Investor update

Dec 17, 2025

Summary

The proposed combination is intended to create a larger infrastructure investment platform, with cash deployment targeted within 18-24 months. Management expects gross cash could exceed $2bn by early Q2 2026 and reaffirmed dividends as a core capital-allocation pillar.

Good afternoon and good morning, everyone. Thank you for joining us on the call today. This is Hesham El Halaby, Investor Relations VP. We are also joined by Osama Abouemsha, our CEO, and Ayman Beltegy, our CFO. We will start with a brief overview by Osama, the proposed combination, then turn over to Q&A. I will now turn the line over to Osama. Thank you, Hesham. Good afternoon, good morning, everybody. Thank you for joining us. I know it is an interesting time, and I am sure that everybody is eager to ask a lot of questions, so we will not take a lot of time in our introduction. Let me first mention a few things. Number one, I think, which is extremely important is that as management and with the board, we ensured that we are following strictly the regulations and the governance procedures by the company and by the two jurisdictions that we are listed in. We also had very good advisors. We had White & Case as our legal advisor. We had KPMG as our tax advisor. We had EFG as our financial advisor. We also had BDO for the fair valuation exercise. One of the reasons of the choice of BDO is that they are approved and accepted by the two regulators in the two jurisdictions we are listed in, which is the ADX and EGX. So we felt that we have done our homework as far as having the right people in the room to make sure that we are following the strict governance procedures for the benefit of Orascom Construction. That is number one. I think the most important thing is our view looking forward. I think this combination, and we believe that we are going to create a much larger player in the space of infrastructure investment and construction. From our experiences, we believe that size matters. I mean, our ability to endeavor into larger size investments in infrastructure, whether in the Middle East or in the States, or through our investments in Besix in Europe or in Australia, we will have the war chest and the oxygen to be able to invest if that makes value to the company and to our shareholders. The other thing is that we would like that moving forward, in a, let us say, certain period of time, to be perceived as an infrastructure player, not strictly a contractor with some concessions. This definitely will have an impact on our valuation. We looked at today at a multiple of earnings at a single digit, four, five, six, depends on which year you are looking at. When we look at examples of similar entities that are having major investments in the infrastructure space like VINCI, like Ferrovial, like Eiffage, we are looking at double-digit multiples for the valuation of the company. That is really the objective that we are looking at. We are looking at creating a platform that has the muscles of an efficient contractor, that has the muscles of deployable cash, and has the financial ability and the technical ability to reach financial close on a lot of investments. This team actually, between the team within OC and the team coming with OCI, is actually not only very well experienced, but also has a diversified geographical experience and knowledge between the U.S. till the Middle East. Having said that, this team also, a big portion of the both teams have been working together in the past. I mean, a lot of the faces within OC and OCI have worked together during the cement times and the fertilizer times when we were one. We believe that this team is very well coordinated, very well in sync to be able to achieve greater value for the shareholders. The other thing is that we also believe that maybe we are going through good times. Also having this amount of cash will give us the opportunity, number one, to weather cyclicality in the construction business. Number two, in certain times, having the amount of cash creates the opportunity for either an acquisition, for either an investment, distressed investment that creates value. For also entering into opportunities where we are going to create construction opportunities to the construction team, and at the same time, create value through infrastructure investment. Basically, we are creating another platform with a decent size that makes a difference, whether in our region in the Middle East, or in our region in the U.S., or with our partners of P6. Last but not least, I believe that it is our major shareholders' intent, and they have been putting pressure on us along all the time, and they created the discipline of dividends. Obviously, once the steps are done through the general assembly and the merger will take place, a very clear dividend policy will be announced so that our shareholders are aware of the way forward as far as that issue is concerned. I do not want to extend my introduction. This is your time to ask a lot of questions, and we appreciate that there is a lot of questions to be asked, and we are here to be able to respond to those. Please go ahead, and Hesham, if you could start organizing that. Great. Thank you for the introduction, Osama Abouemsha. Ellie, can you please give the instructions on the question by phone? In the meantime, we will wait for any questions through the webcast. We are now opening the floor for question and answer session. If you would like to ask