Orascom Development Holding AG

DGAP-Adhoc: Orascom Development Holding AG: 1H 2014: Orascom Development records a net profit of CHF 31.5 mn, despite continued pressure on Egypt's hotel operations.

Orascom Development Holding AG  / Key word(s): Half Year Results/Half Year

26.08.2014 07:00

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

Press Release

1H 2014: Orascom Development records a net profit of CHF 31.5 mn, despite
continued pressure on Egypt's hotel operations.

Orascom Development generated CHF 31.5 million in net profit attributable
to shareholders of the company after a CHF 48.0 million loss in the
comparable period. Key drivers of this result were significant overhead
savings of CHF 20 million compared to FY 2012 cost base, strong real estate
& construction revenues, compensating for a weaker hotel performance,
one-off gains related to the settlement of the Falcon case and
deconsolidation of OHC. The successful carve-out of the budget housing
operations and construction segment in Egypt marks an important milestone
in further reducing the Group's cost base.

Altdorf/Cairo, 26 August 2014 - Orascom Development Holding AG's (Orascom
Development) revenues increased in 1H 2014 by 2% to CHF 120.6 million (1H
2013: CHF 118.3 million), as strong Real Estate & Construction revenues
compensated for a weaker hotel performance. The net profit attributable to
shareholders of the company reached CHF 31.5 million after a CHF 48.0
million loss in the same period last year. The result was significantly
impacted by delivering on the Group's cost savings initiatives by achieving
CHF 20 million of overhead savings compared to FY 2012 cost base, one-off
gains related to the settlement of the Falcon case (CHF 52.6 million) and
the deemed loss of control of OHC and its subsidiaries (CHF 9.4 million).
The adjusted EBITDA for the period was CHF 10.7 million (1H 2013: 1.6

Revenues in Real Estate & Construction segment more than doubled compared
to prior year

Revenues in the Real Estate & Construction segment significantly increased
to CHF 49.5 million
(1H 2013: CHF 22.3 million), equivalent to 41% of Group revenues. The
increase is mainly a result of accelerated delivery of real estate units in
Egypt (El Gouna, Ancient Sands and Makadi). The adjusted segment EBITDA
increased to CHF 15.8 million (1H 2013: CHF -4.6 million). Contracted real
estate sales increased to CHF 35.0 million (1H 2013: CHF 31.0 million),
driven by a continued strong sales momentum in El Gouna and a positive
contribution from Montenegro. In total, 403 units were sold at an average
price of CHF 1,116/m2 including the budget housing segment.

Hotels continued to suffer from travel restrictions on Egypt and inventory
loss in Taba Heights during 1H 2014, with significant improvement being
witnessed during 2H 2014.

The hotel segment continued to suffer from travel bans to the Sinai
Peninsula and general travel warnings on the Red Sea area issued by most
Western European countries at the beginning of the year. In addition,
flooding in May 2014 resulted in a 29% room capacity loss in Taba Heights.
The average occupancy rate declined to 42% (1H 2013: 59%) and revenues
slipped to CHF 48.8 million (1H 2013: CHF 72.0 million), equivalent to 40%
of Group revenues. The adjusted segment EBITDA amounted to CHF 2.3 million
(1H 2013: CHF 18.9 million). TRevPAR (Total Revenues per Available Room)
declined to CHF 39 (1H 2013: CHF 60).

On the positive side, the announced cost savings measures increased
operational efficiency and resulted in an improved flow-through compared to
1H 2013, despite the significant decline in revenues.  The Group expects a
significant improvement in the hotels operations during the second half of
the year.  With the presidential inauguration in June 2014 and the upcoming
parliamentary elections, the road to political reforms became clearer,
which boosted international and domestic confidence in Egypt's stability.
Accordingly, most travel bans were lifted towards the beginning of the
second half of 2014, with occupancy rates rising in the weeks since.
Moreover, the Egyptian Ministry of Finance is working on a stimulus package
to promote private sector investments in select industries, including

We also finished the restoration of 3 hotels in Taba Heights which are now
fully operational and are finalizing the necessary works on the other 3
hotels which are expected to be operational by the end of the year.  At the
end of the reporting period, the Group operated 7,382 hotel rooms.

