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

2015-03-30 / 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

Orascom Development Holding (ODH) Gives Guidance with Strong Preliminary Results for FY 2014, and Reports FY 2014 Results for its Egyptian Largest Subsidiary; Orascom Hotels and Development (OHD)

Orascom Development Holding witnessed a positive year with an increase in both top & bottom line results. Revenues are expected to grow by 10-15% compared to FY 2013 and net profit attributable to the owners of the parent company is also expected to substantially increase to be within the range of CHF 37 to 42 million. The full-fledged 2014 financial results & statements will be published as announced on the 14th of April and the Annual Report on the 23rd of April.

We have attached below Orascom Hotels and Development (OHD)'s FY 2014 earnings release as reported on the Egyptian Stock Exchange.
Orascom Hotels and Development (OHD) FY 2014 Earnings Release:
In the full year 2014, Orascom Hotels and Development (OHD); the largest Egyptian subsidiary of Orascom Development Holding (ODH) reports a significant turn-around in its net profits, generating EGP 100.0 million attributable to shareholders of the company after a loss of EGP 553.1 million in FY 2013. The enhanced operational performance from all business segments, accompanied by the sound execution of our cost savings program and the accelerated monetization of our land, have boosted the EBITDA margins to reach 39.2%, value of EGP 562.1 million (FY 2013: EGP (32.7) million).

Cairo, 30 March 2015 - Orascom Hotels and Development (OHD) revenues increased by 20.1% to EGP 1,434.6 million (FY 2013: EGP 1,194.8 million), on the back of strong real estate & construction revenues, increased hotel occupancy rates during the second half of the year and the increased land revenues resulting from the successful third-party development agreement between OHD and El Sewedy to sub-develop a piece of land in El Gouna. The recognized parcel of land from the agreement contributed EGP 85.0 million to the topline growth during the FY 2014. The EBITDA for the period was EGP 562.1 million vs EGP (32.7) million during FY 2013, solidifying the solid execution of OHD's communicated savings & growth strategy.
Revenues in Real Estate & Construction segment more than doubled, recording an increase of 110% vs the prior year.

Revenues in the Real Estate & Construction segment significantly increased to EGP 441.9 million
(FY 2013: EGP 210.4 million), equivalent to 31% of OHD's revenues. The increase is mainly a result of the accelerated delivery of real estate units in Egypt (El Gouna, Ancient Sands and Makadi), a total of 689 units were delivered in FY 2014. The accelerated delivery marks the healthy construction momentum of the Group, which we are planning to maintain over the coming years.

The segment EBITDA increased to EGP 147.8 million (FY 2013: EGP (29.9) million). Contracted real estate sales, after adjusting for the exclusion of the budget housing segment, increased by 45% to EGP 400.0 million (FY 2013: EGP 275.6 million), driven by the strong sales momentum in El Gouna & Ancient Sands.

Hotels occupancy rate recovered to strong levels during the 2H 2014.
Despite the severe challenges that the hotel segement had encountred during the first half of 2014, with the imposed travel bans in addition to the noticeable decrease in airlift capacities, still the segment showed a significant rebound during the second half of 2014 , after the travel bans were lifted on the Red Sea area. Occupancy rates for the 2H 2014 reached 60% compared to 39% in 2H 2013 and the TRevPAR (Total Revenues per Available Room) increased by 40% to EGP 339 compared to EGP 243 over the same periond, taking into consideration that the full capacity of our hotels was not materilazed because of the continued travel bans on the Sinai Peninsula area and the heavy floods that hit Taba in May 2014, resulting in a complete shut down of our hotels. To date, we were able to re-open four of our hotels in Taba Heights , yet 25% of Taba's inventory remained closed for renovation post the floods through December 2014.
The average occupancy rate for FY 2014 reached 49% (FY 2013: 48%) , TRevPAR (Total Revenues per Available Room) reached EGP 271 (FY 2013: EGP 306) and the Average Room Rate (ARR) reached EGP 320 (FY 2013: 357). Nonetheless, the incorporation of Orascom Hotel Management (OHM) , Orascom Development Holding's hotel asset management subsidiary in early 2014 ,along with its profound implementation of the cost-control and optimization startegies, limited the magnitude of the onogoing challenges to only 16% decrease in total revenues declining from EGP 646.3 million in FY 2013 to EGP 543.0 million in FY 2014. EBITDA reached EGP 140.4 million in FY 2014 compared to EGP 84.0 million in FY 2013. At the end of the reporting period, OHD Group added 283 new rooms to its hotel portfolio by the opening of Makadi Gardens Azur, four-star hotel in Makadi, to operate a total of 6,036 hotel rooms compared to 5,752 rooms in FY 2013

Accelerated monetization initiatives, coupled with sound cost savings implementation, helped in boosting Gross Operating Profit to reach EGP 236.3 million (FY 2013: EGP 77.7 million).