a question, please press star followed by 1 on your telephone keypad. That is star followed by 1 on your telephone keypad. We will pause for a brief moment to wait for the questions to come in. Your first question comes from the line of Mark Adeeb of CI Capital. Your line is now open. Hi, everyone. Thank you for the call. A few questions from my end, if I may. Can you please quantify the $1.3 billion valuation for OCI? What is the sum of the parts behind it? My second question, how is the merger strengthening the balance sheet with OCI currently having a net debt balance on its books? For the valuation, we cannot break it down, but what I can say is that the valuation basically was reached through a combination of a multiples approach as well as the DCF. Details are in the shareholder circular that was posted on our website. This valuation that is done by BDO took into consideration due diligence findings on legal, financial, and tax side that was done by White & Case and KPMG as well. As far as the- Just to clarify this $1.3 billion valuation, as a shareholder, how can we look into this? It is the sum of parts of the business of OCI N.V., being the shares that they hold for Methanex, the deal that they recently signed with AGROFERT on the terminal, the OCI Nitrogen plant ongoing concern valuation, as well as the finalization and the partial release of funds post the blue ammonia plant finalization. So that is the combination for the sum of parts of OCI N.V.. I think to answer also your question about the net debt, I think it is a matter of timing, because we believe that towards the latter part of the first quarter, the execution of the sales of the tank will take place, and also the realization of some of the closures of some of the issues that are working on whether the blue ammonia and other things. Plus the fact that there will be also a disposable asset such as the Methanex shares. So these things, it is a matter of timing as far as we are concerned. But what you have seen is the September 30 reflection of the situation of OCI. All right. Thank you. Your next question comes from the line of Nour Sharif of Arqaam Capital. Your line is now open. Yes, thank you for the call. My first question on the expansion at the Orascom infrastructure and capital. How much of the $1 billion announced is expected to get deployed in each angle? Let me explain. I think the structure that we intend to have is that there will be a pillar that controls the cash. We will have eventually a decent amount of deployable cash between what OCI brings, plus whatever is available outside the construction operation at OC level. That will be quite a big value that what we call capital or Orascom Capital will be managing. Orascom Capital, based on the decisions made by the investment committee or executive committee, we will be placing our investments and our concessions in what we call the infrastructure role. Basically, any money that is deployed for the sake of concessions, for the sake of infrastructure investment, will be deployed from Orascom Capital and the jurisdiction of, let's say, our ownership or the subsidiary that owns that will be under the infrastructure pillar. Basically, it won't be like three different companies, but that's a differentiation of roles, and basically so that if we don't have particular infrastructure opportunities, Orascom Capital will be in charge of managing the treasury and either indicating to management and to the board if there is deployable cash for dividends or we are creating the maximum returns for the group in the meantime. Thank you. On Orascom Capital, do you expect to hold minority stakes in other companies? Is this part of the strategy? No, I think Orascom Capital will be strictly managing the cash that we have. We are planning to do a global cash sweep in order to maximize returns. Again, this will be more of a hypothetical structure because we would like to keep, let's say, for example, our ownership of Besix is in our tax optimized location. We will not move that in order to keep that. But it will be managed by that hypothetical pillar. Clear. In terms of timeline for deployment of cash, can you give us some details about should we expect, let's say, 50% in 2026, then another 50% 2027? Should we expect incremental income from such deployments for the next three years? That's a very good question. Since the announcement, we're very actively seeking opportunities separately as the OCI team and OC team. We haven't determined a particular single opportunity yet, but obviously, our target is to deploy the cash within, let's say, the next 18-24 months. It should most of it come under the infrastructure business, the concession? Obviously, unless we find an opportunity of an acquisition that falls under a different pillar. But, in essence, the general trend is yes, under the infrastructure pillar. Would that mean that these concessions will be up and running, or that's a greenfield project? Well, it depends. Again, we are focused on the best return for the shareholders. Obviously, if there is a brownfield opportunity that has the right ingredients for the returns and also for growth, because a brownfield concession that has no growth, it's a DCF valuation. But we would like to see opportunities where there is potential growth. I mean, obviously, we will look at both. But from our experience on the OC side, greenfield has much higher returns on the short and the long run than brownfield. But again, never say