Orascom Development Holding AG

DGAP-Adhoc: Orascom Development Holding AG: 9M 2013 Results

Orascom Development Holding AG  / Key word(s): 9-month figures/9-month figures

26.11.2013 07:00

Release of an ad hoc announcement pursuant to Art. 53 KR

Press Release

Monetization remains on course and cost savings of CHF 38.5 million have
been identified and budgeted for FY 2014, but civilian unrest and travel
bans post the 30th of June upheavals in Egypt negatively impact 9M 2013

The challenging market environment in Egypt continued to impact Orascom
Development's 9M 2013 results. Revenues declined by 13.2% to CHF 164.7
million, while the net loss of the owners of the parent company of CHF 75.7
million (9M 2012: CHF -59.1 million) was mainly driven by a weaker Real
Estate and Construction result, FX-losses and losses related to associates.
Nonetheless, the Group was able to realize CHF 62.5 million from its
monetization program and to make significant progress towards rescheduling
its debt. Cost savings of 38.5 million have been identified and budgeted
for FY 2014

Altdorf/Cairo, 26 November 2013 - The civilian unrest following June 30th
in Egypt had a significant impact on Orascom Development Holding AG's
(Orascom Development) results. For 9M 2013 the Group reported a 13.2%
decrease in consolidated revenues to CHF 164.7 million (9M 2012: CHF 189.6
million). This was mainly a result of weaker hotel performance associated
with the travel bans in Egypt and fewer real estate units being delivered
in Egypt and Oman. Combined with high-fixed construction cost, the gross
profit margin decreased from 9.3% to 4.7%. The net loss of the owners of
the parent company of CHF 75.7 million is attributable to a weaker real
estate and construction result, foreign exchange losses from
USD-denominated loans and losses related to associates.

Since the beginning of 2013, the Group has successfully realized CHF 62.5
million from its monetization program. In October we sold the 70% stake in
our Romania project to Samih O. Sawiris for CHF 2.9 million, and in
November we were able to secure financing of CHF 22.1 million to finish the
construction of the Rotana hotel in Oman. The remaining monetization
proceeds will be used to retire outstanding debt and to reduce headcount in
the various destinations.

In July 2013 Orascom Development has launched a group-wide cost savings
program to reduce the cost base by CHF 50 million until the end of 2014. So
far cost savings initiatives of CHF 38.5 million have been identified and
budgeted for FY 2014. We remain committed to the CHF 50 million target and
shall continue to monitor and report progress periodically.

Key Figures (in CHF million)                9M 2012     9M 2013    Delta

Total revenues                              189.6       164.7      -13.2%

Gross Profit                                17.6        7.7        -56.1%

Gross Profit-Margin (%)                     9.3%        4.7%

Net income / (loss) after minorities        (59.1)      (75.7)

Operating cash flow after interest/taxes    7.8         (55.5)

Total assets ¹                              2,082.7     1,699.9    -18.4%

Equity ratio (%) ¹                          46.9%       50.6%

Net debt ¹                                  502.2       350.6      -30.2%

EBITDA                                      (17.2)      (26.5)
Adjusted EBITDA2                            16.1        (2.9)

¹ For 2012 as per December 31, 2012
2 EBITDA adjusted for discontinued operations and non-cash items

Main Business Segments

Hotel revenues in 9M 2013 decreased by 7.6% from CHF 104.5 million to CHF
96.5 million, equivalent to 58.6% of Group revenues. Despite the drop in
revenues, the operating result (EBITDA) increased by 14.8 % to CHF 25.5
million (9M 2012: CHF 22.2 million), mainly as a result of ongoing cost
savings initiatives and optimization of the hotels' operations. The
adjusted EBITDA amounted to CHF 30.1 million (9M 2012: CHF 23.9 million).
Occupancy rates slightly declined to 53% (9M 2012: 55%) as operations in
Egypt were negatively impacted by travel restrictions post the 30th of
June, while occupancy rates in Jordan increased to 51% (9M 2012: 41%).
TRevPAR (Total Revenues per Available Room) declined to CHF 53 (9M 2012:
CHF 57). At the end of the reporting period, Orascom Development operated
6,696 hotel rooms.

