Orascom Development Holding AG
EQS-Adhoc: Orascom Development Holding AG: records a net profit of CHF 41.9 million and successfully executes on its communicated four-pillar strategy.
EQS Group-Ad-hoc: Orascom Development Holding AG / Key word(s): Final Results/Final Results Orascom Development Holding AG: records a net profit of CHF 41.9 million and successfully executes on its communicated four-pillar strategy. 14.04.2015 / 07:00 Release of an ad hoc announcement pursuant to Art. 53 KR. The issuer is solely responsible for the content of this announcement. --------------------------------------------------------------------- Press Release Orascom Development records a net profit of CHF 41.9 million and successfully executes on its communicated four-pillar strategy. In the full year 2014, Orascom Development generated a net profit of CHF 41.9 million attributable to shareholders of the parent company after a loss of CHF 157.7 million in FY 2013. The enhanced operational performance from all business segments, accompanied by the sound execution of our cost savings, monetization programs and debt restructuring efforts, all helped in boosting our EBITDA margins to reach 41%, value of CHF 105.2 million (FY 2013: CHF(80.7) million), strongly positioning the company to capitalize on its future growth strategy. Altdorf/Cairo, 14 April 2015 - Orascom Development Holding AG's (Orascom Development) revenues increased by 13.1% to CHF 250.5 million (FY 2013: CHF 221.4 million), on the back of strong real estate & construction revenues, increased hotel occupancy rates during the second half of the year and the increased land revenues resulting from the successful third-party development agreement between Orascom Hotels and Development (OHD); Egyptian subsidiary of the Group and El Sewedy, an Egyptian Investor, to sub-develop a piece of land in El Gouna. . The recognized parcel of land from the agreement contributed CHF 11.5 million to the top line growth during the FY 2014. A very positive year for our real estate business, revenues of the segment increased by 46% vs the prior year. Revenues in the Real Estate & Construction segment significantly increased to CHF 72.9 million (FY 2013: CHF 49.8 million). The increase is mainly a result of the accelerated deliveries in Egypt (El Gouna, Ancient Sands and Makadi) and Oman, a total of 743 units were delivered in FY 2014. The segment EBITDA increased to CHF 18.9 million (FY 2013: CHF (15.1) million). Contracted real estate sales, after adjusting for the exclusion of the budget housing segment, increased by 33% to CHF 87.6 million (FY 2013: CHF 65.7 million), driven by the strong sales momentum in El Gouna & Ancient Sands and the successful closing of a bulk sale deal of 37 units in Al Fanar project in Salalah Beach, Oman with an amount of CHF 8.9 million. Despite the severe challenges that the hotel segment had encountered during 1H 2014, the segment showed a significant rebound during 2H 2014 Hotels in Egypt suffered notable airlift capacity cuts following the travel bans imposed on the country by the majority of the European countries during the end of 2013 and up until July 2014, still the segment showed a significant rebound during the second half of 2014, after the travel bans were lifted on the Red Sea area, Egypt. Also, the opening of Rotana Hotel in Salalah Beach, Oman which started operating at full capacity in August 2014, positively contributed to the segment's revenue. Occupancy rates for the 2H 2014 reached 60% compared to 42% in 2H 2013 and the TRevPAR (Total Revenues per Available Room) increased by 35% to CHF 58 compared to CHF 43 over the same period last year, taking into consideration that the full capacity of our hotels was not materialized because of the continued travel bans on the Sinai Peninsula area and the heavy floods that hit Taba in May 2014, resulting in a complete shutdown of our hotels. To date, we were able to re-open four of our hotels in Taba Heights, yet 25% of Taba's inventory remained closed for renovation post the floods through December 2014. The average occupancy rate for FY 2014 reached 51% (FY 2013: 50%), TRevPAR reached CHF 48 (FY 2013: CHF 51) and the Average Room Rate (ARR) reached CHF 56 (FY 2013: CHF 59). Nonetheless, the incorporation of Orascom Hotel Management (OHM) , Orascom Development Holding's hotel asset management subsidiary in early 2014 ,along with its profound implementation of the cost-control and optimization strategies, limited the magnitude of the ongoing challenges to only 5.6% decrease in total revenues declining from CHF 125.8 million in FY 2013 to CHF 118.8 million in FY 2014. EBITDA reached CHF 18.2 million in FY 2014 compared to CHF 24.6 million in FY 2013. At the end of the reporting period, the Group added 1,195 rooms to its hotel portfolio by the opening of two new hotels, Makadi Gardens Azur, 283 rooms, four-star hotel in Makadi, and Rotana Salalah, 399 rooms, five-star hotel in Salalah, Oman. We also added Citadel-Azur, 513 rooms , five-star hotel in the Red Sea Area, post our settlement deal with Falcon hotels S.A.E, to operate a total of 7,896 hotel rooms compared to 6,696 rooms in FY 2013. The successful execution of our monetization and cost