Orascom Construction - Initiation of Coverage

Orascom Construction a global contractor not leaving awards to come by chance
A Shift to Egypt to dominate the company`s backlog; securing the highest EBITDA margins`
projects based on the accelerated current nature.
We initiate at a target price of EGP 141.30/share implying a 26.01% upside potential.
Hence, we assign OC a “Buy” rating.
ORASCOM CONSTRUCTION LTD. COMPANY …
THE BEST IS YET TO COME … AN ANTICIPATED SKEWED BACKLOG
TOWARDS EGYPT … GUARANTEES MARGINS ENHANCEMENT
MENA EQUITY RESEARCH | EGYPT
CONSTRUCTION
INITIATION OF COVERAGE | ORASCOM CONSTRUCTION LTD. COMPANY
05 May 2015

ORASCOM CONSTRUCTION LTD. COMPANY …
ONE OF FEW FULLY CAPABLE CONTRACTORS
A demerger is the beginning of a new story for further specialization; OCI N.V
announced on the 16
th
of February that it commenced proceeding to demerge the
engineering and construction group from the fertilizer and chemicals business; a
decision previously announced by the Board of Directors on the 6
th
of November. The
demerged construction group known as Orascom Construction got dually listed on
NASDAQ Dubai and the Egyptian Exchange. The demerger resulted in a USD 1.4bn
reduction in OCI N.V.`s share capital whereby each shareholder for OCI N.V received one
share in Orascom Construction for each two held in OCI N.V as of a record date of 6
March 2015. Currently the global nitrogen, methanol and other natural gas base
chemical derivatives group will continue to be listed on the Euronext Amsterdam; while
OC became dually listed on NASDAQ Dubai and the EGX as a global engineering and
construction group encompassing Weitz, Contrack and BESIX.
A Leading international engineering and construction contractor characterized by
extensive capabilities. Orascom Construction is a general engineering, procurement and
construction contractor that designs the assigned and awarded projects, proceed to
installation, then shifts to procuring the necessary materials and fully construct with an
increasing ability to handle the different projects sizes on accelerated timeline
schedules. OC hands the assigned projects to their clients ready for operations. Other
cases the awarded projects scope gets larger; turning into a Build-Operate-Transfer
(BOT) and Build-Own-Operate (BOO) contracts; adding the financing role to the
contractor obligations through self financing or in most cases raising debt in addition to
the EPC procedures but with another addition towards the cycle end of operating the
assigned project. In such method of contracting, OC receives its share from executing
the EPC contract in addition to a streamline of fees/revenues from operations based on
the contracts` specifications. OC currently focus on large-scale infrastructure, complex
industrial and high-end commercial projects in its main markets; the United States and
MENA region with more focus on Egypt and Saudi Arabia. OC is characterized by a good
reputation for their awards completion that facilitated building a solid public entities
and government client base, in addition to growing private sector partners and clients.
2015 is estimated to be a reflection for the turnaround that took place in 4Q2014; a
good year ahead with the company`s backlog shifting towards the higher margins`
markets. In 4Q2014 the company was able to achieve the highest revenues in a single
quarter in 4 years of USD 910mn; to take the whole year`s top line to a new level of USD
3,067.9mn registering a Y-o-Y increase of 30.56%. The last quarter in 2014, is believed to
be the first quarter for what is believed to be a real turn around; through which several
valuable contracts were signed among which comes GE USD 642mn project. 2015
started with several huge award assigned to Orascom Construction; mainly coming from
Egypt driving the company`s top line to come in as USD 4,256.8mn to register a 38.75%
Y-o-Y increase. The top line enhancement comes on the back of an estimated USD
6,183.2mn of new awards; out of which several projects are on a fast tracked basis in
addition to a 60bps increase in completion ratio to stand at 36.6%. It is estimated that
the year`s EBITDA will stand at around USD 241.9mn a Y-o-Y reversal from USD
(155.4)mn in 2014; 2015`s EBITDA margin is expected to stand at 5.68% driven by
Egypt`s higher contribution; characterized by proportionally higher EBITDA margins.
CONSTRUCTION
19 March 2015RECOMMENDATION BUY
CURRENT PRICE USD 14.89
TARGET PRICE USD 18.77
UPSIDE 26.01%
CURRENT PRICE EGP 112.13
TARGET PRICE EGP 141.30
UPSIDE 26.01%
THE USD TP IS ADJUSTED FROM THE EGYPTIAN TP BASED
ON AN FX RATIO OF EGP 7.53/USD
SHARE DATA
Ticker ORAS.CA/ORAS EY
52-week range EGP 103.2 – 132.79
2015`s Av. Daily Turnover EGP 18.5mn
No. of shares 118.04mn
Market Cap EGP 13,235.9mn
SHAREHOLDER STRUCTURE
Sawiris Family 51%
Southeastern Asset Management 4.98%
Cascade Investments 5.8%
Free Float 38.2%
Auto SHARE PERFORMANCE (Absolute & Relative)
Since Inception 1M
3.15% 1.2%
Source: Reuters
KEY FINANCIAL HIGHLIGHTS & MULTIPLES
USD mn 2014e 2015f 2016f 2017f
Revenue 3,067.9 4,256.8 5,202.1 4,863.5
EBITDA (155.4) 241.9 334 332
Net Income (96.1) 180.6 248.2 218.5
Revenue gr (%) 30.57% 38.75% 22.21% -6.51%
EPS gr (%) NA 100% 37.80% 12.09%
EBITDA margin (%) -5.07% 5.68% 6.42% 6.83%
ROE (%) -11.85% 16.93% 21.93% 19.63%
EV/EBITDA (x) NA 8.26 6.33 6.30
PE (x) NA 9.54 6.94 7.89
ND/Equity (x) 0.83 0.71 0.79 0.74
EBITDA/Net Int. (x) NA 0.99 0.93 0.98
Source: OC, CFH estimates
All prices are as 4
th
May 2015
Mohamed Marei
Analyst
mmarei@cf-holding.com
+202 27924281/2/3
Please see page 29 for analyst certification and
important disclosure
0
50
100
150
ORAS.CA EGX 30

CONSTRUCTION
2
05 May 2015
SOURCE: COMPANY DATA, CFH ESTIMATES
Egypt`s contribution to backlog is anticipated to be the largest going forward … replacing the United States
The United States percentage of ending backlog in 9m2014 come in as 43.1%, a figure estimated to have reached 44.9% by year end.
However, such huge contribution was mainly accomplished through the large award received for establishing Natgasoline methanol
production complex. An award size not estimated to be replenished going forward, voluntary as the country`s awards margins are
characterized by the lowest EBITDA margins in comparison to other OC`s points of presence. On the contrary, Egypt is promising with
huge quantity of new projects declared and/or planned on an accelerated construction time line basis, due to the country`s need for
power, social infrastructure and industrial projects fast execution to match the country`s anticipated increasing social needs and support
the anticipated economic expansionary. A belief that led to overweighting Egypt`s contribution to backlog by around a Y-o-Y increase of
19% over 2014`s estimated year end contribution of 27% to stand at 46% in 2015; calculated according to the current announced
awards received by OC. Egypt margins are the most attractive due to the current accelerated projects` nature; to stand at an estimated
and guided EBITDA margin of 7.5% in 2015 due to the current presence of other lower margins` projects; that are anticipated to be
turned over gradually coming in correlation with a 50bps forecasted annual increase in Egypt`s EBITDA margin going forward until
reaching 9.5% by 2019.
Saudi Arabia is risky, Algeria is promising and Iraq construction spending status remains vague going forward
In 2015, it is estimated that awards coming from Saudi Arabia will significantly be affected by the current on-going war over Yemen;
estimated to drop by 23% Y-o-Y from 2014`s estimated yearend total awards of USD 650mn. In 2014, an assumed completion ratio of
29% is estimated driving Saudi Arabia`s ending backlog contribution to come at 22.9% a figure anticipated to drop reaching 15.4% by
2015`s yearend mainly driven from the drop in awards. Algeria forecasted path is somehow moderate based on a recent guidance of an
increase for projects` auctions from the government along with the anticipated increase in private sector investments in the industrial
sector. While Iraq is extremely promising due to the country`s economic potential and deteriorated infrastructure status; a market that
might grow to shape a respectful contribution to the company`s backlog, however such assumption will be underweighted based on the
current political and security conditions there.
Due to a 22.41% upside potential, we assign a “Buy” rating for Orascom Construction | Using the DCF valuation methodology for OC,
the company was valued using a 10.7% discount rate for 2015 (and an average WACC over the 5-year forecasted period of 11.1%) based
on a 12.08% cost of equity and a post tax cost of debt of 7.4%. Leading to a 26.01% upside potential above the current market price of
EGP 112.13 (USD 14.89) per share as of the 4
th
of May 2015 implied in our estimated target price of EGP 141.3 (USD 18.77) per share.
Key Financial Data & KPIs
2014e 2015f 2016f 2017f 2014e 2015f 2016f 2017f
Income Statement (USD mn`) Profitability Ratios
Total Revenues 3,067.9 4,256.8 5,202.1 4,863.5 Gross Profit Margin 2.73% 12.68% 13.42% 13.83%
Cash Cost of Goods Sold (2,984.0) (3,716.9) (4,504.0) (4,191.1) EBITDA Margin -5.07% 5.68% 6.42% 6.83%
Gross Profit 83.9 539.9 698.1 672.4 EBIT Margin -10.21% 7.22% 7.58% 7.06%
EBITDA (155.4) 241.9 334.0 332.0 EBT Margin -11.69% 5.80% 6.19% 5.81%
Depreciation & Amortization (87.3) (83.4) (95.9) (110.3) Net Income Margin -3.07% 4.33% 4.87% 4.58%
Net Operating Profit (242.7) 158.5 238.1 221.6 ROIC -2.74% 13.81% 17.27% 14.47%
EBIT (313.2) 307.5 394.1 343.2 ROA -3.22% 4.90% 5.82% 5.37%
Net Interest Expenses (45.4) (60.5) (72.2) (60.8) ROE -11.85% 16.93% 21.93% 19.63%
EBT (358.6) 247.0 322.0 282.4 Liquidity Ratios
Net Income (96.1) 180.6 248.2 218.5 Cash Ratio 0.15 0.20 0.18 0.17
Balance Sheet (EGP mn) Quick Ratio 0.76 0.86 0.85 0.84
Total Assets 2,929.27 3,765.36 4,354.36 4,153.72 Current Ratio 0.88 0.97 0.96 0.96
Current Assets 1,791.60 2,509.65 2,963.66 2,786.76 Valuation Ratios
Net Fixed Assets 234.57 209.49 209.81 210.18 EPS NA 1.56 2.15 1.89
Total Liabilities 2,134.29 2,676.97 3,199.57 3,018.25 DPS 0.00 0.00 0.00 0.30
Current Liabilities 2,044.81 2,577.17 3,089.90 2,914.48 BVPS 7.57 9.22 9.78 9.62
Total Debts [Short- and Long-term] 658.46 767.34 915.27 837.17 CFPS 2.94 4.44 4.70 4.22
Shareholders' Equity 794.97 1,088.39 1,154.79 1,135.46 FCFPS NA 1.55 2.29 2.43
Net Working Capital | NWC (253.21) (67.52) (126.24) (127.72) P/E NA 9.54 6.94 7.89
Cash Balance 308.84 524.20 554.47 498.09 P/BV 1.97 1.62 1.52 1.55
Enterprise Value 1,912.14 1,997.22 2,113.50 2,092.38 P/Sales 0.51 0.41 0.34 0.36
Cash flow (EGP mn) D/Y 0.00% 0.00% 0.00% 2.03%
NOPLAT (38.53) 198.69 275.23 209.05 EV/EBITDA NA 8.26 6.33 6.30
Gross Investment (153.84) (141.48) (152.35) (81.33) EV/EBIT NA 6.50 5.36 6.10
Free Cash Flow (273.65) 183.19 270.82 286.67 EV/Sales 0.62 0.47 0.41 0.43
ND/Equity 0.83 0.71 0.79 0.74 EBITDA/Net int NA 0.99 0.93 0.98

