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Orascom Development Holding AG / Key Word(s): Compressed effects / 7th effects 19-August-2020 / 07:00 CET / CEST Publication of an ad hoc according to the art. 53 KR The issuer is for the content of this announcement only.
ODH (“Orascom Development Holding”) (SIX ODHN.SW) has its consolidated monetary effects for 1S 2020.
Orascom Development Holding publishes its effects 1S 2020 with CHF 164.1 million in sales and ADJ. EBITDA of CHF 27.2 million.
Highlights of 1S 2020
– The total reached 164.1 million francs in 1S 2020.
– WO. EBITDA reached CHF 27.2 million in 1S 2020, with a margin of 16.0%.
– Net real estate sales reached 191.8 million francs.
– The real estate debt portfolio increased by 30.3% to CHF 667.1 million.
– The balance of the deferred source of income for immovable property also increased by 36.7% to 551.7 million francs.
– Sale of 40,654 m2 of land in El Gouna for CHF 6.4 million.
– Cash and balances reached 180.1 million francs in the first half of 2020.
– Omar El Hamamsy appointed the new Director General from 1 September 2020.
Altdorf, 19 August 2020 – The intensity of the global pandemic was more pronounced in the latter quarter of the year, following the emergence of several restrictions to control its spread. These restrictions have had a serious effect on the hotel aspect of the ODH’s activities, due to the corresponding relief in travel and tourism around the world. However, as the constraints between the other destinations are gradually decreasing, the ODH is in a position to step back and remains optimistic for the recovery of genuine heritage and tourism in the coming months.
Total sales were minimized by 26.4% to CHF 164.1 million (1S 2019: CHF 222.9 million) and gross profit reached CHF 43.6 million (1S 2019: CHF 61.2 million). The Group was able to obtain healthy gross profit margins of 26.6% in 1S 2020 (1S 2019: 27.5%), thanks to the success of adaptations of several cost reduction projects at all levels. Adj. EBITDA was CHF 27.2 million, 34.6% less than at the same time last year (1S 2019: CHF 41.6 million), while EBITDA reached CHF 18.9 million at 1S 2020. General and administrative expenses minimized from CHF 24.9 million in 1S 2019 to CHF 19.1 million at 1S 2020. The minimisation of general and administrative prices is mainly due to the reduction of marketing costs in all destinations and to cost reduction projects implemented in reaction to the Covid-19 pandemic.
Operating margins were heavily affected by the total closure of the hotel business, as well as by the suspension of flights abroad. As a result, ODH recorded a net loss of CHF 19.2 million at 1S 2020 (1S 2019: CHF 1.5 million). Net figures were affected through CHF 2.2 million in foreign exchange losses at CHF 7.9 million in foreign exchange gains in 1S 2019.
The Group continued to maintain a strong balance sheet and control its money flow and liquidity, which reached CHF 180.1 million in 1S 2020. The total debt balance amounted to CHF 437.3 million, while the net debt balance reached CHF 257.2 million at 1S 2020. The Group continued to generate more savings in its monetary prices since the beginning of the year, with interest prices falling by 14.4% to CHF 17.9 million at 1S 2020 (1S 2019: CHF 20.9 million). Real estate of the group: acceleration of painting structures Net sales of authentic real estate decreased by 32.6% to 191.8 million Swiss francs in the first half of 2020 (first half of 2019: 284.6 million Swiss francs). Some of the notable reserves that the time took longer to become contracts, due to the limitations of curfew and social estrangement procedures imposed. The total number of games under contract reached 478 compared to 1058 in 1S 2019. O West continued to be the Group’s largest contributor to new sales (48% of sales), followed by El Gouna (39% of sales), Oman (7% of sales), Makadi Heights (4% of sales) and despite all Lustica Bay (2% of sales, basically by seasonality). The Gouna continued to identify itself as the “destination of choice” with a year-over-year expansion in net sales. Construction slowed in April and mid-May due to government curfews at this time. Revenues decreased by 23.1% to CHF 89.8 million in 1S 2020 (1S 2019: CHF 116.8 million). However, the Group began to redouble its structure efforts in June at all its destinations and delivers all games on time in accordance with contractual obligations. EBITDA in the segment decreased by 14.4% to 28.0 million Swiss francs in the first half of 2020 (first half of 2019: 32.7 million Swiss francs), as more apartments were sold this year compared to more villas, with rapid asset income from the first half of 2019. Deferred total income from real estate, which remains to be accounted for until 2024, more than 36.7% to 551.7 million francs in the first half of 2020. While the receivables of the real estate portfolio overall increased by 30.3% to 667.1 million francs in the first half of 2020.
Group hotels: a complicated year for the global tourism industry After strong functionality in the first two months of 2020, hotel activities were suspended during the last quarter of 2020, in accordance with local regulations and guidelines. All Group hotels (Gouna, Taba Heights, Fayoum, Hawana Salalah, Jebal Sifah, Lustica Bay and Andermatt) were ordered to close because social distance measures and travel restrictions came into force in early March. These restrictions caused sales to fall from 55.4% to 37.3 million francs (1S 2019: 83.6 million francs). EBITDA in the segment decreased by 98.1% to CHF 0.5 million (1S 2019: CHF 26.3 million). However, the early implementation of cost reduction and money preservation measures resulted in an overall positive GOP of CHF 3.5 million in 1S 2020. During the last quarter of 2020, ODH used the suspension time of transitoryness to introduce a full diversity of measures to ensure the protection and well-being of its workers and visitors. The popular hygiene protocol has been absolutely improved, all Egyptian hotels have won the “Safe Crown” audit certificate from Germany’s well-known “T-V Nord Group”. The contactless interaction between visitors and hotel staff has been carried out as far as possible, replacing direct interaction with online solutions. The reaction of the Group’s hotels to Covid-19 remains focused on the commitment to the well-being of consumers and partners, and ODH continues to take all mandatory measures for the resilience of its business style to gain advantages from all stakeholders.
