Amer Group shows strong performance in 1Q-2017 with EGP 603 Million consolidated revenues, representing 11% YoY increase.

Transcription

1 Amer Group shows strong performance in 1Q-2017 with EGP 603 Million consolidated revenues, representing 11% YoY increase. AMER.CA On the Egyptian Exchange Amer Group Revenues 1Q16 vs.1q17, EGP mn) Q-16 1Q-17 Amer Group Gross Profit 1Q16 vs. 1Q17 EGP mn) Q-16 1Q-17 Amer Group Operating Profit (1Q16 vs. 1Q17, EGP mn) Q-16 1Q-17 Amer Group Net Profit (1Q16 vs. 1Q17, EGP mn) Q-2017 Highlights 1Q-2017 Revenues reached EGP 603 Million, 11% YoY increase compared to EGP 544 Million in 1Q Gross Profit reached EGP 185 Million, with a Gross Profit Margin of 30.7%. Operating Profit reached EGP 91.3 Million, with Operating Profit Margin of 15.1%. Net Profit after Taxes and Minority Interest reached EGP 64 Million, with a Net Profit Margin of 10.6%. Total Assets reached EGP Billion, slightly lower than December 31, Bank Balances & Cash amounted to EGP Million compared to EGP 893 Million in December 31, Total debt slightly decreased to EGP Million vs. EGP Million in December 31, Land liability increased from EGP 37.3 Million in December 31, 2016 to EGP 91.5 Million in March 31, 2017 Debt-to-equity ratio recorded 0.25x in 1Q-2017 vs. 0.24x 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 period ending March 31, 2017 recording EGP 603 Million consolidated revenues with 11% increase YoY. We have also achieved a Net Profit of EGP 64 Million, and a Net Profit Margin of 10.6%. Bank Balances & Cash on the Balance Sheet reached EGP Million in March 31, 2017 while total debt slightly decreased to EGP Million with a debt-toequity ratio of 0.25x, 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 * Total 1Q-16 New Real Estate Sales represents 1Q-17 the total value of new unit s sales made in the period, and is distinct from total revenues recognized in the Real Estate 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 1Q-2017 are presently available for download at amer-group.com. EGP MN INCOME STATEMENT HIGHLIGHTS 1Q Q-2017 Change REVENUES % COST OF REVENUES (405.5) (418.1) 3% GROSS PROFIT % GROSS PROFIT MARGIN 25.5% 30.7% 5.16 EBIT % OPERATING PROFIT % OPERATING PROFIT MARGIN 10.2% 15.1% 4.95 NET PROFIT AFTER TAX & MINORITY % NET PROFIT MARGIN 12.5% 10.6% BALANCE SHEET HIGHLIGHTS 31-DEC MR-17 Change TOTAL ASSETS 5, , % CASH % DEBT % EQUITY 1, , % NET DEBT (453.8) (360.0) -21% DEBT/EQUITY CASHFLOW STATEMENT 31-DEC MAR-17 Change NET CASHFLOW OPERATING 85.0 (141.9) NET CASHFLOW INVESTMENT (59.9) 24.4 NET CASHFLOW FINANCE (79.9) (21.8) Amer Group 1Q-2017 Revenues amounted to EGP 603 Million, a rise of 11% YoY (or EGP 59 million) compared to EGP 544 Million in 1Q It is worth noting that the real estate division continues to represent the largest portion of revenues accounting for 62% of total revenues, Porto Vacation Club (PVC) 21%, the Restaurant Division contributed to 8%, the Hotels Division 1%, the Malls Division 1% and the remaining percentage from other activities. Gross Profit reached EGP 185 Million in 1Q-2017 vs. EGP Million in 1Q-2016, 33% higher on a YoY basis. The Gross Profit Margin reached 30.7%, vs. the 25.5% Gross Profit Margin that was achieved in 1Q Cost of revenues in 1Q reached EGP 418 Million vs. EGP 405 Million in 1Q-2016 with cost margin of 69.3% vs. 74.4% in 1Q-2016.

