EQS Group-Ad-hoc: Orascom Development Holding AG / Key word(s):
Orascom Development Holding AG: Gives Guidance for FY 2015, and Reports FY 2015
Results for its Egyptian Largest Subsidiary; Orascom Hotels and Development
30.03.2016 / 07:00
Release of an ad hoc announcement pursuant to Art. 53 KR.
The issuer is solely responsible for the content of this announcement.
Orascom Development Holding (ODH) Gives Guidance for FY 2015, and Reports FY
2015 Results for its Egyptian Largest Subsidiary; Orascom Hotels and Development
Orascom Development Holding expects to report a 20-22% increase in
its consolidated revenues for the year 2015 compared to the same period
last year. ODH expects a net loss in the range of CHF 21-23 million compared
to a net profit of CHF 41.9 million in 2014. The full-fledged FY 2015
financial results & statements will be published as announced on the 14th of
April. 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 FY 2015 earnings
release as reported on the Egyptian Stock Exchange.
Orascom Hotels and Development; Egypt's Premier Resort Developer doubles its net
profits and achieves its sales target for the year.
More than doubled the net profits attributable to shareholders of FY
2014, reaching EGP 228.9 million compared to EGP 100.0 million.Achieved the net
sales target of the year; Net sales grew by 72.9% year on year to reach EGP
588.2 million (USD 75.3 million).Speeding up construction across the launched
projects, with deliveries expected ahead of schedule.Hotels segment closed the
year positively, with a fall back starting 4Q 2015 as a result of the aircraft
crash in the Sinai peninsula and the continuous travel bans on Taba.EBITDA
increased by 8.6% to reach EGP 610.4 million compared to EGP 562.1 million in FY
2014.Re-negotiating the refinancing package, to capitalize on the Central
Bank of Egypt's (CBE) initiative, taking a 3 years grace period on principal
and interest, to be finalized by Q2 2016.
Cairo, 30 March 2016 - Orascom Hotels and Development (OHD) continues
its positive momentum recording a 23.6% increase in revenues reaching
EGP 1,772.6 million compared to EGP 1,434.6 million in FY 2014 and a huge
boost in profitability, with a net income of EGP 228.9 million in FY
2015 compared to EGP 100.0 million in FY 2014. The high margins associated
with the land sub-development agreements was the main contributor to the
boost in profitability. During 2015, we signed two new sub-development
agreements to sub-develop 110,196 m2 of land in El Gouna for a total value of
USD 22.0 million.
Achieved the real estate net sales target of the year and
accelerated construction activities. New Contracted Sales witnessed an increase
of 73.7% over the same period last year reaching EGP 694.9 million compared
to EGP 400.0 million in FY 2014.
Political and economic grounds in Egypt have witnessed more stability with the
kick-off of the long-awaited parliamentary elections and the 4.2% increase in
GDP figures for FY 2014/2015, providing positive news for the Egyptian economy.
This improvement has been clearly reflected in our real estate sales, whereby we
were able to achieve our communicated target for the year. The boost was mainly
driven by the significant increase in El Gouna sales reaching EGP 663.8 million
in FY 2015 compared to EGP 376.8 million in FY 2014.
The successful execution of the newly adapted strategy of offering
a diversification of the usual product mix, with different price
brackets; appealing to a larger pool of clientele, allowed us to launch 4
new projects in El Gouna with a total inventory of USD 93.4 million and
helped us tap into a new target age.
Accelerating construction activities was one of the main focuses of the year,
which will allow earlier recognition of revenues and earlier cash collection of
the 10% client delivery payment. We are planning to deliver Joubal lagoon
project that was launched in November 2014 during Q2 2016, 6
months ahead of schedule. We have reached 75% of construction for Byoum hotel in
Fayoum, expected to be opened in Q2 2016 and will commence the construction of
Makadi's club house facilities in Q2 2016.
The segment's revenue reached EGP 268.2 million vs. EGP 441.9 million in FY 2014
and deferred revenue has increased by 67.0% to reach EGP 685.2 million in FY
2015 versus EGP 410.4 million in FY 2014. We continue to properly manage our
real estate collections reaching EGP 427.0 million in 2015.
