Amer Group shows strong performance in FY-2016 with EGP 2.4 Billion consolidated revenues, representing 32% YoY increase.

Transcription

1 Amer Group shows strong performance in FY-2016 with EGP 2.4 Billion consolidated revenues, representing 32% YoY increase. AMER.CA On the Egyptian Exchange Amer Group Revenues (FY15 - FY 16, EGP mn) 1, ,443.7 FY 15 FY 16 Amer Group Gross Profit FY15 - FY16 EGP mn) FY 15 FY 16 Amer Group Operating Profit (FY15 - FY16, EGP mn) FY 15 FY 16 Amer Group Net Profit (FY15 - FY16, EGP mn) FY-2016 Highlights FY-2016 Revenues reached EGP 2,444 Million, 32% YoY increase compared to EGP 1,846 Million in FY Gross Profit reached EGP Million, with a Gross Profit Margin of 29%. Operating Profit reached EGP Million, with Operating Profit Margin of 12.4%. Net Profit after Taxes and Minority Interest reached EGP Million, with a Net Profit Margin of 7.5%. Total Assets reached EGP Billion, slightly lower than December 31, Bank Balances & Cash amounted to EGP 893 Million compared to EGP Million in December 31, Total debt increased to EGP Million vs. EGP 185 Million in December 31, Land liability decreased from EGP Million in December 31, 2015 to EGP 37.3 Million in December 31, 2016 Debt-to-equity ratio recorded 0.24x in FY-2016 vs in December 31, Amer Group (AMER, CA on EGX), the Master regional developer of large-scale, mixed-use-family-oriented communities, has released its consolidated financial results for the Financial year ending December 31, 2016 recording EGP 2,444 Million consolidated revenues with 32% increase YoY. We have also achieved a Net Profit of EGP Million, and a Net Profit Margin of 7.5%. Bank Balances & Cash on the Balance Sheet reached EGP 893 Million in December 31, 2016 while total debt increased to EGP Million with a debtto-equity ratio of 0.24x, a ratio that highlights, despite its minimal increase, the Group s robust and highly liquid financial position. Amer Group continues to ensure highest margin of safety to its shareholders by following a conservative debt policy even through periods of growth. Amer Group is currently diversifying its exposure across different segments, focusing on generating recurring revenues through the operations of ongoing business in various sectors including Real Estate investment, Malls, Restaurants and Hotels & Vacations. It has also explored new business opportunities in FY 15 FY 16 development segment. The Group recognizes 100% of revenues complimentary from a real estate fields transaction and in new the quarter other investments. which (a) the unit is ready for delivery and (b) 80% of

2 Financial Performance Managements analysis of the Group s financial and operational performance follows, while Amer Group s full consolidated financial statements for 9M-2016 are presently available for download at amer-group.com. EGP MN INCOME STATEMENT HIGHLIGHTS FY-2015 FY-2016 Change REVENUES 1, , % COST OF REVENUES (1,194.1) (1,734.1) 45% GROSS PROFIT % GROSS PROFIT MARGIN 35.3% 29.0% EBIT % OPERATING PROFIT % OPERATING PROFIT MARGIN 16.0% 12.4% NET PROFIT AFTER TAX & MINORITY % NET PROFIT MARGIN 9.1% 7.5% BALANCE SHEET HIGHLIGHTS 31-DEC DEC-16 Change TOTAL ASSETS 6, , % CASH % DEBT % EQUITY 1, , % NET DEBT (368.4) (453.8) 23% DEBT/EQUITY CASHFLOW STATEMENT 31-DEC DEC-16 Change NET CASHFLOW OPERATING NET CASHFLOW INVESTMENT (494.5) NET CASHFLOW FINANCE (286.7) Amer Group FY-2016 Revenues amounted to EGP 2,444 Million, a rise of 32% YoY (or EGP 597 million) compared to EGP 1,846 Million in FY It is worth noting that the real estate division continues to represent the largest portion of revenues accounting for 51.3% of total revenues, Porto Vacation Club (PVC) 25%, the Restaurant Division contributed to 10.4%, the Hotels Division 6%, the Malls Division 1% and the remaining percentage from other activities. Gross Profit reached EGP Million in FY-2016 vs. EGP Million in FY-2015, 9% higher on a YoY basis. The Gross Profit Margin reached 29%, vs. the 35.3% Gross Profit Margin that was achieved in FY Cost of revenues in FY-2016 than FY-2015 with cost margin of 70% from 64% in FY-2015 (from EGP 1,194 Million in December 31, 2015 to EGP 1,734.1Million in December 31, 2016). The increase in cost of revenues was driven by the increase in Amer Group top lines coupled with a significant increase in the construction raw materials cost, which was heavily affected by the EGP floatation and hence, depreciation.