never. We will look at both, but we would prefer greenfield opportunities with growth potential. Clear. Given the strategic overhaul, do you expect any change in the stake of Besix either exiting or accumulating? Well, actually, again, that's something that we will definitely put on the table because we will definitely have enough cash to move the needle there. But I would rather really invest our cash into longer term reoccurring revenue infrastructure opportunities. I mean, we can grow the construction business if we want to continue to grow that, but we would like to grow quality contracts. It's not just a matter of size. Okay. In terms of geographical expansion, in terms of capital deployment, is it more towards MENA or U.S.? Look, we will focus on jurisdictions that we have boots on the ground, which is basically the Middle East and the States as a start. We will not oppose opportunities jointly with Besix in Europe, provided that they bring the right returns, because we see that some of the concessions in Europe do not have the returns that we see in the Middle East. But again, one of the things that we are proud of is that we, as a group, have the flexibility to evolve and to adapt to the market conditions. I think that will not change. Actually, that will become an asset with the cash that we have in our war chest. That's clear. My last question on the concessions. Currently, I think that the concessions generate around $15 million-$20 million. Can we have an indication on where this should go, let's say, in two to three years? With the portfolio that we have today in 2027, the target with the current portfolio, it is expected to contribute around $18 million to our bottom line. That's with the current existing portfolio that we already invested in. For you to also to know that we have announced that we are part of the 900 megawatt development that we're looking at, and we believe that will achieve FC sometime in 2026. But again, as Reham is mentioning, we are talking about our current portfolio. What we really need to also look at post our general assembly is what we would like to achieve as a target for the combined then. The figure that we just shared includes the 900 megawatts that Orascom referred. Clear. Thank you so much. Again, if you would like to ask a question, please press Star followed by one on your telephone keypad. That is Star followed by one on your telephone keypad. As of right now, we do not have any pending questions in the conference line. I would now like to hand back the call to the management to address any questions that we have in the webcast. Thank you. Our first question, other than common ownership, the two businesses have no operational overlap. What is the strategic rationale for merging Orascom Construction with OCI Global? First of all, the rationale here is that we are going to acquire a war chest of additional cash that would allow us to change the size and the scale of our investment in infrastructure. Again, I have to say, size matters in this business. It will be our ability to look at different ticket sizes, maybe sizes and concession where we can consolidate, because obviously if we do not consolidate, we are looking only at a DCF valuation for our concession. Our concession portfolio will only make sense as a disposable asset if we need to, if it has the scale. Today, we are very happy with what we have, but unfortunately, it doesn't have the scale, and we would like to start seeing that scale. The additional part, which I think is even more important than cash, is the human capital. The quality of the team that is going to join us is, number one, we know a lot of that team, and we were all one team in the past. Second, what they have achieved over the last 10 years from M&A, financial arrangements, from even disposing the assets, have shown great acumen. Today, I think the best asset is human capital. We are very excited to create a team that is, let's say, unmatched in a similar organization like ours. It will only be matched in an investment bank or a financial institution. Our next question. Can you explain why combining Orascom Construction with OCI N.V. is the best option for Orascom Construction shareholders as opposed to a rights issue at the Orascom Construction level to raise the capital needed for future growth? That's a very good question. Obviously, we could have made a rights issue, but at the same time, if we ask for a rights issue to do that, we will be asked, why do you have the rights issue today? We will be asked what is the pipeline? We will be asked, why is that size? I don't see that the questions for a rights issue will be different than the questions that we have currently right now. It will end up to be also, I would say, the same result. Some people will be excited about the opportunity and some others won't. There could be a similar dilution if I were to want to do that. But I think the possibility of a rights issue doesn't bring the human capital that we are getting with this team. Unfortunately, it will strictly be cash, and it will be limited cash. I don't think we'll be able to get a similar size cash with the rights issue north of a target of $1 billion. We will never get the human resources that we will acquire there. That also has banking relationships, international staff, whether in the U.S. or in Europe or in the region. I believe we are changing or evolving the nature of the new business to become technically a multinational, a multi-geography, with