REG - Orascom Investment - Annual Financial Report
11/11/2025 15:45
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RNS Number : 1069H Orascom Investment Holding S.A.E 11 November 2025
http://www.rns-pdf.londonstockexchange.com/rns/1069H_1-2025-11-11.pdf
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Orascom Investment Holding
S.A.E.
Consolidated Financial Statements
As at and for the year ended
December 31, 2023 (IFRS)
Together with the auditor's report
US$
ORASCOM INVESTMENT HOLDING S.A.E.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS OF
(In thousands of US$) Note December31,2023 December31,2022
Restated ((a))
Assets
Property and equipment 15 31,558 18,600
Intangible assets 16 -- --
Investment property 17 -- 8,166
Equity accounted investees 13 19,858 24,803
Financial assets at amortized cost 18 47,975 90,471
Financial assets at FVTPL 18 24,332 27,504
Total non-current assets 123,723 169,544
Inventories 35 --
Trade receivables 20 5,208 10,921
Other assets 21 2,057 2,918
Cash and cash equivalents 22 73,583 66,880
Total current assets 80,883 80,719
Total assets 204,606 250,263
Equity
Share capital 23 95,890 95,890
Reserves (56,507) (37,025)
Retained earnings 27,532 66,809
Equity attributable to equity holders of the Company 66,915 125,674
Non-controlling interests (301) (462)
Total equity 66,614 125,212
Liabilities
Borrowings 24 100,009 77,886
Trade payables and other liabilities 26 - 189
Deferred tax liabilities 19-1 9,396 12,363
Total non-current liabilities 109,405 90,438
Borrowings 24 3,386 1,986
Trade payables and other liabilities 26 15,593 19,784
Income tax liabilities 2,328 4,141
Provisions 25 7,280 8,702
Total current liabilities 28,587 34,613
Total liabilities 137,992 125,051
Total equity and liabilities 204,606 250,263
* The accompanying notes from page (5) to page (47) are an integral part of
these consolidated financial statements.
((a)) 2022 figures are being restated to reflect the corrected comparative
figures refer to note (3)
Chief Financial Officer
Chairman
ORASCOM INVESTMENT HOLDING S.A.E.
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE FINANCIAL YEAR ENDED
(In thousands of US$, except per share amounts) Note
December 31 December 31
,2023 ,2022 Restated ((a))
Continuing operations
Revenues 7 5,754 5,085
Other Income 115 4,843
Total Income 5,869 9,928
Purchases and services 8 (4,761) (6,444)
Other expenses 10 (225) (627)
Provisions no longer required / (formed) 25 (1,487) (1,718)
Personnel cost 9 (9,081) (5,678)
Depreciation and amortization 11 (1,627) (579)
Impairment loss of other financial assets 18 (49,448) 614
Operating (loss) (60,760) (4,504)
Finance income 12 4,241 23,534
Losses / Gain on financial assets at FVTPL 12 (3,956) 6,467
Finance expense 12 (9,611) (2,013)
Net foreign currencies translation differences 12 19,783 24,776
Share of profit from equity accounted investee 13 18,103 26,113
Impairment of share of profit from equity accounted investee 13 (18,103) (26,113)
(Loss) /Profit before income tax (50,303) 48,260
Income tax expense 14 1,567 (9,997)
(loss) /Profit for the year from continued operations (48,736) 38,263
Discontinued operations
Gain /(Loss) from discontinued operation (net of income tax) 28 9,434 (620)
(Loss) Profit for the year (39,302) 37,643
Other comprehensive income:
Items that may subsequently reclassified to profit or loss net of tax
Foreign operations- Foreign currencies translation differences (19,834) (19,625)
Total (19,834) (19,625)
Total other comprehensive loss for the year (59,136) 18,018
Profit / (loss) for the year attributable to:
Owners of the Company from continuing operations 27 (48,711) 37,719
Owners of the Company from discontinuing operations 28 9,434 (620)
Non-controlling interests (25) 544
Total (39,302) 37,643
Total other comprehensive loss for the year attributable to:
Owners of the Company (59,197) 17,066
Non-controlling interests 61 952
Total (59,136) 18,018
(losses) / Earnings per share from continuing operation - basic & diluted 27 (0.0093) 0.0072
Earnings / (losses) per share from discontinued operations- basic & 27 0.0018 (0.0001)
diluted
* The accompanying notes from page (5) to page (47) are an integral part of
these consolidated financial statements.
((a)) 2022 figures are being restated to reflect the corrected comparative
figures refer to note (3)
( )
ORASCOM INVESTMENT HOLDING S.A.E.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED DECEMBER 31,
2023
(In thousands of US$) Share capital Legal reserve Translation reserve Total reserves Retained earnings Equity attributable to owners of the parent company Non-controlling interests Total equity
Note
Treasury Share reserve Other reserves
As of January 1, 2022 23 95,890 25,245 (36,492) -- -- (11,247) 30,615 115,258 20,214 135,472
Foreign operations- Foreign currencies translation differences -- -- (20,033) -- -- (20,033) -- (20,033) 408 (19,625)
Gain for the year -- -- -- -- -- -- 12,345 12,345 544 12,889
Total comprehensive (loss) for the year -- -- (20,033) -- -- (20,033) 12,345 (7,688) 952 (6,736)
Transactions with owners of the Company
Disposal subsidiary with NCI -- -- -- -- -- -- -- --- (21,628) (21,628)
Contribution of Koryolink * -- -- -- -- 8,075 8,075 -- 8,075 -- 8,075
Transferred to legal reserve -- 905 -- -- - 905 (905) -- -- --
Total transactions with owners of the Company -- 905 -- -- 8,075 8,980 (905) 8,075 (21,628) (13,553)
As of December 31, 2022 95,890 26,150 (56,525) -- 8,075 (22,300) 42,055 115,645 (462) 115,183
(In thousands of US$) Share capital Legal reserve Translation reserves Other reserves Total reserves Retained earnings Equity attributable to owners of the parent company Non-controlling interests Total equity
Treasury Share reserve
As of January 1, 2023 23 95,890 26,150 (56,525) -- 8,075 (22,300) 42,055 115,645 (462) 115,183
Restatements ((a)) 3 -- -- (6,650) -- (8,075) (14,725) 24,754 10,029 -- 10,029
As of January 1, 2023, restated ((a)) 95,890 26,150 (63,175) -- -- (37,025) 66,809 125,674 (462) 125,212
Foreign operations- Foreign currencies translation differences -- -- (19,920) -- -- (19,920) -- (19,920) 86 (19,834)
Loss for the year -- -- -- -- - - (39,277) (39,277) (25) (39,302)
Total comprehensive (loss) for the year -- -- (19,920) -- -- (19,920) (39,277) (59,197) 61 (59,136)
Transactions with owners of the company
Payment of NCI Share in investment in Subs -- -- -- -- -- -- -- -- 100 100
Gain from Sale of Treasury Share -- -- -- 449 (11) 438 -- 438 -- 438
Total transactions with owners of the Company -- -- -- 449 (11) 438 -- 438 100 538
As of December 31, 2023 95,890 26,150 (83,095) 449 (11) (56,507) 27,532 66,915 (301) 66,614
( )
The accompanying notes from page (5) to page (47) are an integral part of
these consolidated financial statements.
((a)) 2022 figures are being restated to reflect the corrected comparative
figures refer to note (3)
ORASCOM INVESTMENT HOLDING S.A.E.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE FINANCIAL YEAR ENDED
(In thousands of US$) Notes December 31,2023 December 31,2022 Restated ((a))
(Loss) /Profit for the year before tax (50,303) 48,260
Adjustments for:
Depreciation and amortization 11 1,627 579
Finance income 12 (4,241) (23,534)
Finance expense 12 9,611 2,013
Foreign exchange (gain) /loss (19,783) (24,776)
Impairment of financial assets 49,448 (614)
impairment of cash and cash equivalents -- (53)
(Loss)/Gain from valuation financial assets at fair market value 3,956 (6,467)
Change in provisions 25 1,185 (81)
Changes in other assets 2,533 (1,530)
Changes in other liabilities (2,353) (4,779)
Cash flows (used in) by operating activities (8,320) (10,982)
Income tax paid (3,484) -
Interest received 4,021 105
Net cash flows (used in) operating activities (7,783) (10,877)
Cash flows from investing activities
Cash out flow for investments in:
Acquisition of Property and equipment (6,042) (10,399)
Acquisition of financial assets -- (22,671)
Cash proceed from sale process of TWA 28 -- 32,000
Cash collected from sales of investment property 18,075
Proceeds from Investments Held for Trading 4,651 --
Cash Paid Investments Held for Trading (3,799) --
Cash flows generated by (used in) investing activities 12,885 (1,070)
Cash flows from financing activities
Interest paid 24 (3,238) (197)
Proceeds from Sale & lease back 4,854 -
Proceeds from loan and bank facilities 24 906 88,058
Payments for finance leasing (91) --
Cash from NCI related to their share in subsidiary 100 --
Cash from Sale Treasury share 435
Other financial assets - Koryolink bank -- (78,694)
Payments for loans and bank facilities 24 -- (14)
Cash flows generated by financing activities 2,966 9,153
Net change in cash and cash equivalents from continuing operations 8,068 (2,794)
Discontinuing operations
Net cash flows generated by / (used in) operating activities 352 (2,451)
Net cash generated by / (used in) discontinued operations 352 (2,451)
Net change in cash and cash equivalents 8,420 (5,245)
Cash and cash equivalents at the beginning of the period 66,880 69,222
Effect of exchange rates on cash and cash equivalents continued (1,717) 2,903
Cash and cash equivalents at the end of the year 73,583 66,880
* The accompanying notes from page (5) to page (47) are an integral part of
these consolidated financial statements.
((a)) 2022 figures are being restated to reflect the corrected comparative
figures refer to note (3)
1. General information
Orascom Investment Holding S.A.E. ("OIH" or the "Company") is an Egyptian
Joint Stock Company pursuant to the provisions of the Capital Market Law No.
95 of 1992, and its executive regulations. The Company was registered at
Commercial Register under No 394061. The Company's Head Office located at Nile
City Towers, Armlet Boulak-Cairo-Egypt. The Company was established on
November 29, 2011 (the "inception") and until this date the businesses of the
Company were performed under various entities which were controlled by Orascom
Telecom Holding, S.A.E. ("OTH"). As part of a larger transaction pursuant to
which VimpelCom Ltd had acquired OTH dated April 14, 2011, its shareholders
agreed to affect the demerger, whereby, OTH was split into two companies, OTH
and the Company ("Demerger"). The Demerger resulted in the transfer of certain
telecom, cable and media and technology assets (the "OIH Assets") to the
Company.
The Company and its subsidiaries (the "Group") is a mobile telecommunications
business operating in high growth emerging markets in the Middle East, Africa
and Asia. The Company is a subsidiary of Orascom Telecom Media and Technology
Investments S.à.r.l. (the "Ultimate Parent Company").
The Company's shares are listed on the Egyptian Stock Exchange under ISIN
number EGS693V1C014 and has Global Depositary Receipts (GDRs) which are
listed on the London Stock Exchange under ISIN number US68555D2062, and
Egyptian stock exchange under number 2349649
The information presented in this document for the 12 months ended 31 December
2023 has been presented in thousands of United States Dollar ("US$"), except
earnings per share and unless otherwise stated.
2. Material accounting policies
2.1 Basis of accounting
The consolidated financial statements have been prepared in accordance with
the International Financial Reporting Standards as issued by the International
Accounting Standards Board ("IASB") and adopted by the European Union
(hereinafter referred to as "IFRS Accounting Standards").
They were approved and authorized for issue by the Company's board of
directors on April 26, 2023.
The Consolidated Financial Statements have been prepared on a going concern
basis, as Management have verified the absence of financial, management or
other indicators that could indicate critical issues regarding the Group's
ability to meet its obligations in the foreseeable future, and during 12
months following the date of authorization. The description of the methods
through which the Group manages financial risks is contained in the following
note 4 relating to "Financial risk management".
For presentational purposes, the current/non-current distinction has been used
for the statement of financial position. The statement of comprehensive income
is presented using the one-statement approach. Expenses are analyzed in the
statement of profit or loss using a classification based on their nature. The
indirect method has been selected to present the cash flows statement.
2.2 Application of new and revised International Financial Reporting Standards ("IFRSs")
2.2.1 New currently effective requirements
Effective date New standards or amendments
January 1, 2023 IFRS 17 - Insurance Contracts
January 1, 2023 Amendments to IAS 1 - Presentation of Financial Statements: Classification of
Liabilities as Current or Non-Current
January 1, 2023 Amendments to IAS 1 - Presentation of Financial Statements and IFRS Practice
Statement 2: Disclosure of Accounting policies
January 1, 2023 Amendments to IAS 8 - Accounting Policies, Changes in Accounting Estimates and
Errors: Definition of Accounting Estimates
January 1, 2023 Deferred Tax related to Assets and Liabilities arising from a Single
Transaction (Amendments to IAS 12)
In the current year, the group has applied a number of amendments to IFRS
Accounting Standards issued by the IASB that are effective for an accounting
period that begins on or after 1 January 2023. Their adoption has not had any
material impact on the disclosures or on the amounts reported in these
financial statements."
2.2.2 Forthcoming requirements
Effective date New standards or amendments
January 1, 2024 Classification of Liabilities as Current or Non-Current (Amendments to IAS 1)
January 1, 2024 Non-current Liabilities with Covenants (Amendments to IAS 1)
January 1, 2024 Supplier Finance Arrangements (Amendments to IAS 7, Statement of Cash Flows
and IFRS 7, Financial Instruments: Disclosures)
January 1, 2024 Lease Liability in a Sale and Leaseback (Amendments to IFRS 16)
1 January 2025 Lack of Exchangeability - Amendments to IAS 21
1 January 2026 Classification and Measurement of Financial Instruments - Amendments to IFRS 9
and IFRS 7
1 January 2026 Annual Improvements to IFRS Accounting Standards - Volume 11
1 January 2027 IFRS 18 Presentation and Disclosure in Financial Statements
1 January 2027 IFRS 19 Subsidiaries without Public Accountability: Disclosures
"The directors do not expect that the adoption of the standards listed above
will have a material impact on the financial statements of the group in future
periods, except if indicated below."
2.3 Summary of material accounting principles and policies
The main accounting principles and policies adopted in preparing these
consolidated financial statements are set out below. These policies have been
applied consistently by the Group entities.
§ Basis of consolidation
Subsidiaries are all entities (including structured entities) over which the
Group has control.
The Group controls an entity when the Group is exposed to, or has rights to,
variable returns from its involvement with the entity and can affect those
returns through its power over the entity.
The consolidated financial statements include the financial statements of the
Company and the financial statements of those entities over which the Company
has control, both directly and indirectly, from the date on which control is
transferred to the Group until the date such control ceases.
The financial statements used in the consolidation process are those prepared
by the individual Group entities in accordance with IFRS Accounting Standards.
§ Consolidation procedures used are as follows:
- The assets and liabilities and income and expenses of subsidiaries
are included on a line-by-line basis, allocating to non-controlling interests,
where applicable, the share of equity and profit or loss for the year that is
attributable to them.
- The resulting balances are presented separately in equity and the
consolidated income statement; the acquisition method of accounting is used to
account for business combinations.
- The consideration transferred for the acquisition of a subsidiary is
the fair values of the assets transferred, the liabilities incurred to the
former owners of the acquiree, and the equity interests issued by the Group.
- The consideration transferred includes the fair value of any asset
or liability resulting from a contingent consideration arrangement.
Identifiable assets acquired and liabilities and contingent liabilities
assumed in a business combination are measured initially at their fair values
at the acquisition date. The Group recognizes any non-controlling interest in
the acquiree on an acquisition-by-acquisition basis, either at fair value or
at the non-controlling interest's proportionate share of the recognized
amounts of acquiree's identifiable net assets.
- Any contingent consideration is measured at fair value at the date
of acquisition. If an obligation to pay contingent consideration that meets
the definition of a financial instrument is classified as equity, then it is
not remeasured, and settlement is accounted for within equity. Otherwise,
other contingent consideration is remeasured at fair value at each reporting
date and subsequent changes in the fair value of the contingent consideration
are recognized in consolidated profit or loss.
- Goodwill represents the excess of the cost of an acquisition over
the interest acquired in the net fair value at the acquisition date of the
assets and liabilities of the entity or business acquired. Goodwill relating
to investments accounted for using the equity method is included in the
carrying amount of the investment. Goodwill is initially measured as the
excess of the aggregate of the consideration transferred and the fair values
of non-controlling interest over the net identifiable assets acquired and the
liabilities assumed. If the consideration is lower than the fair value of the
net assets of the subsidiary acquired, the difference is recognized in the
consolidated profit or loss.
