Agenda. FY 2017 Destination Progress Page 3. FY 2017 Key Highlights Page 6. Financial Review Page 12. Outlook 2018 Page 17

Transcription

1 FY 2017 Results

2 Agenda FY 2017 Destination Progress Page 3 FY 2017 Key Highlights Page 6 Financial Review Page 12 Outlook 2018 Page 17 2

3 El Gouna, Egypt FY 2017 Highlights and Outlook: Net sales increased by 86.3% to reach EGP 1,434.6bn in FY 2017 vs. EGP 769.9mn in FY Hotels GOP more than doubled to reach EGP 419.0mn vs. EGP 133.0mn in FY Successfully launched a new high-end real estate project over looking the marina called Abu Tig Hills in Q with a total inventory of USD 22.0mn and was sold out completely. Continuing with the renovation works across some of our hotels with plans to be finalized during Successfully launched Phase II of G-Space by end of Dec and all offices were rented out. In Jan we released new inventory in Tawila project. Total Phase III inventory is EGP 776.2mn (USD 44.1mn). The sales of the released units are witnessing a positive momentum. Planning to launch a new real estate project in April with a total inventory of EGP 1.4bn (USD 80.0 mn). Looking into adding more hotel rooms and possibly a new hotel in Financials & KPIs FY 2017 FY 2016 % Chg Hotels Number of rooms 2,480 2, % Occ. for available rooms (%) % TRevPAR (EGP) % GOP PAR (EGP) % Total Revenues (EGPmn) % Real Estate Net Contracted Units (EGPmn) 1, % No of Contracted Units % Avg. Selling Price (EGP/m 2 ) 35,301 26, % Total Revenues (EGPmn) % Deferred Revenue (EGPmn) 1, % Destination Management Total Revenues (EGPmn) % 3

4 Taba Heights, Egypt FY 2017 Highlights and Outlook: Taba Heights remains the most challenging destination for the group due to the extended travel bans on Sinai. Nonetheless, the new measurements that were implemented, comprising strict costcutting measures, centralization of services and suspension of operations, limited the impact at Taba Heights. To date we have 1,260 operating rooms out of 2,365 rooms compared to only 718 rooms operating in FY This will make 4 hotels out of 6 open. Potential upside after Russians are back to Hurghada and Sharm El Sheikh. In 2018 we expect Taba destination to cash breakeven compared to previous losses in the previous years. Financials & KPIs FY 2017 FY 2016 % Chg Hotels Number of rooms 2,365 2,365 - Number of rooms available 1, % Total Revenues (EGPmn) % Occ. for available rooms (%) (10.0%) TRevPAR (EGP)* (9.7%) GOP PAR (EGP)* (29) (45) 35.6% * Financial KPIs are calculated based on the number of available rooms during the reported period of FY 17. 4

5 Agenda FY 2017 Destination Progress Page 3 FY 2017 Key Highlights Page 6 Financial Review Page 12 Outlook 2018 Page 17 5

6 Key Highlights FY 2017 Orascom Development Egypt; Continuously Delivers Solid Earnings Performance. Revenues increased by 78.8% to EGP 2,603.0 billion vs. EGP 1,455.5 billion in FY 2016 and Net Profits reached EGP million. Board proposes a Cash Dividend of EGP 1.0 per share. Achieved net real estate sales target of the year recording an increase of 87.5% to EGP 1,462.8 billion vs. EGP million in FY Real Estate revenues increased by 65.1% to EGP million vs. EGP million, on the back of increased unit deliveries. Hotels revenues more than doubled to reach EGP 1,059.7 billion vs. EGP million in FY Hotels Gross Operating Profits (GOP) increased by 299.2% to reach EGP million vs. EGP million in FY Town Management revenues increased by 59.4% to EGP million vs. EGP million in FY Adjusted EBITDA increased by 139.3% to reach EGP 1,021.4 billion vs. EGP million in FY Net profit during the period reached EGP million vs. a net loss of EGP million in FY Ordinary General Assembly approved the sale of the 3 hotels in Makadi and in parallel we are working on reducing the debt by EGP c. 1.0 billion which will generate interest savings of c. EGP million over the coming 6 years. Extraordinary General Assembly approved a 5:1 stock split with plans to be finalized in April 2018 and the Employee Stock Ownership Program (ESOP). The Board of Directors decided to propose to the AGM a cash dividend of EGP 1.0 per share. 6

7 Business Segments FY 2017 Revenue EBITDA Adj. EBITDA 1 (EGP mn) FY 2017 FY 2016 Δ in % FY 2017 FY 2016 FY 2017 FY 2016 Hotels 1, % (54.5) Real Estate % Land Town Management % Tamweel Group % Corporate & Unallocated Items (31.7) (696.4) 4 (79.0) (37.2) ODE Group 2, , % 1, , Adjusted EBITDA: EBITDA adjusted for non cash items (which includes provisions & impairments, other gains and losses, FX gains & share in associates) 2 The amount represent FX gain from previous land sale that took place in Town Management includes revenues from Utilities and services, Hospital, Marina, Golf, Rentals, Educational services, Limousine, and other town amenities. 4 The EBITDA losses in FY 2016 is mainly due to the devaluation of EGP that took place in November