CONSTRUCTION
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05 May 2015
SOURCE: CFH ESTIMATES
Valuation and Assumptions
 Revenues & Backlog Assumptions
Orascom Construction has an impressive year ahead …
Orascom construction has not yet announced its 2014 full year figures; however the 4
th
quarter in 2014 indicated an obvious turning
point, represented in a significant increase in awards we believe its full materialization to take place in 2015.
In Egypt, Orascom Construction awards are anticipated to increase by 3.4 folds in 2015 before dropping by 18% in 2016; however in
2015 and 2016 the level of anticipated awards are expected to be the highest throughout the company`s history of operations in Egypt
mainly driven by the country`s aggressive need for social infrastructure, power and several mega industrial projects. The announced
projects and rewards assisted in providing guidance for the upcoming 2-years, with Egypt economic status, margins and construction
spending expectation providing guidance for the remaining period till the end of the forecasted horizon. OC consortium with General
Electric was awarded the construction of two power plants worth USD 1.05bn to be fully constructed in 24 months, out of which OC`s
EPC share stands at 61.14% equivalent to USD 642bn. OC received advance payments in 4Q2014 equivalent to 25% of its share value, a
portion treated as the company`s implementation in 4Q2014, with the remaining portion to be spread over 21 months ending in
9m2016. Another significant award came in 2014 was the USD 450mn worth of roads and airport work granted to be fulfilled by OC;
such award implementation is anticipated to be divided between 2014 and 2015 on 25% and 75% percentages of completion
respectively. Adding to the previous awards, Metro Line phase 3 Package 4A awarded in 2015 to link Heliopolis with Cairo Int. Airport;
the award value stands at USD 105mn to be fully constructed over 18 months to end by 1H2016 according to the company`s guidance.
Two mega projects added to Egypt`s awards represent 60.48% of 2015`s total anticipated awards; namely OC share of the announced
USD 1.6bn 3 tunnels project in the new Suez canal and its consortium with IPIC to construct phase 1 of the announced coal fired power
plant at an investment cost of USD 3bn to generate 1.6-2GW. OC share of the 3 tunnels Suez canal project stands at 46.8% equivalent to
USD 750bn, a project estimated to be finalized over 4-years ending 2018. In 2015, a completion rate of 10% is anticipated that would
increase to 40% in 2016 taking the aggregate completion rate to 50%. In 2017 another 40% rate is anticipated and for the remaining
10% to be completed in early 2018. Orascom Construction has a 50% EPC share in constructing the coal fired power plant equivalent to
USD 1.5bn to be completed over 3 years. OC will receive revenues from operating the facility after the beginning of operations;
however, that depends on the government awaited tariffs, conditions and terms of operations to be released and depends as well if
another specialized coal-generating power company will join the consortium or not; so for optimizing higher accuracy the revenue
sharing basis was not considered in the assumptions and only OC EPC share was. Another Mega project awarded, that we expect to
materialize on the company`s awards in 2016 is the consortium with Siemens to construct 2 power plants and a wind rotor blade
addition; the total investment cost stands at USD 4.6bn. OC share is assumed to stand at 50% as no detailed indication was available;
the project is anticipated to be finalized by 2018 at yearly equal percentages of completion of 33%. In 2017, Egypt awards are believed
to decline by around 40% Y-o-Y as the majority of the emergency plan will already be executed, and the decline to smooth down
reaching 3% in 2018. Egypt is the company`s highest EBITDA margin point of presence; a margin expected to increase gradually to stand
at 7.5-8.0% in 2015 and 2016 during the critical portion of executing the emergency plan before and to proceed reaching 9.5% by 2019.
As a result of turning over the current lower EBITDA margin projects in the ending backlog as indicated. Orascom recently announced
being awarded with constructing the hanging rail project in cooperation with Arab contractors on an assumed 50:50 basis; according to
the release the project is anticipated to be initiated in 2016 and to end by 2018.
Table 1:
Egypt - in USD mn 2014f 2015f 2016f 2017f 2018f 2019f
Egypt`s Beg Backlog 1185.6 1471.1 3395.2 3609.4 2870.5 2330.5
Egypt`s Awards 1092.0 3720.0 3050.0 1830.0 1775.1 1721.8
Implemented during the year 806.5 1795.9 2835.8 2568.9 2315.1 2019.5
Ending Backlog 1471.1 3395.2 3609.4 2870.5 2330.5 2032.9
Completion Ratio 35.4% 34.6% 44.0% 47.2% 49.8% 49.8%
% of Aggregate Ending Backlog 27.0% 46.0% 49.0% 44.6% 40.9% 38.2%
EBITDA Margin 7.5-9.5% - 7.5% 8.0% 8.5% 9.0% 9.5%
EBITDA - 134.7 226.9 218.4 208.4 191.8

CONSTRUCTION
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05 May 2015
In 2014, implementation value during the year for all the presented countries are assumed as no break down was available; however,
the most reasonable in accordance to the nature of operations and business environment changes. Saudi Arabia, has one of the largest
announced projects` pipeline over the upcoming 5-years; as the Kingdom faces energy problems especially during the peak months of
summer and pilgrims` arrivals in addition to several mega infrastructure and social projects. The current ongoing war over Yemen and
the decline in oil prices that represent a major share of the Kingdom`s budget; have led to assuming a 23% decline in awards in 2015
that are anticipated to grow at a CAGR of 5.74% from 2015 to 2020; a CAGR that would definitely be considered undervalued in case a
faster than expected increase in oil prices over the upcoming years and a political end to the religious and political conflict over Yemen.
The completion rate is anticipated to increase along with the EBITDA margins in Saudi Arabia starting from 2015, mainly driven from
OC`s current status of tendering solely for mega projects besides tendering through its JV with Binladin group. It is anticipated that Saudi
Arabia`s percentage of total backlog will significantly be impacted from 2015 to 2017 before rebounding in 2018; due to the current and
forecasted country status.
Table 2:
Saudi Arabia - in USD mn 2014f 2015f 2016f 2017f 2018f 2019f
Saudi Arabia`s Beg Backlog 815.9 1250.0 1137.5 1077.4 1055.2 1065.6
Saudi Arabia`s Awards 650.0 500.0 520.0 546.0 584.2 625.1
Ending Backlog 1250.0 1137.5 1077.4 1055.2 1065.6 1099.0
EBITDA Margin 6-9% - 6.0% 6.0% 7.0% 9.0% 9.0%
EBITDA - 36.8 34.8 39.8 51.6 53.3
Algeria is a very promising market with lots of potential and a need for spending to develop its infrastructure and power generating
capacities. However, the Algerian government did not use to organize tenders for the desired projects instead a direct assignment to
specific qualified contractors take place; but the government is slightly changing that strategy towards more tenders. A change in
equation that might act for international contractors with huge capabilities as OC, bringing them on equal distance in comparison with
domestic contractors. However, the Algerian private sector assign and tender projects. The value of awards is expected to increase by
double digits throughout the forecasted time horizon, affected by the recent announced infrastructure spending plan and the projects.
at the time of a deteriorated oil and gas sector status, the country’s main source of revenues having generated about 70% of 2012 &
2013 total budget receipts; still the abundance in hydrocarbons and the government`s ability in diversifying the economy would provide
a buffer for infrastructure spending to proceed. OC completion ratio in Algeria is expected to increase gradually before stabilizing in
2017; due to the anticipated increase in OC`s ability to choose and tender over specific projects and to gear up for any increase in
awards. In addition to, the presence of cement production lines` construction awards in the current backlog as such projects are usually
finalized in a 2-2.5 years` horizon. The EBITDA margin forecasted in Algeria is almost stable at the 9% level according to indication.
Table 3:
Algeria - in USD mn 2014f 2015f 2016f 2017f 2018f 2019f
Algeria`s Beg Backlog 83.6 140.0 223.2 279.1 316.3 353.3
Algeria`s Awards 200.0 220.0 242.0 266.2 292.8 322.1
Ending Backlog 140.0 223.2 279.1 316.3 353.3 391.7
EBITDA Margin 9% - 9.0% 9.0% 9.0% 9.0% 9.0%
EBITDA - 12.3 16.7 20.6 23.0 25.5

CONSTRUCTION
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05 May 2015
Rest of the world markets, comprise several countries that have small over crowded markets but Iraq. The company is anticipated to
complete its current operations in Afghanistan with no anticipated increase in awards, with expectations to remain at its lowest levels
due to the high security risk. According to the company`s guidance only attractive high margins projects awarded will be considered after
weighting its risk versus reward matrix. Qatar and Kuwait are not expected to drive the rest of the world aggregate awards higher, as in
Qatar the historical termination act for Sidra Medical Project by OC partner and project majority owner Qatar Foundation after exceeding
95% project completion has led to the consideration of USD 188mn of provisions; an act that do not play on encouraging much future
partnerships due to the foreseen high risk of repetition. In Kuwait, the market is already tight due to good current infrastructure status,
so no significant weight was assigned to neither Qatar nor Kuwait in the anticipated awards. The UAE is characterized by an over-
crowded market as the major international contractors operate in the UAE; however, the government spending capability, announced
projects pipeline including the Expo 2020 and OC strong presence through its 50% JV with BESIX that have established solely and in
consortiums several mega projects as Burj Khalifa and the Ferrari World in Abu Dhabi gives the company an edge of capturing several
awards for itself in addition to an increasing investment income from BESIX exceeding EUR 25mn. Finally comes Iraq, a nation in extreme
security risk, political turbulence and high budget constraints; but throughout the assumptions Iraq is anticipated to contribute by a
significant portion to the rest of the world new awards as according to the company`s guidance most of the company`s competitive peers
have already left the country for its high risk leaving room for OC to capture more awards; especially when the ongoing turbulences and
ongoing war approach an end.
Table 4:
Rest of the World - includes Afghanistan, UAE,
Qatar, Iraq & Kuwait - in USD mn
2014f 2015f 2016f 2017f 2018f 2019f
Rest of the world Beg Backlog 320.5 350.3 370.5 378.0 381.8 397.1
Rest of the world Awards 240.0 247.2 259.6 280.3 302.8 317.9
Ending Backlog 350.3 370.5 378.0 381.8 397.1 414.7
EBITDA Margin 6% - 6.0% 6.0% 6.0% 6.0% 6.0%
EBITDA - 13.6 15.1 16.6 17.3 18.0
MENA & Rest of the World table below sums up all of the previously mentioned activity excluding the United States, the presented
increase in percentage of aggregate awards in 2015 is mainly driven by the company`s intentions to intensify its focus on the MENA
region due to its high potential and highest EBITDA margins among all; with the major driver being Egypt due to its current political
stability and enhancing economic performance driving the number of projects and spending upward. Starting from 2017, the forecasted
40% decline in Egypt`s awards will partially be compensated by the increase in awards from Saudi Arabia and the remaining markets
with an anticipated decrease from the USA which will help in maintaining the awards skewed towards the MENA region going forward;
hence, an anticipated higher EBITDA margin.
Table 5:
MENA & Rest of the World Aggregates - in USD mn 2014f 2015f 2016f 2017f 2018f 2019f
Add: Beginning Backlog Balance 2405.6 2997.3 4912.2 5129.8 4409.7 3932.3
Growth -24.7% 24.6% 63.9% 4.4% -14.0% -10.8%
Add: New Awards 2182.0 4687.2 4071.6 2922.5 2954.9 2987.0
% of Aggregate New Awards 46.7% 75.8% 78.4% 74.3% 78.5% 79.0%
Less: Implemented During the Year 1590.3 2772.3 3854.0 3642.6 3432.2 3195.1
Growth in Implementation 35.7% 74.3% 39.0% -5.5% -5.8% -6.9%
% of Aggregate Implementation 51.8% 65.1% 74.1% 74.9% 76.3% 76.9%
Ending Backlog 2997.3 4912.2 5129.8 4409.7 3932.3 3724.2
Ebitda margin 7.4-10.1% - 7.12% 7.62% 8.11% 8.75% 9.03%
Ebitda - 197.4 293.5 295.3 300.3 288.7

