EQS Group-Ad-hoc: Orascom Development Holding AG / Key word(s): 9-month figures/9-month figures

25.11.2014 / 07:00
Release of an ad hoc announcement pursuant to Art. 53 KR. The issuer is solely responsible for the content of this announcement.
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Press Release

9M 2014: Orascom Development records a net profit of CHF 36.4 mn, with a strong performance from its operating segments in Q3 2014
In the first nine months of 2014 Orascom Development generated a net profit of CHF 36.4 million attributable to shareholders of the company after a loss of CHF 75.8 million in the comparable period. Improved Real Estate & Construction revenues, accompanied by a strong recovery of the hotel segment in the third quarter and the carve-out of the budget housing operations and construction segment in Egypt were among the key drivers of the results.

Altdorf/Cairo, 25 November 2014 - Orascom Development Holding AG's (Orascom Development) revenues increased by 12.1% to CHF 184.6 million (9M 2013: CHF 164.7 million), as strong Real Estate & Construction revenues and increased hotel occupancy rates during the third quarter compensated for a weaker hotel performance in the first half of the year. In September 2014, Orascom Hotels and Development, The Group's Egyptian subsidiary successfully entered into a real estate agreement with a third-party investor to sub-develop a piece of land in El-Gouna. Red Sea Construction Company; the Group's affiliate will construct the project. This agreement contributed positively to the topline growth (CHF 11.5 million). The net profit attributable to shareholders of the company reached CHF 36.4 million after a CHF 75.8 million loss in the same period last year. The adjusted EBITDA for the period was CHF 24.9 million (9M 2013: -4.9 million).
Revenues in Real Estate & Construction segment almost doubled compared to prior year

Revenues in the Real Estate & Construction segment significantly increased to CHF 60.9 million
(9M 2013: CHF 32.5 million), equivalent to 33% of Group revenues. The increase is mainly a result of accelerated delivery of real estate units in Egypt (El Gouna, Ancient Sands and Makadi) during the first half of 2014. The adjusted segment EBITDA increased to CHF 19.1 million (9M 2013: CHF -5.6 million). Contracted real estate sales, after adjusting for the exclusion of the budget housing segment, increased to CHF 55.0 million (9M 2013: CHF 40.7 million), driven by continued strong momentum in El Gouna, pick-up of client demand in Montenegro and the successful closing of a bulk deal sale (37 units, CHF 8.9 million) in Salalah Beach in the third quarter 2014.

Hotels occupancy rate recovered to a very strong level of 63% during Q3 2014

The hotel segment showed a significant rebound during the third quarter 2014 as travel bans to the Sinai Peninsula and the Red Sea area were lifted. The average occupancy rate for the summer months reached 63% compared to only 42% during the first half of 2014. Importantly, all destinations contributed to this positive result as the Adjusted EBITDA for Q3 2014 reached CHF 5.2 million vs. CHF 2.2 million in Q3 2013. The full activation of the cost-control and optimization strategies announced back in December 2013 supported El Gouna Hotels to mark a 79% flow-through during Q3 2014 vs. Q3 2013. We were also able to re-open three of our hotels in Taba Heights , post the floods that occurred in May of this year; the three hotels are currently operating at their full capacity with an average occupancy rate of 57%. Salalah Rotana Hotel in Oman started operating at full capacity in July 2014, with 399 rooms. Much to the success of Q3, revenues for the first nine months 2014 were still below the comparable period (9M 2014: CHF 78.9 million, 9M 2013: CHF 96.5 million). The average occupancy rate for 9M 2014 reached 49% (9M 2013: 52%) and TRevPAR (Total Revenues per Available Room) reached CHF 43 (9M 2013: CHF 53). The adjusted segment EBITDA amounted to CHF 8.9 million (9M 2013: CHF 21.1 million). At the end of the reporting period, the Group operated 7,382 hotel rooms.

