REG - Orascom Investment - Annual Financial Report
29/12/2025 07:00
For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20251229:nRSc8821Ma&default-theme=true
RNS Number : 8821M Orascom Investment Holding S.A.E 24 December 2025
Orascom Investment Holding
S.A.E.
Consolidated Financial Statements
As at and for the year ended
December 31, 2024 (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$) Note December31,2024 December31,2023
Assets
Property and equipment 14 22,632 31,558
Intangible assets 15 -- --
Investment property 16 -- --
Equity-accounted investees 12 12,071 19,858
Financial assets at amortized cost 17 13 47,975
Financial assets at FVTPL 17 28,522 24,332
Total non-current assets 63,238 123,723
Inventories 365 35
Trade receivables 19 4,302 5,208
Financial assets at amortized cost 17 56,954 --
Other assets 20 12,869 2,057
Cash and cash equivalents 21 45,714 73,583
Total current assets 120,204 80,883
Total assets 183,442 204,606
Equity
Share capital 22 95,890 95,890
Reserves (62,267) (56,507)
Retained earnings 20,821 27,532
Equity attributable to equity holders of the Company 54,444 66,915
Non-controlling interests (87) (301)
Total equity 54,357 66,614
Liabilities
Borrowings 23 104,727 100,009
Deferred tax liabilities 18-1 9,595 9,396
Total non-current liabilities 114,322 109,405
Borrowings 23 3,163 3,386
Trade payables and other liabilities 25 4,903 15,593
Income tax liabilities 996 2,328
Provisions 24 5,701 7,280
Total current liabilities 14,763 28,587
Total liabilities 129,085 137,992
Total equity and liabilities 183,442 204,606
* The accompanying notes from page (5) to page (47) are an integral part of
these consolidated financial statements.
Chief Financial Officer
Chairman
ORASCOM INVESTMENT HOLDING S.A.E.
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE FINANCIAL YEAR ENDED
(In thousands of US$, except per share amounts) Note December 31 December 31
,2024 ,2023
Continuing operations
Revenues 6 7,873 5,754
Other Income 2,728 115
Total Income 10,601 5,869
Purchases and services 7 (9,132) (4,761)
Other expenses 9 (484) (225)
Increase in provisions 24 (1,670) (1,487)
Personnel cost 8 (6,446) (9,081)
Depreciation and amortization 10 (1,085) (1,627)
Impairment loss of other financial assets (14,000) (49,448)
Operating (loss) (22,216) (60,760)
Finance income 11 17,537 4,241
Gain/losses on financial assets at FVTPL 11 5,943 (3,956)
Finance expense 11 (6,918) (9,611)
Net gain from foreign currencies translation differences 11 1,944 19,783
Share of profit from Equity-accounted investees 12 8,868 18,103
Impairment of share of profit from Equity-accounted investees 12 (8,868) (18,103)
(Loss) before income tax (3,710) (50,303)
Income tax expense 13 (3,126) 1,567
(Loss) for the year from continued operations (6,836) (48,736)
Discontinued operations
Gain /(Loss) from discontinuing operation (net of income tax) 28 -- 9,434
(Loss) for the year (6,836) (39,302)
Other comprehensive income:
Items that may subsequently reclassified to profit or loss net of tax
Foreign operations- Foreign currencies translation differences (6,021) (19,834)
Total other comprehensive Loss for the year (6,021) (19,834)
Total other comprehensive Loss for the year (12,857) (59,136)
Profit / (loss) for the year attributable to:
Owners of the Company from continuing operations 26 (6,711) (48,711)
Owners of the Company from discontinuing operations 28 -- 9,434
Non-controlling interests (125) (25)
Total (6,836) (39,302)
Total other comprehensive income for the year attributable to:
Owners of the Company (12,871) (59,197)
Non-controlling interests 14 61
Total (12,857) (59,136)
(losses) per share from continuing operation - basic & diluted 26 (0.001) (0.0093)
* The accompanying notes from page (5) to page (47) are an integral part of
these consolidated financial statements.
ORASCOM INVESTMENT HOLDING S.A.E.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED DECEMBER 31,
2024
(In thousands of US$) Share capital Legal reserve Translation reserve Total reserves Retained earnings Equity attributable to owners of the parent company Non-controlling interests Total equity
Note
Treasury Share Other reserves
As of January 1, 2023 22 95,890 26,150 (56,525) -- 8,075 (22,300) 42,055 115,645 (462) 115,183
Restatements -- -- (6,650) -- (8,075) (14,725) 24,754 10,029 -- 10,029
As of January 1, 2023, restated 95,890 26,150 (63,175) -- -- (37,025) 66,809 125,674 (462) 125,212
Foreign operations- Currencies translation -- -- (19,920) -- -- (19,920) -- (19,920) 86 (19,834)
Profit for the year -- -- -- -- - - (39,277) (39,277) (25) (39,302)
Total comprehensive (loss) for the year -- -- (19,920) -- -- (19,920) (39,277) (59,197) 61 (59,136)
Transactions with owners of the company
NCI Share in investment in Subs -- -- -- -- -- -- -- -- 100 100
Gain from Sale of Treasury Share -- -- -- 449 (11) 438 -- 438 -- 438
Total transactions with owners of the company -- -- -- 449 (11) 438 -- 438 100 538
As of December 31, 2023 95,890 26,150 (83,095) 449 (11) (56,507) 27,532 66,915 (301) 66,614
(In thousands of US$) 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
As of January 1, 2024 22 95,890 26,150 (83,095) 449 (11) (56,507) 27,532 66,915 (301) 66,614 66,614
Reserve -- 400 -- -- -- 400 -- 400 -- 400
Equity-settled share-based payment 27 -- -- -- -- -- -- -- -- 200 200
Foreign operations- Foreign currencies -- -- (6,160) -- -- (6,160) -- (6,160) 139 (6.021)
(Loss) for the year -- -- -- -- -- -- (6,711) (6,711) (125) (6,836)
Total comprehensive (loss) for the year -- -- (6,160) -- -- (6,160) (6,711) (12,871) 14 (12,857)
As of December 31, 2024 95,890 26,550 (89,255) 449 (11) (62,267) 20,821 54,444 (87) 54,357
The accompanying notes from page (5) to page (47) are an integral part of
these consolidated financial statements.