Management has recently adopted the new strategic notion of bringing third party developers in a move to accelerate the monetization of land, while providing strict development guidelines, to ensure control over the development and maintain the architectural harmony of the destination. Under this notion, OHD has successfuly entered into an agreement with El Sewedy; an Egyptian Investor to sub-develop a piece of land in El Gouna. This transaction has contributed EGP 84.5 million to the total EBITDA during FY 2014. The company is targeting one transaction per year of this amount over the coming 3 to 5 years.

The company has also successfully closed the share sale of CMAR, the holding company of the Club Med hotel in Mauritius with gross proceeds amounting to EGP 83.0 million.

Generic cost savings in addition to the carve-out of the budget housing operations and the construction segment, in Egypt in June 2014, contributed positively to the company's cost savings program. As of December 2014, Orascom Hotels and Development has achieved total overheads savings of EGP 89.1 million compared to the cost base FY 2013.

Outlook for FY 2015

Based on the recovery of the Egyptian economy and the increased demand on the investment opportunities in Egypt, Orascom Development Holding (ODH) sold 15% of Orascom Hotels and Development (OHD) reactivating its trading back on the Egyptian Stock Exchange on the 6th of January 2015. The gross proceeds of the sale amounted to EGP 506.1 million which was re-injected into OHD to support its ongoing operations and deleverage its balance sheet.

Following through with its deleveraging strategy, OHD managed to ramp up considerable cash reserves to the tune of EGP 800m. These funds were mainly accumulated through: (1) the re-activation of OHD shares on the Egyptian stock exchange (2) the sale of a 12.5% shareholding stake in CMAR, the owner of Club Med in Mauritius. The aforementioned funds are earmarked to negotiate an optimum debt refinancing package with all of OHD's lenders taking into account grace period, pricing, tenor and currency mix. All of which would result in a healthy balance sheet to continue fueling long term growth.

In light of the favorable market environment, our emphasis going forward will be on generating business opportunities to capitalize on the company's portfolio of hotels, real estate projects & land bank. In terms of real estate, we are targeting sales of USD 75 million (EGP: 571.8 million) for FY 2015, we are working on achieving this figure through the rapid roll-out of new projects and the continued diversification of our product range and client base. In March 2015, we held the pre-launch event for Joubal Lagoons, a new real estate neighborhood project featuring villas, townhouses and apartments, due to hold its official launch in April 2015. We are also finalizing the master plan of another new real estate mix-inventory project to be launched later during 4Q 2015.
2015 started out positively for the hotels segment, with January and February occupancy rates in El Gouna, reaching 60 % vs. 45% over the same period in 2013. We will continue to progress on OHM's successfully proven strategy, and are already finding new routes to increase our occupancy levels in Taba Heights by providing a ferry trip from Aqaaba airport in Jordan from our Tala Bay destination to Taba. We are placing all efforts to assist in the lifting of the travel bans on Taba specifically and we will also be adding one hotel in El Gouna, Ancient Sands; a five-star hotel with 56 guestrooms and 120 hotel apartments.

Accelerating the monetization of our land bank is one of our top strategy pillars moving forward. Under this newly adopted strategy, we will be targeting sub-development agreements within the value of USD 50 million per year (EGP 381.3 million) over the coming 3 to 5 years.
Key figures FY 2014




1 For 2013 as per 31 December 2013
2 Includes borrowings and cash of disposal groups

N.B: The full audited financial statements will be available on the 7th of April.
Presentation
The associated presentation can be found on Orascom Hotels and Development's website www.orascomhd.com under the Investor Relations section.

Telephone conference hosted by CI Capital today at 3:00 pm CLT A telephone conference for analysts and investors hosted by CI Capital will be held in English today at 3:00 pm CET. Chairman and CEO Manal Hussein, CFO Ashraf Nessim and Chief Hotel Officer Abdelhamid Abouyoussef will present the FY 2014 results and will be available to answer questions. A registration is not required.

Dial-in details are as follows: 
  - Conference ID:   9769411

  - International:   +44 1452 541 003

  - UK Toll Free:   0800 694 5707

  - US Toll Free:   1866 254 0808

  - UAE Toll Free:   8000 3570 3014 

A replay of the conference call will be available until 5.00pm GMT on 6 April 2015 with the following dial in details:
  - Access Code:   9769411

  - International Replay #:  +44 1452 550 000  

  - USA Toll Free Replay#:  1866 247 42 22 

 

About Orascom Hotels and Development (OHD)
Orascom Hotels and Development is an integrated developer of resort towns in Egypt, with a vertically-integrated business model involving the development of residential units, hotels, and recreational facilities such as golf courses, town centers, and marinas, in addition to supporting infrastructure, such as hospitals, schools, and utilities. OHD currently owns a land bank of 49.4 million square meter and 24 hotels with a total of 6,039 rooms within three operating destinations. El Gouna, on the Egyptian Red Sea Coast in Hurghada, Taba Heights, on the Sinai Peninsula and Makadi in Hurghada. OHD also holds an 87% stake in Tamweel, a financial services company providing mortgage, leasing, and insurance, among other services.   
       
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
  
   
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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2015-03-30 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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