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05 May 2015
The United States, a country with a stable and solid growing GDP that promises a huge potential in terms of the declared new contracts`
awards announcements and forecasted upcoming construction spending. However, Orascom Construction provided a guidance that the
company will voluntary work on decreasing the USA contribution to total backlog from the 9m2014 level of 43% to stand at below the
30% level. As the company faces high corporate tax rate of 40% on its 2012`s acquired subsidiary Weitz in addition to that the margins
have generally been low and are anticipated to be maintained at that level. However, by the nature of Weitz presence in the market,
operations and awards in and from the United States will continue to exist but at lower levels.
Table 6:
USA - in USD mn 2014F 2015F 2016F 2017F 2018F 2019F
Beginning Backlog Balance 1434.3 2450.0 2461.5 2235.3 2024.3 1766.6
Growth -14.3% 70.8% 0.5% -9.2% -9.4% -12.7%
New Awards 2493.3 1496.0 1122.0 1009.8 807.8 791.7
% of Aggregate New Awards 53.3% 24.2% 21.6% 25.7% 21.5% 21.0%
Implemented During the Year 1477.6 1484.5 1348.1 1220.8 1065.5 962.5
Growth in Implementation 25.4% 0.5% -9.2% -9.4% -12.7% -9.7%
% of Aggregate Implementation 48.2% 34.9% 25.9% 25.1% 23.7% 23.1%
Ending Backlog 2450.0 2461.5 2235.3 2024.3 1766.6 1595.8
EBITDA margin 3-3.5% - 3.00% 3.00% 3.00% 3.00% 3.00%
EBITDA - 44.5 40.4 36.6 32.0 28.9
Table 7:
OC Aggregate Backlog - in USD mn 2014f 2015f 2016f 2017f 2018f 2019f
Add: Beginning Backlog Balance 3839.9 5447.3 7373.7 7365.1 6434.0 5699.0
Add: New Awards 4675.3 6183.2 5193.5 3932.3 3762.7 3778.6
Less: Implemented During the Year 3067.9 4256.8 5202.1 4863.5 4497.7 4157.6
Ending Backlog 5447.3 7373.7 7365.1 6434.0 5699.0 5320.0
Blended EBITDA Margin - 5.68% 6.42% 6.83% 7.39% 7.64%
EBITDA - 241.9 334.0 332.0 332.2 317.5
 CAPEX
No projects under implementation capital expenditure are anticipated throughout the forecasted period, as nothing was declared to
take place. However, an annual increase of 10% is anticipated in other fixed assets in 2014 and 2015, and to increase to 15% from 2016
till reaching 2019 in time with the increasing operations and accumulated depreciation.

CONSTRUCTION
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05 May 2015
 Downside Risks
 Lower than anticipated new contract`s awards from Egypt, and the risk of a volatile period in the Egyptian economy before the
anticipated expansionary period becomes effective.
 Lower than anticipated completion ratios for Orascom Constructon`s assigned projects; hence lower implementation rates
driven from the inability to fulfill the newly assigned projects in Egypt in the assigned accelerated time frame that represent 60-
80% of the standard implementation period in response to Egypt`s emergency plan; mainly due to the increase in overhead,
wages and other costs in addition to the unavailability of more construction equipment to work simultaneously.
 A further than expected intensified security conditions in Saudi Arabia due to its border-to-border with Iraq and Yemen and a
more severe war over Yemen that would affect the government spending, hence affecting the number of anticipated new
awards and OC in relation.
 A slower than anticipated rebound in oil prices over the upcoming years, would adversely impact the expected construction
spending in Saudi Arabia, Iraq, Algeria and the UAE.
 Orascom Construction`s inability to perform its backlog shift from being dominated by the United States representing 43% in
9m2014, to Egypt mainly and other MENA region countries. Hence, a failure in obtaining higher EBITDA margins.
 The risk of an un favorable outcome from the Egyptian Tax Authority appeal, after OC was fully exonerated by the public
prosecutor of tax claims related to the USD 15bn sale of Orascom Building Materials Holding S.A.E to Lafarge in 2007; given that
OC has reversed the tax liability with no provisions reserved in case the appeal did not end in the company`s favor.
 The risk of an unfavorable outcome concerning the arbitration case referred to UK court related to July 2014, termination notice
from Qatar Foundation for the USD 2.4bn 95% completed contract awarded for the Sidra Medical and Research Centre in Doha
to the JV consisting of Obrascon Huarte Lain (OHL-55%) and Contrack (45%)(OC`s Subsidiary) in February 2008. In accordance to
the dispute, OC has already reserved USD 188mn of provisions of which USD 166.5mn represent the carrying amount and
another USD 21.5mn of expected losses.
 Upside Risks
 More than anticipated new awards mainly from Saudi Arabia in first place, Algeria and Iraq. Leading to a faster than expected
increase in such markets contribution to backlog.
 Higher than estimated EBITDA margins; Egypt margins to proceed at higher than 11% EBITDA margin going beyond 2016 and
same for Saudi Arabia. And for the USA to exceed the 3% estimated EBITDA margin going forward after finalizing the mega low
margins` projects contributing largely to the current backlog.
 A political end for the war over Yemen that would halt the estimated high risks for Saudi Arabia security conditions and secure
the announced spending with no war spending burden on the Kingdom`s budget.
 The end for the religious and civil conflict and war in Iraq that would definitely push spending and construction projects higher;
hence directly impacting Orascom Construction amount and value of new awards as its among the few contractors remaining to
fulfill projects in the Iraqi market undertaking the persistent high risk and waiting for higher rewards.
 An accelerated rebound in oil prices, pushing spending in MENA region higher to exceed the assumptions and secure the pre-
announced projects` pipeline execution.

CONSTRUCTION
8
05 May 2015
CHART 1:
MENA REGION CONTRACTS` AWARDS FROM 2009-2014E
SOURCE: MEED INSIGHT, MEED PROJECTS
CHART 2:
2015-2020 PIPE LINE VS. 2009-2014E
CHART 3:
2015-2020 PIPE LINE VS. 2009-2014E
Global & Regional Construction Status …
MENA Region … Increasing population, Low-to-Medium quality infrastructure … A buffer to grow
The principal markets in the MENA region, where Orascom Construction focus on are mainly Saudi Arabia, Egypt, Algeria, Iraq, UAE and
to a certain extent Qatar as well. Those markets have outstanding characteristics in comparison to other emerging markets in terms of
an aggregate high population of around 50% of the region`s population that is growing at faster paces than others, along with high
unemployment rates. The fast growing population in those countries drives the need to boost spending on utilities, social infrastructure
and to increase investments in transportation services. The anticipated increase in infrastructure and utilities spending is considered to
be a must in the upcoming period not only to cope with the increasing demand but to substitute a historical underinvestment.
Middle East & North Africa Projects anticipated pipeline from 2015 to 2020 stands at USD 1.4trn excluding all oil & gas projects; 2.13
folds up from 2009-2014 pipeline of USD 657bn.
From 2009 to 2014E around USD 656.7bn of contracts awards have
been allocated to the represented countries in chemical, transport,
construction, power, water and transport industries; spread over a
large horizon of sectors; among which the most important are the
commercial, infrastructure, residential, hospitality, healthcare,
transmission and treatment projects. Awards have been increasing at
an increasing pace historically until 2012 came, where the effect of
the Arab Spring had its shadow taking over the governments
activities; a year the political turbulences’ materialized causing a
22.31% decline in new contracts awards to stand at USD 101bn down
from USD 130bn in the previous year. A position that was slightly
reverted in 2013 reaching 2011 awards value once again of USD
130bn; due to several reasons the relative stability in the ruling
regime and political conditions in Saudi Arabia that shaped 49% of the
picked countries new awards, contributing by USD 63.7bn. Saudi
Arabia`s awards increased by 43.3% in 2013, while the UAE came in
2
nd
place in terms of contribution and in 1
st
place in terms of the
increase in new awards by 31% and 47.8% respectively standing at
USD 40.3bn. While Egypt`s new awards dropped by 74.1% in 2013
reaching around USD 2.6bn due to the heavy political turbulences
during 1H2013 until the ruling regime was changed. However, the
economic performance remained in a stagnant stage, resisting
towards an uptrend until 2H2014; when an economic outlook
enhancement slightly materialized in around USD 5bn of new
awarded contracts taking 2014 total contracts awarded to stand at
around USD 7.6bn.
The Saudi market currently has the largest anticipated pipeline for the
upcoming 5-years horizon; represented in a USD 674bn of new
awards. The Saudi market offers a huge potential for OC to capture a
respectful percentage. However, with the risk of a continuing
deterioration in oil prices that might increase pressure on the
government spending plans in addition to the on-going war in Yemen
Republic; such investments` outlook might be postponed or extended
over larger time horizon. The UAE follows anticipated awards of USD
465bn driven by a planned infrastructure spending program as well as
for preparations concerning the Expo 2020 and other tourism and
commercial projects. Egypt comes in 3
rd
place in terms of the
anticipated pipeline of USD 157bn worth of new projects; driven by
the Suez canal project, power plants, roads` network in addition to
the massive new capital city to be established. Iraq has a USD 102bn;
that depends on the current security conditions to be implemented.
674
465
157
102
35
1,433
657
Saudi Arabia
UAE
Egypt
Iraq
Algeria
MENA 2015-2020
MENA 2009-2014
9.4 12.8 11.7 9.1 2.6 7.6
40.4
50.3
65.0
44.4 63.7
34.6
37.6
34.2
23.4
27.3
40.3
41.2
2.8
4.3 5.2
9.1
13.0
6.6
3.8
5.4 24.7
11.1
10.4
2.8
0.0
20.0
40.0
60.0
80.0
100.0
120.0
140.0
2009 2010 2011 2012 2013 2014E
Egypt Saudi UAE Algeria Iraq
674
72
29
344
272
43
47%
5%
2%
24% 19%
3%
0
200
400
600
800
Const. Chem. Industrial Power Transport Water
0%
50%
100%
2015-2020 Estimated New Projects Awards By Sector-LHS
Contribution-RHS