3 Operating Profit in 1Q-2017 registered a strong increase of 64.5% YoY amounting to EGP 91.3 Million vs. EGP 55.5 Million in the financial period ending March 31, The increase in Operating Profit was driven by: (i) 11% increase in top lines; (ii) 22.2% decrease in General and Administrative expenses (from EGP 62 Million in 1Q-2016 to EGP 48 Million in 1Q-2017); and (iii) Strong increase in Other Income from EGP 14 Million in 1Q-2016 to EGP 29 Million in 1Q-2017, which is due to registering revenues related to the Malls segment under Other Income. It is worth noting that the strong increase in Other Operating Expenses is due to the effect of the reclassification of some financial instruments. Net Profit after Taxes and Minority Interest for 1Q-2017 recorded EGP 64 Million compared to EGP 68 Million in 1Q-2016, a decrease of 6% YoY driven by Finance Cost increase due to the repayment of the securitization program (from EGP 4.8 Million in 1Q-2016 to EGP 45.5 Million in 1Q-2017). Total Equity in 1Q-2017 reached compared to EGP Billion in December 31, 2016, the lower Total Equity was driven by a decrease in retained earnings from EGP Million in 1Q-2016 to EGP Million in 1Q Amer Group s debts slightly decreased in 1Q-2017 to EGP Million vs. EGP Million in December 31, Amer Group Debt-to-Equity ratio is as low as 0.25x, 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 1Q-2017 registered an increase of EGP 54.2 Million on top of the existing EGP 37.3 Million, which makes a total Land Liability of EGP 91.5 Million in 1Q-2017 compared to EGP 37.3 Million in 31 December The increase in Land Liability was due to additional costs to be paid by Amer Group to Matrouh Governorate for the extension of the BUA in Golf Porto Marina as requested by Amer Group. Segment Contribution to Total Revenues Total Debt (1Q-2017) % Real Estate Restaurants 1% 1% 8% 7% 62% Malls Hotels Retail & Others PVC **Malls Revenues are registered under Other Income FY2016 1Q-17

4 Segment Analysis: Real Estate Investment (62% of total 1Q-2017 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 2,300.7 Million as of March 31, 2017; (ii) selling the inventory that exists in its developments, which recorded as of March 31, 2017 a total of 436 units; and (iii) concluding revenue sharing agreements with third parties in its capacity as Master Developer. Amer Group recorded EGP Million as Real Estate revenues for 1Q-2017 compared to EGP 442 Million registered in 1Q-2016 following the delivery of 469 units. Management achieved new Real Estate sales of 214 units in 1Q-2017 with Real Estate sales amount of EGP 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 and 5K units in Golf Porto Sokhna. Amer Group has already concluded a revenue sharing agreement with Porto Group as well as with Heaven Hills to develop some of the units in Golf Porto Marina and Golf Porto Sokhna. Other revenue sharing agreements are also on the pipeline with a Real Estate Developers for the construction and the launch of the newly approved units. The Group has previously 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), and Golf Porto Sokhna (Phase 4) based on a revenue share agreement equivalent to 20%, 20%, and 20% respectively. Porto Group proven track record in collection and construction cycle set the stage for strong revenue streams. 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 1Q Q-2017 Change Total Number of Units # 15,273 17,148 12% Units delivered # % Revenues Recognized EGP mn % Operating Profit EGP mn % Operating Profit Margin % 18% 21% Recognized Real Estate Revenues MEGP (1Q16 vs. 1Q17) Q 16 1Q 17 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 (8% of total 1Q-2017 Revenues) Amer Group owns and operates family-friendly restaurants under both licensed global and regional brand names and its owned proprietary brands. Restaurants LoB Item Units 1Q Q-2017 Change Operational Restaurants # % Total Available Seats # 6,887 7,003 2% Average Spend per Cover EGP % Segment Revenues EGP mn % Operating Profit EGP mn 1.3 (3.6) -371% Operating Profit Margin % % Amer Group Restaurant Segment registered slight YoY decrease in 1Q-2017 revenues recording EGP 51 Million compared to EGP 52.7 Million in 1Q-2016, 3% decline YoY. The lower revenues coupled with the hike in inflation as well as increased Cost of Food led to recording an operating loss amounting to EGP 3.6 Million in 1Q-2017 compared to a profit amounting to EGP 1.3 Million in 1Q Restaurants Revenues (1Q16 vs. 1Q17) Q Q-2017

7 Segment Analysis Hotels (1% of total 1Q-2017 Revenues) Amer Group owns 7 Hotels scattered across its developments. The Group concluded an agreement with AccorHotels to manage properties in Porto Marina, Porto Golf Marina and Porto Sokhna and other new properties in Porto Matrouh Beach Resort and Porto South Beach. Hotels LoB Item Units 1Q Q-2017 Change Available Rooms room nights 45,087 24,061-47% Room Revenue EGP mn % Food Revenue EGP mn % Other Revenue EGP mn % Total Revenue EGP mn % Operating Profit EGP mn (7.3) (8.0) 9% Operating Profit Margin % 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 1Q-2017, revenues for the Hotels segment recorded EGP 4.3 Million vs. EGP 17.5 Million registered revenues in 1Q The Operating result for the period registered losses amounted EGP 8 Million compared to a loss of EGP 7.3 Million in 1Q-2016, which is due to seasonality effect coupled with the increased inflation in Egypt that affected the utilities expenses and the maintenance costs Hotels Revenue (1Q16 vs. 1Q17) 4.3 1Q Q-2017