savings programs, helped in boosting Gross Operating Profit to reach CHF 37.5 million (FY 2013: CHF 6.5 million). The Group successfully achieved its cost savings target for the year. The generic cost savings in addition to the carve-out of the budget housing operations and the construction segment, in Egypt in June 2014, contributed positively to the company's cost savings program. As of December 2014, Orascom Development has achieved total generic savings of CHF 47.7 million compared to the cost base FY 2012. Management has also recently adopted the new strategic notion of bringing third party developers in a move to accelerate the monetization of land, while providing strict development guidelines, to ensure control over the development and maintain the architectural harmony of the destination. Under this notion, OHD has successfully entered into an agreement with El Sewedy; an Egyptian Investor to sub-develop a piece of land in El Gouna. This transaction has contributed CHF 11.4 million to the total EBITDA during FY 2014. The company is targeting one transaction per year of this amount over the coming 3 to 5 years. The company has also successfully closed the share sale of CMAR, the holding company of the Club Med hotel in Mauritius with gross proceeds amounting to CHF 10.7 million. Towards the final days of 2014, the Group was contemplating the sale of a 15% stake of its Egyptian subsidiary, Orascom Hotels and Development (OHD). The decision was taken in light of the more favourable market environment in Egypt and as part of the Group's overall monetization program. The deal successfully closed in January 2015 and the offering was oversubscribed 3.8x and generated EGP 506.1 million (approximately USD 70.7 million, CHF 69.9 million). Subsequent events Dalia El-Gezery, Group Chief Human Resources Officer, has resigned effective June 30th, 2015 to pursue her own HR consultancy business. Dalia joined the Group last year and was a member of the executive management team reporting to the Group CEO. Since joining, Dalia has supported the Group in a number of key HR initiatives that were part of the overall restructuring plan. The board of directors and the executive management team would like to thank Dalia for her contributions and wish her all the success in her future endeavours. Outlook for FY 2015 After we have successfully executed on our four-pillar strategy by achieving the cost savings target for the year and collecting CHF 100 million in cash from our monetization programs, which are now being used to reduce the debt sitting on the OHD level and also negotiating an optimum debt refinancing package. In addition to the successful restructuring efforts that was done on the Group and subsidiary levels, our emphasis going forward will be on growing the business, generating more opportunities to capitalize on the company's portfolio of hotels, real estate projects & land bank. Nevertheless, we will remain committed to further cost optimization and specific monetization initiatives, making sure that enough cash is available to support the new targeted revenue levels. In terms of real estate, we are targeting sales of CHF 120.9 million for FY 2015, we are working on achieving this figure through the rapid roll-out of new projects and the continued diversification of our product range and client base. In Egypt, we are launching two new real estate projects featuring villas, townhouses and apartments, one in April 2015 and another to be launched later during 4Q 2015. In Oman, we expect further progress in Oman with focus also remaining firmly on selling our built-up inventory. In Montenegro, we are redesigning some of the aspects of our first phase Marina Apartments to make the buildings more efficient and better adapt the product to market demand. Sales should continue to benefit from the new planned project launches, the rapid construction progress and our first residents who should be moving in during the summer of 2015. 2015 started out positively for the hotels segment, with 1Q 2015 occupancy rates in El Gouna, Egypt and Salalah, Oman reaching the 70% level. We are already finding new routes to increase our occupancy levels in Taba Heights by providing a ferry trip from Aqaaba airport in Jordan from our Tala Bay destination to Taba and are placing all efforts to assist in the lifting of the travel bans in the area. Simultaneously, new markets were penetrated for El Gouna, to include Polish, Czech, Dutch and Belgium and we also added the Italian market for Salalah in Oman. A total of CHF 24.4 million worth of commitment deals with major European tour operations were finalized. Two new hotels will be added during the year, one in El Gouna, Ancient Sands, a five-star hotel with 176 rooms and another in Salalah Beach Oman, Al Fanar Hotel and Residence that will house 300 guestrooms. We are also capitalizing on the positive and steady performance of The Cove Rotana Hotel in Ras Al Khaimah, UAE, and will be using its operating cash flow to build an extension to its existing portfolio adding 150 new rooms to the hotel's inventory. Key figures FY 2014 (in CHF million) FY 2014 FY 2013 Delta Total revenues 250.5 221.4 13.1% Gross Profit 37.5 6.5 476.9% Gross Profit-Margin (%) 15% 3.