Orascom Development Holding AG
EQS-Adhoc: Orascom Development Holding AG: gives guidance for the Group 1Q 2016 results and for the results of its Largest Subsidiary; Orascom Hotels and Development (OHD)
EQS Group-Ad-hoc: Orascom Development Holding AG / Key word(s):
Miscellaneous/Miscellaneous
Orascom Development Holding AG: gives guidance for the Group 1Q 2016 results and
for the results of its Largest Subsidiary; Orascom Hotels and Development (OHD)
16.05.2016 / 07:00
Release of an ad hoc announcement pursuant to Art. 53 KR.
The issuer is solely responsible for the content of this announcement.
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Press Release
Orascom Development Holding (ODH) Gives Guidance for Q1 2016, and Reports Q1
2016 Results for its Egyptian Largest Subsidiary; Orascom Hotels and Development
(OHD)
Orascom Development Holding expects to report a 17-20% decrease in its
consolidated revenues for the First Quarter 2016 compared to the same period
last year. ODH expects a net loss in the range of CHF 26-28 million compared to
a net profit of CHF 3.4 million in Q1 2015. The full-fledged Q1 2016 financial
results & statements will be published as announced on the 19th of May.
Management will also hold the earnings conference call on the same day at 1:30
pm CET.
We have attached below Orascom Hotels and Development (OHD)'s Q1 2016 earnings
release as reported on the Egyptian Stock Exchange.
OHD ("Orascom Hotels and Development") (EGX ORHD.CA) has released its
consolidated financial results for its three months ended 31st of March 2016.
Orascom Hotels and Development; Egypt's Premier Resort Developer Results were
impacted by FOREX Losses and Decrease in Land Revenues.
-Revenues decreased by 37.3% to reach EGP 284.0 million compared to EGP 453.3
million in Q1 2015, mainly resulting from the decrease in land revenues.
-An increase in real estate revenues by 11.5% in Q1 2016 to reach EGP 66.1
million compared to EGP 59.3 million in Q1 2015, on the back of expedited
deliveries.
-A tough beginning for the hotel segment, resulting from the continuous flight
suspensions on Egypt by Russia amongst other European countries, yet still
outperforming the market.
-On track with the refinancing package negotiations with the banks, opting for a
3 years grace period, to be finalized by June/July 2016.
-Successfully launched El Gouna "State of Mind" marketing campaign and
positioning
Cairo, 16 May 2016 -Orascom Hotels and Development (OHD) reported a decrease of
37.3% in its revenues to reach EGP 284.0 million compared to EGP 453.3 million
in Q1 2015. The real estate revenue witnessed a healthy increase of 11.5% from
Q1 2015, on the back of accelerated unit deliveries. Hotel segment operations
witnessed a slowdown resulting from the ongoing travel bans on Egypt, yet our
hotels in El Gouna were still able to outperform the market. The drop in total
revenues was mainly driven by the decrease in the land revenue segment to reach
EGP 29.0 million compared to EGP 189.2 million in Q1 2015.
Total deferred revenue from real estate that is yet to be recognized until 2018
increased significantly by 49.6% from to EGP 452.7 million in Q1 2015 to EGP
677.3 million in Q1 2016. Based on the positive momentum witnessed in the real
estate segment, the company decided to be more selective in terms of land sales
moving forward, opting to create the maximum value possible for its
shareholders.
The company recorded a net loss attributable to shareholders of EGP 96.7 million
compared to a net income of EGP 52.7 million in Q1 2015. The results were
impacted by FOREX losses of EGP 69 million in addition to the decrease in land
revenues.
On the other hand, we successfully launched El Gouna "State of Mind" marketing
campaign and have received very positive reviews from several marketing critique
channels.
Real Estate revenues witnessed a positive increase of 11.5% to reach EGP 66.1
million vs. EGP 59.3 million in Q1 2015 driven by the expedited unit deliveries
in Joubal project in El Gouna.
The accelerated construction activities was one of the main achievements of the
quarter, which allowed earlier recognition of revenues and earlier cash
collection of the 10% client delivery payment. We managed to deliver more units
in Joubal during the quarter than what was originally planned. We are currently
at the final stages of finalizing the design for Makadi's Clubhouse, permits
have been submitted and construction commenced on site in April 2016.
Value of contracted units declined to reach EGP 92.4 million in Q1 2016 compared
to EGP 115.7 million in Q1 2015. Nevertheless, we are currently capitalizing on
the great success of the newly launched Fanadir Bay project in El Gouna that we
launched in April 2016 with a total inventory of USD 60.0 million.
Deferred revenue has increased by 49.6% to reach EGP 677.3 million in Q1 2016
compared to EGP 452.7 million in Q1 2015. In addition, our real estate cash
collections reached EGP 83.6 million in Q1 2016.
Egyptian hotels continue to suffer from the harsh decline in number of foreign
tourists post the Russian aircraft crash in October 2015, negatively affected
our hotels performance, yet El Gouna hotels were still able to outperform the
market.
