Altdorf, 15 August 2017 - In local currency, the results and operational performance of the largest Egyptian subsidiary of the Group (Orascom Development Egypt) has continued to improve significantly since the beginning of the year, and revenues increased by 76.9% compared to 1H 2016. Yet this operational enhancement was not reflected in the Group's turnover when being translated into Swiss Francs because of the 50.0% EGP devaluation. Consequently, total revenues slightly decreased by 0.7% to reach CHF 108.6 million compared to CHF 109.4 million in 1H 2016.
Gross profit increased by 11.7% to reach CHF 24.9 million in 1H 2017 compared to CHF 22.4 million in 1H 2016 and the net loss attributable to shareholders for the reporting period was substantially reduced and amounted to CHF 18.8 million vs. a net loss of CHF 41.3 million in 1H 2016. Adjusted EBITDA for the period increased by 34.1% to reach CHF 11.0 million vs. CHF 8.2 million in 1H 2016.
The Company has successfully completed the delisting of its Egyptian Depositary Receipts from the Egyptian Stock Exchange on 24 May 2017 and is only listed on the Swiss Stock Exchange.
The hotels segment continued to uphold and exceed its positive performance in Egypt, Oman and UAE with a 21.4% increase in revenues to CHF 59.0 million and a 153.0% increase in gross operating profits (GOP) to CHF 21.0 million compared to CHF 8.3 million in 1H 2016.
The Tourism sector in Egypt continued to pick up, as per the latest report Egypt's tourist arrivals rose c 62% y-o-y in June 2017 to 533,000 tourists.
In El Gouna, hotels recorded a boost in their operational efficiency on the back of the new hotels strategy that was implemented at the beginning of the year leading to higher occupancy levels and room rates. As a result, El Gouna continued its leading market position, recording a 43.0% increase in occupancy rate to reach 73% vs. 51% in 1H 2016. In addition, TRevPAR increased by 14.8% to reach CHF 45 vs. CHF 39 in 1H 2016. GOP surged by 335.0% to CHF 10.0 million vs. CHF 2.3 million in 1H 2016.
In addition, we started the renovation of Sheraton, Bellevue, Movenpick, Captains' Inn, Turtles' Inn and Ali Pasha Hotels, some of which will be finalized by year-end.
Despite of the extended travel bans on Sinai, the hotels continued to pick up in Taba Heights due to the aggressive marketing campaigns we implemented in Jordan and the local Egyptian markets. Occupancy rates in the operating hotels increased by 14.3% to reach 24% vs. 21% in 1H 2016. We re-opened another 174 rooms in Strand Beach & Golf Resort out of the existing 503 rooms. To date we have 992 operating rooms in Taba Heights out of 2,365 rooms vs. only 442 rooms operating in 1H 2016. In addition, we successfully managed to curb the GOP losses by 69.2% from CHF 1.3 million in 1H 2016 to EGP 0.4 million in 1H 2017.
In Fayoum, Byoum Lakeside Hotel continued its positive momentum and reported an occupancy rate of 46% during 1H 2017.
The Gulf hotels in Oman and UAE continued their positive momentum and witnessed a notable boost in their performance recording a 37.5% increase in GOP to reach CHF 9.9 million in 1H 2017 compared to CHF 7.2 million in 1H 2016. Their contribution to the total segment revenues continued to increase to reach CHF 30.7 million representing 52.0% out of a total segment revenue of CHF 59.0 million in 1H 2017.
At Hawana Salalah, the successful European market penetration and the growing demand from the regional market, allowed a GOP growth of 130.0% from CHF 2.0 million to CHF 4.6 million in 1H 2017 and occupancy rates reached 75% vs. 67% in 1H 2016.
Similarly, in the UAE, The Cove Rotana continued its positive momentum with an increase in occupancy rate to reach 81% in 1H 2017 vs. 74% in 1H 2016. We also opened the new 145 rooms of the hotel in June 2017 thus bringing the total number of hotel rooms to 491.
Overall, total hotel segment revenues increased by 21.4% to CHF 59.0 million in 1H 2017 vs. CHF 48.6 million in 1H 2016 while the Adjusted EBITDA recorded a notable increase of 493.1% to CHF 17.2 million compared to CHF 2.9 million in 1H 2016.
Net contracted sales of CHF 51.6 million with more contributions coming from El Gouna, Sifah and Montenegro.