ORASCOM INVESTMENT HOLDING S.A.E.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE FINANCIAL YEAR ENDED
(In thousands of US$) Notes December 31,2024 December 31,2023
(Loss) for the year before tax (3,710) (50,303)
Adjustments for:
Depreciation and amortization 10 1,085 1,627
Finance income 11 (17,537) (4,241)
Finance expense 11 6,918 9,611
Foreign exchange (gain) /loss 11 (1,944) (19,783)
Impairment loss of other financial assets 14,000 49,448
Equity-settled share-based payment 31 200 --
Gain from valuation financial assets at fair market value 11 (5,943) 3,956
Gain (Loss) from sale of Investments at fair market value (2,728) --
Change in provisions 24 1,670 1,185
Changes in current assets (10,236) 2,533
Changes in current liabilities (17,632) (2,353)
Cash flows (used in) by operating activities (35,857) (8,320)
Income tax paid (1,700) (3,484)
Interest received 3,907 4,021
Net cash flows (used in) operating activities (33,650) (7,783)
Cash flows from investing activities
Cash out flow for investments in:
Acquisition of Property and equipment (5,731) (6,042)
Acquisition of financial assets (11,182) --
Cash collected from sales of investment property -- 18,075
Proceeds from Investments Held for Trading 5,281 4,651
Cash Paid Investments Held for Trading (2,552) (3,799)
Repayment to related party 17 (6,942) --
Cash flows (used in) generated by investing activities (21,126) 12,885
Cash flows from financing activities
Interest paid 23 (1,916) (3,238)
Proceeds from Sale & lease back -- 4,854
Proceeds from loan and bank facilities 23 34,854 906
Payments of loans 23 (4,125) (91)
Cash from NCI related to their share in subsidiary -- 100
Cash from Sale Treasury share -- 435
Payments of operating lease 23 (980) --
Cash flows generated by financing activities 27,833 2,966
Net change in cash and cash equivalents from continuing operations (26,943) 8,068
Discontinuing operations
Net cash flows (used in) / generated by operating activities -- 352
Net cash flows (used in) financing activities -- --
Net cash generated by / (used in) discontinued operations -- 352
Net change in cash and cash equivalents (26,943) 8,420
Cash and cash equivalents at the beginning of the period 73,583 66,880
Effect of exchange rates on cash and cash equivalents continued (926) (1,717)
Cash and cash equivalents at the end of the year 21 45,714 73,583
Cash Held in North Korea classified as financial assets 17 113,909 95,911
Total cash and financial assets at the end of the year 21 159,623 169,494
* The accompanying notes from page (5 to page 47) are an integral part of
these consolidated financial statements.
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 TMT investments S.à.r.l.
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
2024 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
IFRS Accounting Standards.
They were approved and authorized for issue by the Company's board of
directors on …………….
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, 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)
January 1, 2024 Classification of Liabilities as Current or Non-Current (Amendments to IAS 1)
In the current year, the group has applied a number of amendments to IFRS
Accounting Standards 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
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 has the ability to
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
issued by the International Accounting Standards Board (IASB)
§ 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, 2024 year ended December 31, 2023
December 31, 2024 December 31, 2023
Egyptian Pound (EGP) 0.0220 0.0196 0.0326 0.0324
Euro (EUR) 1.0817 1.0353 1.0815 1.1038
Brazilian Real (BRL) 0.1854 0.1620 0.2003 0.2061
LBP Lebanese Pounds (LBP) 0.00001 0.00001 0.00007 0.00007
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.
Employee benefits
Short-term employee benefits
Short‑term employee benefits are expensed as the related service is
provided. A liability is recognised for the amount expected to be paid if the
Group has a present legal or constructive obligation to pay this amount as a
result of past service provided by the employee and the obligation can be
estimated reliably.
Share-based payment arrangements
The grant‑date fair value of equity‑settled share‑based payment
arrangements granted to employees is generally known as an expense, with a
corresponding increase in equity, over the vesting period of the awards.
The amount recognised as an expense is adjusted to reflect the number of
awards for which the related service and non‑market performance conditions
are expected to be met, such that the amount ultimately recognised is based on
the number of awards that meet the related service and non‑market
performance conditions at the vesting date.
For share‑based payment awards with non‑vesting conditions, the
grant‑date fair value of the share‑based payment is measured to reflect
such conditions and there is no true‑up for differences between expected and
actual outcomes.
The fair value of the amount payable to employees in respect of SARs, which
are settled in cash, is recognised as an expense with a corresponding increase
in liabilities, over the period during which the employees become
unconditionally entitled to payment. The liability is remeasured at
each reporting date and at settlement date based on the fair value of the
SARs. Any changes in the liability are recognised in profit or loss.
Termination benefits
Termination benefits are expensed at the earlier of when the Group can no
longer withdraw the offer of those benefits and when the Group recognises
costs for a restructuring. If benefits are not expected to be settled wholly
within 12 months of the reporting date, then they are discounted.
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.
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.
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 entertainment and Other
trading activities.
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.
A.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.
A-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.
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. Revenue from other trading activities
Revenue from other trading activities is predominantly generated by O-Trade
and Blue EV recognized according to the accrual basis based on agreement and
revenue recognition criteria.
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. 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 (17)
- '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.
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
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's 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.
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 %
Euro*
Orascom Investment Holding SAE 60,000,000 60%
Post office Co.at North Korea 40,000,000 40%
Total 100,000,000 100%
*The functional currency for Koryolink is Euro.
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.
4. 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, 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
December 31, 2024 December 31, 2024 December 31, 2024 December 31, 2024
Assets (Liabilities) Net assets/(liabilities) in currency Net assets/(liabilities)
in currency in currency in US$
US$ 81,537 1,397 80,141 80,141
LBP 645,116,211 - 110,603,558 755,719,769 5,971
Euro 110,043 87,413 22,630 23,429
GBP 108 - 108 2
BRL 8,149 2,012 6,137 994
b) As of December 31, 2024, if the functional currencies had
increased/(decreased) by 10% against the US$, Euro, BRL, and GBP with all
other variables held constant, the translation of foreign currency would have
resulted in an increase / (decrease) of US$ $ 7,539 thousand and LBP 493
and Euro of 16,895 as well as BRL 136 of net profit (2023: US$ $
(8,981) thousand and Euro of (349) and LBP 226 as well as BRL 7,565 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, 2024, US$
17,391thousand (December 31, 2023 US$ 32,490 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
2024 finance costs of US$ 0.251 million. (2023: US$ 0.93 million).
v) Fair value hierarchy
The following tables analyze financial instruments carried at fair value, by
level, on 31 December 2024 and 2023:
At 31 December 2024
(Millions of US$) Level 1 Level 2 Level 3 Total
Financial instruments FVTPL -- -- 28,522 28,522
Total assets -- -- 28,522 28,522
At 31 December 2023
(Millions of US$) Level 1 Level 2 Level 3 Total
Financial instruments FVTPL -- -- 24,332 24,332
Total assets -- -- 24,332 24,332
The investment in Lighthouse Energy Fund SCSp 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 2024 of the Lighthouse Energy fund
(Millions of US$) Valuation Technique Unobservable inputs Range of estimates (weighted average) Sensitivity Range Sensitivity
Unlisted private Discounted cash flow PPA prices Market following with EUR 2/MWh discount Discount of EUR 1/MWh/ Discount of EUR 3/MWh The estimated FV would increase, if the PPA prices were higher.
equity investments
Discount rates 8% to 14% +0.5% /-0.5% The estimated FV would increase if the discount rates were lower.
Merchant power prices EUR 51/MWh declining to EUR 30/MWh +10% / -10% The estimated FV would increase if the merchant power prices were higher.
CAPEX Solar EUR 0.5mn to 0.85mn/MW +10% / -10% The estimated FV would increase if the CAPEX prices were lower.
