EQS Group-Ad-hoc: Orascom Development Holding AG / Key word(s): Quarter
Orascom Development Holding AG: Witnessed Higher Operational Contribution from
Oman and Montenegro, Yet Results were Impacted by FOREX losses of CHF 12.9
million and the Strategic Decision to Reduce Land Sales
19.05.2016 / 07:00
Release of an ad hoc announcement pursuant to Art. 53 KR.
The issuer is solely responsible for the content of this announcement.
ODH ("Orascom Development Holding") (SIX ODHN.SW), (EGX ODHN.EY) has released
its consolidated financial results for its three Months ended 31st of March
Management will hold a call today to discuss the results further at 1.30pm CET /
2.30pm CEST /2.30pm CLT Dial ins are included in the release attached
Orascom Development Holding (ODH) Witnessed Higher Operational Contribution from
Oman and Montenegro, Yet Results were Impacted by FOREX losses of CHF 12.9
million and the Strategic Decision to Reduce Land Sales
-Revenues decreased to CHF 61.2 million compared to CHF 74.8 million in Q1 2015,
mainly resulting from the decrease in land revenues in Q1 2016 reaching CHF 3.6
million vs. CHF 24.0 million in Q1 2015
-Significant surge in the real estate segment's revenues, recording an increase
of 69.2% to reach CHF 18.1 million compared to CHF 10.7 million, on the back of
higher deliveries in Egypt and Oman.
-Notable boost in Oman and UAE's hotels performance, yet segment revenues was
impacted by the suspension of flights on Egypt.
-Value of contracted units reached CHF 17.7 million, with contributions coming
from El Gouna, Jebel Sifah and Montenegro.
-FOREX losses of CHF 12.9 million impacted the quarter's profitability. Net loss
attributable to shareholders amounted to CHF 26.4 million compared to net profit
of CHF 3.4 million for the same period last year.
-On track with the refinancing package negotiations with the banks, opting for a
3 years grace period, to be finalized by June/July 2016.
Altdorf, 19 May 2016 - Orascom Development Holding (ODH) revenues decreased by
18.2% to CHF 61.2 million compared to CHF 74.8 million in Q1 2015. Real estate
revenue witnessed a significant increase of 69.2% from Q1 2015, on the back of
accelerated unit deliveries in Egypt and Oman. Revenues from our hotels in Oman
and in the UAE increased by 29.6% versus the same period last year, yet the
segment's total revenue showed a slowdown resulting from the ongoing travel bans
on Egypt. The drop in the Group's total revenues was mainly driven by the
decrease in the land segment's revenue to reach CHF 3.6 million compared to CHF
24.0 million in Q1 2015. Moving forward, the company decided to be more
selective in terms of land sales, opting to create the maximum value possible
for its shareholders.
It is important to highlight that when Adjusted EBITDA is normalized for land
sales in both comparative periods, it reaches CHF 2.0 million in Q1 2016 versus
CHF (0.9) million in Q1 2015.
The net losses attributable to the shareholders of the company reached CHF 26.4
million, the main contributors to the bottom-line losses include: (i) the
decrease in the land segment's revenue. (ii) foreign exchange losses due to the
devaluation of the EGP against CHF and USD (iii) and the increase in ODH's share
of losses from Andermatt Swiss Alps (ASA) and Orascom Housing Communities (OHC),
the Group's largest associate (non-consolidated) companies.
69.2% increase in real estate revenues reaching CHF 18.1 million in Q1 2016
compared to CHF 10.7 million in Q1 2015, driven by accelerated unit deliveries
in Egypt and Oman.
The Group's value of contracted units recorded an increase of 1.7% during Q1
2016 to reach CHF 17.7 million vs. CHF 17.4 million in Q1 2015. While El Gouna
remains to be the biggest contirbutor to the Group's sales value, Lustica bay,
Montenegero witnessed a significant increase in its sales volume, whereby we
sold 8 units for a total value of CHF 2.3 million compared to only 1 unit for a
value of CHF 0.3 million during the same period last year, signaling stronger
demand on the destination. We have also witnessed healthy sales contribution
from Jebel Sifah, Oman with a total contracted value of CHF 3.7 million compared
to CHF 1.5 million in Q1 2015.
In Egypt, the accelerated construction activity was one of the main achievements
of the quarter, allowing for earlier recognition of revenues and earlier cash
collection of the 10% client delivery payment. We managed to deliver more units
in Joubal project during the quarter than what was originally planned. In
Makadi, We are currently finalizing the design for Makadi's Clubhouse, permits
have been submitted and construction commenced on site in April 2016.
In Lustica bay, Montenergo, the year 2016 started as the busiest year yet on the
development and construction fronts. Besides the significant increase in sales
that further emphasized demand on our project, we are strongly progressing with
the construction of the new (F) buildings comprising 45 apartments and have
almost finalized the marina's superstructure, on target to open the marina
during the summer of 2017.
In Oman, ongoing efforts were taken in developing our Omani destinations, adding
to the destinations' livelihood to ultimately drive up real estate sales. We are
progressing with phase 1 launch of Sifah's Golf course and expediting
deliveries. Total value of contractd units increased to reach CHF 4.0 million
compared to CHF 2.4 million in Q1 2015. We successfuly handed over 59 real
estate units in Sifah and Salalah and are working on a new marketing and
positioning campaign for both destinations.