CONSTRUCTION
9
05 May 2015
CHART 4:
EGYPT`S CONSTRUCTION VALUE & CONSTITUENTS – EGP BNS
SOURCE: CBE, CFH ESTIMATES
CHART 5:
EGYPT CONTRACTS` AWARDS 2009-2014E – USD BNS
SOURCE: MEED INSIGHTS, MEED PROJECTS, CFH ESTIMATES
CHART 6:
2015-2020 PROJECTS` PIPELINE BY SECTOR – USD BNS
SOURCE: MEED INSIGHTS, MEED PROJECTS, CFH ESTIMATES
Egypt … A Populous country, trying to catch up and compensate its historical
underinvestment …
Egypt is one of the largest markets in the MENA region, with a population exceeding 90mn growing at an average net growth rate of 2%
per annum. Egypt is characterized by relatively a high unemployment rate, currently standing within the 13.0-13.2% range with
expectations for that range to drop on an accelerating pace in correlation with the increase in investments and mega projects correlated
with the necessity of securing more temporary and permanent jobs to ensure the sustainability and improvement of one of the most
diversified economies. A reverting path towards enhancement that we believe in its occurrence after several years of severe strikes
leading to turbulences in the country`s political stability and economical welfare.
Egypt`s GDP has been growing on double digits nominal growth rates
over the past two fiscal years; where the industrial and other activities
influencing the economy were still in relative paralysis, that started
regaining the normal operations partially reaching the end of FY2014.
Hence, an anticipation of a double digit growth for the upcoming years
is to take place, while the foreseen drop in core inflation rate from its
current levels will be pushing the real GDP growth rates higher after
already dropping by 190bps Y-o-Y to stand at 7.21% in April 2015.
Egypt`s construction industry value reached EGP 88.9bn (equivalent to
USD 12.5bn) in FY14, up by 15.88% over FY13 value of EGP 76.75bn
(Equivalent to USD 11.2bn). The total construction and building
spending has been standing at an average of 4.5% of GDP from FY09 to
FY14, a percentage anticipated to increase to an average of 4.62% for
the fiscal years from 2015 to 2019. The contribution of the private
sector spending is anticipated to drop from an average of 88.25% in the
historical period from FY09 to FY14 and anticipated 88.39% FY15 to
87.58% in FY19. While the remaining portion will represent the
increasing contribution from the public sector in spending over
construction and building that is anticipated to grow at a CAGR of 18%
reaching an estimated value of EGP 23.4bn by the end of the forecasted
horizon.
Egypt`s fiscal position is forecasted to witness gradual improvements
over the upcoming short term time horizon; derived from relatively
declining expenditures on oil derivatives resulting from the current
lower prices, the fuel subsidies reform that took place with anticipation
of further subsidies` cuts to subsequently take place. Boosting the
industrial activities as well as working on tourism sector strong revival
while increasing the tax receipts through a better collection system will
all add to a better fiscal position. Such healthier fiscal governmental
path will assist in growing the infrastructure and construction pipeline
even further than the announced and estimated range of USD 157.4bn.
In line with a declining fiscal budget deficit that is estimated to shrink
reaching 11.3%-10% according to the World Bank estimates and the
Finance Minister respectively, down from 12.4% of GDP registered in
FY14 versus 13.8% in FY13.
9.4
12.8
11.7
9.1
2.6
7.6
53.2
2009
2010
2011
2012
2013
2014E
2009-2014E
85.0
6.3
1.6
26.8 24.4
13.4
54.0%
4.0%
1.0%
17.0% 15.5%
8.5%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
0.0
20.0
40.0
60.0
80.0
100.0
2015-2020 Estimated Egypt New Projects Awards By Sector-LHS
Contribution-RHS
38.9 46.3 52.9 59.5 67.8 78.7
91.3
106.8
123.9
143.1
165.3
5.2
6.3
7.2
7.9
8.9
10.2
12.0
14.4
17.0
19.9
23.4
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
0
20
40
60
80
100
120
140
160
180
200
FY09 FY10 FY11 FY12 FY13 FY14 FY15f FY16f FY17f FY18f FY19f
Private Spending
Public Spending
T. Construction & Building Spending % of GDP -RHS

CONSTRUCTION
10
05 May 2015
SOURCE: EEDC, BMI
The Egyptian Government aims to enhance the private sector confidence in the Egyptian economy while directing focus
on several catchy investments …
The Egyptian government has lately been putting extensive efforts in action to encourage the private sector to pour more investments
in Egypt on the back of an announced new investment law that guarantees rights and inform concerning obligations along with a well
known taxation scheme along; adding to that the improving security and political conditions. The Egyptian government took procedures
to promote Public Private Partnerships (PPP) as a mean for hedging against certain country specific risks and minimizes projects and
performance risks to increase investments in infrastructure; the common adopted models include Build-Operate-Transfer (BOT) and
Build-Own-Operate (BOO) mainly for projects targeting power, Transport and water projects.
Egypt`s Future Hunt starts with an integrated and well diversified capital investments` and projects` plan …
The USD 8.5bn expansion of the Suez Canal project announced in August 2014, which is currently under construction with plans to be
finalized by the end of 2015; was the first announced mega project in line of a series of many others that followed. As the Suez canal is
the gate for around 8% of the world`s see trade generating over USD 5bn of revenues that will definitely increase after finalizing the
widening process that allows ships to transit in both directions simultaneously as well as increasing the depth to 24m. An expansion plan
that is considered the seed for a 76K Sqm industrial and logistics hub that has a master plan of turning Egypt into a storage and trading
global center.
Transport Infrastructure investments … come after a period of severe underinvestment and reflect a positive outlook
Egypt has been ranked 100 of 144 in infrastructure quality according to the World Economic Forum`s 2014 Global Competitiveness
Report due to the country`s partially depreciated transport infrastructure to a great extent. As a result of an increasing lack in investing
in such sub-sector over the past 5-years. A trend coming to an end after an indicated political awareness concerning the matter that was
quite well represented in the previous Egyptian Economic Development Conference during which the announcement of new
investments on roads, ports, railways and airports at an estimated value exceeding USD 32bn including the Suez Canal USD 8.5bn
investment. The below table shows only a portion of the announced projects that will be taking place in the upcoming period; however
several projects have been excluded from the below list as the table includes only the projects with announced estimated investment
cost and time line.
Table 8:
Egypt`s Transportation Projects - in USD mn Sub-sector Value - in USDmn Size Status-Stage
Al-Minya Civil Airport, Al Minya Airports 2,000 150Km Planning
Borg Al Arab Airport New Terminal Airports 167.7 36Km Planning
Hurghada Int. Airport New Terminal Airports 300 2.9mn Passengers
Under
Construction
Cairo Int. Airport Terminal no.2 Renovation Airports 500
3.75mn
Passengers
Under
Construction
Mashreq Fuel Bunkering Terminal (PPP) Ports 430 881.9K Tons Contract Awarded
Safaga Port Project (PPP) Ports 858 60K Tons Study
Suez Canal Expansion Project Ports 8,500 160Km
Under
Construction
Chanel Parallel to Existing Suez Canal Ports 1,500 50 Km
Under
Construction
Ain Soukhna Port Expansion Ports 69.9 450K TEU
Under
Construction
Suez Canal Container Termina Expansion - East Port Said phase 2 Ports 1,000 2,600K TEU
Under
Construction
Cairo Metro Line 3 - Phase 3 Al Ahram station to El Bohy & Shehab Rail 1,200 7.5Km
Under
Construction
Alexandria-Cairo-Luxor (PPP), High Speed Rail Project Rail 10,000 1,087Km Planning
10th of Ramadan City - Ain Shams Rail Link (PPP) Rail 727 72Km
Under
Construction
Heliopolis New Cairo Tram Line Phase 1 Rail 435 31Km Feasibility Study
New Rail Tunnel Construction under Suez Canal Rail 715 5Km Contract Awarded
Beni Suef-Asyut Rail Line Project Rail 116 - Contract Awarded
Shobra Banha Highway, El Kalubia Roads 331 40Km Feasibility Study
Upper Egypt - Red Sea Road (PPP) Project Roads 419 414Km
Under
Construction
Rod El Farag Highway Extention (PPP) Project Roads 1,000 34Km In Tender
Suez Canal 3 Tunnels Roads 1,600 -
Under
Construction
20 Projects Total 31,868

CONSTRUCTION
11
05 May 2015
SOURCE: EEDC, BMI
Energy & Utilities … Last Chance for securing the population needs along with nearly all the industries involved within
the Egyptian Economy …
Egypt Current Usage of energy stands at around 140-145 Terrawatt-hours (TWh) an amount anticipated to increase annually by around
5-6% to surpass 185TWh by 2020. However, the current national electricity grid goes back to ages with decreasing durability and life
remaining duration to continue on supplying the current and increasing population needs before adding the anticipated industrial
activity increase in the coming period. This led to continuous power outages that significantly materialized in the past 2 summer
seasons; leading the government to step in setting a plan to minimize such outages gradually until reaching a point where the supply
matches the increasing demand. Through adding Coal and other alternative fuels to the usable sources of energy after a declaration
from the Ministry of Environment concerning the environmental risk as a consequence for such decision. Egypt plans to add around 30K
MW of new energy generation capacity as well as expansions and renewals for existing power plants and supply networks. However,
several projects are still in the announcement phase with no designing, planning, studying or feasibility studies provided; leading to their
removal from the below table. Many projects from the announced will get established and operated on an IPP (Independent Power
Projects) basis; waiting for the government to settle on the tariffs, supply and pricing schemes and other terms and conditions. Around
USD 660mn worth of investments in waste water projects are currently under construction among which the main is New Cairo`s PPP
waste water plant; in addition to the promising Abu Rawash treatment plant that is planned to pump 0.5bn m³ of treated water in a PPP
agreement. The water treatment new awards are believed to increase in the upcoming period due to the increasing population and
falling per capita share of water that reached 500m³/Capita according to the United Nations Water Organization.
Table 8:
Power & Water Projects - in USD mn Sub-sector Value - in USDmn Size Status-Stage
Assiut Power Plant Upgrade - Upper Egypt Power 597 650MW Planning
El Shabab Power Plant Capacity Increase Project Power 520 500MW Planning
Gabel El-Zeit Wind Complex - Red Sea Power 1,000 600MW Planning
Coal Fired Powe Plant Phase 1 - Res Sea Power 3,000 3,000MW Planning
El Dabaa Nucleur Power Plant Power 5000 4,800MW Planning
Kom Ombo Thermal Solar Power Plant – Aswan Power 796 100MW in Tender
Abu Qir - Badr City Electricity Link Project Power 183 1,300MW Planning
Open Cycle Turnkey Power Plant - 6th of October City Power 343 600MW Contract Awarded
Nuweiba Combined Cycle Plant - Coast of Aqaba Power 714.2 750MW Planning
Gulf of Suez Wind Farm IPP Project- Cairo Power 178 120MW Under Construction
Wind Power IPP Project - Red Sea Power 550 120MW Contract Awarded
North Giza Power Plant - Giza Governorate Power 2,200 1,500MW Under Construction
Samalout Thermal Power Plant – Minya Power 2,900 3,167MW Planning
Gabel El-Zeit Wind Farm Power 457 200MW Under Construction
Beni Suef Combined Cycle Power Plant Power 2,800 2,250MW Planning
Qena Steam Power Plant Power 250 1,300MW Planning
South Helwan Super Critical Power Plant Power 1,950 1,950MW Under Construction
Gabel El Asfar Waste Water Treatment Plant Water 183 912.5mn m³ p.a Under Construction
Abu Rawash Waste Water Treatment Plant Water 752 511mn m³ p.a In Tender
New Cairo Waste Water Treatment Plant Water 475 182mn m³ p.a Under Construction
20 Projects Total 24,373 22,907MW - 1,423.5mn m³ p.a