- Acquisition costs on business combinations are expensed as incurred,
except if they relate to issue debt or equity securities.
- The purchase of equity holdings from non-controlling holders are
accounted for as equity transactions that is, as transactions with the owners
in their capacity as owners. The difference between fair value of any
consideration received and the relevant share of the carrying value of net
assets of the subsidiary is recorded in equity.
- Intra-group balances and transactions, and any unrealized income and
expenses (except for foreign currency transaction gains or losses) arising
from intra-group transactions, are eliminated. Unrealized gains arising from
transactions with equity-accounted investees are eliminated against the
investment to the extent of the Group's interest in the investee. Unrealized
losses are eliminated in the same way as unrealized gains, but only to the
extent that there is no evidence of impairment.
§ Interests in equity-accounted investees
The Group's interests in equity-accounted investees comprise interests in
associates and a joint venture.
- Associates are those entities in which the Group has significant
influence, but not control or joint control, over the financial and operating
policies. A joint venture is an arrangement in which the Group has joint
control, whereby the Group has rights to the net assets of the arrangement,
rather than rights to its assets and obligations for its liabilities.
- Interests in associates and the joint venture are accounted for using the
equity method. They are initially recognized at cost, which includes
transaction costs. Subsequent to initial recognition, the consolidated
financial statements include the Group's share of the profit or loss and OCI
of equity accounted investees, until the date on which significant influence
or joint control ceases.
The equity method is as follows:
- The Group's share of the profit or loss of an investee is
recognized in the consolidated profit or loss from the date when significant
influence begins up to the date when that significant influence ceases or when
the investment is classified as held for sale. Investments in associates with
negative shareholders' equity are recorded till the Group's interest is
reduced to zero and a provision for its losses is accrued only if the Group
has a legal or constructive obligation to cover such losses.
- The Group determines at each reporting date whether there is any
objective evidence that the investment in the associate is impaired. If this
is the case, the Group calculates the amount of impairment as the difference
between the recoverable amount of the associate and it's carrying value.
- If the ownership interest in an associate is reduced, but
significant influence is retained, only a proportionate share of the amounts
previously recognized in the consolidated other comprehensive income is
reclassified to consolidated profit or loss.
- Unrealized gains and losses generated from transactions between
the Company, or its subsidiaries and its investees accounted for using the
equity method are eliminated on consolidation for the portion pertaining to
the Group; unrealized losses are eliminated unless they represent impairment.
- Management fees received from associates are included within
revenue.
Appendix A includes a list of the entities included in the scope of
consolidation.
§ Non-controlling interests
Non-controlling interests of consolidated subsidiaries are presented
separately from the Group's equity" therein".
Non-controlling interests that represent current equity interests and entitle
their holders to a proportionate share of the net assets of the entity in
liquidation, they may be measured at initial recognition either at fair value
or in the Proportionate share of the non-controlling interests in the
recognized values of the net assets acquired - The Measurement basis for each
acquisition transaction is selected separately.
The non-controlling interest in an acquire is initially measured at the
non-controlling interest proportionate share in the fair value of the assets,
liabilities and contingent consideration recognized on acquisition date.
§ Foreign currency translation
Functional and presentation currency
Items included in the financial statements of each of the Group's entities are
measured using the currency of the primary economic environment in which the
entity operates ('the functional currency'). The functional currency of the
Company is Egyptian pound. The Consolidated Financial Statements are presented
in 'US Dollars' (US$), which is the Group's presentation currency. The numbers
disclosed according to the presentation currency "US$" represent the
translation of the group financial results recognized in its functional
currency "EGP "converted to US$ using the appropriate exchange rates
Transactions and balances
Transactions in foreign currencies are translated into the functional currency
of the relevant entity at the exchange rate prevailing at the date of the
transaction. Monetary assets and liabilities denominated in foreign currencies
are translated, at the reporting date, into the prevailing exchange rates at
that date. Foreign currency exchange differences arising on the settlement of
transactions and the translation of the statement of financial position are
recognized in the income statement. Gains and losses on long-term financing
provided to Group subsidiaries by the parent company, for which settlement is
neither planned nor likely to occur, are initially recognized in. other
comprehensive income and reclassified to the income statement on disposal of
the relevant entity, transaction in foreign currency for non-monetary assets
and liabilities carried at historical cost are initially recorded using
closing rate at the date of the transaction while items carried at fair value
should be reported at the rate that existed when fair values were determined.
If a gain or loss on a non-monetary item is recognized in other comprehensive
income, any foreign exchange component of that gain or loss is also recognized
in other comprehensive income.
Group companies
The financial statements of the Group entities are translated into the
presentation currency as follows:
· Assets and liabilities are translated at the closing exchange
rate.
· Income and expenses are translated at the average exchange rate
for the year.
· All resulting exchange differences are recognized as a separate
component of equity in the "translation reserve" until the group loses control
of the relevant subsidiary. When the group disposes of a foreign operation the
translation reserve, previously recognized in equity, is transferred to the
income statement.
· Goodwill and fair value adjustments arising on the acquisition of
a foreign entity are treated as assets and liabilities of the foreign entity
and are translated at the closing exchange rate; and
· In the preparation of the consolidated cash flow statement, the
cash flows of foreign subsidiaries are translated at the average exchange rate
for the year, except for the opening and closing cash balances.
The exchange rates applied in relation to the US$ are as follows:
Average for the Closing rate as of Average for the Closing rate as of
year ended December 31, 2023 year ended December 31, 2022
December 31, 2023 December 31, 2022
Egyptian Pound (EGP) 0.0326 0.0324 0.0521 0.0404
Pakistan Rupee (PKR) 0.0036 0.0036 0.00490 0.00442
Euro (EUR) 1.0815 1.1038 1.05374 1.07021
BRL 0.2003 0.2061 0.2723 0.2723
LBP Lebanese Pounds (LBP) 0.00007 0.00007 0.0007 0.0007
Property and equipment
Property and equipment are stated at purchase cost or production cost, net of
accumulated depreciation and any impairment losses. Cost includes expenditure
directly attributable to bringing the asset to the location and condition
necessary for use and any dismantling and removal costs which may be incurred
because of contractual obligations, which require the asset to be returned to
its original state and condition.
Subsequent costs are included in the asset's carrying amount or recognized as
a separate asset, as appropriate, only when it is probable that future
economic benefits associated with the item will flow to the Group and the cost
of the item can be measured reliably. The carrying amount of the replaced part
is derecognized. All other repairs and maintenance are charged to the income
statement during the financial period in which they are incurred. Each asset
is treated separately if it has an autonomously determinable useful life and
value. Depreciation is charged at rates calculated to write off the costs over
their estimated useful lives on a straight-line basis from the date the asset
is available and ready for use.
The useful lives of property and equipment and their residual values are
reviewed and updated, where necessary, at least at each year-end. Land is not
depreciated. When a depreciable asset is composed of identifiable separate
components whose useful lives vary significantly from those of other
components of the asset, depreciation is calculated for each component
separately, applying the "component approach".
The useful lives estimated by the Group for the various categories of property
and equipment are as follows:
Number of years
Buildings 50
Leasehold improvements and renovations 3-8
Machinery 5-10
Computer equipment 3-5
Furniture and fixtures 5-10
Vehicles 3-6
Gains or (losses) arising from the sale or retirement of assets are determined
as the difference between the net disposal proceeds and the net carrying
amount of the asset sold or retired and are recognized in the income statement
in the period incurred.
Leases
With the adoption of IFRS 16, the Group recognizes a right-of-use asset and a
corresponding lease liability at the date at which the leased asset is
available for use. Each lease payment is allocated between the principal
liability and finance costs. Finance costs are charged to the income statement
over the lease period using the effective interest rate method.
As A leasee , right-of-use assets are initially measured at cost comprising
the following: (i) the amount of the initial measurement of lease liability;
(ii) any lease payments made at or before the commencement date less any lease
incentives received; (iii) any initial direct costs and, if applicable, (iv)
restoration costs. Payments associated with short-term leases and leases of
low-value assets are recognized as an expense in the income statement on a
straight-line basis.
Lease liabilities are initially measured at the net present value of the
following: (i) fixed lease payments, (ii) variable lease payment that are
based on an index or a rate and, if applicable, (iii) amounts expected to be
payable by the lessee under residual value guarantees, and (iv) the exercise
price of a purchase option if the lessee is reasonably certain to exercise
that option. Lease liabilities do not include any non-lease components that
may be included in the related contracts.
Lease payments are subsequently measured at amortized cost and discounted
using the interest rate implicit in the lease. If that rate cannot be
determined, the Group's incremental borrowing rate is used, being the rate
that the Group would have to pay to borrow the funds necessary to obtain an
asset of similar value in a similar economic environment with similar terms
and conditions.
The right-of-use asset is subsequently depreciated on a straight-line basis
over the entire term of the contract, unless the contract provides for the
transfer of ownership at the end of the lease term or the cost of the lease
reflects the fact that the lessee will exercise the purchase option. In this
case, the depreciation must be the shorter of the useful life of the asset and
the duration of the contract. The estimated useful lives for right-of-use
assets are calculated according to the same criterion applied to owned
tangible assets. In addition, the right-of-use asset is decreased by any
impairment losses and adjusted to reflect any remeasurement of the associated
lease liability.
In the statement of financial position, the Group presents right-of-use assets
within property and equipment and lease liabilities within current and
non-current borrowings.
In the income statement, interest expense on lease liabilities constitutes a
component of financial expenses and is shown separately from the depreciation
of right-of-use assets.
Sale and leaseback
An entity (the seller-lessee) transfers an asset to another entity (the
buyer-lessor) and leases that asset back from the buyer-lessor, both the
seller-lessee and the buyer-lessor shall account for the transfer contract and
the lease.
Assessing whether the transfer of the asset is a sale
An entity shall apply the requirements for determining when a performance
obligation is satisfied in IFRS 15 to determine whether the transfer of an
asset is accounted for as a sale of that asset.
Transfer of the asset is a sale.
If the transfer of an asset by the seller-lessee satisfies the requirements
of IFRS 15 to be accounted for as a sale of the asset:
The seller-lessee shall measure the right-of-use asset arising from the
leaseback at the proportion of the previous carrying amount of the asset that
relates to the right of use retained by the seller-lessee. Accordingly, the
seller-lessee shall recognise only the amount of any gain or loss that relates
to the rights transferred to the buyer-lessor.
If the fair value of the consideration for the sale of an asset does not equal
the fair value of the asset, or if the payments for the lease are not at
market rates, an entity shall make the following adjustments to measure the
sale proceeds at fair value:
· Any below-market terms shall be accounted for as a prepayment of
lease payments; and
· Any above-market terms shall be accounted for as additional financing
provided by the buyer-lessor to the seller-lessee.
Transfer of the asset is not a sale :
If the transfer of an asset by the seller-lessee does not satisfy the
requirements of IFRS 15 to be accounted for as a sale of the asset, the
seller-lessee shall continue to recognise the transferred asset and shall
recognise a financial liability equal to the transfer proceeds. It shall
account for the financial liability applying IFRS 9.
Impairment of non-financial assets
Assets that have an indefinite useful life - for example, goodwill- are not
subject to amortisation and are tested annually for impairment. Assets that
are subject to amortisation are reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount may not be
recoverable. An impairment loss is recognized for the amount by which the
asset's carrying amount exceeds its recoverable amount. In determining an
asset's value in use, the estimated future cash flows are discounted using a
pre-tax rate that reflects the market's current assessment of the cost of
money for the investment period and the specific risk profile of the asset.
The recoverable amount is the higher of an asset's fair value less costs to
sell and value in use. For the purposes of assessing impairment, assets are
grouped at the lowest levels for which there are separately identifiable cash
flows (cash-generating units, "CGU"). Non-financial assets other than goodwill
that suffered impairment are reviewed for possible reversal of the impairment
at each reporting date.
For the purpose of impairment testing, goodwill acquired in a business
combination is allocated to each of the CGUs, or groups of CGUs, that is
expected to benefit from the synergies of the combination. Each unit or group
of units to which the goodwill is allocated represents the lowest level within
the entity at which the goodwill is monitored for internal management
purposes. Goodwill is monitored at the operating segment level. Goodwill
impairment reviews are undertaken annually or more frequently if events or
changes in circumstances indicate a potential impairment. The carrying value
of goodwill is compared to the recoverable amount, which is the higher of
value in use and the fair value less costs to sell. Any impairment is
recognized immediately as an expense and is not subsequently reversed.
Investment property
Investment properties are property (land or a building or part of a building
or both) held by the Group to earn rental income or for capital appreciation
or both, rather than for sale in the ordinary course of business or for use in
supply of goods or services or for administrative purposes. Investment
properties are initially measured at cost. The cost of a purchased investment
property comprises its purchase price and any directly attributable
expenditure.
Directly attributable expenditure includes, for example, professional fees for
legal services, property transfer taxes and other transaction costs.
Subsequent to initial recognition, the Group has elected to measure investment
properties at cost less accumulated depreciation and accumulated impairment
losses, if any.
Investment property is derecognized upon disposal, when it is permanently
withdrawn from use and no future economic benefits expected from its disposal.
Gains or losses arising from the retirement or disposal of investment property
are determined as the difference between the net disposal proceeds and the
carrying amount of the asset and are recognized in the consolidated profit or
loss in the period of the retirement or disposal. Reclassifications to / from
investment property are made when, and only when, there is a change of use.
Revenue from operating lease rentals is recognized on a straight-line basis
over the relevant term of the lease. The rental income generated by investment
properties is recognized within revenues in the consolidated income statement.
Depreciation is charged to the income statement on a straight-line basis over
the estimated useful lives of each component of the investment properties. The
estimated useful lives of leased units are estimated at 50 years.
Financial assets
§ Recognition and measurement
Trade receivables and debt securities issued are initially recognised when
they are originated. All other financial assets and financial liabilities are
initially recognised when the Group becomes a party to the contractual
provisions of the instrument.
A financial asset (unless it is a trade receivable without a significant
financing component) or financial liability is initially measured at fair
value plus, for an item not at FVTPL, transaction costs that are directly
attributable to its acquisition or issue. A trade receivable without a
significant financing component is initially measured at the transaction
price.
§ Classification and Subsequent Measurement
The Group classifies non-derivative financial assets into the following
categories:
· Amortized cost
· FVOCI - debt investment
· FVOCI - equity investment or
· FVTPL.
Financial assets are not reclassified subsequent to their initial recognition
unless the Group changes its business model for managing financial assets, in
which case all affected financial assets are reclassified on the first day of
the first reporting period following the change in the business model.
A financial asset is measured at amortised cost if it meets both of the
following conditions and is not designated as at FVTPL:
· It is held within a business model whose objective is to hold assets
to collect contractual cash flows; and
· Its contractual terms give rise on specific dates to cash flows that
are solely payments of principal and interest on the principal amount
outstanding.
A debt investment is measured at FVOCI if it meets both of the following
conditions and is not designated as FVTPL:
· It is held within a business model whose objective is achieved by
both collecting contractual cash flows and selling financial assets; and
· Its contractual terms give rise on specified dates to cash flows
that are solely payments of principal and interest on the principal amount
outstanding.
On initial recognition of an equity investment that is not held for trading
the Group may irrevocably elect to present subsequent changes in the
investment's fair value in OCI. This election is made on an
investment-by-investment basis.
All financial assets not classified as measured at amortised cost or FVOCI as
described above are measured at FVTPL. This includes all derivative financial
assets. On initial recognition, the Group may irrevocably designate a
financial asset that otherwise meets the requirements to be measured at
amortised cost or at FVOCI as at FVTPL if doing so eliminates or significantly
reduces an accounting mismatch that would otherwise arise.
§ Financial assets - Business model assessment
The Group assesses the objective of the business model in which a financial
asset is held at a portfolio level because this best reflects the way the
business is managed, and information is provided to management. The
information considered includes:
· The stated policies and objectives for the portfolio and the
operation of those policies in practice. These include whether management's
strategy focuses on earning contractual interest income, maintaining a
particular interest rate profile, matching the duration of the financial
assets to the duration of any related liabilities, or expected cash outflows
or realizing cash flows through the sale of the assets.
· How the performance of the portfolio is evaluated and reported to
the Group's management.
· the risks that affect the performance of the business model (and
the financial assets held within that business model) and how those risks are
managed.
· How managers of the business are compensated - e.g., whether
compensation is based on the fair value of the assets managed or the
contractual cash flows collected; and
· The frequency, volume, and timing of sales of financial assets in
prior periods, the reasons for such sales and expectations about future sales
activity.
Transfers of financial assets to third parties in transactions that do not
qualify for derecognition are not considered sales for this purpose,
consistent with the Group's continuing recognition of the assets.
