Orascom Development Holding AG
EQS-Adhoc: Orascom Development Holding AG:Turnaround Strategy Bearing Its Fruits with Significant Increase on the Operational and Financial Level across all Segments. Revenues grew by 41.1% to CHF 74.1 million, Adjusted EBITDA Increased By 206.3% to C...
EQS Group-Ad-hoc: Orascom Development Holding AG / Key word(s): Interim
Report/Interim Report
Orascom Development Holding AG:Turnaround Strategy Bearing Its Fruits with
Significant Increase on the Operational and Financial Level across all Segments.
Revenues grew by 41.1% to CHF 74.1 million, Adjusted EBITDA Increased By 206.3%
to CHF 14.7 Million And Losses Significantly Reduced By 59.2% To Reach Only CHF
5.1 Million
06-Jun-2018 / 00:07 CET/CEST
Release of an ad hoc announcement pursuant to Art. 53 KR
The issuer is solely responsible for the content of this announcement.
--------------------------------------------------------------------------------
Orascom Development Holding (ODH); Turnaround Strategy Bearing Its Fruits with
Significant Increase on the Operational and Financial Level across all Segments.
Revenues grew by 41.1% to CHF 74.1 million, Adjusted EBITDA Increased By 206.3%
to CHF 14.7 Million And Losses Significantly Reduced By 59.2% To Reach Only CHF
5.1 Million Net real estate sales increased 2.5 times to CHF 39.8 million in Q1
2018.Hotels revenues increased by 30.5% to CHF 40.2 million and Gross Operating
Profits (GOP) increased by 52.6% to CHF 17.7 million vs. CHF 11.6 million.Town
Management revenues increased by 29.8% to CHF 7.4 million.Adjusted EBITDA
significantly increased by 206.3% to reach CHF 14.7 million.Net losses were
significantly reduced by 59.2% to reach CHF 5.1 million in Q1 2018 vs. CHF 12.5
million in Q1 2017.Orascom Development Egypt (ODE); the subsidiary, entered into
a partnership with the Egyptian government to develop 1,000 feddan in West
Cairo, marking our first foray into the first home market in Egypt.Successfully
sold Citadel Azur Hotel and signed the sale of 3 hotels in Makadi, Red Sea,
Egypt both for a total EV of CHF 98.5 million.ODE signed a contract for the sale
of its stake in Tamweel Group at a total equity valuation of c. CHF 20.0
million.
Altdorf, 6 June 2018 - Orascom Development Holding (ODH) starts the year with
stronger results across all business segments, reaping the fruits of its
successful turnaround strategy. Revenues increased by a 41.1% y-o-y to reach CHF
74.1 million in Q1 2018 vs. CHF 52.5 million in Q1 2017 and Adjusted EBITDA
increased to CHF 14.7 million recording a 206.3% growth from CHF 4.8 million in
Q1 2017. The increase in revenues was driven by the enhanced performance across
all business segments and proves our consistent focus on operational excellence
and strategy execution.
Net loss for the reporting period was substantially reduced by 59.2 % to CHF 5.1
million vs. a net loss of CHF 12.5 million in Q1 2017. This huge drop in losses
is a positive indication that the Group is now poised on the right track for
future profitability
A very positive quarter for our Hotels segment. Revenues increased by 30.5% to
CHF 40.2 million in Q1 2018 with a 65.6% increase in the Adjusted EBITDA to CHF
15.4 million vs. CHF 9.3 million in Q1 2017.
Egypt's tourism sector continued its growing momentum reflecting positively on
our segment's results. Tourism revenues increased by 83.3% in the Q1 2018 to US$
2.2 billion. Hotels revenues increased by 30.5% to CHF 40.2 million vs. CHF 30.8
million in Q1 2017, accompanied by a significant boost in the segment's Adjusted
EBITDA with a 65.6% increase to reach CHF 15.4 million vs. CHF 9.3 million in Q1
2017.
In El Gouna, occupancy rates increased by 9.9% to reach 78% vs. 71% in Q1 2017
and TRevPAR increased by 42.5% to CHF 57 vs. CHF 40 in Q1 2017, supported by an
increase in the room rates. El Gouna hotels revenues increased by 41.2% to CHF
13.7 million vs. CHF 9.7 million in Q1 2017 and the GOP surged 70.7% to reach
CHF 7.0 million vs. CHF 4.1 million in Q1 2017. We are progressing with the
renovation works across some of the hotels and we are currently studying the
addition of more hotel rooms, which will result in a further boost in the
segment's profitability.
