Orascom Construction (OC) management held a conference call yesterday to discuss 2Q results and outlook. The main highlights from the call were:   i) Management has clarified that the Iowa is now on track and is on schedule to be completed before the winter; ii) Iowa losses will be funded through: 1) positive cash flow generated from Netgasoline project, as well as from other operations in the MENA region; 2) USD270mn under billing from the project; and 3) mid-term debt - the company had already secured a USD30mn credit line in 3Q; iii) The Y-o-Y 40bps drop in EBITDA margin came in the absence on Saudi Arabia business in 1H16, which was healthy in 1H15 and less so from lower contribution from power plant projects, with the backlog of the segment still high at cUSD1.5bn; iv) All construction work is still on hold in Saudi Arabia, including those in partnership with Saudi Binladin Group (SBG). Saudi operations currently represents c5% of backlog, while total claims and account receivables are estimated at cUSD300mn; v) Margins in the US are expected to improve with the conclusion of the Iowa project, helped by further progress at the high-margin Netgasoline project and conclusion of OC NV-related projects by mid-17; and vi) OC’s strategic focus will remain on four main high-populous countries, namely Egypt (Metro line 4, lift of subsidy will likely drive more infrastructure spending), Iraq and Saudi Arabia (surge in power generation projects expected in 2017) and Algeria. Company will remain selective in the GCC, given lower margins. (Management conference call, Mai Attia, Sara Boutros)                                    Orascom Construction Limited: EGP62.18 as of 24 August 2016, Rating: Neutral, FV: EGP61.09 per share, MCap: USD827mn, ORAS EY / ORAS.CA