Orascom Development Holding AG: Continues to deliver strong KPIs across all its destinations and more than doubles its cash generation from its operations.
Group Highlights
- Total revenues grew by a solid 33.4% to reach CHF 227.8 million in 9M 2018.
- Net real estate sales significantly increased by 83.5% to CHF 158 million.
- Real estate revenues surged by 61.1% to CHF 79.6 million on the back of increased unit deliveries in El Gouna, Jebal Sifah, Hawana Salalah and Luštica Bay.
- Hotels revenue grew 21.4% to CHF 109.9 million in 9M 2018, with a 41.7% increase in GOP from CHF 30 million to CHF 42.5 million in 9M 2018.
- Town management revenues continues to grow with a 34% increase to CHF 25.6 million as a result of increasing scale across all our destinations.
- Adjusted EBITDA up 182.7% to CHF 45.8 million in 9M 2018.
- Cash from Operations increased by 252.3% to reach CHF 31 million.
- Net Debt to Adjusted EBITDA continues to improve, from 14.5x in FY 2016 to 8.5x in FY 2017 and now to 3.5x in the twelve months period ended 30 September 2018.
- Adjusted net losses excluding one offs reached CHF 22.2 million vs. adjusted net losses of CHF 44.2 million in 9M 2017 (one-offs include: forex losses or gains along with any non-operational one-off transactions). (Reported net loss reached CHF 29.6 million in 9M 2018 vs. CHF 30.3 million in 9M 2017).
- Orascom Development Egypt (ODE); the subsidiary, will officially launch its newly 1,000-feddan project in Sixth of October, Egypt (O-West) in Q1 2019.
- CBRE report values El Gouna Hotels and undeveloped land at USD 2.1 billion 42 times its current book value.
Altdorf, 12 November 2018 - Orascom Development continues to deliver stellar operational performance across all business segments. Revenues grew by a solid 33.4% to reach CHF 227.8 million in 9M 2018 vs. CHF 170.8 million in 9M 2017 and gross profit also increased by 82.3% Y-o-Y to CHF 68 million in 9M 2018 vs. CHF 37.3 million in 9M 2017. Adj. EBITDA also witnessed remarkable growth of 182.7% Y-o-Y to CHF 45.8 million, with an Adj. EBITDA margin of 20.1%.
This operational excellence was reflected in our bottom line figures. Whereby Adjusted net losses excluding one-offs (which includes forex losses or gains along with any non-operational one-off transactions) went down by almost 50% from CHF 44.2 million in 9M 2017 to reach CHF 22.2 million in 9M 2018. Reported net losses reached CHF 29.6 million in 9M 2018 vs. CHF 30.3 million in 9M 2017. Our cash flows from operations for 9M 2018 reached CHF 31 million, a 252.3% increase over the same period last year. The solid operational performance along with the increasing cash balance, are a strong testament that the Group is poised on the right track for the coming year.
Group Hotels:
Our hotels continued with their positive performance across all our destinations. Hotels revenue grew 21.4% to CHF 109.9 million in 9M 2018, accompanied by a 41.7% increase in GOP from CHF 30 million to CHF 42.5 million in 9M 2018. Additionally, the segment Adjusted EBITDA increased by 38.8% to CHF 37.9 million vs. CHF 27.3 million in 9M 2017.
Group Real Estate:
Real estate segment continued its outstanding operational and financial results across all our destinations. Net sales increased by 83.5% to CHF 158 million vs. CHF 86.1 million in 9M 2017 and revenues increased by 61.1% to CHF 79.6 million on the back of the increase in unit deliveries in El Gouna, Jebal Sifah, Hawana Salalah and Luštica. Total deferred revenue from real estate that is yet to be recognized till 2020 increased by 19.7% to reach CHF 213.6 million vs. CHF 178.5 million in 9M 2017. It is also important to note in addition to the outstanding deferred revenue balance; the Group also has a deferred interest income of CHF 15.1 million.