Financial assets that are held for trading or are managed and whose
performance is evaluated on a fair value basis are measured at FVTPL.
§ Assessment whether contractual cash flows are solely payments of principal
and interest
For the purposes of this assessment, 'principal' is defined as the fair value
of the financial asset on initial recognition. 'Interest' is defined as
consideration for the time value of money and for the credit risk associated
with the principal amount outstanding during a particular period and for other
basic lending risks and costs (e.g., liquidity risk and administrative costs),
as well as a profit margin.
In assessing whether the contractual cash flows are solely payments of
principal and interest, the Group considers the contractual terms of the
instrument. This includes assessing whether the financial asset contains a
contractual term that could change the timing or amount of contractual cash
flows such that it would not meet this condition. In making this assessment,
the Group considers:
· Contingent events that would change the amount or timing of cash
flows.
· terms that may adjust the contractual coupon rate, including
variable-rate features.
· prepayment and extension features; and
· terms that limit the Group's claim to cash flows from specified
assets (e.g., non-recourse features).
§ Financial assets - Subsequent measurement and gains and losses
Financial assets at FVTPL These assets are subsequently measured at fair value. Net gains and losses,
including any interest or dividend income, are recognized in profit or loss.
Financial assets at amortized cost These assets are subsequently measured at amortized cost using the effective
interest method. The amortized cost is reduced by impairments losses. Interest
income, foreign exchange gains and losses and impairment are recognized in
profit or loss. Any gain or loss derecognition is recognized in profit or
loss.
§ Financial liabilities - Classification, subsequent measurement and gains
and losses
Financial liabilities are classified as measured at amortised cost or FVTPL. A
financial liability is classified as at FVTPL if it is classified as
held-for-trading, it is a derivative or it is designated as such on initial
recognition. Financial liabilities at FVTPL are measured at fair value and net
gains and losses, including any interest expense, are recognised in profit or
loss. Other financial liabilities are subsequently measured at amortised cost
using the effective interest method. Interest expense and foreign exchange
gains and losses are recognised in profit or loss. Any gain or loss on
derecognition is also recognised in profit or loss.
§ Derecognition
Financial assets are derecognized when one of the following conditions is met:
- The contractual right to receive the cash flows from the asset has
expired.
- The Group has substantially transferred all of the risks and rewards
related to the asset, transferring its rights to receive the cash flows from
the asset or assuming a contractual obligation to pass the cash flows received
to one or more beneficiaries by virtue of an agreement that meets the
requirements set out in IFRS 9 (pass through test)
- The Group has not transferred nor substantially maintained all the
risks and rewards related to the financial asset but has transferred control.
§ Impairment of financial assets
The Group recognizes loss allowances for expected credit losses ("ECL") on:
- Trade receivables related to fees and commission under the scope of IFRS 15
("Revenues from Contracts with Customers")
- Financial assets measured at amortized cost or at FVOCI. The Group applies a
simplified approach to measure some of these assets. For further information,
please, refer to the section 3. Use of estimates and critical judgments-
Impairment of financial assets.
Impairment losses on financial assets are recognized in the consolidated
statement of profit or loss under "Impairment loss of other financial assets".
Lifetime ECLs are the ECLs that result from all possible default events over
the expected life of a financial instrument. 12-month ECLs are the portion of
ECLs that result from default events that are possible within the 12 months
after the reporting date (or a shorter period if the expected life of the
instrument is less than 12 months).
For trade receivables related to fees and commission, the Group measures loss
allowances at an amount equal to 12-month ECLs.
For financial assets measured at amortized cost or at FVOCI, the Group
measures loss allowances at an amount equal to 12-month ECLs. However, a
lifetime ECLs is elected if the credit risk on the financial instruments has
increased significantly since initial recognition.
Significant increase in credit risk and default
When determining whether the credit risk of a financial asset has increased
significantly since initial recognition, the Group considers reasonable and
supportable information that is relevant and available without undue cost or
effort. This includes both quantitative and qualitative information and
analysis, based on the Group's historical experience and informed credit
assessment and including forward-looking information.
The Group considers a financial asset to be in default when:
§ There is a breach of financial covenants by the counterparty; or the
information developed internally or obtained from external sources indicates
that the debtor is unlikely to pay its creditors, including the Group, in full
(without considering any collateral held by the Group);
or
§ The financial asset is more than 90 days past due unless the Group has
reasonable and supportable information to demonstrate that a more lagging
default criterion is more appropriate
Measurement of ECLs
ECLs are a probability-weighted estimate of credit losses. Credit losses are
measured as the present value of all cash shortfalls (i.e., the difference
between the cash flows due to the entity in accordance with the contract and
the cash flows that the Group expects to receive).
ECLs are discounted at the effective interest rate of the financial asset.
Credit-impaired financial assets
At each reporting date, the Group assesses whether financial assets are credit
impaired. A financial asset is 'credit-impaired' when one or more events that
have a detrimental impact on the estimated future cash flows of the financial
asset have occurred.
Evidence that a financial asset is credit-impaired includes the following
observable data:
· Significant financial difficulty of the borrower or issuer.
· A breach of contract such as a default or being more than 90 days
past due.
· The restructuring of a loan or advance by the Group on terms that
the Group would not consider otherwise.
· It is probable that the borrower will enter bankruptcy or another
financial reorganization; or
· The disappearance of an active market for a security because of
financial difficulties.
Presentation of allowance for ECL
ECL for financial assets measured at amortized cost are deducted from the
gross carrying amount of the assets.
For financial instruments at FVOCI, the ECL is charged to consolidated profit
or loss and is recognized in OCI.
Write-off
The gross carrying amount of a financial asset is written off when the Group
has no reasonable expectations of recovering a financial asset in its entirety
or a portion thereof. The Group individually makes an assessment with respect
to the timing and amount of write-off based on whether there is a reasonable
expectation of recovery. The Group expects no significant recovery from the
amount written off. However, financial assets that are written off could still
be subject to enforcement activities to comply with the Group's procedures for
recovery of amounts due. Subsequent recoveries of an asset that was previously
written off are recognized as a reversal of impairment in the consolidated
statement of profit or loss when the recovery occurs.
Financial liabilities
Financial liabilities consisting of borrowings, trade payables and other
obligations are recognized when the Group becomes a party to the related
contractual clauses and are initially recognized at fair value, adjusted by
any directly attributable transaction costs.
Financial liabilities and trade payables, with the exception of derivative
financial instruments, are subsequently measured at amortized cost using the
effective interest rate method
§ Derecognition of financial liabilities
The financial liabilities are derecognized when they are extinguished, namely
when the contractual obligation has been met, cancelled, or prescribed. An
exchange of debt instruments with substantially different contractual terms,
must be accounted for as an extinguishment of the original financial liability
and the recognition of a new financial liability. Similarly, a substantial
modification of the contractual terms of an existing financial liability must
be accounted for as an extinguishment of the original financial liability and
the recognition of a new financial liability.
Finance income and finance costs
The Group's finance income and finance costs include:
· Interest income.
· Interest expense.
· Dividend income.
· Net gain or loss on financial assets at FVTPL.
· Foreign currency gain or loss on financial assets and financial
liabilities; impairment losses (and reversals).
Interest income or expense is recognised under the effective interest method.
Dividend income is recognised in profit or loss on the date on which the
Group's right to receive payment is established.
The 'effective interest rate' is the rate that exactly discounts estimated
future cash payments or receipts through the expected life of the financial
instrument to the gross carrying amount of the financial asset, or the
amortised cost of the financial liability.
In calculating interest income and expense, the effective interest rate is
applied to the gross carrying amount of the asset (when the asset is not
credit‑impaired) or to the amortised cost of the liability. However, for
financial assets that have become credit‑impaired after initial recognition,
interest income is calculated by applying the effective interest rate to the
amortised cost of the financial asset. If the asset is no longer
credit‑impaired, then the calculation of interest income reverts to the
gross basis.
Interest income is recognized using the effective interest method. When a
receivable is impaired, the Group reduces the carrying amount to its
recoverable amount, being the estimated future cash-flow discounted at the
original effective interest rate of the instrument and continues unwinding the
discount as interest income. Interest income on impaired loans is recognized
using the original effective interest rate.
Cash and cash equivalents
Cash and cash equivalents include cash on hand, deposits held at call with
banks and other short-term highly liquid investments with original maturities
of three months or less. In the consolidated statement of financial position,
bank overdrafts are shown within borrowings in current liabilities.
The group recognize loss allowances for ECL on the cash closing balance. The
group measures loss allowances at an amount equal to 12-month ECLs.
Current and deferred income tax
The tax expense for the year comprises current and deferred tax. Tax is
recognized in the income statement, except to the extent that it relates to
items recognized directly in equity. In this case, the tax is also recognized
in equity.
The current income tax charge is calculated on the basis of the tax laws
enacted or substantively enacted at the reporting date in the countries where
the Group's subsidiaries and associates operate and generate taxable income.
Management periodically evaluates positions taken in tax returns with respect
to situations in which applicable tax regulation is subject to interpretation.
It establishes provisions where appropriate on the basis of amounts expected
to be paid to the tax authorities.
Deferred income tax is recognized, using the balance sheet liability method,
on temporary differences arising between the tax bases of assets and
liabilities and their carrying amounts in the Consolidated Financial
Statements. However, deferred income tax is not accounted for if it arises
from initial recognition of goodwill or the initial recognition of an asset or
liability in a transaction other than a business combination that at the time
of the transaction affects neither accounting nor taxable profit or loss.
Deferred income tax is determined using tax rates (and laws) that have been
enacted or substantially enacted at the reporting date and are expected to
apply when the related deferred income tax asset is realized, or the deferred
income tax liability is settled.
Deferred income tax assets are recognized only to the extent that it is
probable that future taxable profit will be available against which the
temporary differences can be utilised.
Deferred income tax is provided on temporary differences arising on
investments in subsidiaries, associates, and joint ventures, except where the
timing of the reversal of the temporary difference is controlled by the Group
and it is probable that the temporary difference will not reverse in the near
future.
Deferred tax assets and liabilities are offset if there is a legally
enforceable right to offset current tax liabilities and assets, and they
relate to income taxes levied by the same tax authority on the same taxable
entity, or on different tax entities, but they intend to settle current tax
liabilities and assets on a net basis, or their tax assets and liabilities
will be realised simultaneously.
Provisions
Provisions are only recognized when the Group has a present legal or
constructive obligation arising from past events that will probably result in
a future outflow of resources, and the amount has been reliably estimated.
Provisions are not recognized for future operating losses. The amount provided
represents the best estimate of the present value of the outlay required to
meet the obligation. The interest rate used in determining the present value
of the liability reflects current market rates and considers the specific risk
of each liability.
Earnings per share
Basic Earnings Per Share:
Basic earnings per share are calculated by dividing the profit for the year
attributable to equity holders of the Company, both from continuing and
discontinued operations, by the weighted average number of ordinary shares in
issue during the year excluding ordinary shares purchased by the Company and
held as treasury shares.
Diluted Earnings Per Share:
Diluted earnings per share are calculated by dividing the profit for the year
attributable to equity holders of the Company by the weighted average number
of ordinary shares of the Company outstanding during the year where, compared
to basic earnings per share, the weighted average number of shares outstanding
is modified to include the conversion of all dilutive potential shares, while
the profit for the year is modified to include the effects of such conversion
net of taxation. Diluted earnings per share are not calculated when there are
losses as any dilutive effect would improve earnings per share.
Discontinued operations
A discontinued operation is a component of the Group's business that
represents a separate major line of business or geographical area of
operations that has been disposed of or is held for sale, or is a subsidiary
acquired exclusively with a view to resale. Classification as a discontinued
operation occurs at the earliest of disposal or when the operation meets the
criteria to be classified as held for sale, if earlier. When an operation is
classified as a discontinued operation, the comparative income statement is
re-presented as if the operation had been discontinued from the start of the
comparative period.
Business Combination
The acquisition method of accounting is used to account for all business
combination, regardless of whether equity instruments or other assets are
acquired. The consideration transferred for the acquisition of a subsidiary
comprises:
· Fair values of the assets transferred.
· Liabilities incurred to the former owners of the acquired
business.
· Equity interests issued by the group.
· Fair value of any asset or liability resulting from a contingent
consideration arrangement and.
· Fair value of any pre-existing equity interest in the subsidiary.
Identifiable assets acquired and liabilities and contingent liabilities
assumed in a business combination are, with limited exceptions, measured
initially at their fair values at the acquisition date.
Acquisition-related costs are expensed as incurred.
The excess of the:
· Consideration transferred.
· Amount of any non-controlling interest in the acquired entity,
and
· Acquisition date fair value of any previous equity interest in
the acquired entity
Over the fair value of the net identifiable assets acquired is recorded as
goodwill. If those amounts are less than the fair value of the net
identifiable assets of the subsidiary acquired, the difference is recognized
directly on profit or loss as a bargain purchase.
Where the settlement of any part of cash consideration is deferred, the
amounts payable in the future are discounted to their present value as the
date of exchange. The discount rate used is the entity's incremental borrowing
rate, being the rate at which a similar borrowing could be obtained from an
independent financier under comparable terms and conditions.
Contingent consideration is classified either as equity or a financial
liability. Amounts classified as a financial liability are subsequently
remeasured to fair value with changes in fair value recognized in the
consolidated profit or loss.
If the business combination is achieved in stages, the acquisition date
carrying value of the acquirer's previously held equity interest in the
acquire is remeasured to fair value at the acquisition date. Any gains or
losses arising from such remeasurement are recognized in the consolidated
profit or loss.
In case that initial treatment of business combination is not complete at the
end of financial period consolidated, the group recognizes temporary amounts
for accounts and during the measurement period not to exceed one year from the
date of acquisition. The adjustment is performed retrospectively for
completion of new information (Intangible assets, deferred taxes/provisions,
and others).
Segment reporting
Operating segments are reported in a manner which is consistent with the
internal reporting information provided to the chief operating decision-maker.
The chief operating decision-maker, who is responsible for allocating
resources and assessing performance of the operating segments, has been
identified as the board of directors of the Company.
Revenue from contracts with customers
The company recognizes revenue based on the following five steps:
· Determination of the contract with the client.
· Determination of the contractual obligation to transport goods
and/or services (known as performance obligations).
· Determination of the price of the transaction.
· Allocation of the transaction price to performance obligations
determined based on the independent selling price for each good or service.
· Recognition of income upon fulfilment of the relevant performance
obligation.
The Group does not recognize any assets associated with the incremental costs
of obtaining a contract with a customer that are expected to be not recovered.
The majority of revenue is recognized over a period of time and the Group
applies the practical expedient to recognize the incremental costs of
obtaining a contract as an expense when incurred if the amortisation period of
the asset that would otherwise be recognized is one year or less.
Specifically, the Group mainly recognizes revenue from financial services and
cables.
The following is a statement of the group revenues and how to define each
revenue:
A. Revenue from Entertainment Segment
Revenue from entertainment segment is predominantly generated by Orascom
pyramids entertainment ("OPE") and Orascom sound and light "OSL" which
includes Sound and light shows and entertainment activities and the pyramids
site.
B. Revenue from investment property Segment
Revenue from investment property is recognized according to the accrual basis
and in the straight-line manner according to the rental contract duration.
C-1 Orascom pyramids entertainment ("OPE")
· Rental income: Rental income is recognized according to the
accrual basis and in the straight-line manner according to the essence of the
lease agreement.
· Sponsorship Revenue: Care income is recognized by the
distribution of sponsorship consideration on a straight-line basis over the
duration of the sponsorship contract.
· Events revenue: Events revenue is recognized when performing
event for customers and no revenue is recognized in case of uncertainty of
refund for this revenue or associated costs.
C-2 Orascom sound and light "OSL
· Revenues of sound and light shows: - It is represented in the
revenues resulting from sound light shows presented within the archaeological
pyramids area.
EBITDA Definition (Alternative performance measure)
· Adjusted earnings before interest, tax, depreciation, and
amortisation (adjusted EBITDA).
· A management has presented the performance measure adjusted
EBITDA because it monitors this performance measure at a consolidated level,
and it believes that this measure is relevant to an understanding of the
Group's financial performance. Adjusted EBITDA is calculated by adjusting
profit from continuing operations to exclude the impact of taxation, net
finance costs, depreciation, amortisation, impairment losses/reversals related
to goodwill, intangible assets, and other financial assets.
· Adjusted EBITDA is not a defined performance measure in IFRS
Accounting Standards. The Group's definition of adjusted EBITDA may not be
comparable with similarly titled performance measures and disclosures by other
entities.