CONSTRUCTION
12
05 May 2015
CHART 7:
THROUGH FY19 TOTAL REAL ESTATE SPENDING, ITS % OF GDP CHART 8:
… AND ITS CONSTITUENTS` CONTRIBUTION – IN EGP BNS
SOURCE: CBE, CFH ESTIMATES SOURCE: CBE, CFH ESTIMATES
SOURCE: EEDC, BMI
Residential & Non-Residential Investments
Egypt has an average urbanization rate of 3% that might be moving upward throughout the upcoming years; which drives the
assumptions for residential and non-residential spending increase. The residential sector has been growing on double digit rates
historically; a trend to proceed with the current gap between supply and demand for units mainly driven by the low and middle income
class segments. The private sector has been supplying new units but directed primarily to the higher and upper middle income classes to
enhance the received margins. With the exception of the recently announced 1mn units project, expected to materialize in 2015
through around 100K units’ delivery executed by Arabtec, along with other several communities` establishment plans to be carried on
by the private sector. Another major project is the New Capital City that is anticipated to cost around USD 45bn; to around 5mn capita
such project will strongly add to the spending scheme after final announcements and construction work begins. Other planned social
infrastructure projects include USD 1.3bn for establishing 6 new hospitals across Egypt and another planned USD 9bn residential
projects. Spending from the private and public sector is anticipated to reach a CAGR of 17.3% by FY19f to stand at EGP 60.4bn up from
around EGP 27.3bn in FY14E.
Not neglecting the tourism sector, that is anticipated to show a strong come back after touching down the trough over the past three
years. With the parliamentary elections to take place during 2H2015, the political risk reduction will help enhancing tourists’ confidence
level in visiting the country. Several countries that largely contribute to the total number of visiting tourists as Germany, Italy & Belgium
have eased travel advisories on Egypt that bodes for a future growth in the number of arrivals. The belief in tourism`s rebound,
encouraged the private sector to start planning and pumping investments in the sector`s infrastructure and utilities; as for instance the
Qatari Diar Real Estate Company received approvals for its North & South Sinai USD 2.16bn project in January 2015, to establish new
hotels, malls and residential units and communities.
Table 9:
Residential & Non-Residential - in USD mn Sub-sector Value - in USDmn Size Status-Stage
Logistic Centre 6 of October City Project Mixed 100 5.5K Sqm Feasibility Study
North & South Sinai Mixed Use Development Mixed 2,160 - Approved
The Gate – Cairo Mixed 587 35K Sqm Planning
Nile Corniche Project Commercial Construction 1,000 9.4K Sqm Under Construction
Sawari Marina - Sahl Hasheesh Resort Mixed 444 2.5mn Sqm Under Construction
Secon Nile Towers – Maadi Mixed 210 110K Sqm Under Construction
Sharm El Sheikh Coastel Resort Project Commercial Construction 80 - Under Construction
Mall of Egypt - 6 of October Commercial Construction 642 162.5K Sqm Under Construction
Cairo Gate Retail Project, Cairo-Alex Freeway Commercial Construction 811.3 647.5K Sqm Planning
Emaar Square – Cairo Mixed 862 2.5mn Sqm Under Construction
Integrated Medical City - Madinaty Cit Health Care 385 161.9K Sqm Planning
New Capital City Mixed 45,000 2.8mn Sqm Under Construction
12 Projects Total 52,281.3 8,931.8K Sqm
13 15 17 19 22 26 32
38
46
54
65
12 14 16
18
19
23
27
31
37
43
50
0.4
0.5
0.6 0.6
0.7
0.8
1.6
3.5
6.2
10.6
18.0
0.7
0.8
0.9 1.0
1.1
1.3
1.6
1.9
2.3
2.7
3.2
0
15
30
45
60
75
90
105
120
135
Private Spending - Ownership Private Spending - Business Services
Public Spending - Ownership Public Spending - Business Services
25.4 29.0 32.6 36.4 41.7 49.1 58.3
69.4
82.3
97.1
114.5
1.1 1.3 1.5 1.6
1.8
2.1
3.2
5.4
8.5
13.3
21.3
0.0%
0.2%
0.5%
0.7%
1.0%
1.2%
1.5%
1.7%
2.0%
2.3%
2.5%
2.8%
3.0%
3.3%
3.5%
0
20
40
60
80
100
120
140
160
Private Spending- Ownership & Services
Public Spending- Ownership & Services
T. Real Estate Spending % of GDP-RHS

CONSTRUCTION
13
05 May 2015
CHART 9:
SAUDI ARABIA INFRASTRUCTURE, RESIDENTIAL & OTHER NON-RESIDENTIAL SPENDING
CHART 10:
… AND TOTAL CONSTRUCTION SPENDING % OF GDP – IN USD BNS
SOURCE: SAUDI ARABIA MONETARY AGENCY, CFH ESTIMATES SOURCE: SAUDI ARABIA MONETARY AGENCY, CFH ESTIMATES
Saudi Arabia … The Largest in Anticipated New Projects` Awards & Spending …
But With Increasing Risks Hovering Around …
The security conditions in Saudi Arabia have been worsening over the past months, with consistent threat from Iraq that represents a
huge portion of the Saudi Arabia`s borders with its neighbors in addition to the deteriorated situation in Yemen that turned into a war
zone led by Saudi Arabia as a response to the multiple attacks recorded in the past months. A war that might turn into a regional or
religious conflict across many groups and/or countries is definitely the worst case scenario that might impact the Saudi economy or
spending status for the annual upgrades performed and new projects needed especially the residential and infrastructural ones.
In 2014, the total construction spending came in as USD 39.8bn; out of which 54.7% represented the infrastructure spending while the
remaining portion was divided between residential and non-residential spending. In 2015, it is estimated that the total construction
spending will slightly grow by 4% after a period of double digits growth rates ending by 11.5% in 2014, taking the construction spending
to USD 41.4bn. Construction spending in Saudi Arabia is anticipated to continue on growing at smooth rates in 2016 and 2017 of 2% and
5% respectively before accelerating once again by 2018 to continue in 2019 at 17% and 22% respectively. The forecasted period is
influenced by a force majeure aspect exceeding the oil prices decline that is expected to rebound to the USD 75-80 bpd level within a 2-
years time horizon. But aside from the oil status a more intensified situation over Yemen putting the conservative forecast for
construction spending and the below projects` pipeline in risk of cancellation or delay; while a political solution will definitely push the
value bars upward, regaining the double digits growth rates by 2016/2017.
The Kingdom of Saudi Arabia has the largest economy in MENA region with a GDP of USD 745.3bn reported for 2014, with massive
hydrocarbon reserves standing at 268bn barrels as of the end of 2014 that act as a safeguard along with registered USD 734.5bn foreign
reserves as of the end of January 2015. The Kingdom is characterized by a 30.6mn population that is anticipated to grow at a net
average rate of 2.5% p.a according to the International Monetary Fund and US Energy Information Administration. The Kingdom has the
largest project pipeline in the MENA region dominating most of the sectors` spending in comparison to other nations. The government
made plans for 465 new schools in 2014`s budget, to be added to another 1,544 already under construction along with 11 new hospitals
and 2 medical complexes other than the annual spending on roads and bridges, ports and airports additions and existing projects`
infrastructure expansions, the government has also planned a SAR 33bn dedicated to new water projects.
Saudi Arabia is characterized by being the largest in anticipated new awards; however, the recent dramatic fall in oil prices is
threatening the government spending. But still no severe impact has been tracked affecting the government spending on infrastructure
or affecting the quantity and/or value of new projects on the expense of cancelling or postponing several other metals and
petrochemical projects.
19.3 21.8 22.8 22.4 24.4 28.5
35.8
16.4
18.0 18.6 19.8 19.9
23.3
27.5
54.0% 54.7% 55.0% 53.0% 55.0% 55.0% 56.5%
46.0% 45.3% 45.0% 47.0% 45.0% 45.0% 43.5%
0%
10%
20%
30%
40%
50%
60%
0
10
20
30
40
50
60
70
2013 2014E 2015F 2016F 2017F 2018F 2019F
Infrastructure
Residential & Non-Residential Spending
Infrastructure Spending % of Construction Spending
Resid. - Non-Resid. % of Construction Spending
734.0 745.3 756.8 779.5
841.8
968.1
1142.3
9.6%
1.5% 1.5%
3%
8%
15%
18%
4.9% 5.3%
5.5% 5.4% 5.3% 5.4% 5.5%
0%
5%
10%
15%
20%
0
200
400
600
800
1000
1200
2013 2014 2015f 2016f 2017f 2018f 2019f
Saudi Arabia GDP
Y-o-Y growth in GDP
Construction Spending % of GDP

CONSTRUCTION
14
05 May 2015
CHART 11:
SAUDI ARABIA CONTRACTS` AWARDS 2009-2014E – IN USD BNS
SOURCE: MEED INSIGHT, MEED PROJECTS, BMI, CFH RESEARCH
CHART 12:
SAUDI ARABIA PROJECTS` PIPELINE 2015-2020 – IN USD BNS
The Kingdom of Saudi Arabia has awarded over the years from 2009 to 2014 new contracts with an aggregate value USD 299.5bn,
while according to announcements the government will award new contracts worth of USD 673.8bn targeting all sectors.
Industrial & Petrochemical investments … a need for diversifying the economy away from the hydrocarbon and oil revenues
dependency…
The kingdom has announced around USD 53.9bn of projects in the social infrastructure and industrial sectors, focusing on petrochemical
plants, mining and metal production; in addition to improving and expanding the educational and healthcare platform.
Energy & Utilities … Saudi Arabia faces an annual increase in power
consumption by approximately 5% p.a that drives the government
to focus on energy mix diversification a case similar to Egypt but less
severe. Hence, the government announced a pipeline of projects to
add further energy and power generating capacities of around 60K
MW out of which 25K MW will be generated from renewable
energy; the total power awards represent around 42% of the
announced contracts awards that includes upgrading the existing
grids performance and transmission capacities as well to provide
sufficient power supply to cope with the new anticipated industrial
projects to be executed along with the 2.5% annual increase in
population. The inefficient use of electricity and the low imposed
electricity tariffs have all led demand to surpass supply causing
shortages, blackouts and forcing the authority to execute power
rationing plans during the peak demand periods.
Residential, Non-residential construction & Transportation
infrastructure spending …
The Saudi government spent over the Ninth Development plan an
amount of USD 130bn and a bill addition of USD 66.7bn; to stand at
a total of USD 196.7bn spent over several residential and non-
residential constructions. Spending targeted the educational,
housing and healthcare sectors; with the housing projects
representing a key priority of the government as according to
estimations developers will need to build around 300K units p.a to
stabilize the housing deficit at 1.65mn units. Health care spending is
a major item in Saudi Arabia`s budget with ambitions to enhance
and increase access to medical centers while increasing the number
of available beds in proportion to the increasing population and
religious visitors; a non-stop spending plan from the government
over the sector targeting a regional excellence. Transportation
infrastructure implementation is a major focus as well that comes in
3
rd
place according to the planned new contracts awards; a spending
package that includes lots of cities` linking projects, rail roads and
airports expansions to serve the annual increasing numbers of
pilgrims that shape an increasing load on the existing transportation
network. The kingdom of Saudi Arabia represents the largest
contributor to the Gulf Cooperation Council`s Gulf`s Railway
Network which will in take a large portion of spending in addition to
the metro lines intended to be spread to link major meeting points
as well; the largest project of which is the Mecca Metro that will
absorb USD 16bn of spending to be completed.
40.1
51.2
65
45
63.6
34.6
299.5
2009
2010
2011
2012
2013
2014E
2009-2014E
202.1
33.7
20.2
283.0
121.3
13.5
30.0%
5.0% 3.0%
42.0%
18.0%
2.0% 0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
0.0
50.0
100.0
150.0
200.0
250.0
300.0
2015-2020 Estimated Saudi Arabia New Projects Awards By Sector-LHS
Contribution-RHS