Total deferred revenue from real estate that is yet to be recognized until 2018
reached CHF 132.2 million in Q1 2016 compared to CHF 137.0 million in Q1 2015.
We continue to manage our real estate collections reaching CHF 13.4 million in
Q1 2016 vs. CHF 21.3 million in Q1 2015.
The notable performance of Al Fanar Hotel in Oman and The Cove Rotana in the
UAE, positively contributed to the Hotel's segment results, limiting the
magnitude of the Egyptian Tourism industry stance.
Our hotels in the Gulf region witnessed a notable boost in their performance
this quarter. In Oman, the opening of Al Fanar Hotel in December 2015
contributed positively to the country's performance. Oman hotels reported a
revenue increase of 43% growing from CHF 6.2 in Q1 2015 to CHF 8.9 million in Q1
2016 and occupancy rate have increased from 65% in Q1 2015 to 82% in Q1 2016.
Similarly in UAE, The Cove Rotana reported a revenue increase of 14% growing
from CHF 6.0 million in Q1 2015 to CHF 6.9 million in Q1 2016 and occupancy
recovered to report a growth from 67% to 77% in Q1 2016.
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 occupancy
from 62% in Q1 2015 to 53% in Q1 2016 and an 11% decline in revenues (TRevPAR:
CHF 46 in Q1 2015 vs. CHF 36 in Q1 2016). We also successfuly opened the new
Ancient Sand Hotel in El Gouna, in April 2016 with 56 rooms.
Makadi, Egypt was still heavily affected by the ongoing Russian travel bans ,
with two hotels shut down 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 of Royal Azur Hotel 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, Egypt
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 CHF 3.3 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's revenues declined by 8.4% to reach CHF 27.1 million vs. CHF 29.6
million in Q1 2015 and was able to report a slight growth in Adjusted EBITDA
from CHF 2.8 million in Q1 2015 to CHF 2.9 million in Q1 2016.
Outlook for FY 2016
We will continue executing on the new development strategy, offering a wider
range of products across our destinations. In El Gouna, we are capitalizing on
the big success of Fanadir Bay project that was launched in April 2016 with a
total inventory of USD 60.0 million. We will also launch new products in Fayoum
with a total inventory of USD 3.4 million in Q4 2016. In Oman, we are
progressing with the launch of phase 1 of the Sifah Golf course, expediting
deliveries across both destinaotions and revisiting the master plans for Salalah
and Sifah to optimize more land use. We are progressing with Salalah's water
park project (planning & studies phase) with plans to start construction by Q4
In Oman, we are capitalizing on the huge tour operator demand for Salalah Beach
that was witnessed at the ITB 2016 conference and accordingly are working on
building an extension for Al Fanar Hotel that will add 80 new rooms to the
existing hotel portfolio, bringing its total room count to 298 by December
2016.In Egypt, we are finalizing the construction of Byoum hotel in Fayoum,
planned to open by Q3 2016. We are also continuing to implement strict cost
cutting measures across our hotels in Egypt and efforts are put in place to
penetrate the niche Gulf market positioning El Gouna as Egypt's lively, high-end
fully fledged touristic town. 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
and also the Russian Trade Representative to Egypt, Fedor Lukashin, expressed
hope that the ban on flights from Russia to Egypt would be lifted this fall. In
UAE, we are finalizing the construction of The Cove Rotana extension, adding 145
rooms to be open during 2016 and we are also planning to start the construction
of the Promenade Hotel in Lustica Bay, Montenegro in 2016.
On track with the the debt refinancing package negotiations with the banks ,
opting for a 3 year grace period, expecting to be finalized by June/July 2016.
The associated financial statements and presentation can be found on Orascom
esentations.htmlunder the Investor Relations section.
Telephone conference today at 1:30 pm CET/ 2.30pm CEST/ 2.30pm CLT
Orascom Development invites you to its Q1 2016 results conference call on 19 May
2016 at 1:30 pm CET. The call will start by a presentation from the CEO Khaled
Bichara, the CFO Ashraf Nessim and Chief Hotels Officer Abdelhamid Abouyoussef,
followed by a Q&A session. A registration is not required.
- Conference password: 50621429
- International: +44 (0)207 192 8000
- Switzerland Toll Free: 0800 920 016
- Switzerland Local Number: 0315 800 059
- Egypt Toll Free: 0800 000 0798
- UK Toll Free: 0800 376 7922
- US Toll Free: 1866 966 1396
A replay of the conference call will be available for one week with the
following dial in details:
- Access Code: # 50621429
- International: +44 (0) 1452 55 00 00
- UK National : 08717000145
- US Toll Free: 1866 247 4222
- Available until 26 May 2016
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 a
primary focus on touristic destinations. The Group currently operates seven
destinations; three in Egypt El Gouna, Taba Heights 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 Exchange.
Contact for Investors:
Sara El Gawahergy
Head of Investor Relations
Tel: +20 224 61 89 61
Tel: +41 418 74 17 11
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from past results). Factors such as (i) general economic conditions and
competitive factors, particularly in our key markets; (ii) performance of
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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
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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
19.05.2016 News transmitted by Tensid EQS AG. www.eqs.com
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
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