Wind EUR 1.3mn/MW
Sale Prices (Non-Iridium): Granted: EUR 300k/MW Requested: EUR 250k/MW +10% / -10% The estimated FV would increase if prices were higher.
Data Center
Borrowing costs Wind EUR 1.3 /MW +1% / -1% The estimated FV would increase if the borrowing cost prices were lower.
4.0% to 6.75%
Fair Value Level 3
The following table shows the fair values of financial assets and financial
liabilities, including their levels in the fair value hierarchy according as
of December 31, 2024, and December 31, 2023.
(In thousands of US$) As at December 31, 2024,
Statement of financial position At amortized Cost Financial assets FVPL Others Level 1 Level 2 Level 3
Cash and cash equivalents 45,714 -- -- -- 45,714 --
Financial assets at amortised cost 56,967 -- -- -- -- 56,967
Trade receivables 4,302 -- -- -- -- 4,302
Financial assets at FVTPL (Note.17) -- 28,522 -- -- -- 28,522
Other assets 12,869 -- -- -- -- 12,869
Borrowings 107,890 -- -- -- 8,585 99,305
Trade payable and other labilities 4,903 -- -- -- -- 4,903
(In thousands of US$) As at December 31, 2023
Statement of financial position At amortized Cost Financial assets FVPL Others Level 1 Level 2 Level 3
Cash and cash equivalents 73,583 -- -- -- -- 73,583
Financial assets at amortised cost 47,975 47,975
Trade receivables 5,208 -- -- -- -- 5,208
Financial assets at FVTPL (Note.17) -- 24,332 -- -- -- 24,332
Other assets 2,057 -- -- -- -- --
Borrowings 103,395 -- -- -- 13,857 89,538
Trade payable and other labilities 15,593 -- -- -- -- 15,593
vi) Credit Risk
Credit risk is the risk of financial loss to the Group if a customer or
counterparty to a financial instrument fails to meet its contractual
obligations and arises principally from the Group's receivables from customers
and investments in debt securities. The carrying amounts of financial assets
and contract assets represent the maximum credit exposure.
Impairment losses on financial assets and contract assets recognized in profit
or loss were as follow: -
(In thousands of US$) December 31, 2024 December 31, 2023
Impairment loss on trade receivables (note 19) (43) (3,963)
Impairment loss on other assets (note 20) -- (52)
Impairment loss of other financial assets (note 17) (13,065) (45,019)
Impairment loss in cash and cash equivalent (note 21) (892) (414)
Total (14,000) (49,448)
· Cash and cash equivalents
The Group Companies have placed funds with the following financial
institutions based on their credit rating: -
Rating
Name of Bank 2024 2023
Arab Bank Zurich BB BB
CA Indosuez LU A+ A+
Credit Agricole Egypt A+ A+
QNB Bank BB- B-
FAB Bank AA- AA-
Bank Masr B B-
Banco General S. A BBB- BBB-
Audi Bank CCC CCC
The Group held cash and cash equivalents of US$ 45,714 million (2023: US$
73,583 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$ 1.2 million in a Lebanese bank as at December 31,
2024 (December 31, 2023: US$ 0.552 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.
During December 2024, Koryolink Company granted all shareholders additional
interest free loan amounted to EUR 30 million (equivalent to US$31 million as
of 31 December 2024) transferred to Orascom investment holding bank account.
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 and December 2024.
· 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, 2024, and 2023, 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, 2024 Carrying amount December 31, 2023
Egypt 1,064 2,009
Brazil 98 685
Lebanon 3,140 2,514
Total 4,302 5,208
As of December 31, 2024, and 2023, the exposure to credit risk for trade
receivables by type of counterparty was as follows: -
(In thousands of US$) Carrying amount December 31, 2024 Carrying amount December 31, 2023
Entertainment 1,064 2,009
Rentals 98 685
GSM 3,140 2,514
Total 4,302 5,208
vii) Liquidity Risk
The Group monitors and mitigates liquidity risk arising from the uncertainty
of cash inflows and outflows by maintaining sufficient liquidity of cash
balances. In general, liquidity risk is monitored at entity level whereby each
subsidiary is responsible for managing and monitoring its cash flows and
rolling liquidity reserve forecast in order to ensure that it has sufficient
committed facilities to meet its liquidity needs.
Laws and regulations in certain countries, such as North Korea, in which the
Group operates limit the conversion of current cash balances into foreign
currency. Given the nature of the business, Group companies may have to make
payments in foreign currencies (for example capital expenditures), the lack of
individual entity foreign currency reserves means that these companies are
largely dependent on the Company to make these payments on its behalf.
In thousands of US$ 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 Koryolink 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
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 8,585 16,127 3,249 11,444 1,434
Loan from Koryolink 90,499 116,052 -- 116,052 --
Trade payables and other liabilities 4,903 4,903 4,903 -- --
Finance lease liability 8,806 32,413 1,969 7,212 23,232
As of December 31, 2024 112,793 169,495 10,121 134,708 24,666
* 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, 2024 As of December 31, 2023
(In thousands of US$) At amortised Cost At FVTPL Total At amortised Cost At FVTPL Total
Assets
Cash and cash equivalents 45,714 -- 45,714 73,583 -- 73,583
Trade receivables 4,302 -- 4,302 5,208 -- 5,208
Financial assets at FVTPL -- 28,522 28,522 -- 24,332 24,332
Other assets 12,869 -- 12,869 2,057 -- 2,057
Total 62,885 28,522 91,407 80,848 24,332 105,180
As of December 31, 2024 As of December 31, 2023
(In thousands of US$) At amortised Cost Total At amortised Cost Total
Liabilities
Borrowings 107,890 107,890 103,395 103,395
Trade payable & other liabilities 4,903 4,903 15,593 15,593
Total 112,793 112,793 118,988 118,988
5. 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:
· 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 in 2023 and 2024.
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.
· 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. --(5-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. --(5-B)
C. Segment capital expenditure: The total cost incurred during the
period to acquire property, equipment, and intangible assets (excluding
goodwill) for the segment. --(5-C)
5-A) Revenue by Segment
For the year ended December 31, 2024 For the year ended December 31, 2023
(In thousands of US$) Total segment revenue Revenue from external customers Adjusted EBITDA Total segment revenue Revenue from external customers Adjusted EBITDA
Entertainments 6,245 6,245 1,288 5,754 5,754 1,860
Other 1,628 1,628 (22,419) -- -- (60,993)
Total 7,873 7,873 (21,131) 5,754 5,754 (59,133)
5-B) Adjusted EBITDA
Reconciliation of adjusted EBITDA to profit / (loss) before income tax
(In thousands of US$) For the year ended For the year ended
December 31, 2024 December 31, 2023
Adjusted EBITDA (21,131) (59,133)
Depreciation and amortization (1,085) (1,627)
Finance income 17,537 4,241
Financial assets at FVTPL 5,943 (3,956)
Finance expense (6,918) (9,611)
Net foreign currencies translation differences 1,944 19,783
(loss) before income tax (3,710) (50,303)
December 31,2024 Entertainments Others Total
Adjusted EBITDA 1,288 (22,419) (21,131)
Depreciation and amortization (947) (138) (1,085)
Finance income -- 17,537 17,537
Financial assets at FVTPL -- 5,943 5,943
Finance expense (3,748) (3,170) (6,918)
Net foreign currencies translation differences 64 1,880 1,944
(loss) before income tax (3,343) (367) (3,710)
Entertainments Others Total
December 31,2023
Adjusted EBITDA 1,860 (60,993) (59,133)
Depreciation and amortization (1,563) (64) (1,627)
Finance income 20 4,221 4,241
Financial assets at FVTPL -- (3,956) (3,956)
Finance expense (4,300) (5,311) (9,611)
Net foreign currencies translation differences 120 19,663 19,783
Profit before income tax (3,863) (46,440) (50,303)
5-C) Segment capital expenditure
§ Assets per segment
The following table illustrates assets for each reportable segment as they are
regularly provided to the board of directors.