Repurchase and reissue of ordinary shares (treasury shares)
When shares recognised as equity are repurchased, the amount of the
consideration paid, which includes directly attributable costs, is recognised
as a deduction from equity. Repurchased shares are classified as treasury
shares and are presented in the treasury share reserve. When treasury shares
are sold or reissued subsequently, the amount received is recognised as an
increase in equity and the resulting surplus or deficit on the transaction is
presented within share premium.
3. Restatements of comparative figures
Discounting effect of non-interest-bearing loan & related tax impact
In August 2022, the Company received a non-interest-bearing shareholder loan
granted by Koryolink, in response to a request from one of its shareholders,
for an amount of EUR 81.7 million (USD 86 million). In accordance with IFRS 9,
the loan should have been measured at fair value on initial recognition by
discounting the expected future cash flows using an appropriate market
interest rate. The restatement corrects the initial recognition by applying a
revised discount rate to better reflect market conditions at the time of the
transaction.
Furthermore, it was identified that the difference between the face value and
the fair value was not classified in accordance with IFRS 9. the difference
between the face value and the fair value has been restated in 2022 to profit
or loss as finance income, to better reflect the nature of the transaction and
ensure consistency with IFRS 9 accounting standard. The adjustment had no
impact on total equity and resulted in a reclassification from other reserves
in equity to profit or loss. Subsequently, the unwinding of interest is
recorded as finance expense in PL.
i. Consolidated statement of financial position
Impact Of Restatement
31 December 2022 Koryolink
(Thousands of USD) As previously Reported loan discounting effect As restated
Total assets 250,263 -- 250,263
Total liabilities 135,080 (10,029) 125,051
Borrowings (non-current) - Note (24) 93,187 (15,300) 77,887
Deferred Tax Liability - Note (19-1) 7,092 5,271 12,363
Others 34,801 -- 34,801
Total equity 115,183 10,029 125,212
Reserves (22,300) (14,725) (37,025)
Retained earnings 42,055 24,754 66,809
Others 95,428 -- 95,428
ii. Consolidated income statement
Impact of Restatement
31 December 2022 As previously Koryolink loan
(Thousands of USD) Reported discounting effect As restated
Finance income - Note (12) 105 23,429 23,534
Financial assets at FVTPL - Note (12) 6,467 -- 6,467
Finance expense- Note (12) (944) (1,069) (2,013)
Net foreign currencies translation differences- Note (12) 17,111 7,665 24,776
Others (4,504) -- (4,504)
Income tax expenses - Note (14) (4,726) (5,271) (9,997)
Profit for the year from continued operations 13,509 24,754 38,263
iii. Consolidated cash flow statement
Impact of Restatement
31 December 2022 As previously Koryolink loan
(Thousands of USD) Reported discounting effect As restated
(Loss) for the year before tax 18,235 30,025 48,260
Finance income- Note (12) (105) (23,429) (23,534)
Finance expense- Note (12) 944 1,069 2,013
Others (30,056) (7,665) (37,721)
Net cash used in operating activities (10,982) -- (10,982)
Others 5,742 -- 5,742
Net (decrease) increase in cash and cash equivalents (5,241) -- (5,241)
Cash and cash equivalents at the beginning of the year 69,222 -- 69,222
Changes in cumulative translation adjustments 2,903 -- 2,903
Cash and cash equivalents at the end of the year 66,880 -- 66,880
4. Use of estimates and critical judgements
The preparation of the Consolidated Financial Statements requires that the
directors apply accounting policies and methodologies that, in some
circumstances, are based upon complex and subjective judgments and estimates
that are based on historical experience and assumptions that are considered
reasonable and realistic at the time, considering the relevant circumstances
for example the assessment of control over subsidiaries and associates as well
as the impairment of goodwill amount. The application of such estimates and
assumptions affects the amounts recorded in the consolidated statement of
financial position, the consolidated income statement, the consolidated
statement of comprehensive income and cash flows, as well as in the notes.
Actual results might differ from such estimates due to the uncertainty
surrounding the assumptions and conditions upon which estimates are based. The
accounting estimates that require the more subjective judgment of management
in making assumptions or estimates regarding the effects of matters that are
inherently uncertain and for which changes in conditions may significantly
affect the results reported in these Consolidated Financial Statements are
summarised below.
A. Valuation of financial instruments - Note (18)
- 'Fair value' is the price that would be received to sell an asset or
paid to transfer a liability in an orderly transaction between market
participants at the measurement date in the principal or, in its absence, the
most advantageous market to which the Group has access at that date. The fair
value of a liability reflects its non‑performance risk.
- A number of the Group's accounting policies and disclosures require
the measurement of fair values, for both financial and non‑financial assets
and liabilities
- When one is available, the Group measures the fair value of an
instrument using the quoted price in an active market for that instrument. A
market is regarded as 'active' if transactions for the asset or liability take
place with sufficient frequency and volume to provide pricing information on
an ongoing basis
- If there is no quoted price in an active market, then the Group uses
valuation techniques that maximise the use of relevant observable inputs and
minimise the use of unobservable inputs. The chosen valuation technique
incorporates all of the factors that market participants would consider in
pricing a transaction.
- If an asset or a liability measured at fair value has a bid price
and an ask price, then the Group measures assets and long positions at a bid
price and liabilities and short positions at an ask price.
- The best evidence of the fair value of a financial instrument on
initial recognition is normally the transaction price - i.e., the fair value
of the consideration given or received. If the Group determines that the fair
value on initial recognition differs from the transaction price and the fair
value is evidenced neither by a quoted price in an active market for an
identical asset or liability nor based on a valuation technique for which any
unobservable inputs are judged to be insignificant in relation to the
measurement, then the financial instrument is initially measured at fair
value, adjusted to defer the difference between the fair value on initial
recognition and the transaction price. Subsequently, that difference is
recognised in profit or loss on an appropriate basis over the life of the
instrument but no later than when the valuation is wholly supported by
observable market data, or the transaction is closed out.
B. Fair value hierarchy
For fair value measurement recognized in the statement of financial position,
IFRS 13 requires an entity to classify fair value measurements based on a fair
value hierarchy, with the following levels, by reference to the significance
of the inputs used in making measurement:
· Level 1 inputs are unadjusted quoted prices in active markets for
items identical to the asset being measured.
· Level 2 inputs are inputs other than quoted prices in active markets
included within Level 1 that are directly or indirectly observable.
· Level 3 inputs are unobservable inputs that are usually determined
based on management's assumptions. However, Level 3 inputs must reflect the
assumptions that market participants would use when determining an appropriate
price for the asset.
Fair value is a market-based measure, based on assumptions of prices and
inputs considered from the perspective of a market participant that are
current as of the measurement date, rather than an entity-specific measure.
Therefore, even when market assumptions are not readily available, the funds
the Group invest into have their own assumptions that are set to reflect those
that market participants would use in pricing the asset or liability at the
measurement date. The availability of valuation techniques and observable
inputs can vary from investment to investment and are affected by a wide
variety of factors, including the type of investment, whether the investment
is new and not yet established in the marketplace, the liquidity of markets,
and other characteristics particular to the transaction. To the extent that
valuation is based on models or inputs that are less observable or
unobservable in the market, the determination of fair value requires more
judgment. Because of the inherent uncertainty of valuation, those estimated
values may be materially higher or lower than the values that would have been
used had a ready market for the investments existed.
Accordingly, the degree of judgment exercised by various funds in determining
fair value is greatest for investments categorized in Level 3. In certain
cases, the inputs used to measure fair value may fall into different levels of
the fair value hierarchy. In such cases, the level in the fair value hierarchy
which the fair value measurement falls in its entirety is determined based on
the lowest level input that is significant to the fair value measurement.
When determining fair value, the funds use valuation techniques that maximize
the use of observable inputs and minimize the use of unobservable inputs. The
valuation techniques used by the funds to determine fair value are consistent
with the market or income approaches. The market approach includes valuation
techniques that use prices and other relevant information generated by market
transactions involving identical or comparable assets, liabilities, or a group
of assets and liabilities. The funds generally use the market approach to
value exchange-traded securities.
The funds value equity securities that are traded on a national securities
exchange at their last reported sales price. The funds generally value equity
securities traded in the over the counter (OTC) markets and listed securities
for which no sale was reported on that date at their last reported bid price
if held long, and last reported ask price if sold short. To the extent that
equity securities are actively traded, and valuation adjustments are not
applied, they are categorized in Level 1 of the fair value hierarchy. Equity
securities traded on inactive markets or valued by reference to similar
instruments are generally categorized in Level 2 of the fair value hierarchy.
The Group has not disclosed the fair values of financial instruments such as
short-term trade receivables, trade payables, other receivables, and other
payables, because their carrying amounts are a reasonable approximation of
fair value.
C. Impairment of non-current assets
Non-current assets are reviewed to determine whether there are any indications
that the net carrying amount of these assets may not be recoverable and that
they have suffered an impairment loss that needs to be recognized. In order to
determine whether any such elements exist, it is necessary to make subjective
measurements, based on information obtained within the Group, in the market
and on past experience. When indicators are identified that an asset may have
become impaired, the Group estimates the impairment loss using suitable
valuation techniques. The identification of elements indicating that a
potential impairment exists and estimates of the amount of the impairment,
depend on factors that may vary in time, affecting management's assessments
and estimates.
D. Impairment of financial assets
The Group applies a simplified approach to measure expected credit losses of
trade receivables related to fees and commission and financial assets measured
at amortized cost and FVOCI. In a simplified approach expected credit losses
are measured on the basis of a lifetime or 12-month expected loss allowance.
The expected credit losses are based on historical information on actual
credit losses on receivables. The model considers other information on the
future economic conditions available at the time of the measurement.
E. Discontinued operation
A discontinued operation is a component of the Group's business, the
operations, and cash flows of which can be clearly distinguished from the rest
of the Group and which:
- Represents a separate major line of business or geographic area
of operations.
- Is part of a single coordinated plan to dispose of a separate
major line of business or geographic area of operations; or
- Is a subsidiary acquired exclusively with a view to resale.
Classification as a discontinued operation occurs at the earlier of disposal
or when the operation meets the criteria to be classified as
held‑for‑sale. When an operation is classified as a discontinued
operation, the comparative statement of profit or loss and OCI is
re‑presented as if the operation had been discontinued from the start of the
comparative year.
F. Intangibles
Intangible assets constitute a significant part of the Group's total assets
and the scheduled amortisation charges from a significant part of the annual
operation expenses. The useful economic lives arrived at, on the basis of
management's estimates and assumptions, have a major impact on the valuation
of intangible assets.
At the end of each reporting period, the Group reviews the carrying amounts of
its intangible assets to determine whether there is any indication that those
assets have suffered an impairment loss. If such indication exists, the
recoverable amount of the intangible asset is estimated, in order to determine
the extent of the impairment loss (if any). Where it is not possible to
estimate the recoverable amount of an individual asset, the Group estimates
the recoverable amount of the cash-generating unit to which the asset belongs.
Where a reasonable and consistent basis of allocation can be identified,
intangible assets are allocated to individual cash-generating units, or
otherwise they are allocated to the smallest group of cash-generating units
for which a reasonable and consistent allocation basis can be identified.
G. Significant influence in North Korea
The Company's investment in North Korea relates primarily to the 60% voting
rights in the local telecom operator Koryolink. The accounting treatment has
been modified during 2015 through recognizing it as an investment in
associates instead of subsidiaries, as the OIH (Egypt) Group management
believes in the existence of significant influence instead of control.
In the light of international sanctions that the United States administration
has decided to impose on the North Korean government and its various
departments, the OIH (Egypt) Group's management closely monitors ongoing
activities to make sure that the sanctions are not violated, and the two sides
reached some understanding of the organizational and commercial frameworks
focused on organizing the work of telecommunications market in North Korea.
H. Depreciation of non-current assets
The cost of property and equipment is depreciated on a straight-line basis
throughout the useful economic life of the relevant asset. The useful economic
life is determined by management at the time the asset is acquired and is
based upon historical experience for similar assets, market conditions, and
forecasts regarding future events that could have an impact on useful life,
including changes in technology. Therefore, the actual useful economic life
may differ from the estimated useful life. The Group periodically evaluates
sector and technology changes in order to update the remaining useful life.
Such periodic updates could result in a change during the depreciation period,
and therefore also in the depreciation in future periods.
I. Taxes
Income taxes (both current income tax and deferred taxes) are determined in
each country whereby the
Group operates in accordance with a prudent interpretation of the applicable
tax regulations.
This process results in complex estimates in determining taxable and
deductible income and taxable temporary differences between accounting and tax
values. In particular, deferred tax assets are recognized when it is probable
that there will be future taxable income against which the temporary
differences can be utilised. The assessment of the recoverability of deferred
tax assets, in relation to tax losses that can be used in future periods and
deductible temporary differences, considers the estimated future taxable
income on the basis of a prudent tax planning.
J. Provisions and contingent liabilities
Management assesses events and circumstances indicating that the Group may
have an obligation resulting in the ordinary course of business, Management
applies its judgment in determining whether the recognition criteria have been
met through assessing the probability of the obligation, making assumptions
about timing and amounts of future cash outflows expected to settle the
obligation.
5. Financial Risk Management
Financial risk factors
The Group is exposed to a variety of financial risks: market risk (including
foreign exchange risk and cash flow and fair value interest rate risk), credit
risk and liquidity risk. In particular, the Group is exposed to risks from
movements in exchange rates, interest rates and market prices. The Group's
overall risk management program focuses on the unpredictability of financial
markets and seeks to minimise potential adverse effects on the Group's
performance through ongoing operational and finance activities. The management
has overall responsibility for the establishment and oversight of the Group's
risk management framework.
i) Market Risk
Market risk is the risk that changes in market prices, such as foreign
exchange rates, interest rates and equity prices will affect the Group's
income or the value of its holdings of financial instruments. The objective of
market risk management is to manage and control market risk exposure with
acceptable parameters, while optimizing the returns.
The Group's strategy is aimed wherever possible at eliminating currency risk
and managing derivatives in compliance with the policies and strategies
defined within the Group, taking into consideration the different effects that
these instruments could have on the profit or loss and the statement of
financial position as a function of their classification and accounting
treatment.
ii) Foreign exchange risk
The Group operates internationally and is exposed to foreign exchange risk
arising when its business transactions are in currencies other than its
functional currency. The main currencies to which the Group is exposed are the
US dollar ("US$"), the Euro ("EUR"), DPRK Won ("KPW") , Brazilian Real ("BRL")
, Lebanese Pound( LBP) and the Egyptian Pound ("EGP").
The Group is exposed to foreign currency risk arising in two separate ways:
a) Foreign exchange operations risk
The Group entities predominantly execute their operating activities in their
respective functional currencies. Some Group subsidiaries are, however,
exposed to foreign currency risks in connection with scheduled payments in
currencies that are not their functional currencies.
In general, this relates to foreign currency denominated supplier payables due
to capital expenditures and receivables. The Group monitors the exposure to
foreign currency risk on a group basis.
Management has set up a policy to require Group companies to manage their
foreign exchange risk against their functional currency. In addition, the
Group manages foreign currency risk by matching its principal cash outflows to
the currency in which the principal cash inflows are denominated. This is
generally achieved by obtaining loan financing in the relevant currency
At year end, major net assets / (net liabilities) foreign currencies positions
presented in 'US Dollars' (US$), were as follows:
December 31, 2022 December 31, 2022 December 31, 2022 December 31, 2022
Assets (Liabilities) Net assets/(liabilities) in currency Net assets/(liabilities)
in currency in currency in US$
US$ 96,298 (4,223) 92,075 92,075
LBP 18,364,576 (16,490,847) 1,873,729 1,312
Euro 87,142 (60,273) 26,868 28,754
GBP 1 - 1 2
BRL 15,784 (9,279) 6,505 903
December 31, 2023 December 31, 2023 December 31, 2023 December 31, 2023
Assets (Liabilities) Net assets/(liabilities) in currency Net assets/(liabilities)
in currency in currency in US$
US$ 101,083 (2,780) 98,303 98,303
LBP 76,064,187 (42,202,771) 33,861,416 2,257
Euro 84,052 (65,713) 18,339 20,242
GBP 1 -- 1 2
BRL 11,310 (1,781) 9,529 1,964
b) As of December 31, 2023, if the functional currencies had
increased/(decreased) by 10% against the US$, Euro, BRL, and GBP with all
other variables held constant, the translation of foreign currency would have
resulted in an increase / (decrease) of US$ $ (8,981) thousand and LBP 226 and
Euro of (349) as well as BRL 7,565 of net profit (2022: US$ $8,370 thousand
and Euro of 493 and LBP 119 as well as BRL 384 of net profit).
c) Foreign exchange translation risk
Due to its international presence, the Group's Consolidated Financial
Statements are exposed to foreign exchange fluctuations, as these affect the
translation of subsidiaries' assets and liabilities denominated in foreign
currencies to the US$ (the Group's presentational currency). The currencies
concerned are mainly the Egyptian pound, and the Euro. This represents a
translational risk rather than a financial risk given that these movements are
posted directly to equity in the cumulative translation reserve
iii) Price risk
The Group has no exposure to equity instruments of other entities that are
publicly traded.
iv) Cash flow and fair value interest rate risk
The Groups interest rate risk arises from borrowings. Borrowings received at
variable interest rates expose the Group to cash flow interest rate risk. The
Group has not entered into any derivative financial instruments to hedge its
exposure to cash flow interest rate risk.