8 Segment Analysis Porto Vacation Club - PVC (21% of total 1Q-2017 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 Unit 1Q Q-2017 Difference Revenues EGP mn % Net Profit EGP mn (3.6) % Net Profit Margin -46% 93% 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 March 31, 2017, the PVC memberships that corresponded to 1,652 vacation units reached a total of 20,422. 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 1Q-2017 compared to EGP 8 Million in 1Q-2016 with 1529% increase YoY. The remaining sales value will be recognized throughout 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 1Q-2017 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 owners. Malls LoB Item Units 1Q Q-2017 Change Gross Leasable Area (GLA) sqm 110,944 72,757-34% Aveg. Occupancy Rate % 32% 15% -54% Revenues** EGP mn Operating Profit EGP mn (3.8) (6.1) 61% Operating Profit Margin % 110,944 72,757-34% ** Revenues for the Mall Segment were registered under Other Income in 1Q-2017 Financial Statement As of 1Q-2017, Amer Group has adopted a new financial instrument registering the revenues of the Malls segment under Other Income. The Malls Segment s Revenues recorded EGP 4.9 Million in 1Q-2017 compared to EGP 12.6 Million in 1Q The Operating result registered a loss of EGP 6.1 Million compared to a loss amounted to EGP 3.8 Million in 1Q 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 1Q-2017 Item (EGP) 31-MAR DEC-16 Non-current Assets Fixed Assets 848,362, ,706,543 Projects Under Construction 64,928, ,838,887 Investment Property Assets 291,447, ,087,888 Intangible Assets 141, ,313 Investments in Associates 5,001,000 5,001,000 Down Payment for Purchase of Investments in Companies - 34,550,752 Restricted Deposits due to Units Owners 636,077, ,495,849 Deferred Tax Liability - - Total Non-current Assets 1,845,958,819 1,945,822,232 Current Assets Development Properties 2,340,972,212 2,446,179,568 Inventories 23,254,760 21,879,139 Accounts & Notes Receivables 279,433, ,459,045 Prepayments & Other Receivables 374,113, ,694,650 Bank Balances & Cash 787,725, ,057,958 Total Current Assets 3,805,499,493 3,945,270,360 Total Assets 5,651,458,312 5,891,092,592 Current Liabilities Provisions 3,045,926 3,045,926 Bank Overdrafts 41,647,668 38,410,342 Land Purchase Liability 37,366,020 37,410,342 Advances from Customers 1,406,630,859 1,620,510,942 Accounts & Notes Payable 461,548, ,758,431 Term Loans 66,667,123 68,328,884 Income Tax Payable 39,120,695 23,801,418 Accrued Expenses & Other Payables 857,689, ,393,469 Total Current Liabilities 2,913,715,723 3,061,615,432 Working Capital 891,783, ,654,928

11 Total Invested Funds 2,737,742,589 2,829,477,160 Financed as Follows: Equity Share Capital 911,908, ,908,929 Translation of Foreign Entity 245,191, ,542,676 Legal Reserve 50,733,848 50,733,848 General Reserve 12,055,859 12,055,859 Other Reserves 7,976,113 7,976,113 Retained Earnings 455,954, ,676,535 Equity Attributable for Majority Owners - - Minority Interest 5,614,052 20,077,961 Total Equity 1,689,435,110 1,800,971,921 Non-current Liabilities Term Loans 319,400, ,519,795 Land Purchase Liability 54,279,485 - Deposits due to Units Owners 636,077, ,495,849 Notes Payable 893,000 1,643,000 Deferred Tax Liability 37,656,741 40,846,595 Total Non-current Liabilities 1,048,306,479 1,028,505,239 Total Equity & Long Term Liabilities 2,737,741,589 2,829,477,160 Amer Group Income Statement for 1Q-2017 Item (EGP) 1Q Q-2016 Change Revenue 603,020, ,343,864 11% Cost of Revenue (418,069,378) (405,480,684) 3% Gross Profit 184,950, ,863,180 33% Selling and Marketing Exp (41,185,016) (21,469,054) 92% General and Admin Exp (48,276,957) (62,002,296) -22% Other Income 29,493,118 14,074, % Other Operating Exp (33,634,994) (13,933,942) 141% Operating Profit 91,346,939 55,531,960 64% Finance Cost (45,540,717) (4,783,721) 852% FX Gain (Loss) 30,764,284 38,249,626-20% Profit for the Year Before Tax 76,570,506 88,997,865-14% Income Tax (12,613,989) (20,919,081) -40% Profit for the Year 63,956,517 68,078,784-6%

12 Shareholders Structure 1Q % 35% SOL GLOBAL HOLDING LIMITED AMER WAKF LTD Lantess Internatinal Limited Egyptian Wakf Limited 4% 7% 2% 10% 11% Mohamed El- Amin Ragb FINEBY ESTATES LIMITED free floting Riad Refaat Noha Agaiby Chief Financial Officer Investor Relations Director About Amer Group 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 projects. 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 investing. 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.