Egyptian group Orascom Development  slumped to a first-half loss, hit by economic disruption caused by the country's popular uprising and the strengthening of its reporting currency, the Swiss franc.

Swiss-listed Orascom, known mostly for building luxury resorts, posted a net loss of 13.7 million Swiss francs ($17.5 million) on Tuesday, compared with a profit of 50.9 million in the 2010 period.

Revenue tumbled 62 percent to 107 million francs.

"Orascom reported roughly higher (loss than expected), but it is still of no surprise that they posted a net loss," said Ankur Khetawat of HC Securities, who had estimated a 3 million franc net loss for the second quarter.     

Reuters calculations show the company made a net loss of 14.3 million francs for that quarter.     

Orascom Development has been diversifying its business, but Egypt remains its biggest market. Businesses there came to a near standstill for almost 50 days due to the uprising that ousted President Hosni Mubarak, the company said.

A slump in occupancy pushed hotels revenue down 43 percent, and a halt in building activity sent turnover from property and construction down 78 percent.

"Normally in the hotel industry, operating breakeven levels are at 40 to 50 percent occupancy. Orascom had 46 percent, with high administrative expenses and a delay in a potential 33 million francs of revenue due to Egypt's uprising, which led to a loss," Khetawat said.

Orascom said revenue and profit were usually skewed to the second half of the year.    

"Nevertheless, the turmoil in Egypt and the Arab world has adversely impacted the business in the region," the firm said.
"We have witnessed lower real estate sales, and hotel occupancy rates continue to remain below normal levels."     

Analysts say that though they expect a rebound in the second half results, they are very unlikely to be higher than in 2010. - Reuters