All borrowings from banks outstanding as of December 31, 2023, US$ 26,028
thousand and December 31, 2022 (US$ 15,865 thousand) note 23 are at a fixed
interest rate, at a variable interest rate and interest rate free.
The Group analyses its interest rate exposure on a dynamic basis. The Group
calculates the impact on the consolidated profit or loss of a defined interest
rate shift. The same interest rate shift is used for all currencies.
The impact of a 1% interest rate shift would be a maximum increase/decrease in
2023 finance costs of US$ 0.93 million (2022: US$ 0.205 million).
v) Fair value hierarchy
The following tables analyze financial instruments carried at fair value, by
level, on 31 December 2023 and 2022:
At 31 December 2023
(Millions of US$) Level 1 Level 2 Level 3 Total
Financial instruments FVTPL -- -- 24,332 24,332
Total assets -- -- 24,332 24,332
At 31 December 2022
(Millions of US$) Level 1 Level 2 Level 3 Total
Financial instruments FVTPL -- -- 27,504 27,504
Total assets -- -- 27,504 27,504
The investment in Lighthouse Energy fund has been classified as Level 3.
Investments classified within Level 3 have significant unobservable inputs, as
they trade infrequently. Level 3 instruments include private equity
securities. As observable prices are not available for these securities, there
were various techniques applied to derive the fair value.
These techniques include comparable trading multiples, comparable transaction
multiples and discounted cash flow analysis.
The following table provides quantitative information related to the
significant unobservable inputs for Level 3 fair value measurements as at 31
December 2023 of the Lighthouse Energy fund
(Millions of US$) Valuation Technique Unobservable inputs Range Sensitivity
Unlisted private Discounted cash flow PPA prices 40 to 130 EUR/MWh The estimated FV would increase, if the PPA prices were higher.
equity investments The estimated FV would increase if the discount rates were lower.
Discount rates 7.5%-13.5% The estimated FV would increase if the merchant power prices were higher.
The estimated FV would increase if the CAPEX prices were lower.
Merchant power prices 39 to 281 EUR/MWh The estimated FV would increase if the interest rates were lower.
Solar EUR 0.6 to 0.8 MN/MW
CAPEX Wind EUR 1.2 to 1.7 MN/MW
Interest rates 4.5% to 7 %
Fair Value Level 3
The following table shows the fair values of financial assets and financial
liabilities, including their levels in the fair value hierarchyaccording as of
December 31, 2023, and December 31, 2022.
(In thousands of US$) As at December 31, 2023,
Statement of financial position At amortized Cost Financial assets FVPL Others Level 1 Level 2 Level 3
Cash and cash equivalents 73,583 -- -- -- -- --
Financial assets at amortised cost 47,975 47,975
Trade receivables 5,208 -- -- -- -- --
Financial assets at FVTPL (Note.18) -- 24,332 -- -- -- 24,332
Other assets 2,057 -- -- -- -- --
Borrowings 103,395 -- -- -- 103,395 --
Tarde payable and other labilities 15,593 -- -- -- -- --
(In thousands of US$) As at December 31, 2022
Statement of financial position At amortized Cost Financial assets FVPL Others Level 1 Level 2 Level 3
Cash and cash equivalents 66,880 -- -- -- -- --
Financial assets at amortised cost 90,471 90,471
Trade receivables 10,921 -- -- -- -- --
Financial assets at FVTPL (Note 18) -- 27,504 -- -- -- 27,504
Other assets 2,918 -- -- -- -- --
Borrowings 79,872 -- -- -- 79,872 --
Tarde payable and other labilities 19,973 -- -- -- -- --
vi) Credit Risk
Credit risk is the risk of financial loss to the Group if a customer or
counterparty to a financial instrument fails to meet its contractual
obligations and arises principally from the Group's receivables from customers
and investments in debt securities. The carrying amounts of financial assets
and contract assets represent the maximum credit exposure.
Impairment losses on financial assets and contract assets recognized in profit
or loss were as follow: -
(In thousands of US$) December 31, 2023 December 31, 2022
Impairment loss on trade receivables (note 20) (3,963) 980
Impairment loss on other assets (note 21) (52) (104)
Impairment loss in other non-current assets (note 21) -- (209)
Impairment loss of other financial assets (note 18) (45,019) --
Impairment loss in cash and cash equivalent (note 22) (414) (53)
Total (49,448) 614
· Cash and cash equivalents
The Group Companies have placed funds with the following financial
institutions based on their credit rating: -
Rating
Name of Bank 2023 2022
Arab Bank Zurich BB BB
CA Indosuez LU A+ A
Credit Agricole Egypt A+ A+
QNB Bank B- A+
FAB Bank AA- B-
Bank Masr B- B+
Banco General S. A BBB- BBB-
Audi Bank CCC CCC
The Group held cash and cash equivalents of US$ 73,583 million (2022: US$
66,880 million) with banks which are rated BB and A+ based on Standard &
Poor and are considered to have low credit risk. The cash balances are
measured on 12-month expected credit losses.
The Group held cash of US$0.552 million in a Lebanese bank as at December 31,
2023 (December 31, 2022: US$1.774 million). Considering Lebanon's economic and
financial crisis represented in (hyperinflation, currency devaluation, and
significant restrictions on foreign currency transfers), the Group assessed
the recoverability of these cash balances and accordingly, The Group decided
to fully impair the total cash balance.
During August 2022, Koryolink decided, at the request of a shareholder in the
company, to grant shareholders, without discrimination, a non-interest loan in
accordance with the rules and procedures of local law, according to the
percentage of its contribution to the company's capital. Accordingly, a cash
amounting to US$ 86 million was transferred to the account of Orascom
Investment Holding Company bank account in the Republic of Korea, knowing that
all local regulations and laws regarding bank transfers and transactions will
be applied to the mentioned amounts, and Orascom Investment Company will
continue to comply with international sanctions resolutions in this regard.
· Trade receivables
The Group's exposure to credit risk is influenced mainly by the individual
characteristics of each customer. However, management also considers the
factors that may influence the credit risk of its customer base, including the
default risk associated with the industry and country in which customers
operate. Details of concentration of revenue are included in notes 6.
The risk management committee has established a credit policy under which each
new customer is analysed individually for creditworthiness before the Group's
standard payment and delivery terms and conditions are offered. The Group's
review includes external ratings, if they are available, financial statements,
credit agency information, industry information and in some cases bank
references. Sale limits are established for each customer and reviewed
quarterly. Any sales exceeding those limits require approval from the risk
management committee.
In monitoring customer credit risk, customers are grouped according to their
credit characteristics, including whether they are an individual or a legal
entity, whether they are a wholesale, retail or end-user customer, their
geographic location, industry, trading history with the Group and existence of
previous financial difficulties.
The Group is monitoring the economic environment in Brazil and is taking
actions to limit its exposure to customers in countries experiencing
particular economic volatility and discussion with government of Lebanon
regarding releasing of the dues.
The Group does not require collateral in respect of trade and other
receivables.
The Group does not have trade receivable and contract assets for which no loss
allowance is recognized because of collateral.
As of December 31, 2023, and 2022, the exposure to credit risk for trade
receivables risk and contract assets by Geographic region was as follows: -
(In thousands of US$) Carrying amount December 31, 2023 Carrying amount December 31, 2022
Egypt 2,009 220
Brazil 685 903
Lebanon 2,514 9,798
Total 5,208 10,921
As of December 31, 2023, and 2022, the exposure to credit risk for trade
receivables by type of counterparty was as follows: -
(In thousands of US$) Carrying amount December 31, 2023 Carrying amount December 31, 2022
Entertainment 2,009 220
Rentals 685 903
GSM 2,514 9,798
Total 5,208 10,921
vii) Liquidity Risk
The Group monitors and mitigates liquidity risk arising from the uncertainty
of cash inflows and outflows by maintaining sufficient liquidity of cash
balances. In general, liquidity risk is monitored at entity level whereby each
subsidiary is responsible for managing and monitoring its cash flows and
rolling liquidity reserve forecast in order to ensure that it has sufficient
committed facilities to meet its liquidity needs.
Laws and regulations in certain countries, such as North Korea, in which the
Group operates limit the conversion of current cash balances into foreign
currency. Given the nature of the business, Group companies may have to make
payments in foreign currencies (for example capital expenditures), the lack of
individual entity foreign currency reserves means that these companies are
largely dependent on the Company to make these payments on its behalf.
The table below analyses the Group's financial liabilities into relevant
maturity groupings based on the remaining period at the balance sheet to the
contractual maturity date. The amounts disclosed in the tables are the gross
contractual, undiscounted cash flows including interest, charges, and other
fees.
(In thousands of US$) Carrying amount Expected cash flows (*) Less than 1 year Between 1 and 5 years More than 5 years
Liabilities
Liabilities to banks 13,857 28,569 2,601 17,576 8,392
Loan from KL 70,905 86,770 -- 86,770 --
Trade payables and other liabilities 15,593 15,593 15,593 -- --
Finance lease liability 18,633 29,542 3,283 10,220 16,039
As of December 31, 2023 118,988 160,474 21,477 114,566 24,431
Carrying amount Expected cash flows (*) Less than 1 year Between 1 and 5 years More than 5 years
Liabilities
Liabilities to banks 14,989 30,778 1,903 28,875 --
Loan from KL 64,007 86,770 -- 86,770 --
Trade payables and other liabilities 19,784 19,784 19,784 -- --
Finance lease liability 876 1,474 251 1,223 --
As of December 31, 2022 99,656 138,806 21,938 116,868 --
* Expected cash flows are the gross contractual undiscounted cash flows
including interest, charges, and other fees.
viii) Capital risk management
The Group's objectives when managing capital are to safeguard the Group's
ability to continue as a going concern and to maintain an optimal capital
structure to reduce the cost of capital.
ix) Other risks
Governmental authorisations
Certain future Group activities, including the GSM operations in Lebanon, are
dependent on obtaining appropriate government authorisations. Should these
authorisations not be obtained or delayed, there could be an adverse impact on
the future operations of the Group, such as a decrease in revenues or penalty
payments due to contractual counterparties.
The telecommunications activity in Lebanon is in accordance with the agreement
with the Ministry of Telecommunications for the management of Mobile Interim
Company One (MIC1) which expired in
January 31, 2013, and has been renewed annually till December 2019, where the
management received a letter from the ministry of telecommunications in
Lebanon to terminate the contract and to proceed in handing over the
management.
Political and economic risk in emerging countries
A significant amount of the Group's operations is conducted in Egypt, North
Korea. The operations of the Group depend on the market economy of the
countries in which the subsidiaries or associate operate. In particular, these
markets are characterised by economies that are in various stages of
development or are undergoing restructuring. Therefore, the operating results
of the Group are affected by the current and future economic and political
developments in these countries. In particular, the results of operations
could be unfavourably affected by changes in the political or governmental
structures or weaknesses in the local economies in the countries where it
operates. These changes could also have an unfavourable impact on financial
condition, performance, and business prospects.
Regulatory risk in emerging countries
Due to the nature of the legal and tax jurisdictions in the emerging countries
where the Group operates, it is possible that laws and regulations could be
amended. This could include factors such as the current tendency to withhold
tax on the dividends of these subsidiaries, receiving excessive tax
assessments, granting of relief to certain operations and practices relating
to foreign currency exchange. These factors could have an unfavourable effect
on the financial activities of the Group and on the ability to receive funds
from the subsidiaries.
Revenue generated by the majority of the Group subsidiaries is expressed in
local currency. The Group expects to receive most of this revenue from its
subsidiaries and therefore it relies on their ability to be able to transfer
funds. The regulations in the various countries, such as North Korea, where
Koryolink operates could reduce the ability to pay interest and dividends and
to repay loans, credit instruments and securities expressed in foreign
currency through the transfer of currency. In addition, in some countries it
could be difficult to convert large amounts of foreign currency due to central
bank regulations. The central banks may amend regulations in the future and
therefore the ability of the Company to receive funds from its subsidiaries
may change.
Classes of financial instrument
The tables below present the Groups financial assets and liabilities by
category.
As of December 31, 2023 As of December 31, 2022
(In thousands of US$) At amortised Cost At FVTPL Total At amortised Cost At FVTPL Total
Assets
Cash and cash equivalents 73,583 -- 73,583 66,880 -- 66,880
Trade receivables 5,208 -- 5,208 10,921 -- 10,921
Financial assets at FVTPL -- 24,332 24,332 -- 27,504 27,504
Other assets 2,057 -- 2,057 2,918 -- 2,918
Total 80,848 24,332 105,180 80,719 27,504 108,223
As of December 31, 2023 As of December 31, 2022
(In thousands of US$) At amortised Cost Total At amortised Cost Total
Liabilities
Borrowings ((a)) 103,395 103,395 79,872 79,872
Trade payable & other liabilities 15,593 15,593 19,973 19,973
Total 118,988 118,988 99,845 99,845
((a)) 2022 figures are being restated to reflect the corrected comparative
figures refer to note (3)
6. Segment reporting
- The chief operating decision-maker has been identified as the
board of directors of the Company. The board of directors reviews the Group's
internal reporting in order to assess its performance and allocate resources,
mainly from a geographical perspective, of the mobile telecommunication
business.
- Pursuant to the decision to dispose of entities previously
included in the Media and Technology segment, OIH management has changed its
internal reporting as analysed by the chief operating decision-maker and
revised the reportable operating segments as follows:
· Cables: relating to the provision of direct broadband and
high-speed connectivity to telecom operators, internet service providers and
major corporations through submarine fibre optic cables. The segment results
were represented as discontinued operations
· GSM - Lebanon: Relating to management contract for the Lebanese
mobile telecommunications operator, Alfa, which is owned by the Lebanese
Government. The contract was terminated in December 2020. As a result, no
revenue was recognized from this contract since 2022.
However, based on our assessment, we continue to consider OTL as part of
ongoing operations, as there is currently no formal plan in place for the
disposal of this segment.
· Investment property: investment properties relate to real estate
property the Group owns in Sao Paolo; Brazil presented as discontinued
operations. (refer to note 29)
· Entertainment: relates to the entertainment activities provided
by OPE and S&L in the Pyramid's area in Egypt.
· Other: relates mainly to the Group's equity investments, income
and expenses related to the parent company of the Group (OIH) in addition the
entertainment activities provided by OPE in the Pyramid's area in Egypt.
- The Group reports on segment reporting, which are independently
managed. The chief operating decision-maker assesses the performance of such
operating segments based on:
A. Total revenue: The total sales generated by the segment -- (6-A)
B. Adjusted EBITDA: A measure of profitability that excludes certain
expenses and taxes. It is calculated as profit before income tax expense,
share of profit/(loss) of investment in associates and related impairment
loss, foreign exchange gains /(loss), financial expense, financial income,
gains/(losses) on disposal of non-current assets, impairment charges and
depreciation and amortization. --(6-B)
C. Segment capital expenditure: The total cost incurred during the
period to acquire property, equipment, and intangible assets (excluding
goodwill) for the segment. --(6-C)
6-A) Revenue by Segment
For the year ended December 31, 2023 For the year ended December 31, 2022
(In thousands of US$) Total segment revenue Revenue from external customers Adjusted EBITDA Total segment revenue Revenue from external customers Adjusted EBITDA
Entertainments 5,754 5,754 1,860 5,982 5,982 1,937
Investment property -- -- -- 1,361 1,361 1,361
Other -- -- (60,993) -- -- (7,223)
Total 5,754 5,754 (59,133) 7,343 7,343 (3,925)
6-B) Adjusted EBITDA
Reconciliation of adjusted EBITDA to profit / (loss) before income tax
(In thousands of US$) For the year ended For the year ended
December 31, 2023 December 31, 2022
Adjusted EBITDA (59,133) (3,925)
Depreciation and amortization (1,627) (579)
Finance income 4,241 23,534
Financial assets at FVTPL (3,956) 6,467
Finance expense (9,611) (2,013)
Net foreign currencies translation differences 19,783 24,776
(loss) / Profit before income tax (50,303) 48,260
December 31,2023 Entertainments Others Total
Adjusted EBITDA 1,860 (60,993) (59,133)
Depreciation and amortization (1,563) (64) (1,627)
Finance income 20 4,221 4,241
Financial assets at FVTPL -- (3,956) (3,956)
Finance expense (4,300) (5,311) (9,611)
Net foreign currencies translation differences 120 19,663 19,783
(loss) before income tax (3,863) (46,440) (50,303)
Entertainments Others Total
December 31,2022
Adjusted EBITDA 2,416 (6,341) (3,925)
Depreciation and amortization (275) (304) (579)
Finance income -- 23,534 23,534
Financial assets at FVTPL -- 6,467 6,467
Finance expense (328) (1,685) (2,013)
Net foreign currencies translation differences 79 24,697 24,776
Profit before income tax 1,892 46,368 48,260
6-C) Segment capital expenditure
§ Assets per segment
The following table illustrates assets for each reportable segment as they are
regularly provided to the board of directors.