a lot of expertise, with the scale that's needed in the next phase. Our next question is along the lines of the previous two. This one, a bit more detail on asking whether we can quantify any growth synergies from this transaction, and whether there will be impact on the top and bottom line going forward. Obviously, there will be an impact on the bottom line. If we look simplistically at the returns we will get with this excess cash, will definitely improve our bottom line. Having said that, I think that we need to have a more of a long view of what this new platform can achieve. Look at VINCI. VINCI is mainly a construction company. Today, you see VINCI Airports, you see VINCI Highways, and you see the amount of cash and the multiplier that VINCI is looked at. It will give us also the depth and the breadth to be able to go head to head with larger investors such as Meridiam, such as Vinci Concessions, such as Eiffage, even in the States. We believe that this gives us the right war chest to do that. Not only in the rest of the world, even in Egypt today, there is a huge program for airport concessions. Any airport you are looking at, particularly the ones that we will be looking at, that you need to add a terminal. Any terminal for a few million passengers, you're looking at an investment or a CapEx of $300 million-$400 million. Again, it is basically creating a platform that puts us ahead of everybody in the region and puts us really in a good position for the next phase. We would like to grow and we would like to continue to have quality growth, not strictly growth in the construction business, but also in a much higher return opportunity. Next question. Given the accelerating convergence between AI and the energy sector, particularly oil and gas, how is Orascom Construction positioning itself to capture value from this trend? Could you share your expansion plans, geographies, and whether Orascom Construction remains open to opportunity-driven expansion beyond predefined regions? Okay. These are two questions. If we talk about AI and energy, definitely we are adopting any AI development that is happening in the market. Our U.S. business is probably the most part of the group that is way ahead of the rest of the divisions in that particular field, due to the fact that digital utilization in construction is much more in the U.S. than the rest of the world. But obviously, today, we are adopting a lot of the AI solutions, particularly in what they call in the construction methodologies of, let's say, avoiding conflicts, BIM, VDC, and all that. That's being adopted. As far as the energy is concerned, obviously, we will definitely look into that, and we are definitely not opposing any investment in that field that combines both AI and energy management. That would also create value to our shareholders. We are looking in all and every opportunities that we have right now, due to the fact that we believe that hopefully by first quarter next year, we have the war chest to do that. As far as jurisdictions is concerned, our plan is to continue to expand in the U.S. We believe the opportunity is there, the construction market is there. And obviously, infrastructure opportunities are not, let's say, small. And that's why the size matters there, so that we are able to get a stake that makes sense to the group. I indicated that. We are continuing to look at the Middle East. We will also look jointly with Besix if there are investments in infrastructure that we can look into Europe, provided that they bring the right returns and they cross the threshold that we are looking at. Next question. Appreciating that the dividend policy will be detailed post-merger, can you clarify whether capital returns remain a core pillar of the combined group's capital allocation philosophy, particularly in light of OCI's historical distribution-led approach? I'll tell you, absolutely, it will be, let's say, a core pillar in our cash allocation moving forward. We have been at the OC level in the last few years, disciplined by making twice dividends every year. I believe that OCI has the same discipline. I have to say that our major shareholder, if we are not delivering the returns, he would definitely suggest that we make a dividend to be able to use the cash for other investments. I think we will be under pressure, not only from the minority shareholders, but also from the family, to continue to disperse dividends to the shareholders as part of our policy moving forward. Our next question. We understand that the common shareholders are not allowed to vote at the EGM. What will Orascom Construction Management do if the proposal is rejected? Will a rights issue be considered? Can you repeat that again? It is our understanding that the common shareholders are not allowed to vote in the EGM. What will Orascom Construction Management do if the proposal is rejected? Will a rights issue be considered? Number one, we have to respect the votes of our shareholders. That's not an issue. I think we need to assess, number one, the opportunities ahead of us, and we need to look at our path forward. Quite honestly, I haven't thought of a rights issue because I don't believe a rights issue will allow us to get the size of cash that we will be bringing. We need to reconsider that and reassess our path forward. But we will respect the opinion of our shareholders. We have to do that. Next question. The actual liquidity you will be acquiring is the proceeds of the terminal