December 31, 2024 December 31, 2023
(In thousands of US$) Property and equipment Equity investments Total Property and equipment Equity investments Total
Entertainment 20,911 -- 20,911 30,325 -- 30,325
Other 1,721 12,071 13,792 1,233 19,858 21,091
Total 22,632 12,071 34,703 31,558 19,858 51,416
§ Capital expenditure
The table below illustrates the capital expenditure incurred by each segment
for the year ended December 31,2024 and the year ended December 31,2023:
(In thousands of US$) For the year ended For the year ended
December 31, 2024 December 31, 2023
Entertainment 4,510 17,162
Other 1,100 1,222
Total 5,610 18,384
6. Revenue
(In thousands of US$) 2024 2023
Entertainment 6,245 5,754
Others 1,628 --
Total 7,873 5,754
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, 2024, and
December 31, 2023:
(In thousands of US$) 2024 2023
Primary geographical markets
Egypt 7,873 5,754
Total primary geographical markets 7,873 5,754
Major service lines
Entertainment 6,245 5,754
Others 1,628 --
Total major service Lines 7,873 5,754
Timing of revenue recognition
Services transferred over a period 7,873 5,754
Total timing of revenue recognition 7,873 5,754
7. Purchases and services
(In thousands of US$) For the year ended For the year ended
December 31, 2024 December 31, 2023
Rental of local network, technical sites & other leases 109 59
Maintenance costs 138 155
Consulting and professional services 2,173 2,291
Purchases of goods and changes in inventories 2,903 59
Advertising and promotional services 287 141
Utilities and energy cost 15 32
Site expense 862 959
IT supplies and expense 61 69
Insurance expenses 15 23
Airfare expenses 94 79
Accommodation, meals and per diem 66 57
Bank and post office charges 199 228
Other service expenses 2,210 609
Total 9,132 4,761
8. Personnel Costs
(In thousands of US$) For the year ended For the year ended
December 31, 2024 December 31, 2023
Wages and Salaries 4,975 8,048
Contractual bonuses 637 474
Other benefits 94 91
Pension Costs - defined contribution plan 80 163
Social Security 329 256
Subscription and membership dues 66 8
Other personnel Costs 265 41
Total 6,446 9,081
9. Other expenses
(In thousands of US$) For the year ended For the year ended
December 31, 2024 December 31, 2023
Other operating expenses 484 225
Total 484 225
10. Depreciation and amortisation
(In thousands of US$) For the year ended For the year ended
December 31,2024 December 31,2023
Depreciation of tangible assets
Buildings 370 453
Right of use 450 871
Commercial and other tangible assets 265 303
Total 1,085 1,627
11. Net financing (costs)
(In thousands of US$) For the year ended For the year ended
December 31,2024 December 31,2023
Interest income 3,907 4,241
Discounted effect - fair value of financial liabilities - Koryolink ** 13,630 --
Financial assets at FVTPL- Net change in fair value 5,943 --
Finance income 23,480 4,241
Financial assets at FVTPL- Net change in fair value * -- (3,956)
Interest expense on borrowings (6,918) (9,611)
Finance expense (6,918) (13,567)
Net gain from foreign currencies translation differences 1,944 19,783
Net gain foreign currencies translation differences 1,944 19,783
Net financing (costs) 18,506 10,457
(*) this amount representing the value of the Loss resulting from the value
adjustment of investment fund as mentioned in note (17)
(**) During 2024, OIH S.A.E. received an interest-free loan, that was measured
at present value of all future cash receipts discounted using the prevailing
market rate of interest for a similar instrument. Refer to "Borrowings" in
note 23. The discounted effect using the fair value of the loan is recognised
as finance income of USD 13.6 million.
12. 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 As of Ownership As of
December 31, 2024
December 31, 2023
Cheo Technology-Koryolink DPRK 60% 280,321 60% 550,528
Accumulated impairment loss (**) (268,250) (530,670)
Total 12,071 19,858
(**) 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$) As of As of
December 31, 2024 December 31, 2023
Opening balance 19,858 24,803
Share of profit of equity accounted investee before impairment 8,868 18,103
Impairment loss (8,868) (18,103)
Foreign currency translation differences (7,787) (4,945)
Ending balance 12,071 19,858
Koryolink:
The tables below set forth-summary of unaudited financial information of
Koryolink and the carrying amount of the Group's interest in Koryolink.
§ Summarised statement of financial position
(In thousands of US$) As of As of
December 31, 2024 December 31, 2023
Assets 396,280 392,033
Liabilities (31,404) (34,512)
Net assets 364,876 357,521
§ Summarised statement of income statement
(In thousands of US$) For the year ended December 31, 2024 For the year ended December 31, 2023
Revenues 59,488 80,122
Total expense (44,709) (49,950)
Profit for the period after tax 14,779 30,172
Share of profit of the associate company 8,868 18,103
The Group's investments in North Korea related primarily to the 60% voting
rights in the local telecom operator Koryolink.
13. Income tax expenses
(In thousands of US$) Note For the year ended December 31, 2024 For the year ended December 31, 2023
Current income tax (1,156) 22
Deferred tax (18-1) (1,970) 1,545
Total income tax expenses (3,126) 1,567
14. Property and equipment
As at 31 December 2024, property and equipment, including right-of use assets
amount to USD 23 million (2023: USD 32 million) classified as follows:
(In thousands of US$) Land & Buildings Commercial & other tangibles Assets under construction Total
Right Of Use
Cost 7,334 2,014 11,349 13,334 34,031
Accumulated depreciation & Impairment (888) (714) (871) -- (2,473)
Net book value as of January 1, 2024 6,446 1,300 10,478 13,334 31,558
Additions 1,148 3,068 118 1,397 5,731
Depreciation (361) (274) (450) -- (1,085)
Foreign currency translation differences (2,617) (250) (4,742) (5,964) (13,573)
Net book value as of December 31,2024 4,617 3,844 5,404 8,767 22,632
Cost 5,478 4,542 6,331 8,767 25,117
Accumulated depreciation and impairment (862) (698) (927) -- (2,486)
(In thousands of US$) 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
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)
Property, plant, and equipment includes Right-of-use assets of USD 5 million
(2023: USD 10 million) related to leased properties that do not meet the
definition of investment property. For details refer to Note 23 which describe
in details finance and operating lease and related right of use.