Group Town Management:
This was the quarter of our El Gouna Film Festival 2nd Edition, which turned out to be a huge success following the footprints of the first one. We also celebrated the opening of the Chedi Hotel in Montenegro along with the marina and retail outlets, this summer was alive which was reflected in the real estate sales of the destination. Revenues increased by 34.0% to CHF 25.6 million vs. CHF 19.1 million in 9M 2017.
El Gouna, Egypt
The tourism industry in Egypt continued to witness positive performance in terms of occupancy rates and investment appetite. El Gouna, continued its leading market position within the Egyptian tourism industry. Which was reflected positively on our hotels whereby, occupancy rates recorded a 5.3% increase to reach 79% and TRevPAR increased by a significant 36.2% to CHF 64 in 9M 2018, on the back of the huge demand on our hotels and the increase in room rates. Additionally, hotels revenues continued its uptrend and recorded a 34.7% increase to CHF 46.2 million vs. CHF 34.3 million in 9M 2017 and GOP surged by 45.7% to reach CHF 22.9 million in 9M 2018 vs. CHF 15.8 million in 9M 2017. Additionally, we are in advance negotiations with one of the biggest tour operators to build a new 5 stars hotel with 100 rooms to be opened in 2019. In addition to that we are planning to add 200 rooms to the existing hotels.
Real Estate sales continued to grow, and we are on track on achieving the real estate sales target of the year. Net real estate sales recorded a 60.9% increase to CHF 84.8 million vs. CHF 52.7 million in 9M 2017. In end of September 2018, we launched a new real estate project called "Cyan" with a total inventory of USD 73 million offering a wide range of villas and townhouses overlooking the golf course and a lake. Phase 1 of "Cyan" had a total inventory of USD 23.1 million and we managed to sell and reserve almost USD 20 million to date. We are targeting a 20% - 25% increase in real estate sales for 2018 vs. the CHF 79.1 million in FY 2017.
Town management revenues recorded a 34% increase to CHF 20.5 million vs. CHF 15.3 million in 9M 2017. We successfully hosted the second edition of El Gouna Film Festival in September 2018, with more than 1,000 attendees from media, local and international celebrities. Our hotel's occupancy at the time reached 100%.
ODH assigned CBRE Group Inc, to conduct a fair market value study for El Gouna's 22.9mn sqm remaining undeveloped land bank and its 17 hotels with 2,654 guestrooms. CBRE's report valued the remaining 22.9mn sqm of undeveloped land in El Gouna at an aggregate market value of USD 1.82 billion, 170 times its current book value which stands at USD 10.7 million as of 1H 2018. The report also valued the 17 hotels using a Discounted Cash Flow (DCF) method at USD 303.6 million compared to their book value of USD 39.3 million as of 1H 2018.
Taba Heights, Egypt
Taba Heights started witnessing positive momentum this quarter. We managed to sign a deal with Itaka; a Polish tour operator to send two weekly planes "back to back", to Taba International Airport. Planes started on the 7th of November 2018 and will continue till the 1st of May 2019. Itaka is also planning to add two more planes from the Czech Republic during 2019, which in total would potentially increase their contribution to Taba's room nights to 45,000. Hotels revenues increased by 77.4% to CHF 5.5 million in 9M 2018 vs. CHF 3.1 million in 9M 2017. Occupancy rates increased by 12.9% to reach 35% in 9M 2018 vs. 31% in 9M 2017. Additionally, for the first time since 2010 Taba recorded a positive GOP of CHF 0.1 million vs. a GOP loss of CHF 0.3 million in 9M 2017. The positive GOP figure solidifies that Taba is on track to cash break-even in 2018.
Makadi Heights, Egypt
Makadi Heights, our new rising destination continued to deliver strong sales since April 2018. Net sales increased 103 times to CHF 10.3 million vs. only CHF 0.1 million in 9M 2017. Capitalizing on the great success of the 1st phase of the project, we released new inventory to cater for the huge demand of our clients. We are targeting to close the year with sales of CHF 14.0 million in the destination.