CONSTRUCTION
15
05 May 2015
Table 10:
Top announced power & Industrial
Projects in Saudi Arabia - in USD mn
Sub-sector Value - in USDmn Size
Power Stations & a Desalination plant - Jubail Power 1,050 2,500 MW
Shuqaiq Steam Power Plant Power 3,300 2,640 MW
Jeddah South Power Plant - Phase 2 Power 3,600 2,650 MW
Rabigh 6 Thermal Power Plant (PPP) Project Power 3,440 2,800 MW
Yanbu 3 Power & Water Project - Al Madinah Power 3,000 3,100 MW
Qurayyah Combined Cycle Gas-Fired Power Plant Power 2,800 3,927 MW
Ras Abu Qamis Power Plant Power 4,500 3,600 MW
Ras Al-Khair Power Plant - Phase 1 Power 3,000 3,600 MW
Duba IPP - Phase 2 Power 2,700 1,800 MW
Saudi Egypt Power Interconnection Power 1,600 3,000 MW
Mecca Solar Power Plant PV Power 640 100 MW
Industrial Complex Jubail City Expansion Project Industrial 800 600K tons
Ethylene & Polyethylene Jubail City Expansion Project Industrial 750 200K tons
13 Projects Total 31,180 29,717 MW – 800K tons
Table 11:
Top announced Transport projects - in
USD mn
Sub-sector
Value - in
USDmn
Size Status-Stage
Prince Mohamed Bin Abdel Aziz Int. Airport
Phase1
Airports 1,400 8mn Passengers P.a Under Construction
King Abdel Aziz Int. Airport Expansion Project Airports 7200 32mn Passengers P.a Under Construction
Hail Int. Airport Expansion Project Airports 150 NA Planning
King Khaled Int. Airport Airports 800 25mn Passengers P.a Under Construction
Jazan, Abaha, Al Qasim Airports Airports 10,660 NA Planning
Port at King Abdullah Economic City - Phase 1 Ports 665 1,300K TEU Operational
King Abdulaziz Port Expansion – Dammam Ports 914 1,500K TEU Under Construction
Riyadh Metro Project - Lines 1 & 2 Rail 9,450 64Km Contract Awarded
Riyadh Metro Project - Line 3 Rail 5,210 40.7Km Contract Awarded
Riyadh Metro Project - Lines 4 & 5 Rail 7,820 73Km Under Construction
Mecca Public Transport Program Rail 16,531 114Km In Tender
Haramain High Speed Rail Link - Phase 2 Rail 9,236 NA Under Construction
Haramain High Speed Rail Link - (Makkah-
Medina)
Rail 14,000 450Km Under Construction
Jeddah Metro Project Rail 2,666 NA Planning
Haramain High Speed Rail (HPR) Phase 1 pt. 1 &
2
Rail 21,100 1,350 Km Under Construction
Riyadh Northern Saudi Border Road Roads & Bridges 2,666 1,418 Km Under Construction
King Fahd Causeway Expansion Project Roads & Bridges 553 NA Planning
Makkah Third Ring Road Roads & Bridges 133 5.5 Km Under Construction
Qulaiba-Abu Ajram Road Roads & Bridges 757 140 Km Under Construction
65mn Passengers - 2,800K TEU – 3.6
Km
Table 12:
Top Resi.-Non-Resi. & Health
projects - in USD mn
Sub-sector
Value - in
USDmn
Size Status-Stage
Sudair City Development Project Commercial Construction 42,500 266,000 Km Under Construction
King Abdullah Financial District Commercial Construction 7,800 16,000 Km Under Construction
Madinnah Knowledge Economic City Educational 7,000 4,800 Km Planning
King Khaled Medical City Healthcare 4300 1,500 beds Under Construction
Riyadh Security Forces Medical City Healthcare 3,350 1,668 beds Under Construction
National Guard Hospital Program Healthcare NA 1,422 beds Contract Awarded
King Abdullah Medical City Healthcare 1,200 1,500 beds In Tender
King Fahad Medical City Healthcare 316 510 beds Under Construction
Mecca Gate Residential 2,800 7,500 units Under Construction
Villas Housing Project - Al Hasa Residential 1350 5,000 units Under Construction
Khaleej Salman Housing Project Residential 1,600 25,000 units Under Construction
Blom Invest Maskan Arabia Fund Residential 155.5 312 units Under Construction
Mutrafiah Housing Project - Phase 1 Residential 270 800 units Contract Awarded
287K Km - 6.6K beds - 38.6K
units

CONSTRUCTION
16
05 May 2015
CHART 13:
UAE CONTRACTS` AWARDS 2009-2014E – IN USD BNS
CHART 14:
UAE PROJECTS` PIPELINE 2015-2020 – IN USD BNS
United Arab Emirates … The 2nd
largest in MENA Concerning the Declared New
Awards …
The UAE has currently become the world`s commercial and business
center, possessing one of the largest economies in the region; with
its GDP recording 3.5% growth in 2014 to stand at USD 416bn.
Although the decline in oil prices pose a threat to the country`s
economy and might lead to a fiscal deficit for the first time over
2015. The construction industry seems to be on a railway track
supported by less reliance from Dubai and the Northern states on oil
inflows in addition to the crucial preparations for EXPO 2020; of
needed investments in tourism related projects, infrastructure and
commercial segments to accommodate and serve an estimated
number of 25mn EXPO visitors. Such investments pushes the
estimations for the country`s GDP growth rates upward to hover
around 4.8%-5% in 2015 and 2016 according to IMF and BMI
consensus forecasts.
Over a 100% increase in the 5-years planned pipeline ending 2020
in comparison to the previous one …
The UAE`s construction sector new awards almost represent 63% of
the USD 465bn anticipated new contracts awards aggregation for
the upcoming 5-years. Out of which the commercial sector is
anticipated to stand at around USD 120bn of new projects, with the
mixed use constructions including new hotels, administrative
towers, retail complexes and malls and residential developments.
Contributing to the hike in such sector is the estimated USD 9bn
estimated total construction cost for the EXPO 2020 that will feature
an underground service rail network. Announcements concerning
the transportation sector almost stand at USD 93bn of new
contracts, among which the Abu Dhabi`s USD 7bn Metro lines
network that is planned to cover over 70Km and the USD 2.5bn Light
Rail Transit projects in addition to Dubai Metro expansions to add
130-135Km of coverage through adding and expanding 4 lines, a
project solely exceed USD 4bn. The chemical and industrial sectors
combined represent around 9.5% of the announced pipeline;
including the USD 20bn Al-Gharbia Chemicals Industrial City
comprising 12 plants divided between aromatics, olefins and
fertilizers and other production facilities. The power and water
projects aggregately represent around 7.5% mainly driven by UAE`s
aim towards shifting its energy mix towards renewable energy
through establishing a USD 30bn nuclear plant currently under
construction, in addition to another 1,200 MW coal-fired plant
under construction that was issued in late 2013 by Dubai Electricity
and Water Authority.
37.3
34.8
22.6
27.5
40.2
41.2
203.6
2009
2010
2011
2012
2013
2014E
2009-2014E
293.0
23.3 20.9 30.2
93.0
4.7
63.0%
5.0% 4.5% 6.5%
20.0%
1.0% 0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
0.0
50.0
100.0
150.0
200.0
250.0
300.0
350.0
2015-2020 Estimated UAE New Projects Awards By Sector-LHS
Contribution-RHS

CONSTRUCTION
17
05 May 2015
SOURCE: MEED INSIGHT, MEED PROJECTS, CFH RESEARCH
CHART 15:
ALGERIA CONTRACTS` AWARDS 2009-2014E – IN USD BNS
SOURCE: BMI
Table 13:
UAE Sectors` Top projects - in USD mn Sub-sector Value - in USDmn Size Status-Stage
Al Maktoum Int. Airport - Phase 1 Dubai Airports 32,670 160mn passengers p.a Under Construction
Abu Dhabi Int. Airport Midfield terminal Airports 2,930 40mn passengers p.a Under Construction
Abu Dhabi Metro - Phase 2& 3 Rail 4,000 NA Planning
Abu Dhabi Metro - Phase 1 Rail 1,906 300mn Passengers P.a In Tender
Eithad Rail Project Rail 10,800 1,200 Km Under Construction
Mafraq Ghweifat Highway (PPP) project Roads 2,720 327 Km Finance Closure
Lower Zakum Oil Lines Replacement Project Power 885 90 Km Contract Awarded
Industrial City Waste-to-energy power Project Power 850 100 MW Under Construction
Civil Nuclear Programe Power 30,000 NA Under Construction
Coal Fired Plant Power 3,900 3,500 MW Under Construction
Abu Dhabi Alumina Refinary Industrial 1,500 4.1K Tons/day Under Construction
Al Gharbia Chemicals Industrial City Chem-Indust 20,000 NA Under Construction
Renaissance City Residential 2,900 Km NA Under Construction
Al Habtoor City Residential 3,000 NA Under Construction
Dubai Expo 2020 - Jebel Ali Non-Residential 9,000 4,380 Km Planning
Mall of the World Entertainment Distract Commercial 6,800 4,459 Km Planning
Al-Zohra Flagship project Commercial 16,335 5,400 Km Under Construction
Amusement Park Complex Commercial 2,900 NA Planning
Algeria … A Stable Market with a Huge Government Spending Plan Ahead …
Algeria is a large nation characterized by around 39mn population
that grows rapidly at 1.9-2% p.a. The country`s economy is dependent
to a great extent on the abundant oil and gas production and secured
by large reserves. The Algerian government rarely issues construction
projects` tenders; instead the government allocates projects to
contractors based on their mutual historical track record and
contractors` capabilities. Recently the government announced its 5-
year infrastructure development plan that stands at around USD
262bn; the plan includes the completion of existing projects in
addition to maintaining and servicing the existing roads and bridges
networks. The plan also includes power projects, comes on top of it
the previously announced 22K MW project to be completed by 2030;
out of which 12K MW will be targeted towards satisfying domestic
needs and the remaining portion to be exported. Algeria has several
industrial projects currently under planning as well; aiming to
establish fertilizers, steel and mining facilities.
Table 14:
Algeria Sectors` Top projects - in USD mn Sub-sector Value - in USDmn Size Status-Stage
Saida - Moulay Slissen Railway Line Rail 832 120 Km Under Construction
Saida - Tiaret Railway Line Rail 777 153 Km Under Construction
Metro Algiers Line 1 Extention Rail 115 4 Km Contract Awarded
Highland Highway Roads 5,000 1,020 Km Under Construction
Power Station in Mostaganem Power 1,370 Na Contract Awarded
Naama Solar Plant Power 285 70 MW Under Construction
Concentrated Solar Power Plant Power 5,000 2,475 MW Under Construction
Oued Keberit Fertiliser Plant Industrial 2,000 NA Under Construction
Hassi Messaoud New Town Residential 6,000 11,000 Km Under Construction
Dounya Park Mixed Use 5,900 13K units - 500 beds hotel - 200 beds hospital Under Construction
2.8
4.3
5.2
9.1
13.0
6.6
41.0
2009
2010
2011
2012
2013
2014E
2009-2014E

CONSTRUCTION
18
05 May 2015
SOURCE: MEED INSIGHT, MEED PROJECTS, CFH RESEARCH
CHART 16:
IRAQ CONTRACTS` AWARDS 2009-2014E – IN USD BNS
CHART 17:
THE UNITED STATED ANTICIPATED CONSTRUCTION SPENDING
CHART 18:
… AND GDP – IN USD BNS
SOURCE: FEDERAL RESERVE SYSTEM, CFH ESTIMATES SOURCE: FEDERAL RESERVE SYSTEM, CFH ESTIMATES
Iraq … The highest in security risk … the highest in potential …
Iraq has awarded a total of USD 58.2bn of contracts over the years
from 2009 to 2014. In 2014, with the increasing tensions and
conflicts and the internal war turning brutal; the number of newly
awarded contracts have dropped significantly by 95.2% in
comparison to the previous year. However, over the years from
2015 to 2020 the Iraqi government announced a pipeline of USD
102bn. Despite the current on-going war, the Iraqi construction
industry has a huge potential due to the country`s mostly
destructed infrastructure and the government inability to fulfill any
social infrastructure supply commitments due to war spending.
However, the current government is struggling to enhance
spending gradually over the country`s infrastructure and to tackle
the severe housing shortage, power supply shortage,
transportation unavailability and water and sewage sectors. Hence,
the situation in Iraq remains ambiguous with no remarkable
indications for a short term solution until 1 of 3 options take place;
the defeat of ISIS, country partitioning based on sectarian lines or a
gradually stabilizing security and political situation. But whenever
the conflict ends we should witness a change in MENA region
ranking in accordance to the added new contract awards.
United States … The highest in Construction spending … A return to the pre-
crisis levels … Still the lowest margins` market in OC points of presence …
The United States is the world`s largest economy which is believed to maintain such position over at least the upcoming 5-years taking
into consideration beyond such horizon, China`s higher annual growth rates. However the USA GDP registered USD 17.4trn in 2014 vs.
China`s USD 10.4trn. The US GDP is believed to grow at a CAGR of 5.24% from 2014 to 2020 to surpass USD 22trn. The US has the largest
construction spending budget and announced new awards globally. However, the market is overcrowded by strong contractors and
construction firms. Construction spending in the US has returned back to the pre-economic crisis levels indicated in a V-shaped growth
rates` trend that tapped the USD 1trn+ spending per annum starting from 2012. Spending over the residential and non-residential
construction is almost stable on a 67:33 ratio. The US construction activity and spending is expected to regain historical highs by 2018;
as the aggregate value of new awards` announced through to 2018 are expected to exceed USD 5trn. The construction sector is
expected to grow by 6% and 4.8% in 2015 and 2016 respectively. The non-residential sector is estimated to grow by around 5% p.a from
2015 to 2018, driven by further educational, commercial and manufacturing projects. The planned power projects value are expected to
stand around USD 455bn, while the announced industrial projects` pipeline amounts to USD 244bn for the same time horizon.
1.40 1.38
1.28
1.09
0.970.95 1.03
1.09 1.16
1.23
1.29 1.34 1.39
-20.0%
-15.0%
-10.0%
-5.0%
0.0%
5.0%
10.0%
15.0%
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
USA Total Construction Spending Y-o-Y %-Change
3.8
5.4
24.7
11.1
10.4
2.8
58.2
2009
2010
2011
2012
2013
2014E
2009-2014E
15.5 16.2 16.8 17.4 18.1
19.0
19.9
20.8
21.6
22.5
3.7%
4.2%
3.7% 3.9% 4.1%
4.6% 4.8% 4.6%
4.1% 4.0%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
10.0%
0.0
5.0
10.0
15.0
20.0
25.0
2011 2012 2013 2014 2015f 2016f 2017f 2108f 2019f 2020f
United States GDP - In USD Trillions-LHS Y-o-Y Growth-RHS