December 31, 2023 December 31, 2022
(In thousands of US$) Property and equipment Equity investments Total Property and equipment Equity investments Total
Entertainment 30,325 -- 30,325 17,133 -- 17,133
Other 1,233 19,858 21,091 1,467 24,803 26,270
Total 31,558 19,858 51,416 18,600 24,803 43,403
§ Capital expenditure
The table below illustrates the capital expenditure incurred by each segment
for the year ended December 31,2023 and the year ended December 31,2022:
(In thousands of US$) For the year ended For the year ended
December 31, 2023 December 31, 2022
Entertainment 17,162 12,970
Other 1,222 146
Total 18,384 13,116
7. Revenues
Disaggregation of revenue from contracts with customers.
The table below illustrates the Geographical, Service line and Timing of
revenue incurred by each segment for the year ended December 31, 2023, and
December 31, 2022:
(In thousands of US$) For the year ended For the year ended
December 31, 2023 December 31, 2022
Entertainment 5,754 5,085
Total 5,754 5,085
For the year ended For the year ended
(In thousands of US$) December 31, 2023 December 31, 2022
Primary geographical markets
Egypt 5,754 5,085
Total 5,754 5,085
Major service lines
Entertainment 5,754 5,085
Total 5,754 5,085
Timing of revenue recognition
Services transferred over a period 5,754 5,085
Total 5,754 5,085
8. Purchases and services
(In thousands of US$) For the year ended For the year ended
December 31, 2023 December 31, 2022
Rental of local network, technical sites & other leases 59 43
Maintenance costs 155 133
Consulting and professional services 2,291 4,332
Purchases of goods and changes in inventories 59 26
Advertising and promotional services 141 575
Utilities and energy cost 32 52
Site expense 959 197
IT supplies and expense 69 46
Insurance expenses 23 29
Airfare expenses 79 23
Accommodation, meals and per diem 57 42
Bank and post office charges 228 183
Other service expenses 609 763
Total 4,761 6,444
9. Personnel Costs
(In thousands of US$) For the year ended For the year ended
December 31, 2023 December 31, 2022
Wages and Salaries 8,048 4,860
Contractual bonuses 474 433
Other benefits 91 67
Pension Costs - defined contribution plan 163 10
Social Security 256 303
Subscription and membership dues 8 5
Other personnel Costs 41 --
Total 9,081 5,678
10. Other expenses
(In thousands of US$) For the year ended For the year ended
December 31, 2023 December 31, 2022
Real estate taxes -- 19
Other taxes -- 111
Other operating expenses 225 497
Total 225 627
11. Depreciation and amortisation
(In thousands of US$) For the year ended For the year ended
December 31,2023 December 31,2022
Depreciation of tangible assets
Buildings 453 129
Right of use 871 --
Commercial and other tangible assets 303 236
Depreciation of investment property
Buildings -- 214
Total 1,627 579
12. Net financing income
(In thousands of US$) For the year ended For the year ended
December 31,2023 December 31,2022
Interest income 4,241 105
Fair value adjustment of financial liabilities - Koryolink ((a)) 23,429
Financial assets at FVTPL- Net change in fair value -- 6,467
Finance income 4,241 30,001
Financial assets at FVTPL- Net change in fair value * (3,956) --
Interest expense on borrowings ((a)) (9,611) (2,013)
Finance expense (13,567) (2,013)
Net foreign currencies translation differences ((a)) 19,783 24,776
Net foreign currencies translation differences 19,783 24,776
Net financing (costs) 10,457 52,764
(*) Amount representing the value of the Loss resulted from the F.V adjustment
of investment fund -- refer to note (18)
((a)) 2022 figures are being restated to reflect the corrected comparative
figures refer to note (3)
( )
( )
13. Equity accounted investees
Investment in equity accounted investees primarily relate to the investment in
telecommunication operator in North Korea (Cheo Technology Koryolink)
The following table provides a breakdown of equity accounted investees:
Company Country Ownership 2023 % 2022
Cheo Technology-Koryolink DPRK 60% 550,528 60% 537,370
Accumulated impairment loss (*) (530,670) (512,567)
Total 19,858 24,803
(*) The group does not recognize any profits from the company due to the
sanctions and the probability of collecting such profits through dividends
process. Accordingly, the group impairs any profit recognized from Koryolink
and maintain the original investment which represent management's best
estimate of the recoverable value.
The following table presents the movement on the investment of Koryolink
during the year:
(In thousands of US$) 2023 2022
Opening balance 24,803 39,185
Share of profit of equity accounted investee before impairment 18,103 20,660
Gain from dilution -- 5,453
Impairment loss (18,103) (26,113)
Foreign currency translation differences (4,945) (14,382)
Ending balance 19,858 24,803
Koryolink:
The tables below set forth-summary financial information of the associate
company.
§ Summarised statement of financial position
(In thousands of US$) 2023 2022
Assets 392,033 370,044
Liabilities (34,512) (37,345)
Net assets 357,521 332,699
§ Summarised statement of income statement
(In thousands of US$) For the year ended December 31, 2023 For the year ended December 31, 2022
Revenues 80,122 76,812
Total expense (49,950) (46,204)
Profit for the period after tax 30,172 30,608
Share of profit of the associate company 18,103 20,660
The Group's investments in North Korea related primarily to the 75% voting
rights in the local telecom operator Koryolink.
The accounting treatment has been modified during period ended September 30,
2015, though recognizing it as an investment in associates instead of
investment in subsidiaries, as the Group management believes that the
existence of significant influence instead of control due to the increase of
the restrictions, financial and operating difficulties facing Koryolink due to
the international sanction imposed by the international community including
the United States of America, the European Union, and the United Nations."
These sanctions have the effect of restricting financial transactions and the
import and export of goods and services, including goods and services required
to operate, maintain, and develop mobile networks. In addition, the
restrictions implemented affect the ability of its associate to transfer
profits to the parent (return of funds to its native).
On September 11, 2017, the United Nations Security Council issued a resolution
obliging member state of the United Nations to pass laws prohibiting joint
ventures and existing partnerships with the North Korean Republic unless
approval is obtained to continue such joint ventures.
At the present, the Group's management submitted an official request through
Ministry of the foreign affairs of the Government of the Arab Republic of
Egypt in order to be excluded from adhering to the said resolution.
On December 26, 2018, the request to the Security Council Committee
established to follow up the implementation of sanctions on North Korea was
approved, with the exception of Koryolink, to ban foreign investment in North
Korea and to allow Orascom Investment Holding to continue its activities in
North Korea. And consider the company as a telecommunications infrastructure
company offering a public service.
During the third quarter of 2022, Koryolink announced an increase in the
company's capital by about 20 million euros, and KPTC, the shareholder of
Koryolink by 25% at that time, subscribed to the entire shares of the capital
increase, with Orascom Investment Holding refraining from subscribing to it.
This increase led to a Dilution of Orascom Investment Holding's shareholding
in Koryolink from 75% to 60%.
Share capital % Share capital %
(Before increase) (After increase)
Euro Euro*
Orascom investment holding 60,000,000 75% 60,000,000 60%
Post office Co.at North Korea 20,000,000 25% 40,000,000 40%
Total 80,000,000 100% 100,000,000 100%
*The functional currency for Koryolink is Euro.
14. Income tax expenses
(In thousands of US$) Note For the year ended December 31, 2023 For the year ended December 31, 2022
Current income tax 22 (507)
Deferred tax ((a)) (19-1) 1,545 10,504
Total income tax expenses 1,567 9,997
((a)) 2022 figures are being restated to reflect the corrected comparative
figures refer to note (3)
15. Property plant and equipment
(In thousands of US$) Land & Buildings Commercial & other tangible assets Assets under construction Total
Right Of Use
Cost 8,174 1,907 -- 9,577 19,658
Accumulated depreciation & Impairment (535) (523) -- -- (1,058)
Net book value as of January 1, 2023 7,639 1,384 -- 9,577 18,600
Additions 788 487 11,388 5,721 18,384
Net disposals -- -- -- -- --
Depreciation (453) (303) (871) -- (1,627)
Foreign currency translation differences (1,528) (268) (39) (1,964) (3,799)
Net book value as of December 31,2023 6,446 1,300 10,478 13,334 31,558
Cost 7,334 2,014 11,349 13,334 34,031
Accumulated depreciation and impairment (888) (714) (871) -- (2,473)
(In thousands of US$) Land & Buildings Commercial & other tangible assets Assets under construction Total
Right Of Use
--
Cost 3,354 1,445 -- 10,286 15,085
Accumulated depreciation and impairment (688) (628) -- -- (1,316)
Net book value as of January 1, 2022 2,666 817 -- 10,286 13,769
Additions 7,806 1,354 -- 3,956 13,116
Depreciation (129) (236) -- -- (365)
Foreign currency translation differences (2,704) (551) -- (4,665) (7,920)
Net book value as of December 31,2022 7,639 1,384 -- 9,577 18,600
Cost 8,174 1,907 -- 9,577 19,658
Accumulated depreciation and impairment (535) (523) -- -- (1,058)
16. Intangible assets
(In thousands of US$) License Goodwill Total
Cost 892 327 1,219
Accumulated amortization and impairment (892) (327) (1,219)
Net book value as of January 1, 2023 -- -- --
Additions -- -- --
Amortization -- -- --
Foreign currency translation differences - Cost (178) (65) (243)
Foreign currency translation differences - Accumulated 178 65 243
Net book value as of December 31, 2023 -- -- --
Cost 714 262 976
Accumulated amortization and impairment (714) (262) (976)
(In thousands of US$) License Goodwill Total
Cost 1,408 506 1,914
Accumulated amortization and impairment (1,408) (506) (1,914)
Net book value as of January 1, 2022 -- -- --
Additions -- -- --
Amortization -- -- --
Foreign currency translation differences - Cost (516) (179) (695)
Foreign currency translation differences - Accumulated 516 179 695
Net book value as of December 31, 2022 -- -- --
Cost 892 327 1,219
Accumulated amortization and impairment (892) (327) (1,219)
The following table provides an analysis of goodwill:
2023 2022
(In thousands of US$) Other Total Other Total
Opening balance
Cost 327 327 506 506
Accumulated impairment (327) (327) (506) (506)
Net book value of the opening balance -- -- -- --
Foreign currency translation differences - Cost (65) (65) (179) (179)
Foreign currency translation differences - Accumulated 65 65 179 179
Net book value of the ending balance -- -- -- --
Cost 262 262 327 327
Accumulated impairment (262) (262) (327) (327)
17. Investment property
(In thousands of US$) 2023 2022
Cost 8,347 13,187
Accumulated depreciation and impairment (181) (22)
Net book value of opening balance 8,166 13,165
Addition 488 --
Disposal (6,922) --
Depreciation (101) (214)
Foreign currency translation differences (1,631) (4,785)
Net book value of ending balance -- 8,166
Cost -- 8,347
Accumulated amortization and impairment -- (181)
- According to the contract concluded with Bluestone Investment
Company (the seller) regarding the sale of the seven floors in Brazil during
2015 to Orascom Investment Holding, which states a guarantee of obtaining a
fixed annual return at the end of the fourth year of the contract, in the
event of the company inability to rent the seven mentioned floors and achieve
the return mentioned in the contract the company has the right for the return
difference as per the contract, and the Company addressed the Bluestone
Investment Company in order to obtain the return difference in accordance with
the concluded contract.
- In October 2021, the company received a letter from Bluestone
Investment Company stating that Bluestone agreed to give the company 1.5 floor
representative "6 offices" in the same building which correspondent to a final
settlement on the guaranteed revenue mentioned in the original contract.
- The fair value of investment property was determined by external,
independent property valuers, having appropriate recognized professional
qualifications and recent experience in the location and category of the
property being valued.
- The group acquired in December 2021 a real estate investment valued
at approximately 13 million US dollars. Of this amount, 12 million US dollars
were recognized as a gain, in financial year ending December 31, 2021, while 1
million US dollars represented transaction cost corresponds to the FV of the
1.5 floors received from the guaranteed revenue from Bluestone.
- During May 2023, the group announced about an acquisition offer
received regarding its owned assets in Brazil of which the Board of Directors
approved to hire an independent financial consultant, to report a study
related to the equivalent price of the assets and that in accordance with the
requirements of article (43) from rules for listing and delisting securities
on the stock exchange.
During September 2023 and for securing the selling transaction, the company
established two subsidiaries in Brazil and the ownership of the investment
property has been transferred to the two companies with the amount totaling to
87.5 million BRL equivalent to around 539 million Egyptian pounds (after
deduction of due taxes).
The new entities was established due to the fact that, The initial disposal
strategy for the building floors required all tenants to waive their
pre-emptive rights, a condition that proved impractical to secure in the
current circumstances so we implemented an alternative structural solution to
Establishment the above mentioned New Entities and transfer The ownership of
the targeted floors to both of them Subsequently, we sold 100% of the shares
in these two entities to a third-party buyer.
- In 2023, the Group disposed the remaining 1.5 floors equivalent to 6
offices to a third party for a value of BRL 87,5 Million equivalent in US$
17,6 Million, as per the sale agreement executed. And Management considers
this disposal price as an approximation of fair value.
(In thousands of US$) 2023 2022
less than one year (note 27-2) 853 89
One to two years -- 925
Two to three years -- 1,038
Four to five years -- 674
More than 5 years -- 562
Investment property revenue:
18. Other Financial Assets
As of December 31, 2023 As of December 31, 2022
(In thousands of US$) Non-Current Current Total Non-Current Current Total
Financial receivables at amortized cost (18.1.1) -- -- -- -- -- --
Restricted cash at amortized cost (18.1.2) 47,975 -- 47,975 90,471 -- 90,471
Financial assets at FVTPL (18.2) 24,332 -- 24,332 27,504 -- 27,504
Total Other financial assets 72,307 -- 72,307 117,975 -- 117,975
18.1 Financial receivables at Amortized Cost
18.1.1) Financial Receivables
(In thousands of US$) 2023 2022
Expected credit loss percentage 100% 100%
Financial receivables 9,163 9,163
Expected credit loss during the year (*) (9,163) (9,163)
(*) During September 2019 OIH sold the entire shares owned by the Group in
Riza Capital to an external party for a consideration of US$ 13,323 thousand
as well as interest with amount US$423 thousand. The transaction was
structured such that the purchaser pays the consideration in six equal
instalments starting from the date of sale and ending in February 2022.
However, up to October 2022, the purchaser only paid the first two instalments
dated September 2019 and February 2020 with a total amount of US$ 4,442
thousand and US$107 thousand of the third instalment, which was due in August
2020. No change took place till December 2023.Therefore, after considering all
facts and circumstances, the Group estimated an ECL of US$ 9,163 on this asset
as the following: -
2023 2022
(In thousands of US$)
Opening Balance 9,163 9,163
Total 9,163 9,163
18.1.2) Restricted Cash
As of December 31, 2023 As of December 31, 2022
(In thousands of US$) Non-current Current Total Non-current Current Total
Pledged deposits 10 -- 10 10 -- 10
Cash on banks in North Korea 95,911 -- 95,911 92,541 -- 92,541
Expected credit loss* (47,946) -- (47,946) (2,080) -- (2,080)
Total 47,975 -- 47,975 90,471 -- 90,471
During August 2022, Koryolink decided, at the request of a shareholder in the
company, to grant shareholders, without discrimination, a non-interest loan in
accordance with the rules and procedures of local law, according to the
percentage of its contribution to the company's capital. The loan, amounting
to approximately 81.7 million euros (equivalent to U$D 86), was transferred to
the account of Orascom Investment Holding Company in the Republic of Korea,
knowing that all local regulations and laws regarding bank transfers and
transactions will be applied to the mentioned amounts, and Orascom Investment
Company will continue to comply with international sanctions resolutions in
this regard.