Jebel Sifah, Oman
Net real estate sales continued to increase and reached CHF 16.3 million in 9M 2018 up 83.1% vs. CHF 8.9 million in 9M 2017. We launched Phase 2 of Jebal Sifah Heights project with a total inventory of CHF 19.1 million. We are progressing with the construction of phase one of the Golf Lake Residence project compromising 131 units with plans to be delivered before end of 2018. We are targeting to increase real estate sales by 50% - 55% in 2018 vs. the CHF 11.8 million in FY 2017.
From the town management side, additional pontoons will be installed in the Marina during Q1 2019, while the marina workshop is being finalized and an enhanced water taxi service has been launched. The destination will welcome the region's first X-Dubai Spartan TRIFECTA race in December 2018 and is expected to welcome 4,000 participants and visitors. The international super market chain SPAR also opened its doors in October 2018 and the destination will also welcome a new bar, restaurant and bakery by Q1 2019.
Hawana Salalah, Oman
The third quarter is usually affected by the seasonality of the destination, nevertheless, hotels revenues increased by 20.6% to CHF 28.1 million in 9M 2018 vs. CHF 23.3 million in 9M 2017; GOP also increased by 40% to CHF 9.8 million vs. CHF 7 million in 9M 2017 and occupancy rates reached 64%. Additionally, we are progressing ahead with the 3rd extension of Al Fanar Hotel, adding a further 177 rooms thus bringing the total number of rooms to 577 room.
On the real estate side, net sales increased by 89.3% to reach CHF 19.5 million vs. CHF 10.3 million in 9M 2017. Capitalizing on the huge demand and the great success of our recent launches, we launched a new project called "Forest Island" with a total inventory of CHF 28.9 million. The project was very well received, and we managed to sell more than CHF 7 million. We are on track on achieving our real estate target of the year which is expected to increase by 10% - 15% in 2018 vs. the CHF 16.5 million in FY 2017. On the construction side, we are progressing ahead with the construction of "Hawana Lagoon" real estate project to be finalized by end of 2019.
Moving to the destination management side, the destination fuel station will start operating in the Hawana Marina in Q4 2018. The destination has welcomed several new outlets in Q4 2018 including cafes, souvenir shop and a toy shop, with the planned addition of other shops by the end of 2018.
Luštica Bay, Montenegro
We successfully held the soft opening for the first hotel in the destination the "Chedi Luštica Bay" with 111 rooms, occupancy reached 65% in the first days. Very positive feedback from guests - financial contribution to be recognized in Q4 2018.
With the increased interest on Luštica Bay, net real estate sales increased by more than double to CHF 26.9 million vs. CHF 13.1 million in 9M 2017. The year 2018 started as the busiest year yet on the development and construction fronts. Besides the significant increase in sales that further emphasized demand on our project, we are strongly progressing ahead with the construction of the town homes and villas of the marina village plus the E" and "B" building clusters to be finalized in Q4 2018 and early 2019. In addition, we are expecting real estate sales to double in 2018 vs. the CHF 17.2 million in FY 2017.
Corporate Updates
On track with finalizing the documentation for the sale of our earlier communicated 3 hotels in Makadi and Tamweel Group which together will result in total cash proceeds of c. CHF 44.8 million and will also allow us to deconsolidate their related debt. In parallel, we are working diligently on our plan with the banks to reduce our debt to be finalized in Q1 2019.
On the real estate side, O West; our new 1,000 feddan project in Sixth of October, Egypt will have its official sales launch in Q1 2019.
In Oman we are working on a new debt package with plans to be finalized in Q4 2018.
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.
Contact for Investors:
Sara El Gawahergy
Head of Investor Relations
Head of Strategic Projects Management
Tel: +20 224 61 89 61
Tel: +41 418 74 17 11
Email: ir@orascomdh.com
Contact for Media Relations:
Philippe Blangey
Partner
Dynamics Group AG
Tel: +41 432 68 32 35
Email: prb@dynamicsgroup.ch
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