Orascom Development Holding Continues to Deliver on its Strategy and Plans Expansion in Oman and Montenegro
Altdorf, 17 January 2018 - In June 2016, Orascom Development Holding AG (Orascom Development) announced that the future strategy will be anchored on three imperatives: enhancing operational performance, strengthening the balance sheet as well as repositioning and enhancing the Orascom Development brand.
These strategic guidelines have been successfully implemented with the following achievements:
- On 25 May 2017, Orascom Development has successfully completed the delisting of the company's Egyptian Depositary Receipts (EDRs) from the EGX.
- The operational performance across the Group was enhanced in 2017, highlighted by an increase in real estate net sales value to reach CHF 125.4mn in FY 2017 vs. CHF 115.2mn in FY 2016 resulting from multiple new launches across our destinations. In El Gouna, Egypt net sales figures for the year remained stable in CHF despite of the 50% devaluation of the EGP against the CHF, and the two destinations in Oman, Hawana Salalah and Jebel Sifah, recorded an increase of 53% in their sales value in 2017 compared to 2016.
- The expansion plans across the hotels segment was continued and 265 rooms in the Gulf hotels were added during 2017. 120 new hotel rooms in Hawana Salalah, Oman were opened in December 2017 recording an occupancy rate of 93% in the first week of operation and 145 new rooms in The Cove, UAE were opened in May 2017 recording an occupancy rate of 70% in December 2017.
- El Gouna, Egypt continued its leading market position within the Egyptian tourism industry. The new hotel management strategy introduced in January 2017, coupled with the start of renovation of six hotels triggered a boost in operational efficiency, leading to higher occupancy and room rates.
- Several amenities were added under the destination management segment bringing more life to the destinations and further sharpening their positioning.
In 2018, Orascom Development will further advance its growth plans in Oman and Montenegro, building on the successful returns that were achieved last year and adding more hotel rooms and amenities in both destinations. We are currently finalizing the construction of the Chedi hotel, the Marina and retail outlets in Montenegro, all planned to be launched in the summer of 2018. We are also planning to add more rooms and a new hotel in Hawana Salalah, Oman. The financing of these planned expansions will be secured through different mid to long term financing instruments that are being evaluated at both the Group and the destination level. Accordingly, the Group will enter in discussions with certain financial intermediaries and capital providers regarding the potential issue of public or private fixed income financing instruments.
At the same time, Orascom Development will continue to seek an optimal balance sheet structure and will continue its plans to reduce and restructure the debt held at the Egyptian subsidiary level. The Egyptian subsidiary debt was reduced by CHF 52.5mn (EGP 883mn) and for 2018 it is planned to reduce the balance by a further CHF 44.2mn to CHF 55.2mn (EGP 800mn to EGP 1.0bn) through the sale of non-core assets and excess cash from operations.
CEO Khaled Bichara commented: "2017 was a year of change, transition and growth. We have diligently worked to embed a culture of ownership across the company under the destination-based model, which yielded successful operational and financial results. In 2018, we will continue to wisely invest our capital to drive growth, and prioritize our time and resources to build a stronger and sustainable organization."
Orascom Development will announce its FY 2017 results on 5 April 2018.
About Orascom Development Holding
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. The shares of Orascom Development Holding are listed on the SIX Swiss Exchange.
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