Earnings Release FY 2016

Transcription

1 ODH ( Orascom Development Holding ) (SIX ODHN.SW), (EGX ODHN.EY) has released its consolidated financial results for its twelve months ended 31 st of December Orascom Development Holding (ODH): Enhanced operational performance across all destinations yet bottom line results were impacted by FX losses derived from its Egyptian largest subsidiary Orascom Hotels & Development (OHD) after the Central Bank of Egypt s (CBE) decision to float the Egyptian pound (EGP). Revenues reached CHF million vs. CHF million in FY 2015 Significant increase in Oman and UAE s hotels performance A 101% increase in net real estate sales to reach CHF million vs. CHF 57.3 million in FY 2015 Non-cash loss of CHF million impacting the Group s P&L post Central Bank of Egypt s decision to float the Egyptian pound Altdorf, 11 April 2017 During 2016, Orascom Development Holding (ODH) was challenged by several periods of volatility and turbulences. Results were further impacted by the political and economic backdrop in Egypt especially after the CBE s decision to float the EGP. Nonetheless, the Group was able to enhance operational performance across all its destinations, especially in Oman and Montenegro. In line with the strategic decision of being selective with land sales moving forward, the Group did not pursue any land sales in Total revenues of the Group reached CHF million vs. CHF million in FY 2015, which included CHF 65.2 million of land sales revenue. The decision taken by the CBE in November 2016 to float the Egyptian pound in an attempt to stabilize the economy has had a significant impact on a lot of companies that operate in Egypt including the Group. The 102.7% appreciation of the U.S. Dollar against the EGP from 8.88 to 18.0 resulted in substantial revaluations of the debt held in US Dollars at the subsidiary and subsequently negatively impacted the Groups P&L statement with a noncash foreign exchange loss of CHF million. On the other hand, total debt of the Egyptian subsidiary on ODH s balance sheet decreased by 24% from CHF million to CHF million. It is important to note that the Group s hotels and real estate income is mostly in foreign currency and therefore ODH borrows also in USD and benefits from a lower interest rate. Results were further impacted by impairments in the amount of CHF 32.9 million. Gross profit reached CHF 11.3 million and the net loss attributable to shareholders for the reporting period amounted to CHF million vs. a net loss of CHF 19.1 million in FY Adjusted EBITDA, Margin (CHFmn,%) 26.4% % 20 On the positive side, Adjusted EBITDA for the period reached CHF 19.6 million. When results are normalized for land sales in the comparative period the Adjusted EBITDA would have reached only CHF 15.6 million in FY New destination based structure Throughout the first half of 2016, important positions within the organization have been changed and filled on the executive and top management level. After a strategic review, it was decided that the Company s medium to long term strategy will be streamlined in three areas: 1) Establishment of enhanced business practices, 2) Strengthening of ODH s balance sheet, and 3) Repositioning and enhancement of ODH s brand. Revenues ODH started working on re-organizing the current segment structure to a destination based structure. Each destination will become a separately managed entity headed by its own CEO or General Manager, giving more authority and responsibility to a destination with the goal of increased operational efficiency and shorter decisionmaking processes. The model is already implemented in Fayoum and Taba ODH will continue to capitalize on the core asset of the Group; its land bank and the value that it pertains through the following approaches; its own developments, sub-development of certain projects that will add value to the destination and also by providing the market with an independent fair value of the undeveloped land bank by an external valuator. The Group is also divesting some of its non-core assets and using the proceeds to further reduce its outstanding debt. In parallel, ODH is examining the revaluation of some of the mature assets that have been booked at cost so far and thus are not representing their higher market values. 1