3 Operating Profit amounted to EGP Million in FY-2016 vs. EGP Million in the financial year ending December 31, The almost flat Operating Profit despite increased top lines was due to 38% increase in General and Administrative expenses (from EGP 192 Million in FY-2015 to EGP 265 Million in FY-2016) coupled with 45% rise in Other Operating Expenses (from EGP 85.5 Million in FY-2015 to EGP 124 Million in FY-2016). It is worth noting that the YoY increase in G&A cost and Other Operating Expenses was mainly due to the reclassification of some financial instruments following the restructuring plan that followed Porto Group spin-off. It was also due to a Capital Loss recorded in FY following the sale of Amer Group treasury shares towards the end of the year. The Capital Loss amounted to EGP 28.2 Million vs. EGP 1.5 Million recorded in FY Net Profit after Taxes and Minority Interest for FY-2016 recorded EGP Million compared to EGP Million in FY- 2015, a YoY increase of 10% despite the 41.9% increase in Finance Cost due to the repayment of the securitization program (from EGP 81.6 Million in December 31, 2015 to EGP 115 Million in December 31, 2016). Total Equity in December 31, 2016 reached EGP Billion compared to EGP Billion in December 31, 2015, a rise of 26% that resulted from increased FX gain resulted from Amer s ownership in Porto International Group Investment. The FX gain amounted to EGP 246 Million in December 31, 2016 compared to EGP Million in December 31, Total Equity in December 31, 2016 has also increased following an increase in Legal Reserve and Retained Earnings by 18.4% and 27% respectively. Amer Group s debts increased in December 31, 2016 to EGP Million vs. EGP 185 Million in December 31, The EGP Million increase in total debt were used to finance the Heliopolis Land and to decrease the Company s Land Liabilities. Amer Group Debt-to-Equity ratio is as low as 0.24x, which reflects the Group s robust and highly secured financial position. The Group continues to ensure highest margin of safety to its shareholders by following a conservative debt policy even through periods of growth. Land liability in FY-2016 witnessed a remarkable decrease from EGP Million in December 31, 2015 to EGP 37.3 Million in FY-2016, which was due to the repayment of Porto Heliopolis land. Segment Contribution to Total Revenues Total Debt 25% Real Estate Restaurants % 6% 1% 11% 51% Malls Hotels Retail & Others PVC FY-2015 FY-2016

4 Segment Analysis: Real Estate Investment (51% of total FY-2016 Revenues) The Real Estate segment is an integral part amongst Amer Group various Lines of Business. Though it is no longer a real estate developing vehicle but rather a real estate investment and urban development arm, it plans to generate high quality of projected revenue streams. The Real Estate market remains strong in Egypt where demand is high amid shortage of property and where Egyptian buyers favor real estate asset investment as a hedge against upcoming currency devaluation. Amer Group principally builds its two-year projections for the real estate division on three main revenue streams: (i) delivering its current backlog that reached EGP Billion as of December 31, 2016; (ii) selling the inventory that exists in its developments, which recorded as of December 31, 2016 a total of 842 units; and (iii) concluding revenue sharing agreements with third parties in its capacity as Master Developer. Amer Group recorded EGP 1,254 Million as Real Estate revenue for FY-2016 compared to EGP 1, 225 Million registered in FY-2015 following the delivery of 1,977 units. Management achieved new Real Estate sales of 1,645 units in FY-2016 with Real Estate sales amount of EGP 1,412 Million, which is in line with the adopted strategy to move toward Real Estate investment rather than regular Real Estate sales. The Group continues to invest for the future and has recently secured the needed permits related to the construction of 23K new units in Golf Porto Marina in the North Coast. It is currently looking to conclude the optimum revenue sharing agreement with a Real Estate Developer for the construction and the launch of the newly approved units. Additional units in other areas are also on the pipeline, waiting to secure the related construction permits. Amer Group has secured four revenue share agreements with Porto Group. The agreements encompass the developing of 464 K Sqm, both residential and commercial units in Porto Matrouh (phase 2), Golf Porto Marina (Phase 4), Golf Porto Sokhna (Phase 4) and Porto Heliopolis based on a revenue share agreement equivalent to 20%, 20%, 20% and 40% respectively. Porto Group proven track record in collection and construction cycle set the stage for strong revenue streams that will be recognized on quarterly basis by Amer Group. Amer Group continues to explore a variety of Land parcels in order to secure excellent Land opportunities that will be added to its existing Land Bank, which has reached a total of 5.5 Million Sqm (out of which 2 Million Sqm are un-developed land). We have made good progress on this matter and we are in the process of finalizing a strong pipeline of longerterm strategic lands.