In line with the Group's strategy of selling its non-core assets, we
successfully sold Citadel Azur hotel in Sahl Hashish for an EV of CHF 49.5
million. This sale resulted in cash proceeds of c. CHF 31.7 million and the
deconsolidation of c. CHF 17.8 million of debt. The hotel however still
contributed positively to the segment's revenues in Q1 2018, recording a 60%
increase in TRevPAR to CHF 48 vs. CHF 30 in Q1 2017.
The new rooms addition in our Gulf hotels in Oman and UAE positively contributed
to the segment's revenue and profitability during the quater. Total hotel
revenues from the region increased to CHF 21.9 million representing 54.5% out of
a total segment revenue of CHF 40.2 million.
Hawana Salalah, Oman the Group's rising destination, continued its positive
performance, with additional revenue contribution coming from the new 120 rooms
added to Al Fanar and Rotana hotels. The successful European market penetration
and the growing demand from the regional market also pushed revenues further to
CHF 13.1 million vs. CHF 10.4 million in Q1 2017 and GOP increased by 46.3% to
CHF 6.0 million vs. CHF 4.1 million in Q1 2017. Occupancy rates reached 97% and
TRevPAR increased to CHF 160 vs. CHF 148 in Q1 2017.
In UAE, occupancy reached 79% in Q1 2018 and revenues increased by 19.1% to
reach CHF 8.1 million vs. CHF 6.8 million in Q1 2017; and GOP also increased by
28.6% to reach CHF 3.6 million in Q1 2018.
Overall, the new hotel strategy catered to the different destinations continued
to prove its successfulness boosting the segment's profitability levels.
Real estate segment records a boost in its operational and financial results in
all destinations. Net sales more than doubled to CHF 39.8 million and revenues
increased by 81.3% to reach CHF 22.3 million.
Our real estate segment started the year on a positive note recording a 150.3%
increase in net sales to reach CHF 39.8 million in Q1 2018 vs. CHF 15.9 million
in Q1 2017.
El Gouna, Egypt has continued its solid performance on the back of our
consistent targeted sales and marketing activities. Net sales more than doubled
to reach CHF 21.3 million vs. CHF 10.1 million. In January 2018, we released
new inventory in "Tawila" for a total value of USD 44.1 million. The new phase
includes town houses and apartments, of which we have sold USD 16.4 million to
date. In April 2018, we launched a new real estate project called "Ancient Sands
Villas" with a total inventory of USD 80.0 million. The launched phase total
inventory is USD 22.7 million witnessing strong demand.
In Makadi Heights, Egypt we started an aggressive sales and marketing campaign
to revive the destination and push back sales which is showing very positive
momentum with numbers contributing to the Group sales in Q2 2018. The new phase
was launched in April 2018 with a total inventory of CHF 11.1 million and have
successfully sold and reserved more than 50% of the launched phase to date (c.
CHF 5.5 million).
In Jebel Sifah, Oman, net sales increased by 55.5% to reach CHF 8.4 million in
Q1 2018 vs. CHF 5.4 million in Q1 2017 on the back of the great success of phase
2 of the Golf Lake Residence launched in November 2017 with a total inventory of
CHF 18.0 million.
In Hawana Salalah, Oman, the new launch released in Q4 2017 continued to witness
huge demand whereby net sales reached CHF 6.2 million in Q1 2018 compared to
zero sales in the same period last year.
In Luštica Bay, Montenegro, the upcoming summer destination of the year we
finalized the construction of the Chedi hotel which will hold its soft opening
in July with bookings already in place. We will also launch the Marina with its
1,000-sqm retail outlets. We are progressing ahead with construction of "E" and
"B" building clusters comprising 68 apartments due for delivery in 2018. Net
sales in Luštica Bay also witnessed a noticeable boost to reach CHF 3.9 million
in Q1 2018 compared to zero sales last year in Q1 2017.
Total real estate revenues increased by 81.3% to CHF 22.3 million vs. CHF 12.3
million in Q1 2017 on the back of unit deliveries in El Gouna, Jebal Sifah and
Montenegro. Total deferred revenue from real estate that is yet to be recognized
till 2021 increased by 11.8% to reach CHF 144.9 million vs. CHF 130.5 million in
Q1 2017. It is also important to note in addition to the outstanding deferred
revenue balance; the Group also has a deferred interest income of CHF 10.2
million.