15. Intangible assets
(In thousands of US$) License Goodwill Total
Cost 714 262 976
Accumulated amortization and impairment (714) (262) (976)
Net book value as of January 1, 2024 -- -- --
Additions
Amortization -- -- --
Foreign currency translation differences - Cost (280) (103) (383)
Foreign currency translation differences - Accumulated 280 103 383
Net book value as of December 31, 2024 -- -- --
Cost 434 159 593
Accumulated amortization and impairment (434) (159) (593)
(In thousands of US$) 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)
The following table provides an analysis of goodwill:
December 31, 2024 December 31, 2023
(In thousands of US$) Other Total Other Total
Opening balance
Cost 262 262 327 327
Accumulated impairment (262) (262) (327) (327)
Net book value of the opening balance -- -- -- --
Foreign currency translation differences - Cost (103) (103) (65) (65)
Foreign currency translation differences - Accumulated 103 103 65 65
Net book value of the ending balance -- -- -- --
Cost 159 159 262 262
Accumulated impairment (159) (159) (262) (262)
16. Investment property
(In thousands of US$) As of As of
December 31, 2024 December 31, 2023
Cost -- 8,347
Accumulated depreciation and impairment -- (181)
Net book value of opening balance -- 8,166
Addition -- 488
Disposal -- (6,922)
Depreciation -- (101)
Foreign currency translation differences -- (1,631)
Net book value of ending balance -- --
Cost -- --
Accumulated amortization and impairment -- --
- In 2015 Orascom Investment Holding (OIH) purchased seven floors in
Brazil from Bluestone Investment Company under a contract that guaranteed a
fixed annual return after four years. When the return was not achieved, OIH
claimed the shortfall.
- In October 2021, Bluestone settled the claim by transferring
ownership of 1.5 floors (6 offices) in the same building. OIH recognized
this settlement as an investment property with a fair value of ~$13 million
USD. Of this amount, $12 million was recorded as a gain in 2021, with the
remaining $1 million allocated to transaction costs.
- In 2023, OIH received an acquisition offer for its Brazilian assets.
To facilitate the sale while bypassing complex tenant pre-emptive rights, OIH:
§ Established two new Brazilian subsidiaries.
§ Transferred the property ownership into these entities.
§ Sold 100% of the shares of both subsidiaries to a third-party buyer in
September 2023 for 87.5 million BRL (~EGP 539 million, net of taxes).
- In 2023, the Group disposed the remaining 1.5 floors equivalent to 6
offices to a third party for a value of BRL 87,5 Million equivalent in US$
17,6 Million, as per the sale agreement executed. And Management considers
this disposal price as an approximation of fair value and no more PPE at the
end of 2023 and 2024 .
(In thousands of US$) As of As of
December 31, 2024 December 31, 2023
less than one year (note 27-2) -- 853
One to two years -- --
Two to three years -- --
Four to five years -- --
More than 5 years -- --
Investment property revenue:
17. Other Financial Assets
As of December 31, 2024 As of December 31, 2023
(In thousands of US$) Non-Current Current Total Non-Current Current Total
Financial receivables at amortized cost (17.1.1) -- -- -- -- -- --
Cash held in North Korea at amortized cost (17.1.2) -- 56,967 56,967 47,975 -- 47,975
Financial assets at FVTPL (17.2) 28,522 -- 28,522 24,332 -- 24,332
Total Other financial assets 28,522 56,967 85,489 72,307 -- 72,307
17.1 Financial receivables at Amortized Cost
17.1.1) Financial Receivables
(In thousands of US$) December 31, 2024 December 31, 2023
Expected credit loss percentage 100% 100%
Financial receivables 9,163 9,163
Expected credit loss during the year (*) (9,163) (9,163)
(*) During September 2019 OIH sold the entire shares owned by the Group in
Riza Capital to an external party for a consideration of US$ 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$107 thousand of the third instalment, which was due in August
2020. Therefore, after considering all facts and circumstances, the Group
estimated an ECL of US$ 9,163 on this asset and During 2024, OIH has ongoing
lawsuit against the purchaser of the shares in Riza Capital and no updates
till end of December 2024.
17.1.2) Cash held in North Korea and restricted deposits
As of December 31, 2024 As of December 31, 2023
(In thousands of US$) Non-current Current Total Non-current Current Total
Pledged deposits 13 -- 13 10 -- 10
Cash on banks in North Korea** -- 113,909 113,909 95,911 -- 95,911
Expected credit loss* -- (56,955) (56,955) (47,946) -- (47,946)
Total 13 56,954 56,967 47,975 -- 47,975
** Due to the sanctions imposed on north Korea, OIH S.A.E. is not able to
repatriate the cash balance out of the country, therefore it has been
classified as financial asset. As of 31 December 2024, USD 8 million is kept
as cash on hand in North Korea, and the remaining balance of USD 106 million
is cash in OIH S.A.E. bank account in North Korea.
* Expected credit loss of other financial assets is represented in the
following:
(In thousands of US$) As Of December 31, 2024 As Of December 31, 2023
Expected loss ratio 50% 50%
Cash at bank in North Korea 113,909 95,911
Expected credit loss during the year * (56,955) (47,946)
Net cash at bank in North Korea - non-current 56,954 47,965
(In thousands of US$) December 31, 2024 December 31, 2023
Opening Balance 47,946 2,080
Allowance for impairment loss 13,065 45,019
Foreign currency translation differences (4,057) 847
Total 56,954 47,946
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); this implies a PD of 0%. We will also assume that there is a
likelihood that the Company will not be able to transfer the money out of
North Korea due to the sanctions and 50% given that Management do not have any
plans to utilize this cash balance within the country, this implies a PD of
100% that the valuation is performed with Level 3 assumptions.
* In 2023, OIH S.A.E. management performed ECL assessment and considered that
there is 50% likelihood of recoverability due to the unpredictability of
future developments, including potential changes in international sanctions,
regulatory restrictions, etc. Therefore, 50% ECL was recorded. As at 31
December 2024, ECL of USD 13 million was booked in profit or loss (2023: USD
45 million).
** Until 31 December 2023, cash in North Korea was classified as non-current
asset given the management`s intention to utilize the cash for loan settlement
at maturity date. In 2024, USD 8 million was used for repayment of an old
balance of trade payables within North Korea and the classification of
outstanding balance of USD 114 million changed to current.
It is worth noting that all transfers are subject to local policies and laws
related specified to bank transfers and transactions. OIH S.A.E. will continue
to comply with international decision specified to international penalties
related to this matter.
17.2 Financial assets at Fair Value Through profit or Loss (Lighthouse energy
SCSP)
(In thousands of US$) As Of December 31, 2024 As Of December 31, 2023
Investment in investment funds 28,522 24,332
Total 28,522 24,332
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, 2024, to
December 31, 2024, 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$) As of As of
December 31, 2024
December 31, 2023
Cost of the purchase 24,332 27,504
Effect of the Fair value (note 11) 5,943 (3,956)
Currency translation reserve (1,753) 784
Total 28,522 24,332
18. Deferred taxes
18.1 Recognized deferred tax assets and liabilities
Deferred income tax assets and liabilities are offset when there is a legally
enforceable right to offset current tax assets and liabilities and when the
deferred income tax assets and liabilities relate to income taxes due to the
same tax authority.