It is worth noting that the loan is interest-free and for a period of 5 years,
which can be automatically increased for another period or periods of 3 years
each, and it will be agreed between the company and Koryolink on the method of
repayment, whether in cash or by settlement with other balances between the
two companies
Due to the sanctions imposed on north Korea, the group is not able to
repatriate the cash balance out of the country.
* Expected credit loss of other financial assets is represented in the
following:
(In thousands of US$) 2023 2022
Expected loss ratio 50% 36%
Cash at bank in North Korea- non-current 95,911 92,541
Expected credit loss during the year * (47,946) (2,080)
Net cash at bank in North Korea - non-current 47,965 90,461
(In thousands of US$) 2023 2022
Opening Balance 2,080 3,190
Charged during the year 45,019 79
Foreign currency translation differences 847 (1,189)
Total 47,946 2,080
During 2017, CHEO (Koryolink) the Company's subsidiary located at North Korea
declared and distributed dividends amounting to EUR 46.7 million. The
Company's share amounted to EUR 35 million, out of which EUR 29.2 million were
directly transferred to the Company from North Korea to its bank account in
Egypt. Therefore, we will assume a 50% likelihood that it will also be able to
transfer the existing bank balance of EUR 81,7 million (cash balance in NK as
of Dec 21).
* In 2023, OIH S.A.E. management performed ECL assessment on the cash received
from Koryolink Loan and considered that there is 50% likelihood of
recoverability due to the unpredictability of future developments, including
potential changes in international sanctions, regulatory restrictions.
Therefore, 50% ECL was recorded. As at 31 December 2023, ECL of USD 45 million
was booked in profit or loss.
18.2 Financial assets at Fair Value Through profit or Loss (Lighthouse energy
SCSP)
(In thousands of US$) 2023 2022
Investment in investment funds 24,332 27,504
Total 24,332 27,504
During 2022 the Company invested in investment fund which operates in
renewable energy industry. The share of the company in the fair value of the
investment amounted to EUR 25.7 million equivalent to US$ 27.5 million. This
investment classified in the fund as of December 31,2022 as financial
investment at fair value through profit or loss and its fair value is
classified based on level 3 investments (levels of fair value revaluation) as
there are inputs used that are not observed for assets and liabilities. There
are no transfers between the levels for the year from January 1, 2023, to
December 31, 2023, the investments in the fund assessed from the third level
using unadjusted inputs provided by the fund management based on the team's
internal assumptions for the investment's business plan. As the result of
management evaluation represents the median valuation between minimum and
maximum valuation ranges.
The following table shows fair value adjustment for the investment classified
within the third level during the year.
(In thousands of US$) 2023 2022
Cost of the purchase 27,504 21,037
Effect of the Fair value (note 12) (3,956) 6,467
Currency translation reserve 784 --
Total 24,332 27,504
19. Deferred taxes
18.1 Recognized deferred tax assets and liabilities
Deferred income tax assets and liabilities are offset when there is a legally
enforceable right to offset current tax assets and liabilities and when the
deferred income tax assets and liabilities relate to income taxes due to the
same tax authority.
(In thousands of US$) 2023 2022
Deferred tax liabilities ((a)) (9,396) (12,363)
Net position of the deferred tax (liabilities) (9,396) (12,363)
((a)) 2022 figures are being restated to reflect the corrected comparative
figures refer to note (3)
The movement in deferred tax liabilities is as follows:
(In thousands of US$) 2023 2022
As of January 1, (12,363) (4,812)
(Charged) to the income statement (Note 14) 1,545 (10,504)
Foreign currency translation differences 1,422 2,953
As of December 31, (9,396) (12,363)
A breakdown of the movement in deferred tax liabilities during 2023 and 2022,
is provided in the tables below:
Deferred tax liabilities Depreciation &amortization Unremitted earnings Forex Other Total
(In thousands of US$)
As of January 1, 2023 (532) (588) (8,486) (2,757) (12,363)
(Charged) to the statement of profit or loss (169) 297 (324) 1,741 1,545
Foreign currency translation differences 107 113 653 549 1,422
As of December 31, 2023 (594) (178) (8,157) (467) (9,396)
Deferred tax liabilities Depreciation Unremitted earnings Forex Other Total
& Amortization
(In thousands of US$)
As of January 1, 2022 (241) (1,207) (434) (2,930) (4,812)
(Charged) to the statement of profit or loss (489) 227 (9,065) (1,177) (10,504)
Foreign currency translation differences 198 392 1,013 1,350 2,953
As of December 31, 2022 (532) (588) (8,486) (2,757) (12,363)
No deferred tax liability has been recognized in respect of temporary
differences associated with investments in subsidiaries, branches, and
associates, where the Group is in a position to control the timing of the
reversal of the temporary differences, and it is probable that such
differences will not reverse in the foreseeable future.
Should additional information arise in future periods resulting in differences
between the tax base and accounting base of recorded assets and liabilities in
the financial statements as of December 31, 2023, Management will reassess its
estimate in a way that might result in the recognition of deferred taxes
related to those assets and liabilities.
18.2 Unrecognized deferred tax assets
The following schedule illustrates the unrecognized deferred tax assets for
the group:
(In thousands of US$) 2023 2022
Carried forward losses -- 12,363
Total -- 12,363
Carried forward losses should be utilized within a period of 5-6 years at
maximum. The management of the Group followed a prudent approach and did not
recognize a deferred tax asset for unused tax losses as of December 31, 2023,
as the management does not expect sufficient taxable results will be generated
in the respective countries. The ability of the Group to settle these tax
losses against future taxable profits is not impacted by not recording an
asset.
Generally, the Group does not recognize deferred tax assets for temporary
differences related to accruals for provisions, due to uncertainties in
connection with the tax treatment of such expenses, as they might be
challenged by local tax authorities.
20. Trade receivables
(In thousands of US$) 2023 2022
Receivable due from government 14,382 19,083
Receivables due from telephone operators * 12,364 15,169
Other trade receivables 1,500 1,059
Allowance for doubtful receivables (ECL) (23,038) (24,390)
Total 5,208 10,921
* This balance related to Koryolink mainly this balance come from demerge
processes dated 2010, and the whole balance is fully impaired.
The following table shows the movement in the allowance for doubtful
receivables:
(In thousands of US$) 2023 2022
Opening balance (24,390) (35,465)
Addition (allowances recognized as an expense) (3,963) --
No Longer required -- 980
Foreign currency translation differences 5,315 10,095
Ending balance (23,038) (24,390)
The following table shows the ageing analysis of trade receivables as of
December 31, 2023, and 2022, net of the relevant allowance for doubtful
receivables:
2023 2022
(In thousands of US$) Gross Allowance Gross Allowance
Not past due 1,126 -- 232 --
Past due 0-30 days 44 -- -- --
Past due 31-120 days 15 -- -- --
Past due 121 - 150 days 148 -- -- --
Past due more than 150 days 26,913 (23,038) 35,079 (24,390)
Trade receivables 28,246 (23,038) 35,311 (24,390)
The maximum exposure to credit risk at the reporting date is the carrying
value of the receivable. The Group does not hold any collateral as security
and the increase mainly relating to the reversal of impairment related
receivables Orascom telecom Lebanon.
21. Other assets
(In thousands of US$) As of December 31, 2023 As of December 31, 2022
Non-current Current Total Non-current Current Total
Prepaid expenses -- 239 239 -- 201 201
Advances to suppliers -- 800 800 -- 166 166
Receivables due from tax authority -- 67 67 -- 93 93
Assets from current tax -- 40 40 -- 45 45
Other non-trade assets -- 1,175 1,175 161 2,678 2,839
Allowance for doubtful of current assets -- (264) (264) (161) (265) (426)
Total -- 2,057 2,057 -- 2,918 2,918
(In thousands of US$) As of December 31, 2023 As of December 31, 2022
Non-current Current Total Non-current Current Total
Opening Balance 161 265 426 -- 390 390
Made during the year -- 52 52 209 24 233
Used during the year (161) -- (161) -- -- --
Foreign currency translation differences -- (53) (53) (48) (149) (197)
Total -- 264 264 161 265 426
22. Cash and cash equivalents
(In thousands of US$) 2023 2022
Bank accounts and gross deposits 75,279 68,635
Cash on hand 78 19
75,357 68,654
Impairment cash and equivalents (1,774) (1,774)
Total 73,583 66,880
The Group held cash of US$0.552 million in a Lebanese bank as at December 31,
2023 (December 31, 2022: US$1.774 million). Considering Lebanon's economic and
financial crisis represented in (hyperinflation, currency devaluation, and
significant restrictions on foreign currency transfers), the Group assessed
the recoverability of these cash balances and accordingly, The Group decided
to fully impair the total cash balance.
(In thousands of US$) 2023 2022
Opening Balance (1,774) (1,827)
Formed -- --
Reversed -- 53
Total (1,774) (1,774)
23. Equity attributable to the owners of the Company
i) Share capital
On November 29, 2011, the Company was incorporated with an authorised and
issued share capital amounting to EGP 2,203,190,060 (equivalent to US$ 366,148
thousand at date of transactions) distributed over 5,245,690,620 shares, each
with a nominal value of EGP 0.42.
According to the decision of the Extraordinary General Assembly of Orascom
Investment Holding dated October 19, 2020, and the approval of the General
Investment Authority dated November 17, 2020, on demerging the company (refer
to note no. 33), Orascom Investment Holding's share of the issued capital was
EGP 577,025,968 (equivalent to US$ 95,890 thousand) divided on 5,245,690,620
shares with a nominal value of EGP 0.11 per share.
The following table lists the largest shareholders in the Company in addition
to the other remaining shares as of December 31, 2023:
Shareholder Ordinary shares % Of ordinary shares having voting right
OTMTA (parent company) 2,709,989,320 51.661%
OTMTI 33.485.965 0,638 %
Other 2,502,215,335 47.70%
Total available common shares 5.245.690.620 100%
ii) Translation reserve
Translation reserve comprises all foreign currency differences arising from
the translation of the financial statements of foreign operations. The
translation reserve is a component of equity that reflects the cumulative
exchange differences arising from the translation of foreign currency assets
and liabilities of our foreign operations. These differences are recognized in
the translation reserve at the balance sheet date using the closing exchange
rate. The translation reserve is not recognized in profit or loss but is
presented as a separate component of equity. Any exchange differences arising
on the disposal of a foreign operation are recognized in profit or loss.
iii) Legal reserve
According to the company's articles of association, 5% of the net profits are
set aside to form the legal reserve, and these amounts may be stopped when the
balance of this reserve reaches 50% of the value of the issued capital, and
the retainer process is resumed when the reserve balance falls below this
limit, and this reserve can be used to cover losses and can also be used to
increase the company's capital, subject to the approval of the ordinary
general assembly of the company's shareholders. Non-distributable earnings
Retained earnings include an amount of US$ 1.26 million as of December 31,2023
compared to US$ 1,58 million as of December 31,2022, which is not available
for distribution representing a legal and special reserves at the subsidiaries
level.
24. Borrowings
2023 2022
(In thousands of US$) Current Non-current Total Current Non-current Total
Loan from North Korea ((a)) -- 70,905 70,905 -- 64,007 64,007
Bank loans 796 13,061 13,857 1,903 13,086 14,989
Finance lease liability 2,590 16,043 18,633 83 793 876
Total 3,386 100,009 103,395 1,986 77,886 79,872
((a)) 2022 figures are being restated to reflect the corrected comparative
figures refer to note (3)
The following table shows the ageing of borrowings:
(In thousands of US$) Due within one year Due between one and five years Due beyond five years Total
Loan from North Korea -- 70,905 -- 70,905
Bank loans 796 6,934 6,127 13,857
Finance lease liability 2,590 15,835 208 18,633
As of December 31, 2023 3,386 93,674 6,335 103,395
(In thousands of US$) Due within one year Due between one and five years Due beyond five years Total
Loan from North Korea -- -- 64,007 64,007
Bank loans 1,903 6,959 6,127 14,989
Finance lease liability 83 585 208 876
As of December 31, 2022 1,986 7,544 70,342 79,872
The following table provides the breakdown of total borrowings by currency of
issue:
(In thousands of US$) Euro EGP Total
As of December 31, 2023 70,905 32,490 103,395
As of December 31, 2022 64,007 15,865 79,872
The following table illustrates the movements in the borrowings during the
year:
(In thousands of US$) 2023 2022
Balance at the beginning of the year 79,872 10,190
of which:
Current borrowings 1,986 17
Non-current borrowings 77,886 10,173
Payments of loans (91) (15)
Proceeds from loans 906 73,366
cash from sale & lease back 4,854 --
Proceeds Finance lease liabilities 11,819 1,130
Interest Expenses 9,611 336
Interest Paid (3,238) (197)
Interest capitalized 954 1,587
Currency transaltion differences (1,293) (6,525)
Balance at the end of the year 103,395 79,872
of which:
Current borrowings 3,386 1,986
Non-current borrowings 100,009 77,886
i) Bank Loans
The following table shows a breakdown of bank loans by country:
Description Company 31 Dec 2023 31 Dec 2022 Original Currency Nominal Value Maturity Nominal interest rate Security
In US$ In US$
North Korea OIH 70,905 64,007 Euro 81,707 Dec -27 - Unsecured
Egyptian Banks OPE 13,857 15,865 EGP 230,000 Oct-28 1% + corridor Unsecured
Total 84,762 79,872
North Korea (Koryolink)
- During August 2022, Koryolink decided, at the request of a
shareholder in the company, to grant shareholders, without discrimination, a
non-interest loan in accordance with the rules and procedures of local law,
according to the percentage of its contribution to the company's capital. The
loan, amounting to approximately 81.7 million euros (equivalent to US$ 90.18
million as of 31 December 2023), was transferred to the account of Orascom
Investment Holding Company in the Republic of Korea, knowing that all local
regulations and laws regarding bank transfers and transactions will be applied
to the mentioned amounts, and Orascom Investment Company will continue to
comply with international sanctions resolutions in this regard.
- It is worth noting that the loan is interest-free and for a
period of 5 years, which can be automatically increased for another period or
periods of 3 years each, and it will be agreed between the company and
Koryolink on the method of repayment, whether in cash or by settlement with
other balances between the two companies.
Loan (Orascom Pyramids Entertainment (OPE)
On 30 September 2020, a long-term loan contract was signed between the Bank of
the Arab International Banking Company and Orascom Pyramids for Entertainment
Projects (LLC), provided that the Bank of the Arab International Banking
Company grants the company financing in the form of a long-term loan amounting
to EGP 230 million equivalent US$7.4 million. This is for the purpose of
contributing to the financing of the remaining part of the investment costs of
the project to develop and provide services in the visit area of Giza Pyramids
and the adjacent and associated areas according to the usufruct licensing
contract dated December 13, 2018, concluded between the Supreme Council of
Antiquities and Orascom Investment Holding Company, as follows:
- An amount of EGP 80 million equivalent US$ 2.6 million for the
civil works for the restaurant complex and the connection of utilities.
information systems and the accounting system for the project.
- An amount of EGP 52 million equivalent US$ 1.7 million for the
infrastructure works for the information network
- An amount of EGP 90 million equivalent US$ 2.9 million for the
civil works, renovations and improvements to the visitors' building, the VIP
building "the current student building", the site of the visit, the
organization of the area for the stables "horses camels - karts" and for the
electric vans, the charging station and its maintenance.
- An amount of EGP 8 million equivalent US$ ,26 million for the
field work of The Nile Pyramids Lounge.
- Provided that the company is committed to disbursing in
accordance with the above items only with the same values, except for the
items of civil works. The company is allowed to increase it by 10% as a
discount on the surpluses of other exchange items, provided that the use of
all items does not exceed the total value of the loan.
ii) Finance lease liabilities
- Finance Lease Contracts Liabilities:
The Group entered into finance lease transactions between OPE (Orascom
pyramids Entertainment) and El Tayer For Leasing during the year 2022 with a
total contractual amount EGP 23M (US$0.745M) in order to rent 6 electric buses
and 2 charging stations, and the rental value is paid in quarterly instalments
for a period of 27 instalments, while giving the company the right to own
these buses and charging stations at the end of the contract period, and the
payment of instalments ends on 30/7/2028, for a specific value.
