Orascom Development Holding AG
EQS-Adhoc: Orascom Development Holding AG: 1Q 2015: Another profitable quarter for Orascom Development with a positive cash flow from operations and a stronger balance sheet.
EQS Group-Ad-hoc: Orascom Development Holding AG / Key word(s): Quarter Results/Quarter Results Orascom Development Holding AG: 1Q 2015: Another profitable quarter for Orascom Development with a positive cash flow from operations and a stronger balance sheet. 21.05.2015 / 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 1Q 2015: Another profitable quarter for Orascom Development with a positive cash flow from operations and a stronger balance sheet. In the first quarter of 2015, Orascom Development generated positive operational results with a 7.2% increase in revenue, CHF 74.8 million (1Q 2014: CHF 69.8 million). The positive operational performance was contributed by most business segments, solidifying the Group's message of being back on track. Gross profit margin increased to 34%, (1Q 2014: 19%) with a value of CHF 25.6 million (1Q 2014: CHF 13.1 million), adjusted EBITDA was CHF 23.2 million (1Q 2014: CHF 9 million) and net cash from operations was positive for the first time since 2010. Net debt decreased by 16.8% to reach CHF 358.5 million (1Q 2014: CHF 431 million) and the Group recorded a net profit of CHF 3.4 million attributable to shareholders of the parent company. Altdorf/Cairo, 21 May 2015 - Orascom Development Holding AG's (Orascom Development) revenues increased by 7.2% to CHF 74.8 million (1Q 2014: CHF 69.8 million), on the back of enhanced hotels operations, with the first contribution of Rotana hotel in Salalah beach, Oman & the increased land revenues resulting from the recognition of the second land parcel from the earlier signed 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 Adjusted EBITDA for the period was CHF 23.2 million (1Q 2014: CHF 9.0 million) Hotels revenue witnessed a 25% increase in revenues reaching CHF 29.6 million (1Q 2014: CHF 23.6 million), despite the ongoing travel bans on Taba. The strict application of the cost-efficiency measures, the reviewed management deals, along with efforts exerted in signing new tour operator commitments , afforded a 25% boost in the top line performance of the segment to reach CHF 29.6 million in the first quarter of the year (1Q 2014: CHF 23.6 million). The tour operating deal that was signed with Alpine tour (Italian tour operator) in 4Q 2014 for our Rotana hotel in Salalah beach, helped boost revenues of the hotel witnessing revenues of CHF 4.5 million in1Q 2015. Taba Heights continued to operate at 75% of its capacity and is still suffering from the European Countries' travel bans on the region, ultimately affecting the total segment's profitability margins. Occupancy rates for the 1Q 2015 reached 47% compared to 44% in 1Q 2014, the ARR increased by 10% to reach CHF 56 (1Q 2014: CHF 50) and the TRevPAR (Total Revenues per Available Room) increased by 15% to CHF 46 compared to CHF 40 over the same period. It is worth noting that the hotel's segment witnessed total savings fee of CHF 2.5 million resulting from the renegotiation of the different management contracts, since the incorporation of OHM. We were also able to finalize new commitment deals with tour operators for a value of CHF 7.0 million, covering the Russian and Dutch markets for our hotels in Makadi and the Serbian market for our hotels in El Gouna. By the end of the period, the Group operated a total of 7,896 hotel rooms compared to 6,696 rooms in 1Q 2014. Real Estate sales increased by 15% over the same period last year to reach CHF 18.9 million (1Q 2014: CHF 16.4 million) Real Estate operations continued to uphold its positive momentum in terms of sales and development. Whereas in Egypt, after the successful sale of Joubal project in El Gouna that was launched in October 2014, Orascom Hotels and Development (OHD) launched Joubal Lagoons in March 2015 and already sold 77% of the project to date. Contracted value of units sold in El Gouna witnessed 62% to reach CHF 12.9 mn in 1Q 2015 compared to CHF 8.0 million in 1Q 014. OHD also adapted a number of new sales-mechanisms to boost its unit sales and enhance its cash flow position. Some of which include the introduction of new attractive promotion packages with extended payment terms, signing with sale-referrals and brokerage agreements and creating a re-sale and rental department for the clients. Oman also witnessed a positive pick up in terms sales, whereas contracted units in Salalah has increased to reach a value of CHF 0.9 in 1Q 2015 compared to CHF 0.1 million in 1Q 2014. Real Estate & Construction segment revenue reached CHF 10.7 million vs. CHF 34.3 million in 1Q 2014. We expect to increase unit deliveries during the second half of the year, boosting the revenue of the segment. The accelartated of monetization of our land bank continues to boost our margins With the newly adopted 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. The Group was able to