(In thousands of US$) As of As of
December 31,2024 December 31, 2023
Deferred tax liabilities (9,595) (9,396)
Net position of the deferred tax (liabilities) (9,595) (9,396)
The movement in deferred tax liabilities is as follows:
(In thousands of US$) As of As of
December 31,2024 December 31, 2023
As of January 1, (9,396) (12,363)
(Charged) to the income statement (Note 13) (1,970) 1,545
Foreign currency translation differences 1,771 1,422
As of December 31, (9,595) (9,396)
A breakdown of the movement in deferred tax liabilities during 2024 and 2023,
is provided in the tables below:
Deferred tax liabilities Depreciation &amortization Unremitted earnings Forex Other Total
(In thousands of US$)
As of January 1, 2024 (594) (178) (8,157) (467) (9,396)
(Charged) to the statement of profit or loss (83) 102 96 (2,085) (1,970)
Foreign currency translation differences -- -- -- 1,771 1,771
As of December 31, 2024 (677) (76) (8,061) (1,785) (9,595)
Deferred tax liabilities Depreciation Unremitted earnings Forex Other Total
& Amortization
(In thousands of US$)
As of January 1, 2023 (532) (588) (8,486) (2,757) (12,363)
(Charged) to the statement of profit or loss (169) 297 (324) 1,741 1,545
Foreign currency translation differences 107 113 653 549 1,422
As of December 31, 2023 (594) (178) (8,157) (467) (9,396)
No deferred tax liability has been recognized in respect of temporary
differences associated with investments in subsidiaries, branches, and
associates, where the Group is in a position to control the timing of the
reversal of the temporary differences, and it is probable that such
differences will not reverse in the foreseeable future.
Should additional information arise in future periods resulting in differences
between the tax base and accounting base of recorded assets and liabilities in
the financial statements as of December 31, 2024, Management will reassess its
estimate in a way that might result in the recognition of deferred taxes
related to those assets and liabilities.
Deferred tax liability has been recognized in connection with the gain arising
from the discounting effect applied to the fair value adjustment of the
financial liabilities related to Koryolink (Note 11). This provision is made
as a prudent measure against potential future tax assessments by the Egyptian
Tax Authority regarding the taxability of this gain.
18.2 Unrecognized deferred tax assets
The following schedule illustrates the unrecognized deferred tax assets for
the group:
(In thousands of US$) As of As of
December 31,2024 December 31,2023
Carried forward losses -- --
Total -- --
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, 2024,
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.
19. Trade receivables
(In thousands of US$) As of As of
December 31, 2024 December 31, 2023
Receivable due from government * 14,079 14,382
Receivables due from telephone operators ** 7,602 12,364
Other trade receivables 650 1,500
Allowance for doubtful receivables (ECL) (18,029) (23,038)
Total 4,302 5,208
* This balance relates primarily to OT Lebanon resulted from receivables due
from "Mobile Interim Company" S.A.L resulting from the company's operations.
** This balance relates primarily to Koryolink and originates from the
demerger processes carried out in 2010 and impaired in full.
The remaining receivable balance is mainly related to OT Lebanon receivable
balance which still not fully impaired.
The following table shows the movement in the allowance for doubtful
receivables:
(In thousands of US$) As of As of
December 31, 2024 December 31, 2023
Opening balance (23,038) (24,390)
Addition (allowances recognized as an expense) (43) (3,963)
Foreign currency translation differences 5,052 5,315
Ending balance (18,029) (23,038)
The following table shows the ageing analysis of trade receivables as of
December 31, 2024, and 2023, net of the relevant allowance for doubtful
receivables:
As of As of
December 31, 2024 December 31, 2023
(In thousands of US$) Gross Allowance Gross Allowance
Not past due 61 -- 1,126 --
Past due 0-30 days 73 -- 44 --
Past due 31-120 days 187 -- 15 --
Past due 121 - 150 days -- -- 148 --
Past due more than 150 days 22,010 (18,029) 26,913 (23,038)
Trade receivables 22,331 (18,029) 28,246 (23,038)
The maximum exposure to credit risk at the reporting date is the carrying
value of the receivable. The Group does not hold any collateral as security
and the increase mainly relating to the reversal of impairment related
receivables Orascom telecom Lebanon.
20. Other assets
(In thousands of US$) As of December 31, 2024 As of December 31, 2023
Non-current Current Total Non-current Current Total
Prepaid expenses -- 193 193 -- 239 239
Advances to suppliers* -- 11,566 11,566 -- 800 800
Receivables due from tax authority -- 411 411 -- 67 67
Assets from current tax -- 27 27 -- 40 40
Other non-trade assets -- 846 846 -- 1,175 1,175
Allowance for doubtful of current assets -- (174) (174) -- (264) (264)
Total -- 12,869 12,869 -- 2,057 2,057
* The balance relates primarily to the advance payment paid by Orascom
Investment Holding Company under the acquisition agreement of Misr
entertainment Investment group to Gemini Egypt for Investment Company, "parent
company" amounted to US$ 10M.
(In thousands of US$) As of December 31, 2024 As of December 31, 2023
Non-current Current Total Non-current Current Total
Opening Balance -- 264 264 161 265 426
Made during the year -- -- -- -- 52 52
Used during the year -- -- -- (161) -- (161)
Foreign currency translation differences -- (90) (90) -- (53) (53)
Total -- 174 174 -- 264 264
21. Cash and cash equivalents
As of 31 December 2024, the group has net cash position equal to USD 160
million (2023: USD 169 million). The following table summarises cash balances
as at 31 December 2024 and 2023:
(In thousands of US$) As of As of
December 31, 2024 December 31, 2023
Bank accounts and gross deposits 47,530 75,279
Cash on hand 52 78
47,582 75,357
Impairment cash and equivalents (1,868) (1,774)
Cash and Cash equivalents in the statement of financial position 45,714 73,583
Cash held in financial assets 113,909 95,911
Cash and Cash equivalents in the statement of Cash Flows 159,623 169,494
The Group held cash of US$ 1.3 million in a Lebanese bank as at December 31,
2024 (December 31, 2023: US$ 0.552 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$) As of As of
December 31, 2024 December 31, 2023
Opening Balance (1,774) (1,774)
Formed (892) --
Foreign currency translation differences 798 --
Total (1,868) (1,774)
The remaining cash balance represents cash available in Egyptian banks related
to Egyptian entities equivalent to US$ 15M in addition to Victoria group
amounted to US$ 31M.
22. 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 million (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, 2024:
Shareholder Ordinary shares % Of ordinary shares having voting right
OTMTA (parent company) 2.709.989.320 51.661%
Orascom TMT investments S.à.r.l. 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 31,2024
compared to US$ 1.26 million as of December 31,2023, which is not available
for distribution representing a legal and special reserves at the subsidiaries
level.
iv) Capital management
The Group's policy is to maintain a strong capital base so as to maintain
investor, creditor and market confidence and to sustain future development of
the business. Management monitors the return on capital, as well as the level
of dividends to ordinary shareholders.