Egyptian Government officials reported a 45% decline in the number of foreign
tourists and a 67% decline in the tourism revenue in Q1 2016 compared to the
same period last year. However, El Gouna's diversified market segmentation,
limited the magnitude of this industry stance to only a 15% decline in its
hotels occupancy from 62% in Q1 2015 to 53% in Q1 2016 and an 11% decline in
TRevPAR from EGP 373 in Q1 2015 to EGP 332 in Q1 2016. We also successfuly
opened the new Ancient Sand Hotel in El Gouna, in April 2016 with 56 rooms.
Makadi was still heavily affected by the ongoing Russian travel bans and is
still operating at 44% of its capacity since Q4 2015. Nevertheless, Orascom
Hotel Management ran special promotional campaigns of the destination in Germany
to cope with the decline in demand. These promotions, coupled with the profound
business cooperation with FTI, the major German tour operator, resulted in an
83% increase in the number of German room-nights growing from 6,000 in Q1 2015
to more than 11,000 this quarter.
We continued to implement drastic cost cutting measures in Taba Heights, our
mostly challenged destination to date given the extended travel bans on Sinai by
all major European countries. The savings initiatives taken so far are expected
to generate total cost savings of EGP 27.0 million in FY 2016. Furthermore, we
centralized all hotel and destination management cost centers in Taba, starting
from the 1st of March 2016 which is expected to promote further operational and
cost savings down the road.
The segment revenues decreased by 29.8% to reach EGP 85.6 million vs. EGP 121.9
million. TrevPar reached EGP 249 vs EGP 281. Foreign exchange losses has
negatively impacted our Hotels EBITDA further this year. In Q1 2016, the foreign
exchange accumulated a total loss of EGP 37.9 million compared to a total gain
of 4.5 million in Q1 2015.
Outlook for FY 2016
Real Estate
We will continue accelerating the construction activites across the launched
projects and continue executing on the new development strategy, offering a
diversified range of products across our destinations. In El Gouna, we are
capitalizing on the big success of Fanadir Bay project launched in April 2016,
recording solid sales that are expected to increase the value of contracted
units in Q2 2016. We will launch new products in Fayoum with a total inventory
of USD 3.4 million in Q4 2016 and are currently studying several opportunities
for the first and second home markets in Cairo and the North Coast.
Hotels
We are finalizing the construction of Byoum hotel in Fayoum, planned to open by
Q3 2016 and continute to study the implementation of strict cost cutting
measures across our hotels in Egypt. On the other hand, efforts are in place to
penetrate the niche Gulf market, increasing their presence in El Gouna. More
positively, the Tourism Ministry announced that Germany's aviation authority has
officially notified all tour operators of the ban removal which will see flights
resume normally to the Red Sea resorts. On the other hand, Russia's aviation
watchdog (Rosaviatsiya) head Aleksandr Neradko announced that security measures
in Egypt are now satisfactory, with plans to resuming flights are very much in
sight.
Debt
On track with the the debt refinancing package negotiations with the banks,
opting for a 3 years grace period, expecting to be finalized by June/July 2016.
Presentation
The associated presentation can be found on Orascom Hotels & Development's
websitehttp://www.orascomhd.com/financial-presentations/under the Investor
Relations section.
Telephone conference hosted by CI Capital today at 3:00 pm CLT
A telephone conference for analysts and investors hosted by CI Capital will be
held in English today at 3:00 pm CET. CEO Khaled Bichara, CFO Ashraf Nessim,
Chief Hotel Officer Abdelhamid Abouyoussef and Chief Development Officer Ossama
Aboualam will present the Q1 2016 results and will be available to answer
questions. A registration is not required.
Dial-in details are as follows:
- Conference ID: 9845487
- International: +44(0) 20 3427 1903
A replay of the conference call will be available until 4.00 pm GMT on 23 May
2016 with the following dial in details:
- Access Code: 9845487
- International Replay: +44 (0) 20 3427 0598
About Orascom Hotels and Development (OHD)
Orascom Hotels and Development is the largest subsidiary of Orascom Development
Holding. OHD is an integrated developer of resort towns in Egypt, with a
vertically-integrated business model involving the development of residential
units, hotels, and recreational facilities such as golf courses, town centers,
and marinas, in addition to supporting infrastructure, such as hospitals,
schools, and utilities. OHD currently owns a land bank of 45.7 million square
meter and 25 hotels with a total of 5,955 rooms within three operating
destinations. El Gouna, on the Egyptian Red Sea Coast in Hurghada, Taba Heights,
on the Sinai Peninsula and Makadi in Hurghada. OHD also holds an 87% stake in
Tamweel, a financial services company providing mortgage, leasing, and
insurance, among other services.
Contact for Investors:
Sara El Gawahergy
Head of Investor Relations
Tel: +20 224 61 89 61
Tel: +41 418 74 17 11
Email:ir@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 Hotels and Development'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 Hotels and Development's results of operations
and on whether Orascom Hotels and Development will achieve its targets. Orascom
Hotels and Development 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
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16.05.2016 News transmitted by Tensid EQS AG. www.eqs.com
The issuer is responsible for the contents of the release.
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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
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463859 16.05.2016