Achieved CHF 30 million of overheads savings compared to FY 2012 cost base
Generic cost savings in addition to the carve-out of the budget housing operations and the construction segment, in Egypt in June 2014, started to contribute positively to the Group's cost savings program in the third quarter of 2014. Due to the reduction of contracted and non-contracted labor by about 2,500 FTE the quarterly cost run-rate was reduced by about CHF 2.2 million. As of 30 September 2014 Orascom Development has achieved total overheads savings of CHF 30 million compared to the cost base FY 2012.

In August 2014, the Group announced the successful share sale of CMAR, the holding company of the Club Med hotel in Mauritius. The Prime Minister of Mauritius approved, in principle, the transaction and closing is expected before year-end.

Subsequent events

Based on the recovery of the Egyptian economy and the increased demand on the investment opportunities in Egypt, The Group is evaluating the sale of 10-15% of its Egyptian subsidiary; Orascom Hotels and Development (OHD) in order to reactivate its trading on the Egyptian Stock Exchange. The proceeds of the sale, if conducted, shall be re-injected into OHD to support its ongoing operations and deleverage its balance sheet
Outlook for FY 2014

Orascom Development has achieved significant progress in terms of restructuring its operations and cutting costs. As of today, the operating segments have started to positively contribute to the Group's results, namely the Hotel's segment witnessed a significant increase in terms of occupancy rates accompanied by an improved flow-through. Additionally, the Real Estate arm has been witnessing a positive sales momentum with a significant boost during the third quarter of the year not only in Egypt but also in Oman and Montenegro.

In light of the more favorable market environment, the focus will increasingly shift from cost cutting to generating business opportunities to capitalize on the Group's portfolio of hotels and real estate projects. Further balance sheet deleveraging remains a key focal point and shall be the main focus of management in the coming period.
Key figures 9M 2014


1 For 2013 as per 31 December 2013
2 EBITDA adjusted for discontinued operations and non-cash items 3 Includes borrowings and cash of disposal groups

Financial statements and presentation
The associated financial statements and presentation can be found on Orascom Developments' website www.orascomdh.com under the Investor Relations section.

Telephone conference today at 2:00 pm CET  
A telephone conference for analysts and investors will be held in English today at 2:00 pm CET. CEO Samih O. Sawiris, CFO Eskandar Tooma and Chief Hotel Officer Abdelhamid Abouyoussef will present the 9M 2014 results and will be available to answer questions. A registration is not required.
Dial-in details are as follows: 
  - Password:   49963823

  - International:   +44 1452 555 566

  - Switzerland Toll Free:  0800 828 006

  - Egypt Toll Free:  0800 000 0318 

  - UK Toll Free:   0800 694 0257

  - US Toll Free:   1866 966 9439 

A replay of the conference call will be available for one week with the following dial in details:
  - Access Code:   49963823

  - International Replay #:  +44 1452 550 000  

  - UK Local Call Replay #:  08717 000 145

  - USA Toll Free Replay#:  1866 247 42 22  

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         
Director of Investor Relations   
Tel: +20 224 61 89 61
Tel: +41 418 74 17 11      
Email: ir@orascomdh.com

Contact Media Relations
media@orascomdh.com  
   
Disclaimer & Cautionary Statement

The information contained in this e-mail, 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 e-mail 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. End of ad hoc announcement

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25.11.2014 News transmitted by EQS Schweiz AG. www.eqs.com - news archive: http://switzerland.eqs.com/de/News

The issuer is responsible for the contents of the release.
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Language:    English                         
Company:     Orascom Development Holding AG  
             Gotthardstraße 12               
             6460 Altdorf                    
             Switzerland                     
Phone:       +41 41 874 17 17                
Fax:         +41 41 874 17 07                
E-mail:      ir@orascomdh.com                
Internet:    www.orascomdh.com               
ISIN:        CH0038285679                    
Valor:       A0NJ37                          
Listed:      Foreign Exchange(s) SIX         
 
 
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