Carve-out of budget housing operations and construction segment in Egypt
successfully completed

In June 2014 Orascom Development successfully completed the carve-out of
OHC and its subsidiaries, including Red Sea for Construction, the entity
overseeing most of the construction activities in Egypt. Following a
capital increase of OHC by CHF 22.3 million, in which Orascom Development
did not participate, the Group's stake was diluted from 69.34% to 35.25%
which resulted in a loss of control. Effective Q2 2014 the investment in
OHC has been deconsolidated and is now classified as an investment in
associates. The transaction led to a gain of CHF 9.4 million in Q2 2014
mainly due to the difference between fair value and carrying value of the
residual interest in OHC.

The OHC transaction significantly contributes to the Group's savings
program by reducing contracted and non-contracted labor by about 2,500 FTE.
Management expects first positive P&L effects to become visible in Q3 2014.

Subsequent events

In August 2014, a bulk deal was signed for the sale of 71 units within the
newly launched  Al Fanar project in Salalah Beach (Oman) for a total
purchase price of OMR 6.9 million (c. CHF 16.3 million). According to the
payment terms the Group will receive a 40% advance payment split over two
tranches until September 15th, 2014 and the remaining 60% until November
30th, 2014. The first tranche with the value of CHF 0.5 million has already
been received.

In July 2014, the Group successfully closed the share sale of CMAR, the
holding company of a Club Med hotel in Mauritius, to an US investment
company. Settlement of the deal is pending final approval of the Prime
Minister of Mauritius, which is expected to take between three to six

In May 2014, the Group announced the signing of a Memorandum of
Understanding (MoU) with Egyptian Resorts Company (ERC) to divest select
non-core assets in Egypt. On 24 August 2014 this MoU expired as both
parties did not reach a mutual agreement to continue with the transaction.
The expiration of the MoU also terminates the exclusivity rights that were
granted to ERC in connection with the agreement and releases both parties
from any further obligations.

Outlook for 2014

While 1H 2014 was materially impacted by the low performance of the hotel
segment, Orascom Development is already witnessing improvements in its
Egyptian hotel's operations. The Group should also be able to start
recognizing revenue in Montenegro for the first real estate deliveries
starting in either FY 2014 or Q1 2015.

Apart from improving operational performance, debt reduction and
restructuring remain the key topics to improve the current cash flow
situation. That said the Group is at advanced discussions with its lenders
to reschedule all commitments from March 2014 until the end of Q1 2015.
Having sustained its full activities during the period of unrest through
executing on its earlier communicated strategies, the management is now
capitalizing on Egypt's improved economic and political outlook, making use
of its strong hotel portfolio and real estate projects to boost the Group's

Key figures 1H 2014

(in CHF million)                               1H 2014   1H 2013   Delta

Total revenues                                 120.6     118.3     2.0%

Gross Profit                                   16.3      5.1       219.6%

Gross Profit-Margin (%)                        13.5%     4.3%

Net income / (loss) attributable to ODH        31.5      (48.0)
shareholders shareholders

Operating cash flow after interest/taxes       (22.3)    (40.6)

Total assets1                                  1,631.3   1,672.7   (2.5)%

Equity ratio (%)1                              48.1%     45.5%     5.7%

Net debt1 3                                    425.2     398.9     6.6%

Adjusted EBITDA2                               10.7      1.6       568.8%

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 1:30 pm CET
A telephone conference for analysts and investors will be held in English
today at 1:30 pm CET. CEO Samih O. Sawiris, CFO Eskandar Tooma and Chief
Hotel Officer Abdelhamid Abouyoussef will present the 1H 2014 results and
will be available to answer questions. A registration is not required.

Dial-in details are as follows:
  - Password:   49950580

  - 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:   49950580

  - 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 primary focus on touristic destinations and
budget housing. The Group currently operates eight destinations; four in
Egypt El Gouna, Taba Heights, Haram City 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

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

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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.

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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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