5 Real Estate LoB Item Units FY-2015 FY-2016 Change Total Number of Units # Units Sold # Total New Sales Value EGP mn Units delivered # Revenues Recognized EGP mn Operating Profit EGP mn Operating Profit Margin % 15,257 16,902 11% 1,376 1,645 20% 1, , % 1,666 1,977 19% 1, , % % 21% 11% Recognized Real Estate Revenue (FY-15 vs. FY-16) 1,254.8 Total New Sales Value MEGP (FY-15 vs FY- 16) 1, , ,412.2 FY15 FY16 FY15 FY16 Amer Group Land Bank Un-developed Land Geographic Distribution Un-developed Land (Million Sqm), 2.00 Developed Land (Million Sqm), % 7% 25% 12% 24% 29% 2% Golf Porto Sokhna Porto South Beach Golf Porto Marina Golf Bay Marina Porto Matrouh Porto Heliopolis Porto Sharm

6 Segment Analysis: Restaurants (10.4% of total FY-2016 Revenues) Amer Group owns and operates family-friendly restaurants under both licensed global and regional brand names and its owned proprietary brands. The division includes a central kitchen that provides services to all Amer Group restaurants brands and catering operations. Restaurants LoB Item Units FY-2015 FY-2016 Change Operational Restaurants # % Total Available Seats # 7,367 7,413 1% Average Spend per Cover EGP % Segment Revenues EGP mn % Operating Profit EGP mn 18.1 (19.1) -206% Operating Profit Margin % 8% -8% Amer Group Restaurant Segment showed good performance in FY-2016 in terms of revenues recording EGP Million compared to EGP Million in FY-2015, 13% increase YoY. Nevertheless and given the hike in inflation with a significant increase in Cost of Food coupled with the expenses related to the restructuring of the Restaurants segment as well as utilities expenses, operating income recorded a loss amounting to EGP 19.1 Million in FY-2016 compared to a profit amounting to EGP 18.1 Million in FY Restaurant Brands Contribution 3% 5% to revenues STUDIO MISR CARINOS Restaurants Revenues (FY15 vs. FY16) % 6% 12% 56% STUDIO & SEAFOOD HALAKA FRESHI I_S OCEAN BASKET FY-2015 FY-2016

7 Segment Analysis Hotels (6% of total FY-2016 Revenues) Amer Group owns and manages 7 Hotels scattered across its developments. The Hotels division manages properties in Porto Marina, Porto Golf Marina and Porto Sokhna and has inaugurated new properties in Porto Matrouh Beach Resort and Porto South Beach. Hotels LoB Item Units FY-15 FY-16 Change Available Rooms room nights 221, ,361-6% Room Revenue EGP mn % Food Revenue EGP mn % Other Revenue EGP mn % Total Revenue EGP mn % Operating Profit EGP mn % Operating Profit Margin % 1% 9% 8.29 Amer Group Hotels distinguishes itself by offering a complete package of family-oriented resort destinations where retail shops, restaurants and other entertainments activities are available in a single location. The Group mainly targets domestic clientele, which makes this segment relatively immune to the volatility of the Tourism sector. In FY-2016, revenues for the Hotels segment rose 4% YoY, recording EGP Million vs. EGP Million registered revenues in FY The Operating profit for the period registered impressive increase YoY (110%) recording EGP 13.2 Million compared to EGP 0.8 Million in FY-2015 and despite the increased inflation in Egypt that affected the utilities expenses and the maintenance costs. Total Revenue (FY2015 vs FY2016) FY2015 FY % 2% 11% 6% 27% Hotels contribution to revenues MARINA GOLF MARINA 37% SOUKHNA EL-JABAL CANCUN SOUTH BEACH 3% MATROUH