- Liabilities from sale and lease back transactions:
During March 2023, the company sold and leased its headquarters to GB for
leasing for the amount of 156,594,000 Egyptian pounds (US$ 5,073,678) and for
that the lessor approved to rent owned assets in 2005 - A. Nile City Towers-
South Tower - Floor 26 that of 1304.95 square meter for 5 years starting from
March 31, 2023 and ending March 31, 2028. This asset has been leased for
148,764,300 Egyptian pounds (US$ 4,819,994) and the lessee has the right to
buy the leased asset at the end of the contracted period for 1 Egyptian
Pounds, for the lessee to address the buying option for the lessor two months
before the defined period ends and for the selling price at the end of
contracted period to be equivalent to the unsettled current lease prices added
to asset fair value at contracted date with 5% early-settlement penalty in
accordance with terms and conditions as follows:
In the case of the lessee chose, as per his right, to buy the asset, the
lessor has to propose a final selling contract to the lessee within a month
from the end of contract date as long as the lessee applied all written terms
and conditions. And in all cases, asset ownership cannot be transferred from
lessor to lessee unless the lessee fully settles the contracted amount, formed
a written contract between the two parties moreover the lessee is obliged to
pay all expenses, taxes, customs and any other related payments of the selling
contract.
During March 2024, the company requested to settle the amount of loan,
penalties related to early-payments and the company transferred the amount in
full including the early-payment penalties dated March 13, 2024, and is
currently working towards signing the liability's settlement.
- Operating Lease Contracts Liabilities:
During 2018, ana agreement has been made at The Pyramids area in giza with the
amount of 20 million Egyptian pounds (US$ 0.648M.) with annual 10% increase
starting from actual operating date or 50% of net profits, which ever is
higher. The subsidiary was given a grace period to finalize its developments
in the ancient area for the Egyptian government is committed to finalize some
issue in the ancient area for then the subsidiary can actually begin
operating. The actual start date of the lease contract is within the last
quarter of year 2023. According to the governmental parties responsible for
the project, company's management has approved to pay the minimum limit for
the financial year starting July 1, 2022 and ending June 30, 2023.
The following table the amount of finance lease liabilties as of December 31,
2023:
Description Company 31 Dec 2023 31 Dec 2022 Original currency
In US$ In US$
Finance lease liabilities OPE 612 876 EGP
Sale & Lease back OIH 4,814 -- EGP
Operating lease liability OPE 13,207 -- EGP
Total 18,633 876
25. Provisions
(In thousands of US$) 2023 2022
Opening balance 8,702 11,769
Made 1,487 1,718
Used during the year (302) (1,799)
Foreign currency translation differences (2,607) (2,986)
Ending balance 7,280 8,702
Provisions are related to expected claims resulting from the Group companies'
ordinary course of business. The required information about these provisions
were not disclosed, according to the related IFRSs Accounting standards,
because the management of the Group believes that doing so, will strongly
affect the final settlement of these provisions for claims.
26. Trade payables and other liabilities
2023 2022
(In thousands of US$) Current Non-current Total Current Non-current Total
Trade payables
Trade payables due to suppliers 9,812 -- 9,812 8,249 -- 8,249
Customers credit balance 220 -- 220 58 -- 58
Other trade payables 724 -- 724 987 -- 987
Total 10,756 -- 10,756 9,294 -- 9,294
Other liabilities
Prepaid traffic & deferred income 994 -- 994 137 -- 137
Contract liabilities -- -- -- -- 189 189
Due to local authorities 6 -- 6 3 -- 3
Personnel payables 103 -- 103 261 -- 261
Subscriber deposits 63 -- 63 17 -- 17
Other credit balances * 3,671 -- 3,671 10,072 -- 10,072
Total other liabilities 4,837 -- 4,837 10,490 189 10,679
Total 15,593 -- 15,593 19,784 189 19,973
* Other credit balances include employee benefits managed by OIH under the
Management Agreement with the Ministry of Telecommunications. OIH oversees
MIC1 SAL on behalf of the Republic of Lebanon, the owner of both mobile
network operators.
Orascom Telecom Lebanon SAL (OTL) is created to manage the personnel of MIC,
as employer, yet all personnel costs are charged to and reimbursed by the
Lebanese Government as per the term of the management agreement. The amount
which is included in the other credit balances - current as of December 31,
2023, is US$ 0.262 million (2022 US$ 0.262 million) and regarding to the
remaining amount of other credit balance is comprised of accrued bonuses and
other payable towards governments by US$ 2.8 million and US$2.7 million,
respectively.
27. Earnings / (Losses) per share --- (Basic & Diluted)
- Basic (losses) / earnings per share is calculated by dividing the profit
attributable to equity holders of the Company by the weighted average number
of ordinary shares outstanding during the year. For the purposes of the
(losses) / earnings per share calculation, it has been assumed that the number
of issued shares at the date of incorporation (5,245,690 thousand) had been
outstanding during the year.
- Diluted (losses) / earnings per share is calculated by adjusting the
weighted average number of ordinary shares outstanding to assume conversion of
all dilutive potential ordinary shares. During the period covered by the
report, the Company did not have any dilutive potential ordinary shares and as
such diluted and basic (losses) / earnings per share from continuing
operations and from discontinued operations are equal.
A. Earnings / (Losses) per share from Continuing operation attributable
to equity holders
Basic and diluted (in US$)
(In thousands of US$) For the year ended For the year ended
December 31, 2023 December 31, 2022
(loss) / Earnings from continuing operations (48,711) 37,719
Weighted average number of shares (in thousands of shares) 5,245,691 5,245,691
(Losses) / Earnings per share - basic and diluted (0.0093) 0.0072
B. Earnings / (Losses) per share from Discontinuing operation
attributable to equity holders
Basic and diluted (in US$)
(In thousands of US$) For the year ended For the year ended
December 31, 2023 December 31, 2022
Earnings / (Losses) from discontinuing operation 9,434 (620)
Weighted average number of shares (In thousands of shares) 5,245,691 5,245,691
Earnings / (Losses) per share - basic and diluted 0.0018 (0.0001)
28. Discontinued operations
(In thousands of US$) For the year ended December 31, 2023 For the year ended December 31, 2022
Loss on disposal of TWA (28-1) (500) (620)
Disposal of floors in Brazil (28-2) 9,413 --
Mena Cable (28-3) 521 --
Profit/(Loss) (net of income tax) 9,434 (620)
28-1 Discontinued operations result from TWA:
During 2021 the Company has announced the sale of all shares of TWA, Orascom
Investment Holding owns 51% of total TWA and the sale transaction is completed
on 21 January 2022 and the share of Orascom Investment Holding amounted about
US$ 35.5 million and the shares ownership has been transferred on that date
mentioned above.
During the year 2023, the final selling price has been agreed to be around 35
million US$ and according to this adjustment, Orascom Investment Holding
settled around US$ 500 thousands as adjustments to the transaction of
subsidiary's selling.
TWA' results during the financial year ending (In Thousands of US$) For the year ended December 31, 2023 For the year ended December 31, 2022
Sale value of Company in TWA received in 2022 -- 32,005
Advanced payment of sale value paid in 2021 -- 2,995
Total amount received -- 35,000
Carrying amount of assets sold -- (44,818)
Disposal of carrying amount to NCI -- 21,628
Disposal of currency translation reserve -- (5,300)
Company shares in TWA profit before tax -- 6,510
Income Tax -- (7,130)
Group net loss from the disposal -- (620)
28-2 Discontinued operations result from Sale of 1.5 Floor in Brazil:
During May 2023, the group announced about an acquisition offer received
regarding its owned assets in Brazil of which the Board of Directors approved
to hire an independent financial consultant, to report a study related to the
equivalent price of the assets and that in accordance with the requirements of
article (43) from rules for listing and delisting securities on the stock
exchange.
During September 2023 and for securing the selling transaction, the company
established two subsidiaries in Brazil and the ownership of the investment
property has been transferred to the two companies with the amount totaling to
87.5 million BRL equivalent to around 539 million Egyptian pounds (after
deduction of due taxes).
The Group disposed the remaining 1.5 floors equivalent to 6 offices to a third
party for a value of BRL 87,5 Million equivalent in US$ 17,575 Million, as per
the sale agreement executed Note (17).
And Management considers this disposal price as an approximation of fair value
as follows:
(In Thousands of US$) For the year ended December 31, 2023 For the year ended December 31, 2022
Cash Proceed resulted from disposal of 1.5 Floor 18,075 --
NBV of investment property (7,079) --
Total Gain resulted from disposal 10,996 --
Expenses incurred associated to Sales process (32) --
Rental income recognized before sale 853 --
Profit before tax 11,817 --
Income Tax (2,404) --
Group net Profit after tax 9,413 --
28-3 Discontinued operations result from Mena cable:
In 2023, the Group received EGP 16 million (US$ 521 thousand) which represents
the total balance due to Orascom investments holding and its subsidiaries from
Mena cable company regarding the technical malfunction of Mena Submarine Cable
System and Transferring 100% of Group shares in MENA Cable to the Egyptian
International Submarine Cables Company.
29. Commitments
The commitments as of December 31, 2023, and December 31, 2022, are provided
in the table below:
(In thousands of US$) For the year ended December 31, 2023 For the year ended December 31, 2022
Purchase of property and equipment 499 4,600
Others -- 916
Total 499 5,516
30. Related party transactions and balances
Transactions with, associates, affiliate, and other related parties with the
Group throughout the year are not considered atypical or unusual, as they fall
within the Group's normal course of business.
The main related party transactions and balances, other than those already
disclosed in this consolidated financial statement, resulted from these
transactions are summarised as follows:
(In thousands of US$) Year ended December 31, 2023 Year ended December 31, 2022
Exp paid on behalf of related party Investment expenditure Exp paid on behalf of related party Investment expenditure
OIH
CHEO Technology JV - associate ((a)) 221 -- 155 --
(In thousands of US$) Year ended December 31, 2023 Year ended December 31, 2022
Receivables Payables Receivables Payables
OIH
CHEO Technology JV - associate -- 8,093 -- 7,800
Balances receivables from CHEO Technology JV are fully impaired. Furthermore,
the Group did not offset balances receivables against the payables relating to
CHEO, due to the Group not intending to settle the recognized amounts on a net
basis or to realize the asset settle the liability simultaneously.
((a)) 2022 figures are being restated to reflect the corrected comparative
figures refer to note (3)
Key management compensation
§ Key management includes executive and non-executive directors, the chief
financial officer and other managing directors considered key personnel.
§ The compensation paid or payable to key management for employee services
amounted to US$ 1,6 million and 0.34 million, respectively for the years ended
December 31, 2023, and December 31, 2022.
31. Contingent assets and liabilities
The contingent liabilities, are represented in guarantees issued by the
holding company and related to the activities of its subsidiaries, as follows:
Orascom Pyramids for Entertainment Projects
There are letters of guarantee equivalent to US$ 0,646 million in favour of
the Bank of the International Arab Banking Company.
Orascom Investment Holding Company
There is letter of credit equivalent to US$ 2.4 million in favour of the
National Bank.
32. Reversal of provisions
(In thousands of US$) For the year ended December 31, 2023 For the year ended December 31, 2022
Reversal of provisions - 2,585
Total - 2,585
During OTL operation in Lebanon, the company accrued for a bonus for OTL
employees. The accrued amount was more than the actual paid bonus; hence the
company reversed the extra accruals in 2022.
During OTL operation in Lebanon, the company accrued for a bonus for OTL
employees. The accrued amount was more than the actual paid bonus; hence the
company reversed the extra accruals in 2022.
33. Subsequent events
§ On June 25, 2023, Orascom Investment Holding S.A.E. (the "Company") entered
a strategic partnership with Caxton Holding LLC (the "Founders SPV"), a
limited liability company established in the United Arab Emirates a company
founded to revolutionize light electric mobility through battery-swapping
technology and a fully integrated digital platform. The objective of the
partnership is to drive a major transformation in the transportation sector
within Egypt and across regional markets in the Middle East and Africa. As
part of the investment structure, the Company established BluEV Holding
Limited (the "HoldCo"), with an injection of an initial investment amount of
$3 million. As a result, the Company hold 98% interests in HoldCo, while the
remaining 2% is held by Caxton Holding LLC (the "Founders SPV"),
Caxton Holding LLC (the "Founders SPV") is entitled to acquire a share of
BluEV Holding Limited (the "HoldCo")'s total capital in the form of (Eligible
Shares) in equal instalments expiring in 2029. They are also entitled to
acquire a share of the Company's capital in the form of (Call Option Shares)
to be vested in instalments expiring in 2027 and exercisable until December
31, 2031.
All rights to Founders SPV were granted starting from July 1, 2024, which will
be vested based on the achievement of defined technical, commercial, operation
and financial targets as well as the founders' continued service in HoldCo.
§ During March 2024, Orascom Investment Holding Company has made an early
settlement for the sale and leaseback process for the 29th floor with an
amount of approximately EGP 159 million (US$ 3.4 million), and several legal
procedures are still in process.
§ On November 18, 2024, the Company's Board of Directors, representing
experienced non-executive members and independent members, approved the
following:
- Acquisition of Misr Entertainment Investments Co. M.L. ' In
principle, following all legal and regulatory procedures and authorizing
engineer/Akil Bashir to negotiate acquisition terms.
- Appointment of an independent financial adviser to submit a study of
the exchange at the fair price of shares/shares in possession in accordance
with the procedures set out in article 44 of the Rules for the Entry and
Deletion of Securities in the Egyptian Stock Exchange.
- To appoint a legal adviser to prepare a study on acquisition
companies that is not unaware.
§ During December 2024, Koryolink grant shareholders, without discrimination,
a 5 years non-interest bearing loan in accordance with the rules and
procedures of local law, according to the percentage of its contribution to
the company's capital. The loan, amounting to approximately 30 million euros
was transferred to the account of Orascom Investment Holding Company in the
Republic of Korea.
§ During the year 2024, the company paid the credit balance due to Koryolink
Company with an amount of approximately 8 million euros from the company's
bank account in North Korea.
§ In June 2025, the board of Directors approved a share buyback program of up
524,569 shares (10% of the company's capital), following the FRA's approval on
June 18,2025, to be executed at market prices in accordance with regulatory
requirements. No shares had been repurchased as of June 30, 2025.
§ Orascom Investment Holding's subsidiary, OSL for Entertainment Projects,
has entered medium-term financing agreement with Commercial International Bank
(CIB) the main financial collateral was provided as the following:
· Agreement: A nine-year, medium-term financing deal with
Commercial International Bank (CIB), signed in July 2025.
· Parties: OSL for Entertainment Projects (a subsidiary of Orascom
Investment Holding) and CIB.
· Funding Breakdown:
o Loan: US$ 9.146 million .
o Loan: EGP 364.8 million (equivalent to US$ 11.81)
o Letters of Guarantee: EGP 36 million (equivalent to US$ 1.2)and USD 1.5
million
· Purpose: To fund the development of the sound and light shows
and a new exhibition area at the Pyramids and Sphinx.
Orascom Investment Holding S.A.E.
Appendix A - Subsidiaries and investment in Equity accounted investees as of December 31, 2023
Segment Country of incorporation and place of business Entity name Nature of business Proportion of ordinary shares held by the Company (%) Proportion of ordinary shares held by OIH Group (%) Proportion of ordinary shares held by the non-controlling interest / other Investment type
shareholders (%)
Media and Technology Egypt Oracap Holding Co. (Free zone) Other 100% 100% 0.00% Subsidiary
Media and Technology Malta Oracap Far East Ltd Other 100% 100% 0.00% Subsidiary
Management services Lebanon Orascom Telecom Lebanon Management services 99,8% 99,8% 0.20% Subsidiary
Other Luxembourg OIH-Renewables Other 100% 100% 0.00% Subsidiary
Other North Korea Osorcon Other 100% 100% 0.00% Subsidiary
Investment Property Netherlands Victoire coop Investment Holding Investment Property 100.00% 100.00% 0.00% Subsidiary
Investment Property Netherlands Victoire BV Investment Property 100.00% 100.00% 0.00% Subsidiary
Investment Property Brazil INCA 9 (Brazil) Investment Property 100.00% 100.00% 0.00% Subsidiary
Investment Property Brazil INCA 19 (Brazil) Investment Property 100.00% 100.00% 0.00% Subsidiary
Energy Egypt O Capital for energy Energy 99,2% 99,99% 0.01% Subsidiary
Energy Egypt O Capital for services and construction Energy 99,2% 99,99% 0.01% Subsidiary
Media and Technology Egypt Orascom Telecom Venture co. "S.A.E" Other 99,99% 99,99% 0.01% Subsidiary
Entertainment Egypt Orascom Pyramids Entertainment "S.A.E" Entertainment 100% 100% 0.00% Subsidiary
Entertainment Egypt Orascom Prisme Pyramides Entertainment "S.A.E" Entertainment 70% 70% 30% Subsidiary
Entertainment Egypt Orascom Pyramids for Touristic Establishment Entertainment 100% 100% 0.00% Subsidiary
GSM North Korea North Korea CHEO Technology JV Company Telecommunication operator 60% 60% 25.00% Associate
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