recognize the revenues of the second parcel of land under the earlier agreement that was signed with OHD and an Egyptian investor to sub-develop a piece of land in El Gouna. Whereby revenues from the land segement reached CHF 24.0 million (1Q 2014: CHF 0.3 million) with an EBITDA of CHF 22.3 million (1Q 2014: CHF 0.2 million) The Egyptian subsidiary of the Group is also introducing new concepts to ensure the efficient use of its land bank. We are now in the process of signing agreements with external investors that are interested to built boat-yard workshops and industrial kitchen manufacturing space. In addition to bringing on some new investors to build a business park in El Gouna. Subsequent event Orascom Development and Management (ODM); the Group's wholly owned subsidiary will activate its earlier agreement with Egyptian Resorts Company (ERC) after the company reached clearance from the Tourism Development Authority (TDA) regarding its land allocation. Under this agreement, ODM will begin to market with ERC Phase 1 of Sawari, accounting for 1.1 million m2 of land. ODM shall be entitled to a management and development fee amounting to 15% of the project's earnings before tax (EBT), and a sales commission within the range of 6-8% from all sales proceeds, without being liable for any CAPEX obligations. The total revenues expected from Phase 1 of the project are approximately USD 300 million (CHF 281 million and EGP 2.3 billion) Outlook for FY 2015 Following through with our deleveraging strategy, we are progressing on target to reduce the debt by CHF 100 million. Whereby we have paid off all the interest that was capitalized in 2014 on OHD and we are now holding advanced negotiations with all the company lenders and are agreeing on the necessary terms of the new optimum debt re-financing package that would better match the company's cash flows. We expect to finalize those discussions during the third quarter of 2015 The positive trend that Egypt has been witnessing since the second half of 2014 continues to uphold reflecting quite strongly on our real estate sales and hotel's occupancy, especially post the initial materializations of earlier commitments by the Gulf countries during the Egypt Economic Development Conference. Real Estate sales indicators in April and May are already quite promising, whereby OHD is already close to achieving its real estate sales target of the year of USD 75 million. We are actively progressing on growing our real estate development operations, In El Gouna, Egypt, we are in the process of finalizing the re-launch of Fanadir Bay, studying the design of a new project under the name of Cable Park Apartments and planning to introduce a new phase for our Ancient Sands project, all of which are planned for launch during the year. In Oman, we expect further progress on the first phase of Al Sifah Golf Villas project & Al Fanar project, and our focus will also remain firmly on selling our built-up inventory. In Montenegro, we are redesigning some of the aspects of our first phase Marina Apartments to 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. Preliminary readings of occupancy's in El Gouna during April 2015 are above the 70% and have reached the 80% range for our hotels in Makadi. We are still exerting strong efforts to grab business to Taba Heights through Aqaba by providing a ferry trip from Aqaaba airport in Jordan from our Tala Bay destination to Taba. Signs of recovery of the destination are being noted with France and Belgium relaxing their travel advice, and we are also expecting operation from Poland during the summer of 2015. We are also progressing with the development of Al Fanar Hotel in Salalah Beach, Oman, and the extension of the Cove Rotana in Ras Al Khaima, UAE. Both properties are due to open in December 2015 The Group also retaliates its commitment to further cost optimization and will address specific monetization initiatives, availing enough cash to support the new targeted revenue levels. Key figures 1Q 2015 (in CHF million) 1Q 2015 1Q 2014 Delta Total revenues 74.8 69.8 7.2% Gross Profit 25.6 13.1 95.4% Gross Profit-Margin (%) 34% 19% 15.0 ppt Net income / (loss) attributable to ODH 3.4 5.0 -32.0% shareholders shareholders Operating cash flow after interest/taxes 0.4 (7.3) 50.0% Total assets1 1,756.3 1,781.0 -1.4% Equity ratio (%)1 48.1% 46.1% 2.1 ppt Net debt1 & 3 358.5 431.0 -16.8% EBITDA 19.9 20.7 -3.9% Adjusted EBITDA2 23.2 9.0 157.8% 1 For 2014 as per 31 December 2014 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 1Q 2015 results and will be available to answer questions. A registration is not required. Dial-in details are as follows: - Password: 93437094 - 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: 93437094 - 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 --------------------------------------------------------------------- 21.05.2015 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 --------------------------------------------------------------------- 360261 21.05.2015