8 Segment Analysis Porto Vacation Club - PVC (25% of total FY-2016 Revenues) Amer Group views Porto Vacation Club (PVC) as an important driver of high margins revenues. PVC enables customers to share ownership and use of fully-furnished vacation accommodations, which gives the purchaser a right to use a property for a specific period of time. For many purchasers, vacation ownership is an attractive alternative rather than owning a second-home or resorting to regular hotel accommodation. PVC Item Units FY-2015 FY-2016 Difference Revenues Net Profit Net Profit Margin EGP mn % EGP mn % 37% 20% We generate most of our revenues from three primary sources: (i) selling vacation ownership products, which is the core business of PVC segment; (ii) the collection of maintenance fee for managing our resorts and; (iii) the collection of service fee for renting vacation inventory on behalf of the PVC members. As of December 31, 2016, the PVC memberships that corresponded to 1,652 vacation units reached a total of 19,861. According to the agreed accounting standards (Accounting Standard No. 11 from the EAS), Amer Group has started to record revenues for PVC segment in The Group has recorded EGP Million in FY-2016 compared to EGP 86.9 Million in FY-2015 with 610% increase YoY. The remaining sales value will be recognized in FY The future continues to be bright with opportunities that complement our commitment for growth. We recently announced plans for new destinations (Porto Marina North Coast) that would also include new on-site sales locations.

9 Segment Analysis Malls (1% of total FY-2016 Revenues) Amer Group s Malls division operates seven malls in four locations around Egypt, including Porto Marina Mall, Golf Marina Mall, Porto Matrouh, Mega Mall, Sky Mall and Waterfront Mall. The division produces revenues primarily through commissions generated from leasing units to commercial operators on behalf of units owners3 Malls LoB Item Units FY-2015 FY-2016 Change Gross Leasable Area (GLA) sqm 76,753 72,757-5% Number of Tenants # % Aveg. Occupancy Rate % 53% 52% Revenues EGP mn % Operating Profit EGP mn % Operating Profit Margin % 6% 30% Malls Segment s Revenues recorded EGP 30.7 Million in FY-2016 compared to EGP 55.9 Million in FY-2015, a YoY decline of 45%. Nevertheless, Operating profit registered EGP 9.2 Million as of FY-16, which is an increase of 185% YoY. The Group s portfolio comprises 5 malls after transferring Porto Cairo Mall to our sister company Porto Group and selling Meeting Point Tagamo3 as Office Space, which led to a gross leasable area of 73K sqm. The contraction in Malls GLA is the result of the restructuring and redesign plan which has been adopted by management, aiming to enhance the overall performance of the Malls segment.

10 Amer Group Balance Sheet for FY-2016 Item (EGP) 31-DEC DEC-15 Non-current Assets Fixed Assets 854,706,543 1,052,165,555 Projects Under Construction 104,838, ,156,915 Investment Property Assets 293,087, ,636,970 Intangible Assets 141, ,526 Investments in Associates 5,001,000 2,500,500 Down Payment for Purchase of Investments in Companies 34,550,752 25,197,775 Restricted Deposits due to Units Owners 653,495, ,916,027 Deferred Tax Liability - - Total Non-current Assets 1,945,822,232 2,153,317,268 Current Assets Development Properties 2,446,179,568 3,060,577,800 Inventories 21,879,139 25,083,832 Accounts & Notes Receivables 269,459, ,588,499 Prepayments & Other Receivables 314,694, ,316,318 Bank Balances & Cash 893,057, ,333,775 Total Current Assets 3,945,270,360 4,126,900,224 Total Assets 5,891,092,592 6,280,217,492 Current Liabilities Provisions 3,045,926 4,503,755 Bank Overdrafts 38,410,342 40,691,845 Land Purchase Liability 37,366, ,438,204 Advances from Customers 1,620,510,942 2,561,162,788 Accounts & Notes Payable 478,758, ,663,002 Term Loans 68,328,884 69,977,352 Income Tax Payable 23,801,418 49,886,025 Accrued Expenses & Other Payables 1,146,823, ,068,277 Total Current Liabilities 3,417,045,732 3,996,391,248 Working Capital 528,224, ,508,976 Total Invested Funds 2,474,046,860 2,283,826,244 Financed as Follows: 2,446,179,568