CONSTRUCTION
19
05 May 2015
SOURCE: COMPANY DATA
Orascom Construction Ltd. Company Overview
The Demerger …
OCI N.V. announced on the 16
th
of February that it commenced proceeding to demerge the engineering and construction group from
the fertilizer and chemicals business; a decision previously announced by the Board of Directors on the 6
th
of November. The demerged
construction group known as Orascom Construction got dually listed on NASDAQ Dubai and the Egyptian Exchange. The demerger
resulted in a USD 1.4bn reduction in OCI N.V.`s share capital whereby each shareholder for OCI N.V received one share in Orascom
Construction for each two held in OCI N.V as of a record date of 6 March 2015. Currently the global nitrogen, methanol and other
natural gas base chemical derivatives group will continue to be listed on the Euronext Amsterdam; while OC became dually listed on
NASDAQ Dubai and the EGX as a global engineering and construction group encompassing Weitz, Contract and BESIX. Orascom
Construction offered a total of 12,984,565 new ordinary shares representing 12.4% of the company`s shares to public retail investors
and through a private placement to qualified institutional investors. Around 9% of the capital enlargement was offered to qualified
institutional investors standing at 10,623,735 shares offered at EGP 108.71/share (approximately USD 14.28/share); while 2,360,830
shares were offered to believed to be qualified institutional buyers or professional high net worth investors.
The Company`s rationale behind the demerger …
The decision came to create two separately listed companies, offering distinct business models to favor the different shareholders and
investors preferences while enhancing both shares liquidity and to separate the different industries` upside and downside risks that
might adversely affect each other. As well as providing a better understanding for the core activities and operations related to the two
companies`. Another important reason for such demerger was a better managerial focus and performance oriented; to be able to
sharpen the focus on any value accretive opportunity and/or new partnerships while maintaining separate capital structures that
provide a better outlook for lenders` assessing the company`s effectiveness and repayments ability. After the demerger became
effective Orascom Construction Ltd. is currently considered as a newly established entity with all the preceding financial status extracted
on a pro-forma basis from OCI N.V financial statements.
OCI N.V. `s Shareholder Structure (Pre-demerger)
Sawiris Family Free Float
Incorporating
Fertilizers
Group
Orascom
Construction
Contrack Weitz BESIX
(50% JV)
54 % 46 %

CONSTRUCTION
20
05 May 2015
Orascom Construction …
The construction group roots goes back to the 1950s when it was founded by Onsi Sawiris in Upper Egypt and got awarded the first
project of refurbishing a school wall, before turning into a general contracting and trading company known as Orascom Construction
Ltd. in 1976. A company limited by shares incorporated in the Dubai International Financial Centre (DIFC) as of the 18
th
of January 2015,
with its head quarters located in the DIFC, Emirate of Dubai in the United Arab of Emirates as the holding company for the demerged
engineering and construction group. OC is an international engineering and construction contractor focused on large-scale
infrastructure, complex industrial and high-end commercial projects in the United States, the Middle East, Africa and Central Asia for
public and private clients that sum up to over 20 different countries of executed projects and track record. OC is currently highly
exposed to the Saudi Arabia, Egypt and the US markets along with exposure to the Algerian market and further expansion plans in Iraq
to capture the country`s deep need for infrastructure and construction activities when the time suit increasing the company`s exposure
and penetration there. Orascom Construction Industries, has consistently been ranked among the world`s top contractors and was
ranked number 67 on ENR`s Top 225 international Contractors list published on 28 August 2014.
The Sawiris family owns 51% of the total company`s shares; with Nassif holding the largest portion of a 27.14% ownership through
himself and his entities represented in a 32mn shares, while Onsi follows with a contribution of 16.36% represented through holding
19.3mn shares and at last comes Sameh Sawiris holding almost 8mn shares equivalent to a 6.75% stake. The family aggregately holds
60.2mn shares out of 118mn shares issued at a par value of USD 1/share equivalent to USD 118mn of capital.
51% 38.2%
OC Ltd. Shareholder Structure (Post-demerger)
Sawiris Family Free Float
Incorporating
Orascom
Construction
Contrack Weitz BESIX
(50% JV)
Institutions
 Southeastern Asset Management In – 4.98%
 Cascade Investment LLC - Bill & Miranda Gates –
5.8%
10.8%

CONSTRUCTION
21
05 May 2015
LONG TERM INVESTMENTS: EGYPT NETHERLANDS USA CYPRUS ALGERIA SAUDI ARABIA REST OF INVESTMENTS & SUBSIDIARIES
OC Group`s Subsidiaries and Long Term Investments …
The company mainly operates under three main business units and a 50% JV, encompassing their respective subsidiaries …
Long term investments and entities under the umbrella of OC Ltd. includes a list of 42 fully consolidated companies and 14
others based on the equity consolidation method. Out of the 56 companies; 14 are located in Egypt, 14 in the Netherlands,
7 in USA, 6 in Cyprus, 3 in Algeria, 3 in Saudi Arabia and the remaining 9 companies are divided over several other
countries including Luxembourg, Pakistan, Bahrain, Nigeria, UAE and Belgium.
Established in 1976, Orascom is
an engineering, procurement
and construction contractor
with over 60 years of
experience in the MENA region,
US and Asia; fulfilling large
industrial complexes
construction, commercial and
infrastructure projects.
Established in 1985, and is
based in McLean, Virginia.
Contract inclusion provided the
construction group by a strong
EPC capability; acting as an
engineering, procurement and
construction contractor. As well
as providing other services as
facilities operation and
maintenance primarily on
institutional and infrastructure
projects throughout the Middle
East and Central Asia.
.
Weitz was established in 1855,
and it is a leading general
contractor, design builder and
construction manager based in
Des Moines, Iowa. Weitz is the
largest contractor in the state of
Iowa, targeting commercial,
industrial, infrastructure and
other plant services
construction projects in the
United States.
Orascom WeitzContrack
OC has a 50% non-controlling
stake in BESIX; the Belgium
Engineering, Procurement and
Construction Contractor based
in Brussels and has executed
EPC projects and others in 19
different countries throughout
Europe, MENA and Central
Africa. BESIX is accounted for as
an associate company using the
equity method.
BESIX
Construction Segment of
OCI-99.8%
Orasqualla for Construction
S.A.E -50%
United Company for Paint &
Chemicals S.A.E -56.5%
Orascom Construction S.A.E
-99.9%
Orascom for Storage &
Maintenance -100%
Orasqualie for Development
of Wastewater S.A,E -50%
Orasqualla for Operations &
Maintenance S.A,E -50%
Suez Industrial Development
Company -60.5%
Orascom Road Construction
S.A.E -99.98%
National Steel Fabrication
S.A.E -99.9%
Alico Egypt S.A.E -50%
United Holding Company
S.A.E -56.5%
OCI Construction Egypt S.A.E
-100%
National Pipes Company
S.A.E -40%
OCI Construction
International B.V -100%
Mena Mining B.V -100% Red Sea Holding B.V -100% Contrack B.V -100% OCI Construction B.V -100% Orascom Holding
Cooperatief U.A. -100%
OC IHC 1 B.V. -100% OC IHC 2 B.V. -100% OC IHC 3 B.V. -100% OC IHC 4 B.V. -100% OC IHC 5 B.V. -100%
OC IHC 6 B.V. -100% OC IHC 7 B.V. -100% OC IHC 8 B.V. -100% Contrack International Inc. -
100%
The Weitz Group LLC -100%
Orascom E&C USA Inc -100% URS Contrack Pacer Forge IV
JV -45%
Watts – Webcor Obayashi JV
-55%
Alexander – Weitz JV -49% RW Constructors LLC JV -
50%
OCI Construction Holding
Ltd. -100%
OCI Construction Ltd. -100% Contrack Cyprus Ltd. -100% OC International Ltd. -100% OC Overseas International
Ltd. -100%
OC Investments S.A.R.L -
100%
Orascom Construction
Industries –S.P.A. -99.9%
Orascom Tervi Skikda Ltd.
50%
Algerian Co. for Industrial
Cement LLC -99.9%
OCI Saudi Arabia Limited
Company -100%
Orascom Saudi Company -
60%
El Yamama United Company
-50%
Cementech Limited BVI -
100%
BESIX Group Belgium -50% OCI Nigeria Ltd -99.9%
Sidra Medical Center JV
Qatar -50%
Medrail Limited - UAE -50%Contrack International Wll
Bahrain -100%
OCI Luxemburg S.A.R.L -
100%
OCI Pakistan Ltd -100%

CONSTRUCTION
22
05 May 2015
OC`s Track Record of Growth and Expansion …
OC`s four Pillars` Commercial & Operating Strategy …
 OC Management has set the company`s strategic goals that can be summarized in pursuing selected projects in core markets and
penetrate others; while hunting other opportunities to expand the company`s activities in key sectors in Egypt, USA, Saudi Arabia,
Algeria and Iraq.
 The second pillar depends on establishing new partnerships and joint ventures with other market leaders; to mitigate risks and
increase success rates in obtaining and fulfilling new awards; as such consortiums have enabled the company to participate in
some of MENA`s largest construction projects. OC`s current key partnerships include the Saudi Binladin Group, IPIC, Aqualia, GE
and Vinci.
 Pursing value adding investment opportunities that promise a stable cash flow, scalable and growing platforms
OC puts in efforts to capture respectful portions of the anticipated infrastructure spending. Such strategy materialized in 2009
through being the co-contractor and owner of Egypt`s first PPP project through establishing New Cairo Waste Water Plant in a JV
with Aqualia. The company`s flexibility in bidding for projects to be executed on a standalone basis as well assists in securing
further awards while capturing higher margins as the company is currently bidding for other BOT/PPP projects (OC handles the
financing, designing, constructing and operating stages for the BOT awarded projects). OC focus as well in expanding its
capabilities, construction capacity and human resources through considering valuable acquisitions likewise fully acquiring Weitz
group in 2012.
 OC has set its operational strategy high; in order to provide excellence through being committed to follow quality, safety,
environmental and ethical business practices; in addition to utilizing the highest possible calibers expertise and operational field
experience available in order to deliver quality work.
1950
1985
1999
2002
2004
2005-08
2005-08
2009
2011
2012-2014
Oracom was founded by Onsi Sawiris in Upper Egypt and got awarded the first project of refurbishing a school wall.
Establishing Contrack company in USA, with the aim of targeting the USAID and US-Army Corps of Engineers projects in Egypt.
Orascom Construction Industries Initial Public Offering Execution to list on the EGX.
OCI S.A.E launches a (50%-05) plan to generate 50% of its revenues outside Egypt by 2005.
OCI S.A.E and BESIX management jointly acquire BESIX Group in a 50/50 leveraged buyout – OCI achieves its 50%-05 plan.
OCI S.A,E backlog grows through new awards in Algeria, Egypt & UAE.
OCI S.A.E to lead the first initiative of developing Egypt`s first ammonia plant in 2006 and Africa`s largest fertilizer complex in 2007
OCI got awarded with Egypt`s first PPP project of constructing “New Cairo Waste Water Plant” in a JV with Aqualia
Establishing Orascom Saudi Ltd in a JV with Saudi Binladin family, KSA backlog contribution grows from 0% in 2010 to 21% in 2014
 Acquires Weitz in 2012 to establish strategic foothold in USA.
 Began Work on first world scale Greenfield fertilizer plant in USA in 25 years & largest new methanol plant in USA.
 A new JV with the International Petroleum Investment Corporation to develop a coal-fired plant in Egypt.

