the challenge. But currently, we are not seeing a slowdown, at least for the next 18-24 months of the pipeline on data centers.
Again, we have been involved in data centers since 2018. We have always been seeing a growth, and we were always concerned that there will be a limitation to that. With the introduction of AI, we saw a surge in this demand. I think it is a three to five year horizon that we still continue to see this as healthy as it is. I think also that all of the power developers are also looking at making sure that they are making power available for these developments. I think the households in the U.S. and certain counties and certain states may suffer due to that.
We have a final question that is semi-related to one that was asked, and it is looking ahead to a potential post-conflict environment. How do you see reconstruction needs and energy sector considerations translating into opportunities across infrastructure renewals, in terms of future awards and pipeline visibility?
First of all, I think there will be an immediate influx of funds to do any repairs required in the oil and gas infrastructure that has been affected by the current events. That is number one. I think there will be a shift of strategy for some of the oil majors. They look at places like Mozambique, places like Africa, as another source to be able to create a redundancy just in case the geopolitical tension continues. Because I do not believe that when the events stop, Iran will disappear or Iran and the U.S. and Israel will be on a peace accord basis. The tension will always be there.
I think that a lot of oil majors will be looking at alternatives, and the alternatives are in the region, in Egypt, in Africa, in Algeria, which is again where we have a presence and where we have been there, and we can do a lot of work. That would be actually a potential for us, and we are looking. We are expecting things to move, I would say, in the next few months. On the other hand, the infrastructure drive, I believe, will continue. The Middle East, particularly Saudi, it is a young generation. It is a big country, 38 million people, continuing to grow. I think this will continue. As I said, we are building a power plant there. It has not stopped. We are working. We believe the developer we are working with is adamant on trying to minimize the delay due to the force majeure.
We are not seeing a slowdown in the need of infrastructure. There might be some slowdown in new projects coming in, but I do not see that except a few months down the road, not more than that.
That concludes the questions received on the webcast. Osama, I hand it over to you for closing remarks.
Well, again, we are very proud of our results of 2025, and we thank you for joining us, and we appreciate your time. We are also bullish about our performance for the next year. While we are quite vigilant of the impact and the consequences of the current events on our performance and our numbers, we believe that at least we are taking the right steps to mitigate that. Obviously, it is not over yet. We have to see the end, let us say, the last part of the impact on us. But so far, I think we are able to, as much as we can, to mitigate that. We are not saying that we will not be affected. We definitely will be. But we are working hard to minimize the impact and to work with our clients so that they take their fair share under our contractual agreements.
We are looking forward to see everybody in six weeks. Mid-May will be the date for us to release our Q1 results. Thank you so much.
Thank you for attending today's call. You may now disconnect. Goodbye.