11 Equity Share Capital 911,908, ,908,929 Translation of Foreign Entity 246,542, ,014 Legal Reserve 50,733,848 42,859,122 General Reserve 12,055,859 12,055,869 Other Reserves 7,976,113 7,976,113 Retained Earnings 551,676, ,370,498 Equity Attributable for Majority Owners - - Minority Interest 20,077,961 14,433,682 Total Equity 1,800,971,921 1,423,929,227 Non-current Liabilities Term Loans 332,519,795 74,311,457 Land Purchase Liability - 177,854,417 Deposits due to Units Owners 653,495, ,916,027 Notes Payable 1,643, ,752 Deferred Tax Liability 40,846,595 15,083,374 Total Non-current Liabilities 1,028,505, ,897,027 Total Equity & Long Term Liabilities 2,829,477,160 2,283,826,254 Amer Group Income Statement for FY-2016 Item (EGP) FY-2016 FY-2015 Change Revenue 2,443,731,220 1,846,486,350 32% Cost of Revenue (1,734,098,263) (1,194,128,005) 45% Gross Profit 709,632, ,358,345 9% Selling and Marketing Exp (126,672,398) (154,270,992) -18% General and Admin Exp (265,122,112) (192,622,221) 38% Other Income 108,109,659 75,523,848 43% Other Operating Exp (124,037,065) (85,527,723) 45% Operating Profit 301,911, ,461,257 2% Finance Cost (115,084,633) (81,625,966) 41% FX Gain (Loss) 47,125,140 21,012, % Profit for the Year Before Tax 233,951, ,847,435 0% Income Tax (49,498,295) (66,982,371) -26% Profit for the Year 184,453, ,865,064 10%

12 Shareholders Structure FY-2016 SOL GLOBAL HOLDING LIMITED 31% 35% AMER WAKF LTD Lantess Internatinal Limited Egyptian Wakf Limited Mohamed El- Amin Ragb 4% 7% 2% 10% 11% FINEBY ESTATES LIMITED free floting Riad Refaat Chief Financial Officer About Amer Group Noha Agaiby Investor Relations Director Established in 2007, Amer Group is the Middle East and North Africa s leading developer of large-scale mixed-use familyfriendly destinations that combine upscale residential, retail and office space in addition to world-class restaurants. Amer Group operates across four primary interlinked lines of business, including Real Estate, Mall, Restaurants and Hotels; other wholly-owned Amer subsidiaries offer facilities management, sales and vacation club services, among others, to Amer developments. Listed on the Egyptian Exchange (EGX) under the symbol AMER.CA, Amer Group is headquartered in Cairo, The company takes pride in developing new communities; creating jobs; and embracing family values at all of its developments. In 2008, the lead shareholders donated 33% of its shares to an Egyptian endowment to support funding for charity projects3 The endowment s shareholding following the company s IPO stands currently at 11%; all returns support charities as part of the Group s mission to support social investing3 Learn more about our Group and our projects at amer-group.com. Disclaimer Statements contained in this document that are not historical facts are based on current expectations, estimates, projections, opinions and beliefs of Amer Group. Such statements involve known and unknown risks, uncertainties and other factors; undue reliance should not be placed thereon, Certain information contained herein constitutes targets or forward-looking statements which can be identified by the use of forward-looking terminology such as may, will, seek, should, expect, anticipate, project, estimate, intend, continue or believe or the negatives thereof or other variations thereon or comparable terminology. Actual events or results or the actual performance of Amer Group may differ materially from those reflected or contemplated in such targets or forward-looking statements. The performance of Amer Group is subject to risks and uncertainties.