% 12 ppt Net income / (loss) attributable to ODH 41.9 (157.7) nm shareholders shareholders Operating cash flow after interest/taxes (26.2) (52.2) 50.0% Total assets1 1,781.0 1,672.7 6.0% Equity ratio (%)1 46.1% 45.5% 0.6 ppt Net debt1 & 3 431.0 398.9 8.0% EBITDA 105.2 (80.7) nm Adjusted EBITDA2 24.6 (6.9) nm 1 For 2013 as per 31 December 2013 2 EBITDA adjusted for discontinued operations and non-cash items 3 Includes borrowings and cash of disposal groups Financial statements and presentation The associated financial statements and presentation can be found on Orascom Developments' website www.orascomdh.com under the Investor Relations section. Telephone conference today at 2:00 pm CET A telephone conference for analysts and investors will be held in English today at 2:00 pm CET. CEO Samih O. Sawiris, CFO Eskandar Tooma and Chief Hotel Officer Abdelhamid Abouyoussef will present the FY 2014 results and will be available to answer questions. A registration is not required. Dial-in details are as follows: - Password: 93422558 - International: +44 207 192 8000 - Switzerland Toll Free: 0800 920 016 - Egypt Toll Free: 0800 000 0798 - UK Toll Free: 0800 376 7922 - US Toll Free: 1866 966 1396 A replay of the conference call will be available for one week with the following dial in details: - Access Code: 93422558 - International Replay #: +44 1452 550 000 - UK Local Call Replay #: 08717 000 145 - USA Toll Free Replay#: 1866 247 42 22 About Orascom Development Holding AG Orascom Development is a leading developer of fully integrated destinations that include hotels, private villas and apartments, leisure facilities such as golf courses, marinas and supporting infrastructure. Orascom Development's diversified portfolio of destinations is spread over eight jurisdictions (Egypt, UAE, Jordan, Oman, Switzerland, Morocco, Montenegro and United Kingdom), with a primary focus on touristic destinations. The Group currently operates seven destinations; three in Egypt El Gouna, Taba Heights and Makadi, The Cove in United Arab Emirates, Jebel Sifah and Salalah Beach in Oman and Andermatt in Switzerland. Orascom Development has a dual listing, with a primary listing on the SIX Swiss Exchange and a secondary listing on the EGX Egyptian Exchange. Contact for Investors: Sara El Gawahergy Director of Investor Relations Tel: +20 224 61 89 61 Tel: +41 418 74 17 11 Email: ir@orascomdh.com Contact Media Relations media@orascomdh.com Disclaimer & Cautionary Statement The information contained in this e-mail, its attachment and in any link to our website indicated herein is not for use within any country or jurisdiction or by any persons where such use would constitute a violation of law. If this applies to you, you are not authorized to access or use any such information. Certain statements in this e-mail and the attached news release may be forward-looking statements, including, but not limited to, statements that are predications of or indicate future events, trends, plans or objectives. Forward-looking statements include statements regarding our targeted profit improvement, return on equity targets, expense reductions, pricing conditions, dividend policy and underwriting claims improvements. Undue reliance should not be placed on such statements because, by their nature, they are subject to known and unknown risks and uncertainties and can be affected by other factors that could cause actual results and Orascom Development Holding AG's plans and objectives to differ materially from those expressed or implied in the forward looking statements (or from past results). Factors such as (i) general economic conditions and competitive factors, particularly in our key markets; (ii) performance of financial markets; (iii) levels of interest rates and currency exchange rates; and (vii) changes in laws and regulations and in the policies of regulators may have a direct bearing on Orascom Development Holding AG's results of operations and on whether Orascom Development Holding AG will achieve its targets. Orascom Development Holding AG undertakes no obligation to publicly update or revise any of these forward-looking statements, whether to reflect new information, future events or circumstances or otherwise. It should further be noted, that past performance is not a guide to future performance. Please also note that interim results are not necessarily indicative of the full-year results. Persons requiring advice should consult an independent adviser. End of ad hoc announcement --------------------------------------------------------------------- 14.04.2015 News transmitted by EQS Schweiz AG. www.eqs.com - news archive: http://switzerland.eqs.com/de/News The issuer is responsible for the contents of the release. --------------------------------------------------------------------- Language: English Company: Orascom Development Holding AG Gotthardstraße 12 6460 Altdorf Switzerland Phone: +41 41 874 17 17 Fax: +41 41 874 17 07 E-mail: ir@orascomdh.com Internet: www.orascomdh.com ISIN: CH0038285679 Valor: A0NJ37 Listed: Foreign Exchange(s) SIX End of News EQS Group News-Service --------------------------------------------------------------------- 343733 14.04.2015