The board of directors seeks to maintain a balance between the higher returns
that might be possible with higher levels of borrowing and the advantages and
security afforded by a sound capital position.
Management decides to maintain the ratio below 2. The Group's net debt to
equity ratio on 31 December 2024 as follows:
(In thousands of US$) As of As of
December 31, 2024 December 31, 2023
Total Liabilities* 39,590 67,087
Cash and Cash Equivalents (45,714) (73,583)
Net Cash Surplus (6,124) (6,496)
Total Equity 53,353 66,614
Net debt to equity ratio -- --
* Intercompany loans "Koryolink" are excluded from total liabilities to fairly
present the total value of external obligations. Furthermore, cash balances
that are restricted for the settlement of these specific intercompany loans
are excluded from 'Cash and cash equivalents' and are presented as 'Restricted
cash' within financial assets."
The Company's primary strategy for meeting its financial obligations is
centered on robust operating cash flow, which provides the fundamental
liquidity for day-to-day operations. This is supplemented by active management
of working capital, ensuring that receivables, inventory, and payables are
optimized to support cash requirements. Furthermore, the Company maintains a
balanced capital structure and access to undrawn committed bank lines,
providing ample financial flexibility to manage seasonal fluctuations, invest
in growth opportunities, and service all short and long-term debt as it comes
due. Management continuously monitors liquidity positions and believes that
these resources are more than adequate to meet all foreseeable obligations.
23. Borrowings
As of December 31, 2024 As of December 31, 2023
(In thousands of US$) Current Non-current Total Current Non-current Total
Loan from North Korea -- 90,499 90,499 -- 70,905 70,905
Bank loans 1,139 7,446 8,585 796 13,061 13,857
Finance lease liability 2,024 6,782 8,806 2,590 16,043 18,633
Total 3,163 104,727 107,890 3,386 100,009 103,395
The following table shows the ageing of borrowings:
(In thousands of US$) Due within one year Due between one and five years Due beyond five years Total
Loan from North Korea -- 90,499 -- 90,499
Bank loans 1,139 -- 7,446 8,585
Finance lease liability 2,024 -- 6,782 8,806
As of December 31, 2024 3,163 90,499 14,228 107,890
(In thousands of US$) 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
The following table provides the breakdown of total borrowings by currency of
issue:
(In thousands of US$) Euro Egyptian Pound Total
As of December 31, 2024 90,499 17,391 107,890
As of December 31, 2023 70,905 32,490 103,395
The following table illustrates the movements in the borrowings during the
year:
(In thousands of US$) As of December 31, 2024 As of December 31, 2023
Balance at the beginning of the year 103,395 79,872
of which:
Current borrowings 3,386 1,986
Non-current borrowings 100,009 77,886
Payments of loans (4,125) (91)
Payments of operating lease (980) --
Proceeds from loans * 34,854 906
Cash from sale & lease back -- 4,854
Proceeds Finance lease liabilities -- 11,819
Interest Expenses 9,163 9,611
Interest Paid (1,916) (3,238)
Interest capitalized 1,086 954
Currency transaltion differences (33,497) (1,293)
Balance at the end of the year 107,890 103,395
of which:
Current borrowings 3,163 3,386
Non-current borrowings 104,727 100,009
i) Bank Loans
The following table shows a breakdown of bank loans by country:
Description Company 31 Dec 2024 31 Dec 2023 Original Currency Nominal Value Maturity Nominal interest rate Security
In US$ In US$
North Korea OIH 71,523 70,905 Euro 81,707 Dec -27 - Unsecured
North Korea OIH 18,976 -- Euro 29,939 Dec -29 - Unsecured
Egyptian Banks OPE 8,585 13,857 EGP 230,000 Oct-28 1% + corridor Unsecured
Total 99,084 84,762
* 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$ 85
million as of 31 December 2024), 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.
- During December 2024, Koryolink Company granted all shareholders
additional interest free loan amounted to EUR 30 million (equivalent to US$ 31
million as of 31 December 2024) transferred to Orascom investment holding bank
account.
As at 31 December 2024, the outstanding amount of the loan is EUR 111.7
million (USD 116 million), out of which USD 91 million is classified as a
long-term loan and the remaining was booked as discounted effect thought
profit or loss in the relevant year.
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$7.4 million. This is
for the purpose of contributing to the financing of the remaining part of the
investment costs of the project to develop and provide services in the visit
area of Giza Pyramids and the adjacent and associated areas according to the
usufruct licensing contract dated December 13, 2018, concluded between the
Supreme Council of Antiquities and Orascom Investment Holding Company, as
follows:
- An amount of EGP 80 million equivalent US$ 1.5 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$ 1.02 million for the
infrastructure works for the information network
- An amount of EGP 90 million equivalent US$ 1.8 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$ 0.2 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$0.4 million) in order to rent 6 electric
buses and 2 charging stations, and the rental value is paid in quarterly
instalments for a period of 27 instalments, while giving the company the right
to own these buses and charging stations at the end of the contract period,
and the payment of instalments ends on 30/7/2028, for a specific value.
- Liabilities from sale and lease back transactions:
During March 2023, the company sold and leased its headquarters to GB for
leasing for the amount of 156,594,000 Egyptian pounds (US$ 3.1 million) 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$ 2.9 million) 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$ 0.4 million) 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,
2024:
Description Company 31 Dec 2024 31 Dec 2023 Original currency
In US$ In US$
Finance lease liabilities OPE 343 612 EGP
Sale & Lease back OIH -- 4,814 EGP
Operating lease liability OPE 8,463 13,207 EGP
Total 8,806 18,633
24. Provisions
(In thousands of US$) As of December 31, 2024 As of December 31, 2023
Opening balance 7,280 8,702
Allocation 1,956 1,487
Reversal (286) --
Utilisation -- (302)
Foreign currency translation differences (3,249) (2,607)
Ending balance 5,701 7,280
Provisions are related to expected claims resulting from the Group companies'
ordinary course of business. The required information about these provisions
were not disclosed, according to the related IFRSs Accounting standards,
because the management of the Group believes that doing so, will strongly
affect the final settlement of these provisions for claims.
25. Trade payables and other liabilities
As of December 31, 2024 As of December 31, 2023
(In thousands of US$) Current Non-current Total Current Non-current Total
Trade payables
Trade payables due to suppliers 284 -- 284 9,812 -- 9,812
Customers credit balance 111 -- 111 220 -- 220
Other trade payables 683 -- 683 724 -- 724
Total 1,078 -- 1,078 10,756 -- 10,756
Other liabilities
Prepaid traffic & deferred income 3 -- 3 994 -- 994
Due to local authorities 3 -- 3 6 -- 6
Personnel payables 333 -- 333 103 -- 103
Subscriber deposits 284 -- 284 63 -- 63
Other credit balances * 3,202 -- 3,202 3,671 -- 3,671
Total other liabilities 3,825 -- 3,825 4,837 -- 4,837
Total 4,903 -- 4,903 15,593 -- 15,593
* 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,
2024, is US$ 0.264 million (2023 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$ 1,713million and US$ 1,225 million,
respectively.