In line with the company's strategy of optimizing internal processes,
Orascom Development recently announced the establishment of a joint venture
with Abdelhamid Abouyoussef under the name of 'Orascom Hotels Management'
(OHM) to asset manage the entire Group's hotels. Abdelhamid Abouyoussef is
the owner and managing director of 1,600 hotel rooms throughout Egypt, and
Orascom Development is building on his expertise to further strengthen the
segment's capacity and performance. OHM will be 75% owned by Orascom
Development and 25% owned by Abdelhamid Abouyoussef who will also be the
Managing Partner of the Company.

Real Estate and Construction
Revenues in the real estate and construction segment amounted to CHF 32.5
million, a decrease of 32.1% compared to the previous year (9M 2012: CHF
47.8 million) and equivalent to 19.7% of Group revenues. The decrease is
mainly a result of less value sold in Oman and less deliveries in Egypt &
Oman. The segment's EBITDA slightly improved over the same period last year
to CHF -2.4 million (9M 2012: CHF -4.2 million) but still impacted by
higher costs of sales and overhead construction costs in Egypt and Oman.
The adjusted EBITDA was CHF 1.8 million (9M 2012: CHF 14.9 million).
Contracted real estate sales in 9M 2013 amounted to CHF 44.3 million
compared to CHF 44.1 million a year ago. In total, 312 units were sold (9M
2012: 471 units).

Outlook 2013
Business performance until October 2013
In October, occupancy rates continued to decrease when compared to the same
period of last year. However, we are confident that the organizational
changes and the establishment of OHM will lead to a better utilization of
inventory and will enhance the segment's performance in the currently
challenging market environment. Until the end of October 2013 the value of
sold real estate units was about 3% higher than in the comparable period of
last year. For 4Q 2013 we are planning to deliver 121 units in Ancient
Sands (El Gouna) and 531 units in Makadi.

Hotel openings on track
As communicated earlier, the new hotel The Chedi Andermatt in Switzerland
(89 rooms), the Rotana hotel in Oman (399 rooms) and the hotel in Makadi
(299 rooms) will open by the end of this year.

Political transition in Egypt
The civilian unrest that took place on the 30th of June 2013 and the
subsequent events which led to the declaration of a state of emergency and
to the imposition a night time curfew have all again pushed several
countries to issue travel bans on Egypt and has decreased tourism rates
significantly, compared to the same periods last year. These conditions
directly impacted our hotel businesses, our major sector of operations.
However, the current efforts exerted by the ad-interim government to
restore economic growth, along with the drafting of the new constitution
and the expected parliamentary and presidential elections in early 2014,
the country has been signaling growing confidence in its ability to impose
security after the unrest. Egypt has succeeded in convincing many countries
to ease the travel bans for Egypt. The list of countries that lifted travel
bans to Egypt includes Germany, Ireland, Austria, Bulgaria, Sweden,
Lithuania and Switzerland.

Should the latter positive events materialize, we believe that the Group is
fundamentally well positioned, with a solid portfolio of hotels and real
estate infrastructure as well as cost savings and monetization programs on
track, to quickly recover from this downturn and bounce back to earlier
positive operational levels.

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 Gerhard Niesslein and CFO Eskandar Tooma will
present 9M 2013 results and will be available to answer questions. A
registration is not required. Dial-in details are as follows:
  - Password:   98995651

  - International:   +44 1452 555 566

  - Switzerland Toll Free:  0800 828 006

  - Egypt Toll Free:  0800 000 0318

  - UK Toll Free:   0800 694 0257

  - US Toll Free:   1866 966 9439

A replay of the conference call will be available for one week with the
following dial in details:

  - Access Code:   98995651

  - International Replay #:  +44 1452 550 000

  - UK Local Call Replay #:  0845 245 52 05

  - 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 nine
jurisdictions (Egypt, UAE, Jordan, Oman, Switzerland, Morocco, Montenegro,
United Kingdom and Romania). The Group currently operates six destinations;
three in Egypt El Gouna, Taba Heights and Haram City, The Cove in United
Arab Emirates and Jebel Sifah and Salalah Beach in Oman. 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
Email: ir@orascomdh.com

Contact Media Relations

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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.

26.11.2013 News transmitted by EQS Schweiz AG.
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Language:               English
Company:                Orascom Development Holding AG
                        Gotthardstraße 12
                        6460 Altdorf
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

End of Announcement                             EQS Group News-Service



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