With the increase in scale witnessed in our different destinations, along with
presence of more activities and events, the results of our third revenue segment
"Town Management» increased by 29.8% to CHF 7.4 million.
In El Gouna, we hosted the FIFA World Cup Trophy tour in March 2018, with more
than 1,000 attendees including football stars, media celebrities and public
figures. We also continued to host our successful yearly events; the
International Open Squash Championship in April 2018 for men and women and El
Gouna Polo event. We are also planning to hold our second edition of El Gouna
Film Festival in September 2018. In Hawana Salalah, Oman, we organised in
February 2018 a special Hawana Fiesta "Omani Night", the event featured a host
of entertainment activities and was attended by more than 1,000 attendees. Also
in January 2018, we opened Hawana Salalah Aqua Park, the first Aqua Park in Oman
and is witnessing positive feedback from visitors. In Luštica Bay, Montenegro,
we have several events lined up this summer with the launch of our hotel the
Chedi Montenegro.
Outlook for FY 2018:
Corporate
We remain on track with finalizing all necessary documentation for the sale of
our earlier communicated 3 hotels in Makadi for a total EV of CHF 49.0 million
with cash proceeds of CHF 27.4 million and the deconsolidation of CHF 14.4
million of debt. We are also finalzing the necessary fillings for the sale of
ODE's stake in Tamweel Group at a Equity valuation of CHF 20.0 million and will
deconsolidate its debt of c. CHF 59.2 million. In paralel, we are holding
advanced discussions and executing on our communicated plan with the banks to
reduce the debt on ODE by c. CHF 56.0 million in 2018.
In line with the Group's strategy of enhancing its balance sheet and increasing
the liquidity of the stock of its listed Egyptian subsidiary Orascom Development
Egypt (ODE), ODH has successfully sold c. 18.2 million shares of ODE to a set of
strategic investors. The proceeds of the sale of c. CHF 33.2 million will be
used to finance the Group's expansion plans in Oman and Montenegro for the year.
Real Estate
In El Gouna, we are capitalizing on the great success of our launches and
planning the launch of new product in December. In Makadi Heights, we are
witnessing very strong momentum in the sales of our new launch, which will be
reflected in our Q2 2018 results. Most importantly, we are finalizing the
documentation for our revenue share agreement with the NUCA on the 1,000 feddan
plot that was previously announced in West Cairo. We are also continuing to hold
advanced discussions to acquire a land plot in North Coast, marking our first
entrance into second home markets.
In Oman, construction on the Golf Lake project in Jebel Sifah commenced in 2017,
with plans to deliver Phase I of the project in Q4 2018. We are also planning to
launch new real estate projects in Q3 2018 in Sifah and Salalah. In Luštica Bay
Montenegro, we are progressing with the construction of "E" and "B" building
clusters comprising 68 apartments due for delivery in 2018 and early 2019; and
over 1,000 sqm of marina retail due for delivery in summer 2018.
Hotels
In El Gouna, we are continuing with the renovation works across some of our
hotels to further upgrade the destination's positioning. With demand recently
picking up we are also considering the addition of more rooms to the existing
hotels and possibly building a new hotel for the destination in 2018/2019.
Capitalizing on the high demand and proven quick return on investment in the
hotels business, we started the construction works for 176 new rooms in Al Fanar
Hotel be finalized this year. In Montenegro, we are at the final stages of
construction of the Chedi hotel and the Marina, holding its soft opening in July
2018.
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 seven jurisdictions (Egypt,
UAE, Oman, Switzerland, Morocco, Montenegro and United Kingdom), with primary
focus on touristic destinations. The Group currently operates ten destinations;
five in Egypt (El Gouna, Taba Heights, Fayoum Makadi, and Harram City), The Cove
in the United Arab Emirates, Jebel Sifah and Hawana Salalah in Oman, Luštica Bay
in Montenegro and Andermatt in Switzerland.
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
Contact for Media Relations:
Philippe Blangey
Partner
Dynamics Group AG
Tel: +41 432 68 32 35
Email:prb@dynamicsgroup.ch
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------------------------------------------------------
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: SIX Swiss Exchange
End of Announcement EQS Group News Service
--------------------------------------------------------------------------------
692715 06-Jun-2018 CET/CEST