sale. Can you please quantify the net versus gross proceeds? Also, what are your plans regarding the Methanex stake sale? I cannot comment on the Methanex shares right now, because that will be something that we will opine on once we become a combined entity. But I believe that beginning of Q2, we will probably, with the cash, with the EBITDA coming from the construction, we will be having a gross cash of maybe more than $2 billion. Again, that shows the size that we will be at. But I cannot comment on anything related to OCI prior to the combined entity being voted. Our next question. Why not pay out a special dividend to shareholders prior to completing the deal, especially now that several issues are passed and OCI will provide almost $1 billion of cash once the deal is completed? One important factor is that if a dividend is paid, it will affect the valuation of OC. What we have worked with BDO, we gave them information, we gave them details, we gave them data in order to achieve the number we have indicated in our press release, which I think it's very close to the target indicated by the analyst. Any leakage from a special dividend will affect the ratio, will affect the combination. I think, probably, maybe this is something we discuss with the new board. Do we need to make a dividend offer post the combination? Before that, I think that the shareholders are benefiting from the valuation achieved by BDO for OC shares. That's my opinion. Obviously, other people could disagree with me. Our next question. We're combining them. How much liquidity will the clean ammonia add given the recent upward revision of the project CapEx? Why not wait for the sale of the OCI Nitrogen business to make sure that it serves the combination rationale of acquiring a sizable war chest? To be honest, I think, first of all, the valuation of the 1.3 has incorporated, let's say, the worst-case scenario in OCI's completion cost for the clean ammonia. That's number one. Number two, I think also there is a logistics issue. What we would like to do is to be able to have a complete year with the combined entity for 2026. Waiting for that will create a lot of fiscal and logistical problems. When we combine the entities, when we have a quarter or two as OC and as OCI, then we combine the accounts and all that. We felt also we would like to streamline management time in order to focus on our future, what we would like to achieve, rather than manage the logistics of having two entities closing one or two quarters and then combining them. You might not think that's important, but trust me, that's a lot of work. We decided on the schedule with OCI that's more important that we free management time to managing our future plan rather than to just continue managing the past. Next question. Would you please elaborate more on the tax implications for the share swap, especially from the OCI Global shareholders' point of view as they receive Orascom Construction shares? How will the Dutch withholding tax be applied, if at all? I think that is an OCI matter. Honestly speaking, I am not an expert to opine on that. I know that also they have a proper structure to deal with that. I think that is a question that should be asked to the OCI management team on that, because that is something that does not affect OCI at this stage. The OCI European nitrogen operations continue to report losses amid elevated raw material costs. Do you expect the business to return to profitability in the near term? Actually, the forecast is that it will have a certain level of EBITDA. Actually, I would say a reasonable assessment was made for OCI Nitrogen in the valuation. Nevertheless, our priority is to look at disposing that asset. It has some antitrust process that has to be followed. I would not take that as a negative asset for next year. It is our expectation that it will return to positive numbers. Again, it was reasonably valued in the numbers that we got from BDO. Our next question. OCI currently reports net debt on its balance sheet. Given this, how should we interpret management's comments about having a cash war chest upon deal completion? As I said, it's a matter of timing. We believe that they will be receiving the cash for the sale of the tank in the Netherlands that was announced a few weeks ago, prior to maybe by end of the Q1. We have the shares of disposable assets of Methanex. Already, that's available. There is either the EBITDA coming from OCI Nitrogen or if we sell OCI Nitrogen. I believe that during the first quarter and the second quarter of 2026, there will be the amount of cash that we are looking at. Our next question. We read today that some of OCI's shareholders are disputing against most of the votes in the general assembly. What's your take on that? Well, actually, we got the news like you. This was on the press in the morning today, so I cannot make an opinion on that. Obviously, all shareholders are entitled to make their own opinion on what's happening. I believe, as I said at the beginning of the call, that OCI, and that was confirmed by our advisors, have followed all the regulations and are under full compliance with what they have to do in the Netherlands. Again, we just have to wait and see how this evolves. But I'm like you, we just saw that today on the news. We cannot, let's say, give you a valid opinion on that. Our next question. Corporate costs seem a bit high for OCI Global. A negative EBITDA of $68.7 million in the first half of 2025. What