Hotels segment closed the year on a positive note with revenues increasing by
6.1% to reach EGP 576.0 million (FY 2014: EGP 542.9 million), yet still severely
impacted by the ongoing bans on Taba and the Russian aircraft crash in the Sinai
The optimization strategies that we applied in 2014 across our hotel portfolio,
and the strong performance of the first 9 months, set the stones for a
successful operation of the segment through September 2015. Those strategies
helped us close the year positively and limited the magnitude of
the challenges that the world tourism witnessed in 2015 especially after the
Russian aircraft incident that took place in October 2015.
Total occupancy reached 54% versus 48% in FY 2014 and TRevPAR increased by 21.9%
from EGP 265 to EGP 323 in FY 2015, as a result of the continued hotel
refurbishments, the reviewed contracting strategy introduced in 2014 and the
opening of new food and beverage outlets across El Gouna and Makadi hotels. El
Gouna continued to benefit from its safe haven and has been
outperforming the competition, closing the year at an occupancy of 67% compared
to 59% in FY 2014 and a TRevPAR growing from EGP 386 to EGP 439 in FY 2015. On
the other hand, Makadi, operated at 30% of its capacity as of December 2015 post
the Russian travel bans.
Foreign exchange losses and one-off tax provision, impacted our Hotels' EBITDA
further this year to reach EGP 17.6 million in FY 2015 compared to EGP 140.4
million in FY 2014. 2014 EBITDA included a one-off gain of EGP 21 million
resulting from the waiver of the current account with Garranah and Taba
insurance for an amount of EGP 71 million.
The Board of Directors of OHD has resolved pursuant to Orascom
Development Holdings (ODH's) recommendation to appoint Mr. Khaled Bichara, ODH's
CEO, as a Member of the Board of Directors and the ad-interim CEO of
OHD, representing ODH. Dr. Manal Hussein will resume her role as the
Chairwoman of the Board. The announced changes were effective as of the 1st
of February 2016.
Outlook for FY 2016
After we have received approvals from all banks on the initial
rescheduling agreement to get a 2 years grace period, the CBE issued a new
initiative allowing tourism companies to obtain a 3 years grace period on
principal and interest. Accordingly, we are re-negotiating with the banks,
making use of this initiative, expecting to get it finalized by Q2 2016.
We will continue executing on the new development strategy, offering a wider
range of products across our destinations. In El Gouna, we are planning to
launch Fanadir Bay project with a total inventory of USD 60.0 million. The
project targets second home ownership with a focus on
luxurious yet comfortable living with the unique location of the bay and sea
view units. We will also launch new products in Fayoum with a total inventory of
USD 3.9 million. In Makadi, we are currently finalizing the design for the
Clubhouse and will proceed to permits in order to commence
construction by Q2 2016. We are also studying the possibility of entering the
first and second home markets in Cairo and the North Coast.
On track with the construction of Ancient Sands hotel in El Gouna, and Byoum
hotel in Fayoum, planned to open by Q2 2016. We are studying the implementation
of strict cost cutting measures across our hotels in Egypt. From centralization
of services to suspension of operations at some hotels, minimizing fixed costs,
or even changing in the meal plans, all possibilities are being tackled.
The associated presentation can be found on Orascom Hotels &
Development's website http://www.orascomhd.com/financial-presentations/ under
the Investor Relations section.
Telephone conference hosted by EFG-Hermes today at 3:00 pm CLT A telephone
conference for analysts and investors hosted by EFG-Hermes 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 FY 2015 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 6
April 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.
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.
Contact for Investors:
Sara El Gawahergy
Head of Investor Relations
Tel: +20 224 61 89 61
Tel: +41 418 74 17 11
Contact Media Relations
End of ad hoc announcement
30.03.2016 News transmitted by EQS Schweiz AG. www.eqs.com - news archive:
The issuer is responsible for the contents of the release.
Company: Orascom Development Holding AG
Phone: +41 41 874 17 17
Fax: +41 41 874 17 07
Listed: Foreign Exchange(s) SIX
End of News EQS Group News Service