2 Gulf hotels are on the rise and hotels in El Gouna continue to be the best in the market The Gulf hotels in Oman and UAE witnessed a notable boost in their performance recording a 57.5% increase in GOP growing from CHF 12.7 million to CHF 20.0 million in. Their contribution to the total segment revenues continued to increase to reach CHF 59.3 million out of a total segment revenue of CHF million. Demand on our hotels in Salalah, Oman continued to be acknowledged also in the latest ITB Berlin conference. We added 84 new rooms in Al Fanar hotel during December 2016 bringing the total room count to 302. The Salalah destination has been recently branded to Hawana Salalah and its hotels alone recorded a 28% increase in occupancies growing from 54% to 69% and a 166.7% increase in GOP. Similarly, in UAE, The Cove Rotana continued its positive momentum with an increase in occupancy rate to reach 78% in vs. 70% in FY In Egypt, the severe decline in the country s tourism sector continued to affect the segment s performance. Tourist arrivals fell by 41.9% in compared to same period last year. El Gouna, Egypt however, with its strong positioning and strong ties with leading European tour operators, continued to be the best performer on the market and recorded a 15.4% GOP growth from FY Demand started to pick up in Taba Heights, Egypt despite of the extended travel bans on Sinai, due to aggressive marketing campaigns implemented in Jordan and on the local Egyptian markets. In January 2017, 100 rooms in the El Wekala Golf Resorts out of the hotels existing 215 rooms were reopened. To date, we have a total of 818 operating rooms in Taba Heights out of 2,365 rooms compared to only 442 rooms operating in We are also planning to open more rooms in the coming months. A 3-year lease agreement with FTI Group for 3 of the Group s hotels in Makadi for a total of EUR 3.3 million was signed. In Fayoum, the Byoum Lakeside Hotel was successfully opened in September 2016 with 50 rooms recording an occupancy of 43% during. Overall, total hotel segment revenues decreased by only 3.2% to reach CHF million in vs. to CHF million in FY 2015 while the Adjusted EBITDA recorded a 12.2% increase from CHF 18.1 million in FY 2015 to CHF 20.3 million in. Net contracted sales increased by 101% to CHF million with more contributions coming from El Gouna, Sifah and Luštica Bay The real estate sales target for the year was exceeded with total net sales value reaching CHF million vs. CHF 57.3 million in El Gouna remained the Group s most important sales contributor recording a net sales value of CHF 80.6 million in vs. CHF 61.1 million in FY 2015 on the back of targeted sales and marketing activities. In Jebel Sifah, Oman, a new real estate project called Golf Lake Residence was launched in November 2016 with a total inventory of CHF 19.3 million and comprising 118 apartments overlooking the golf course. ODH managed to sell more than 80% of the total project by February Total net sales in Oman reached CHF 16.2 million in. Interest in Luštica Bay, Montenegro has continued to flourish. Net sales reached CHF 17.3 million in compared to CHF 9.1 million in FY The Group is progressing with the construction of the new buildings comprising 88 apartments with plans to be delivered during the first half of Further, the marina superstructure was finalized. Total real estate revenues reached CHF 65.4 million in vs. CHF 66.4 million in FY Total deferred revenue from real estate that is yet to be recognized until 2019 reached CHF million in compared to CHF million in FY Hotels Financials Revenue Adj. EBITDA Net Sales Value Value of Deferred Income

3 Outlook for FY 2017 Real Estate In El Gouna, ODH is building on the strong base and momentum of last year s offerings and plans to launch new phases of Tawila and Fanadir Bay with an expected inventory of USD 40.0 million. In Fayoum, new products with a total inventory of CHF 3.4 million in Q will be launched. In Oman, two new launches in Sifah and Hawana Salalah are planned and we will continue with the construction of the water park project in Hawana Salalah. Hotels In El Gouna, some renovation works across the hotels are planned to further upgrade the destination's positioning. With demand recently picking up in Taba Heights, opening additional rooms is being considered. In Montenegro, construction of the 5-star Chedi Hotel in Luštica Bay is expected to start during the first half of 2017, with plans to be opened in July In UAE, we finalized the construction of The Cove Rotana extension, adding 145 rooms to open during Corporate The Group will continue with the implementation of the new destination based structure and put emphasis on further efficiency improvements. Revenue by Business Segment 14% 7% 27% 51% Hotels Real Estate Land Destination Management Other Operations 3

4 Key Figures for the Revenue by Business Segment FY 2015 Hotels Real Estate Land Destination Management Other Operations ODH Group Income Statement FY 2015 Revenue Cost of sales (226.1) (235.0) Gross profit Gross profit margin 4.8% 23.2% Investment income Other gains and losses (144.3) (7.0) Administrative expenses (46.7) (39.4) Finance costs (44.8) (33.6) Share of associates losses (17.3) (19.4) Loss before tax (235.4) (18.3) Income tax expense (8.4) (4.2) Loss for the period (243.8) (22.5) Attribute to: ODH Shareholders (196.4) (19.0) Non-controlling interests (47.4) (3.5) Basic EPS (CHF) (4.9) (0.7) Balance Sheet Property, plant and equipment Inventories Receivables Cash and bank balances Investments in associates Other assets Non-current assets held for sale Total assets 1, ,808.6 Borrowings Payables Provisions Other liabilities Liabilities related to assets held for sale Total liabilities Non-controlling interests Equity attributable to ODH shareholders Total liabilities and equity 1, ,

5 Presentation The associated financial statements and presentation can be found on Orascom Developments website under the Investor Relations section. Telephone conference today at 4:00 pm CET/CLT (Zurich and Cairo Time) Orascom Development invites you to its results conference call on 11 April 2017 at 4:00 pm CET/CLT (Zurich and Cairo Time). The call will include an address from the Chairman Samih Sawiris, a presentation from the CEO Khaled Bichara and the CFO Ashraf Nessim, followed by a Q&A session. A registration is not required. Conference password: International: +44 (0) Switzerland Toll Free: Switzerland Local Number: Egypt Toll Free: UK Toll Free: US Toll Free: A replay of the conference call will be available for two weeks with the following dial in details: Access Code: # International: +44 (0) UK National: US Toll Free: Available until 25 April 2017 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 seven jurisdictions (Egypt, UAE, Oman, Switzerland, Morocco, Montenegro and United Kingdom), with primary focus on touristic destinations. The Group currently operates ten destinations; five in Egypt (El Gouna, Taba Heights, Fayoum Makadi, and Harram City), The Cove in the United Arab Emirates, Jebel Sifah and Hawana Salalah in Oman, Luštica Bay in Montenegro 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: Tel: ir@orascomdh.com Contact for Media Relations: Philippe Blangey Partner Dynamics Group AG Tel: prb@dynamicsgroup.ch Disclaimer & Cautionary Statement 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 Holding AG 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 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 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. 5