El Gouna continued to be our top contributor in terms of sales on the back of more targeted sales and marketing activities in addition to the new product offerings that included serviced hotel apartments in Fanadir, Bellevue and Mosaique hotels. We managed to transfer 82 hotel rooms into real estate products and sold them all out. Net sales reached CHF 39.0 million compared to CHF 40.5 million in 1H 2016.
In April 2017, we launched "Fanadir Bay II" with a total inventory of USD 10.6 million, a successful project that was also completely sold-out. We also launched the second phase of "Tawila" with a total inventory of USD 22.4 million and managed to sell more than 40.0% of the project to date.
In Fayoum, the destination continued its positive momentum with net sales increasing to CHF 0.7 million in 1H 2017 compared to CHF 0.04 million in 1H 2016.
In Jebel Sifah, Oman, sales continued its positive momentum on the back of the success of a new real estate project that was launched in November 2016 with a total inventory of CHF 20.8 million. We managed to sell more than 90% of the total project until July 2017. Net sales increased by 158.1% to reach CHF 8.0 million compared to CHF 3.1 million in 1H 2016.
In Luštica Bay, Montenegro, we finalized the construction of the (G) buildings comprising of 160 apartments. We are continuing with construction of the town-homes and the villas - with plans to be finalized early 2018. We are also progressing with the construction of the Chedi hotel and started the rough works of the golf course. Net sales in Luštica reached CHF 3.6 million vs. CHF 5.7 million in 1H 2016.
Total real estate revenues reached CHF 30.5 million in 1H 2017 vs. CHF 32.1 million in 1H 2016. Total deferred revenue from real estate that is yet to be recognized until 2019 reached CHF 149.5 million in 1H 2017 compared to CHF 148.6 million in 1H 2016.
Efforts towards the development of the destinations' livelihood and town management
We have undertaken several initiatives to continuously uphold our town's livelihood and "life as it should be" slogan. We have successfully opened the first Phase of our G-Space offices in El Gouna. The complex offers flexible private office spaces, which are already rented out, in addition to co-working membership packages. We also launched the first electric bike-sharing system in Africa, and the largest in the Middle East. The initial phase comprises 100 bikes, with 10 docking stations in locations spread all around El Gouna. We hosted El Gouna International Squash Open and Orascom Development PSA Women's World Championship, the first time to be held in Egypt and for which we have built four new high standard squash courts and hosted the top model of the world competition event in July 2017. In Jebal Sifah, Oman we finalized the construction of the 9 holes golf course and the infinity pool, to be launched in October 2017. In Luštica, we started the rough construction works of the golf course and finalized the new access road to the marina village.
Outlook for FY 2017
In El Gouna, in Q4 2017 we are planning to launch a new luxury real estate apartment project overlooking the marina with a total inventory of USD 19.5 million. We are currently holding advanced discussions with private owners of a land plot in the North Coast to eventually enter the second home market in Egypt. In Oman, capitalizing on the great success of Phase 1 of Golf Lake Residence real estate project, we are planning to launch the second phase of the project in November 2017 with a total inventory of CHF 3.7 million. In Hawana Salalah, Oman we launched a new real estate project on the 2nd
of August called "Lagoon Project" (254 apartments) with a total inventory CHF 29.8 million and have successfully sold and reserved almost 15% of the inventory to date.
In El Gouna, we are undergoing renovation works across some of our hotels to further upgrade the destination's positioning. With demand recently picking up in Taba Heights, we are planning to open more rooms in Bay View Hotel and Strand Beach & Hotel during Q3 2017, which would then make four out of our six hotels open. In Hawana Salalah, we started the construction of 98 new rooms of Al Fanar Hotel (to reach 400) and 22 new rooms to Rotana Hotel (to reach 422) to be finalized before the end of 2017. In Montenegro, construction of the 5-star Chedi Hotel in Luštica Bay has started, with plans to be finalized and opened in July 2018.
In El Gouna, Egypt we are planning to launch Phase II of G-Space in Q4 2017 after the great success of Phase I. Phase II is planned to offer more private offices, meeting rooms and a large chill out area. In addition, we started the construction of Phase I of the Abydos Marina North Jetty expansion to add 10 berths, expected to be finalized in November 2017. We are also planning to build a permanent events area to host all seasonal parties and weddings with a capacity of 2,500 guests. In Hawana Salalah, Oman we will continue with the construction of the water park project with plans to be finalized before the end of 2017.
Contact for Investors:
Sara El Gawahergy
Head of Investor Relations
Tel: +20 224 61 89 61
Tel: +41 418 74 17 11
Email: [email protected]
Contact for Media Relations:
Dynamics Group AG
Tel: +41 432 68 32 35
Email: [email protected]