CONSTRUCTION
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05 May 2015
CHART 19:
THE DEVELOPMENT OF OC CEMENT STORY
CHART 20:
… AS WELL AS; ITS FERTILIZERS` SECTOR PENETRATION
SOURCE: COMPANY DATA SOURCE: COMPANY DATA
Investments Highlights …
From construction to operation; a capable EPC contractor with a historical track record of creating value …
The company `s points of presence provides a mix of secured business stream due to the company`s manufactured hedge through
diversifying its operations. Orascom Construction presence in a developed nation as the United States of America that is characterized
by a strong construction base provides a strong hedge against any political or specific countries risks found in the MENA region.
However, the company`s presence in the MENA region also provides a huge potential in capturing such developing economies rise;
being characterized by a lower to moderate infrastructure base status along with an anticipated boost in infrastructure, Industrial,
Construction and Real Estate activities and spending.
The company`s hunt for value generating investments and projects is in action around the clock; mainly in the Middle East and USA.
With a track record of successful projects being executed that support the company in bidding against others for mega projects. In 1996,
Orascom started its cement business with a 1.5mn tpa green field project in Egypt that was divested in 2007 at an Enterprise Value of
USD 15bn after becoming 32mn tpa business distributed over the various cement plants owned by that time. The company distributed
USD 11bn in the following year; and retained the remaining portion for other investment opportunities. The construction group divested
its 45% stake in another investment; mainly the Soukhna port in 2007. OCI by that time exited such investment in return of a USD
372mn received from Dubai Ports World equivalent to an exit EV/EBITDA multiple of 20.6x and a double digit IRR created over an
investment period of 8.5 years of 49%.
Two other investments OCI got involved in and remain until the current time with no future announced plans for divestments; namely
establishing a fertilizers group in 2005 and establishing a joint venture with Aqualia in 2009. OCI constructed its first fertilizer plant in
1998; before identifying and investing in Egypt Basic Industries Corporation (EBIC) through acquiring a 30% stake in 2005 in partnership
with KBR, government-owned EGAS, and a number of other private investors. OCI increased its stake to 60% after completing the plant
construction in 2009; a state-of-the-art 0.73mn tpa Greenfield ammonia plant characterized by being the only merchant ammonia
producer in the Middle East. OC group constructed the Egyptian Fertilizers Company`s two production lines in 2000 and 2006
respectively, before fully acquiring the 1.55mn tpa company in 2008. OC group built Sorfert Algerie in a JV with Contrach that
commissioned by end-2013. And started the construction of the Iowa Fertilizer Company in USA in 2012 before starting in Natgasoline`s
construction in USA in 2014. OC constructed a USD 472mn (EGP 2.646bn) New Cairo Wastewater treatment plant over a 20 years PPP
contract, through a joint venture with Aqualia; and operates the plant as well. the company received a relevant portion of the EPC
contract due to the company`s participation in developing the project.
1.5
3.0
5.3
7.0 7.5
9.7
13.8
19.5
32.0
35.9
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Million Tons Per Annum
1.3
2
4.7
5.7 5.7
7.8 7.9
10.4
11.9
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
2008 2009 2010 2011 2012 2013 2014 2015E 2016E
Million Tons Per Annum

CONSTRUCTION
24
05 May 2015
Recent Developments …
A forward looking vision, eyes on attractive new auctions & awards; to secure the future …
The company has significant growth opportunities represented in several recent awarded projects and partnerships; with hopes
concerned with capturing further ones in the upcoming period correlated with the increasing anticipation for new upcoming awards
especially from the MENA region. An announcement came on the 5th of November indicating a joint agreement with the International
Petroleum Investment Company (IPIC) to jointly commence studies to develop, construct and operate a 2-3K Mw coal-fired power plant.
The deal was finalized on the 12th of November through signing a MoU with the Egyptian government to formalize the cooperation. OC
and IPIC decided to accelerate the development and construction schedule to meet Egypt`s rising demand for electricity. Such step
comes in favor of the company through gaining further governmental trust in assigning future projects, the strategic partnership comes
on the back of the company`s increasing focus in capturing more projects in Egypt and other key regional markets.
In December 2014, a consortium of General Electric and OC was awarded the construction of 2 power plants in Egypt as part of the
country`s Emergency Power Generation Program; the two plants have an estimated investment cost of USD 1.05bn out of which OC
share stands at USD 642mn. The two plants are expected to be fully constructed and operational by 1H2016 to meet the Egypt`s high
demand for power. A similar scope project awarded to Orascom Construction is the USD 4.6bn signed JV contract with Siemens to
establish another two power plants and a wind rotor blade; anticipated to produce 7.2GW of energy a project, OC share is expected to
stand at 50% of the total contract value. Another mega project was the award received in cooperation with Arab Contractors and the
Egyptian Military Armed Forces Engineering and Construction Authority from the Egyptian government for the construction of three
tunnels as part of the New Suez Canal project in Port-said at an estimated cost of EGP 12bn out of which OC`s share stands at 46.8%
equivalent to EGP 5.62bn (USD 750bn). The project targets to enlarge the canal`s transit capacity and increase the utilities available to
facilitate the industrial activity expansion in the area.
The company has contracted similar power projects in Saudi Arabia and Algeria besides sever social infrastructure and industrial
construction projects. In addition to, other new lower investment value projects` awards throughout 2014 standing at approximately
USD 330mn in USA and Egypt. OC was shortlisted by the ministry of electricity as being one of the qualified developers for a new solar
and wind renewable energy program in Egypt, OC constructed the first solar power plant in the Middle East in Kuraymat, Egypt as an
EPC contractor; and it seems that the company`s success in conducting the project has paid off as the company expects at least one or
two other projects to be awarded by 2015. In 2014, OC was assigned a USD 450mn of road and airport work, and around a similar value
throughout the year from Saudi Arabia in the infrastructure sector. OC expanded its foot print in USA through the construction of one of
the largest methanol plants participating in the Y-o-Y 89% increase in Weitz backlog that is believed to be completely finalized by 2015.
In 2015, the company was able to capture a USD 101mn award to build a 330-rooms hotel to be connected to Iowa events center and
entertainment complex. In addition to, the most recent award of constructing the hanging rail in Egypt; in cooperation with Arab
Contractors. The project`s investment cost stands at USD 1.5bn funded by a 14 year loan to be registered on the Ministry of Housing,
Utilities and Urban Development accounts. The project`s implementation is anticipated to start in 2016 and to be finalized by mid-2018
according to the company`s latest release.

CONSTRUCTION
25
05 May 2015
CHART 21:
HISTORICAL COGS-TO-REVENUES RATIO AND ITS DRIVERS
CHART 22:
ORASCOM CONSTRUCTION HISTORICAL MARGINS`
CHART 23:
ALTHOUGH A NEGATIVE NPM IN 2014; IT STRONGLY INDICATED AN UPTREND
Historical Financial Results & Performance …
An Increasing COGS-to-Revenues ratio, driving the
company`s margins down in time with an
increasing backlog contribution from USA |the past
few years have been difficult for the company`s operations in MENA
region; due to the political turbulences that took place mainly in
Egypt (the forecasted highest contributor to backlog going forward)
and other countries as Iraq; that has been witnessing brutal conflicts.
Leading OC to direct its focus towards the USA which, characterized
by high costs of implementation and lower margins`. The shift in
focus towards the USA consequently led to declining gross profit
margins. The USA awards have historically been characterized by low
EBITDA margins according to the company`s indication; in addition to
the country`s high corporate tax rate standing at 40%.
A 1.8% EBITDA margin in 2012 moved towards a
-41.2% Bottom Line Margin |The company`s EBIT in 2012
came in at USD 14.1mn that was affected by a net debt service
obligation of USD 59mn; a figure turning the Earning Before Taxes
into a loss of USD 44.9mn. Such figure was impacted by a tax claim
initiated by the ETA in Egypt accusing OCI S.A.E of tax evasion
pertaining to the sale of Orascom Building Materials Holding S.A.E
(OBMH) to Lafarge in 2007 after delisting the company. OCI S.A.E
entered a planned payment agreement with the ETA totaling to EGP
7.1bn (around USD 1.1bn) for resolving the tax dispute. In 2012 OC
incurred the first tranche registered on 2012 statements amounting
to USD 554.6mn plus a USD 1.2mn of deferred. After the appeal
presented from OCI S.A.E a reversal took place due to the court ruling
in favor of the company, registered on 2013`s profit and loss
statements turning the income tax net value to stand at a positive
figure of USD 0.4mn. However, in 2013 the net debt service expense
came in at USD 98.4mn that almost fully eliminated the USD 98.8mn
EBIT figure. A residual of USD 0.4mn remained as an EBT that was
diminished by net tax dues of USD 0.7mn; to end the year with a net
loss of USD 0.3mn.
A Historical trend of declining Awards … Reversed
in 9m2014 |In 9m2014, OC completion ratio declined from 38.5%
in 2013 to stand at 28% a decline actually showing the positive impact
of new awards` additions to the company`s backlog that help in
securing the company`s operations over the upcoming 1.5-2 years
implementation hence revenues. However, revenues increased by
32.8% Y-o-Y from USD 1,624mn top line in 9m2013; reflecting a
positive signal of the increase in operations. Still, a net loss took place
of USD 79.5mn mainly due to the historical high COGS-to-Revenues;
high SG&A expenses and undertaken provisions.
1811.3
1457.3
2349.7
2157.4
1410.8
1280.1
2178.8 2090.1
77.9%
87.8%
92.7%
96.9%
0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
0
500
1000
1500
2000
2500
2011 2012 2013 9m2014
Revenues COGS (Dep & Amort. Adjusted)
COGS-to-Revenues
22.1%
12.2%
7.3%
3.1%
14.4%
1.8% 1.3%
-7.4%
11.5%
-41.2%
0.0%
-3.7%
-50.0%
-40.0%
-30.0%
-20.0%
-10.0%
0.0%
10.0%
20.0%
30.0%
2011 2012 2013 9m2014
GPM EBITDA Margin NPM
2660 2619
1233
3869.6
1811.3
1457.3
2349.7
2157.4
3321.3
4869.3
3839.9
5566.2
-1
-0.5
0
0.5
1
1.5
2
2.5
0
1000
2000
3000
4000
5000
6000
2011 2012 2013 9m2014
New Contracts Awarded Implementation-Revenues
Ending Backlog Y-o-Y Change in Awards
Y-o-Y Change in Backlog

Orascom Construction - Initiation of Coverage

Orascom Construction - Initiation of Coverage

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