8 Business Segments 4Q 2017 Revenue EBITDA Adj. EBITDA 1 (EGP mn) 4Q Q 2016 Δ in % 4Q Q Q Q 2016 Hotels % (45.4) Real Estate % Land (5.2) Town Management % Tamweel Group % Corporate & Unallocated Items (17.0) (493.5) 4 (4.9) (12.0) ODE Group % Adjusted EBITDA: EBITDA adjusted for non cash items (which includes provisions & impairments, other gains and losses, FX gains & share in associates) 2 The amount represent FX gain from previous land sale that took place in Town Management includes revenues from Utilities and services, Hospital, Marina, Golf, Rentals, Educational services, Limousine, and other town amenities. 4 The EBITDA losses in FY 2016 is mainly due to the devaluation of EGP that took place in November

9 Real Estate KPIs FY 2017, 4Q 2017 and Deferred Revenue Net value of Contracted Units (EGPmn) Number of Contracted Units Average Selling Price (EGP/m 2 ) Destination FY 17 FY 16 FY 17 FY 16 FY 17 FY 16 El Gouna 1, ,301 26,004 Fayoum ,920 7,844 Makadi ,839 4,555 Gardania ,188 ODE Group 1, ,981 24,747 Destination 4Q 17 4Q 16 4Q 17 4Q 16 4Q 17 4Q 16 El Gouna ,906 28,615 Fayoum ,793 - ODE Group* ,435 27,955 Revenue Recognition Schedule (EGPmn) Destination Deferred Revenue Balance El Gouna 1, , Fayoum Makadi ODE Group 1, , * Includes EGP 0.4mn of cancellation in Makadi in 4Q17 vs. EGP 1.5mn in 4Q16 and also cancellation of one unit in both years. 9

10 Hotel KPIs FY 2017 and 4Q 2017 Total number of hotel rooms Number of available rooms Occupancy for available rooms (%) TRevPAR* (EGP) GOP PAR** (EGP) Destination FY 17 FY 16 FY 17 FY 16 FY 17 FY 16 FY 17 FY 16 FY 17 FY 16 El Gouna 1 2,480 2,473 2,480 2, Taba Heights 2 2,365 2,365 1, (29) (45) Fayoum (209) Floating Hotel , (188) Makadi 4 1,113 1, ODE Group 6,035 6,028 3,817 3,759 Destination 4Q 17 4Q 16 4Q 17 4Q 16 4Q 17 4Q 16 4Q 17 4Q 16 4Q 17 4Q 16 El Gouna 1 2,480 2,473 2,480 2, , Taba Heights 2 2,365 2,365 1, (42) 31 Fayoum (157) Floating Hotel ,771 1,019 1, Makadi 4 1,113 1, ODE Group 6,035 6,028 3,817 3, In FY 17 we transferred 87 hotel rooms of Fanadir and Bellevue into real estate products and in Q Ancient Sands hotel room increased by 94 rooms. 2. During FY 2017, only 4 hotels were operating (Sofitel with 442 rooms, Strand Beach Hotel with 503 rooms, El Wekala Hotel with 215 rooms and 100 rooms in Bay View Hotel out of 394 existing rooms). Whereby, only 2 hotels were operating representing 718 rooms in FY In September 1 st, 2016, Byoum Lakeside Hotel was opened. 4. Our 3 hotels in Makadi were rented to FTI Group since Jan Where by in FY 2016 only 1 hotel was operating (Royal Azur with 491 rooms). * Financial KPIs are calculated based on the number of available rooms during the reported period of FY 17 and 4Q 17. ** Includes all expenses of the hotels in the destinations. 10

11 Agenda FY 2017 Key Highlights Page 3 FY 2017 Destination Progress Page 6 Financial Review Page 12 Outlook 2018 Page 17 11

12 Income Statement (EGP mn) 4Q Q 2016 FY 2017 FY 2016 Revenue , ,455.5 Cost of sales (541.6) (321.3) (1,619.5) (1,015.9) Gross profit Gross profit margin 38.5% 35.2% 37.8% 30.2% Investment income Other gains and losses (18.9) (157.1) (244.7) Administrative expenses Share of associates gain/(losses) (21.0) (24.2) (84.2) (72.9) 4.0 (1.6) 3.4 (8.9) EBITDA , Depreciation (56.1) (103.3) (222.0) (224.3) Finance costs (131.9) (141.5) (439.5) (340.4) Income tax expense (42.6) (81.4) 6 (128.8) (108.0) Net profit/(loss) for the period Attributed as follows: (317.7) (499.5) ODE shareholders 94.7 (227.2) (377.5) Non-controlling interest 28.5 (90.5) (122.0) Basic EPS (EGP) 0.4 (1.0) 1.3 (1.7) 4 5 Notes Revenues and gross profit increased due to the enhanced operational performance across all business segments. Investment income increased mainly due to: The increase in real estate cash collection. Increase in interest income on bank deposits. Other gains and losses includes: Gains in relation to settlement of borrowings in the amount of EGP 114.0mn. FX gain of EGP 41.4mn. Other gains of EGP 14.3mn. Other losses of EGP 12.2mn. The share of associates gain is due to the enhanced operations of the associate companies. Increase in Finance costs mainly due to: Increase in interest rates. Increase in the translation of USD denominated loans when translated to EGP. Income Tax expense increased due to the increase of the profitability of the company. 12