26. 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.
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, 2024 December 31, 2023
(loss) from continuing operations (6,711) (48,711)
Weighted average number of shares (in thousands of shares) 5.245.691 5.245.691
(Losses) / Earnings per share - basic and diluted (in US$) (0.001) (0.0093)
27. Share based Payment
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.
In addition, they are entitled to purchase a share of Blue EV Holding
Limited's capital, which matures on December 31, 2029, for a purchase price
calculated as the higher of the Par Value and the fair market value of HoldCo
at the time of exercise of the option (the "Earn-Out Shares").The Company
granted the rights to Founders SPV, which vest on condition of the achievement
of defined technical, commercial, operation and financial targets as well as
the founders' continued service in HoldCo.
The fair value of the Vesting Shares, for accounting purposes was measured at
the grant date by discounting the projected equity value (including the
capital injections) forward to each tranche's specific vesting year.
The fair value of the Vesting Shares of $3 million, for accounting purposes
was measured at the grant date as is calculated based on the fair value of the
company
The fair value of the Call Options Shares for accounting purposes was measured
at the grant date using a Monte Carlo Simulation model where capital
injections were assumed as certain and reflected in the adjusted equity values
and strike prices. The volatility, equal to 48.2%, was estimated using
unlevered asset volatilities from comparable public companies.
For the year ended December 31, 2024, the Group recognized $0.2 million
equivalent to EGP 9 million as share-based payment compensation expense (which
is based on the rights expected to vest) and an offsetting increase to
non-controlling interests' equity in relation to the Vesting Shares and Call
Options Shares.]
On December 31, 2024, unrecognized compensation expenses amounted to $1.1
million and is expected to be recognized over the remaining vesting period
through 2029.
The Earn-Out Shared for accounting purposes does not contain a share-based
payment.
28. Discontinued operations
(In thousands of US$) For the year ended December 31, 2024 For the year ended December 31, 2023
Loss on disposal of TWA (27-1) -- (500)
Disposal of floors in Brazil (27-2) -- 9,413
Mena Cable (27-3) -- 521
Profit/(Loss) (net of income tax) -- 9,434
27-1 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.
27-2 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 Thousands, as
per the sale agreement executed Note (16).
And Management considers this disposal price as an approximation of fair value
as follows:
(In Thousands of US$) Year ended December 31, 2024 Year ended December 31, 2023
Cash Proceed resulted from disposal of 1.5 Floor -- 18,075
NBV of investment property -- (7,079)
Total Gain resulted from disposal -- 10,996
Expenses incurred associated to Sales process -- (32)
Rental income recognized before sale -- 853
Profit before tax -- 11,817
Income Tax -- (2,404)
Group net Profit after tax -- 9,413
27-3 Discontinued operations result from Mena cable:
In 2023, the Group received EGP 16 million (US$ 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, 2024, and December 31, 2023, are provided
in the table below:
(In thousands of US$) Year ended December 31, 2024 Year ended December 31, 2023
Purchase of property and equipment * 10,573 499
Total 10,573 499
* Capital commitments related mainly to the operating contracts between the
group and construction companies responsible for development of the Pyramids
site "OPE" and Sound & light project "OSL"
OIH (Egypt) Group has also provided guarantees and letters of credit in the
ordinary course of business.
Guarantees include the following at the level of OIH (Egypt) Group:
- A letter of guarantee of EGP 20 million (USD 400 thousand) in favor
of the SAIB from Orascom Pyramids for Entertainment
- A letter of credit of EGP 125 million (USD 2.5 million) in favor of
the National Bank of Egypt from Orascom Investment Holding Company
- During the month of October 2021, OIH (Egypt) Group sold the floors
owned by it in the State of Brazil through one of its subsidiaries, Victoire
BV Holding Company, for a total amount of USD 76.5 million.
- The contract stipulates the guarantee of OIH S.A.E. For the seller
to obtain a fixed annual return for a period of 24 months from the date of
selling the above-mentioned floors, with a total amount of USD 847 thousand,
- whereby OIH S.A.E. will transfer the difference to the return to the
seller in the event that the fixed return stipulated in the contract is not
reached. The company has agreed with the seller to open an escrow account
- for the full amount previously mentioned. The guarantee period
regarding the annual return terminated in October 2023, and the total amount
paid is BRL 436 thousand (USD 90 thousand). The sales contract also stipulates
a guarantee for the payment of any amounts resulting from cases brought due to
real estate taxes on floors. There are tax disputes in Brazil with Inca Re 2
and Inca Re 19 companies, and no judgment was issued towards, for which
provision was booked as at 31 December 2023.
30. Related party transactions and balances
Ultimate undertaking parent the transactions with related parties include but not limited to those associated companies, key personnel, associates, affiliates. 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, 2024 Year ended December 31, 2023
Exp paid on behalf of related party Investment expenditure Exp paid on behalf of related party Investment expenditure
OIH
CHEO Technology JV - associate 98 -- 221 --
(In thousands of US$) Year ended December 31, 2024 Year ended December 31, 2023
Receivables Payables Receivables Payables
OIH
CHEO Technology JV - associate -- -- -- 8,093
Gemini for Investment 9,984
* Balances receivables from CHEO Technology JV are fully impaired.
Furthermore, the Group did not offset balances receivables against the
payables relating to CHEO, due to the Group not intending to settle the
recognized amounts on a net basis or to realize the asset settle the liability
simultaneously.
Key management compensation
§ Key management includes executive and non-executive directors, the chief
financial officer and other managing directors considered key personnel.
§ The compensation paid or payable to key management for employee services
amounted to US$ 1.3million and, US$ 1,6 million, respectively for the years
ended December 31, 2024, and December 31, 2023.
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. Subsequent events
· On June 18, 2025, the Board of Directors unanimously approved the
company's implementation of a treasury stock purchase program with a maximum
number of (524,569,062) local shares (only five hundred and twenty-four
million, five hundred and sixty-nine thousand and sixty-two local shares),
which represents a maximum percentage of 10% of the total issued capital
shares of the company traded on the Egyptian Stock Exchange, amounting to
5,245,690,620 shares, according to the market price on the date of
implementation, provided that these shares are purchased from the open market
and through the company's own financial resources, in accordance with the
rules stipulated in the decision of the Board of Directors of the Financial
Regulatory Authority No. 210 of 2023.
§ 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, 2024
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
Other UAE BlueEV Holding Electric Vehicles 98% 98% 2% 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% 40.00% Associate
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END FR PKQBDKBDBDBB
Copyright 2019 Regulatory News Service, all rights reservedRecent news on Orascom Investment Holding SAE
See all newsREG - Orascom Investment - Annual Financial Report
AnnouncementREG - Orascom Investment - Annual Financial Report
AnnouncementREG - Orascom Investment - Orascom Investment Holding IFRS 2021
AnnouncementREG - Orascom Investment - OIH Press Release
AnnouncementREG - Orascom Investment - OIH BOD Summary
Announcement