is the plan there? Actually, OCI have been taking care of their, let us say, G&A, during 2025. The only corporate cost that we are going to take will be, as I said, the team that we believe is unmatched on the corporate finance and the management side, that will add a lot of power to our infrastructure and capital allocation pillars. Obviously, there will be some costs associated with that, but I believe that our size at the time, we will be able to manage that efficiently, during 2026. It is important to flag that this all whole cost included corporate expenses. In the valuation. have been built in our valuation with the transitional phase also. With the headcount. So it's all part of BDO's assessment and the valuation that we disclose. Our next question, could you please clarify if Mr. Naguib Sawiris voting rights in the upcoming EGM regarding the merger? If the proposal is approved in the EGM, is there an envisaged timeline to complete the share swap? Number one, we are going to comply, literally, to the ADX and EGX requirements. According to the ADX and EGX requirements, Naguib Sawiris is not allowed to vote, and he's also not planning to vote. If you have observed from our board decisions, the two representatives of NNS and OCI were recused from even the meeting itself. So that's the plan. I think that if the EGM takes place on the 22nd, which it will, probably, we believe that within maybe a couple of weeks after that, depending on the process and the regulations and let's say, how quickly the Dutch shareholders move, this will be completed within two weeks from the EGM decision. Next question. From a long-term minority shareholder point of view, after waiting for years for all of the divisions to perform well, now there is an immediate dilution of value. I understand that there are deferred tax assets to be utilized, but I struggle to see why this is in the best interest of minority shareholders. Can you give us your and the board's view on this? I have to say that if somebody looked at as a long-term shareholder, I have to say two things. Today, the valuation of OC shares are quite, let's say, rewarding for a lot of the shareholders. The other thing is that the OC valuation also in this merger, takes consideration of even the target valuation that was expressed by the analyst. I believe that from a valuation point of view, the OC shareholders are benefiting from that. But putting the share value aside, I think that part of the nature of the Orascom Group is the evolution and avoiding the status quo in order to grow and create value to the shareholders. We have worked very hard on cement in early 2000s. The cement was disposed. I remember very clear questions, why dispose the cement shares? Why not swap with Lafarge? Everybody said. Every time, I believe that there will be questions of why we are doing this or doing that. But I think that the underlining nature of this group is evolving in order to create value for the future. Our long view is really what's in play. We are not looking at what happens in the next few months or even the next quarters. We are looking at the long view of this group in order to look at what we can bring value. Look at the construction group today compared to where we started in 2015. The same way on the fertilizers. The amount of dividends that they gave to the shareholders and this. I think the question really is, do you believe that this group will continue to create value or not? We have now completed all the questions that have come through the webcast. Any others by phone? As of right now, we don't have any questions through the conference line. Okay. Thank you, Hesham. Thank you. When we have good results, we do not have that many questions. I am glad of the interest and the engagement. As management, we are very bullish about this evolution. We believe that the nature of this group is really in its ability to be flexible and adapt itself to the future. We have been always not only evolving, but ahead of our curve. I think this is the right time for us to be ready to invest in infrastructure or invest in concessions, or if there are opportunities of acquisition, this would allow us to do so that we can have a quality growth and quality expansion, not let us say, do more of the same. We will still continue to focus on the excellence of the Construction Group, the discipline of how we operate the business, and it will allow us to invest with strength in infrastructure where we can build that for ourselves. I believe it is an interesting opportunity, and I believe that the OC shareholders are taking the maximum extent of their valuation ahead of, let us say, achieving that result. We are looking forward that this merger takes place, and we want to really focus on what we can do in the future, in the next few quarters and the next couple of years. Thank you again. We might, if there is a need, reach out to the market after the EGM to share with them the results. Obviously, with the corporate structure that will take place and all that once we get the EGM taking place. We will be happy to accommodate any questions from the market, from the shareholders, at any time. I know it is Christmas time, but still the EGM is on January 22, so there is enough time that we are able to respond to you and to give you all the clarity that you need for the combination. Thank you again, and if we do not speak, happy New Year to everybody. Thanks for attending today's call. You may now disconnect. Goodbye.