13 Balance Sheet (EGP mn) Property, plant and equipment 1 3, ,814.3 Inventory Receivables 1, ,428.4 Cash and bank balances 3 1, Investments in associates Other assets 1, Non-current assets held for sale 4 1, ,349.4 Total assets 10, ,098.9 Borrowings 4, ,647.4 Payables Provisions Other liabilities 5 1, ,087.7 Liabilities related to assets held for sale 13 1, ,117.6 Total liabilities 8, ,523.3 Non-controlling interests Equity attributable to ODE shareholders 1, ,219.9 Total liabilities and equity 10, , Notes PPE decreased mainly due to the reclassification of the 3 hotels in Makadi to assets held for sale. Inventory increased mainly due to: Acceleration of the construction of real estate units in El Gouna. Transferring some hotel rooms into real estate units. Increase in cash is due to: Increase in profitability across all business segments. The increase in real estate collection. Asset and liabilities held for sale include the following: Tamweel Group. Makadi hotels which was transferred during the period as a result of the OGM approval to sell the existing three hotels in Makadi. Other liabilities increased mainly due to: Proceeds from one of our co-investors in one of our subsidiaries. Increase of advanced payments from our real estate sales.

14 Cash Flow Statement (EGP mn) FY 2017 FY 2016 Cash from operations Interest paid 2 (27) (40) Taxes paid 3 (58) (36) Operating Cash Flow Payments for PP&E 4 (218) (452) Other items Investing Cash Flow (98) (353) Change in Borrowings 5 5 (284) Other Items - (11) Financing Cash Flow 5 (295) Net change in cash/equivalents Cash & bank balances beginning of period Cash and bank balances end of period* , Notes Cash flow from operations decreased mainly due to: Increase in construction cost. Increase of Tamweel Mortgage activities during FY Interest paid decreased as a result of capitalized interest of 1H Taxes increased due to the increase of the profitability of the company. Payments for PP&E includes payments related to Tamweel leasing activity and hotels renovations during the period and other amenities across our destinations. Change in Borrowings mainly resulting from: (-) Debt repayment of EGP 236mn. (+) Loan proceeds related to Tamweel for EGP 158mn. (+) Proceeds from other shareholders EGP 83.0mn. * Includes cash related to assets held for sale. 14

15 Financing Profile 1 Interest expense by currency in %, as of Total debt by currency in %, as of % 6% 19% 41% 55% 75% EGP USD EUR EGP USD EUR Equity ratio (%) % 17.3% Cost of debt (%) % 7.7% 1 All debt figures exclude debt relating to assets held for sale (Tamweel and Royal) 2 Equity Ratio = Total Equity/Total Asset. 3 After the effectiveness of Club Med and the syndication agreements with the banks. 15

16 Agenda FY 2017 Key Highlights Page 3 FY 2017 Destination Progress Page 6 Financial Review Page 12 Outlook 2018 Page 17 16

17 Outlook 2018 ODE s expected cash proceeds from its stake sale in the 3 hotels in Makadi + a land plot is c. EGP million. The sale will result in the deconsolidation of EGP million of debt, with an expected one-off gain of c. EGP million. Proceeds of the approved sale in addition to the proceeds from the sale of Tamweel Group and excess cash from operations will be used to: 1. Reduce the debt by c. EGP 1.0 billion of debt. 2. Generate interest savings of c. EGP 150 million in the first year and a total of c. EGP 600 million over 6 years. 3. Further optimize our repayment schedule. Cost of Debt is 10.1% Current Maturity as of FY 2017 Maturity Profile after ODE Rescheduling in 2018 Cost of Debt is 8.6% , , CF CF EGM approved the stock split at a ratio of 5:1, expected to be finalized in April 2018 and also approved the proposed ESOP. Relaunching Makadi destination with a new product offering in April Actively progressing with negotiations to acquire land in Cairo and North Coast to enter the first and second home markets. Positive KPI indicators for the Real Estate and Hotels segments for the first quarter of

18 IR Dashboard Investor Relations Contact: Sara El Gawahergy Head of Investor Relations Tel Dir +20 (0) Mobile CH:

19 Disclaimer The information contained in this , 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 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 Egypt 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 Egypt s results of operations and on whether Orascom Development Egypt will achieve its targets. Orascom Development Egypt 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. 19