Group destination management: consistent and continuous performance, despite the success of Covid-19
Despite the tough times the world is going through, the destination control segment maintained its strength and continued to ensure its recurring profit flows for the Group. Revenues increased by 1.3% to CHF 22.8 million in 1S 2020 (1S 2019: CHF 22.5 million) and EBITDA losses decreased to CHF 1.9 million to CHF 0.5 million in 1S 2020. Profit accumulation is the result of the accumulation of Utilities benefits, which come with water and light. In El Gouna, Egypt, paintings began on the fourth edition of the Gouna Film Festival (GFF), scheduled for October 23 and 31, 2020. The Group has completed the status quo of the new venue of the occasion, which will result in the opening and final ceremonies and other key networking occasions will take place in a much larger outdoor space, and with less than a part of the total capacity of indoor cinemas will be used to make some social distance. The occasion will feature virtual functions so that visitors who are not physically able to attend can participate in the online festival.
Subsequent events:
Omar El Hamamsy appointed new CEO as of September 1, 2020 On July 29, 2020, the ODH Board of Directors approved the appointment of Omar El Hamamsy as CEO as of September 1, 2020. Hamamsy joined ODH after McKinsey and Company where he was a Senior Partner in the Middle East workplace and was in the past at the workplace in Belgium. During his 18 years at McKinsey, he led many practices, additions and transportation. His clients at McKinsey covered many sectors and he supported them on topics ranging from strategy, organization, sales and marketing, operations and finance. Hamamsy holds a master’s degree from Stanford University.
The appointment of the new CEO marks the end of the interim committee. Samih Sawiris, Jurgen Fischer and Naguib S. Sawiris will once again concentrate on their duties as members of the ODH Board of Directors. Abdelhamid Abouyoussef will take over as president of Orascom Hotels Management (OHM), the Group’s hotel control company. Ashraf Nessim will continue to serve as current CFO (CFO) and member of the Executive Board. Outlook 2020 Most of the countries in which HDC operates are reopening and loosening their health-related measures, which is definitely beginning to be reflected in the overall business. The Group experienced a slow and continuous improvement in hotel bookings in July and August in Egypt, the United Arab Emirates and Andermatt. While the possibility of new local and foreign restrictions may have an additional effect on this finish, this improvement in reserve speed reflects the Group’s repressed need and ability to offer a perceived vacation option as “safer” compared to other alternatives. A fort that was provided in El Gouna, Egypt, during the party break of El Adha, where we opened 887 rooms and received a profession of 82%.
ODH has accelerated the speed of structure in all destinations, with the aim of boosting real estate revenues by 2020. The Group remains committed to fulfilling all contractual delivery obligations. In Egypt, sales of real estate increased significantly in all destinations, with total contracts and reserves reaching 44.5 million Swiss francs in July 2020, to 21.9 million Swiss francs in contracts by July 2019, as shown in the following table. Notable reserves take longer than expected to become contracts due to social estrangement procedures put in place for the Covid-19 pandemic.
We continue to execute our strategy of accelerating the monetization of our land bank by 2020 and beyond. ODH remains diligent in exploring opportunities to sell strategic land that would raise the price to the destination and the hidden/present price of the land bank in the market.
The Group remains true to its past position and refrains from providing year-round direction on its 2020 effects. However, we remain committed to providing updates on progress during all of our quarterly effects calls and market communications as needed. Meanwhile, the underlying strength of our business during the pandemic gives us the confidence to meet all long-term obligations. We, that ODH’s movements in reaction to those unprecedented times, make sure that our company is strong in the other aspect of this pandemic.
Details about destinations El Gouna, Red Sea El Gouna continues its position of being the “preferred destination” even in the unprecedented circumstances. Real estate sales continued to increase with a recovery of 4.9% to 74.6 million Swiss francs in the first half of 2020 (first half of 2019: 67.3 million Swiss francs), along with a 24.7% increase in promotional costs to 3388 Swiss francs in line with square footage. We expect to launch a new genuine real estate product in the fourth quarter of 2020, due to the construction of a demand on our projects with a total stock of $88.0 million. The speed of the structure is accelerating, deploying a hundred consistent capacity at the sites of the structure, complemented by all mandatory precautionary and protective measures. ODH has controlled the construction of the destination structure budget in 2020 to CHF 64.7 million, which is expected to generate genuine real estate revenues of CHF 112 to CHF 123 million by 2020. We plan to deliver 254 games this year with primary deliveries. Abu Tig Hill, Tawila, Ancient Sands, Cyan and Sabina are committed to fulfilling contractual delivery obligations. The real estate sector continued its upward trend and revenues increased by 25.1% to CHF 59.8 million in 1S 2020 (1S 2019: CHF 47.8 million).
Hotels were particularly affected in the part of 2020, due to resolution through Covid-19 to close hotel operations in accordance with local regulations and rules from March 19 to mid-May. Revenues in the segment decreased by 57.3%, from CHF 35.8 million in 2019 to CHF 15.3 million in 1S 2020. TRevPAR hotels reached CHF 31 compared to CHF 80 in 1S 2019. Occupancy rates in total rooms reached 32% in 1S 2020 (1S 2019 : 84%), noting that the maximum room was closed in the first two months of the second quarter of 2020 and that the reopening began with a limited number of rooms to comply with the capacity rules established throughout the government. The ARR reached CHF 67 (1S 2019: CHF 67).
Flexible booking and cancellation features have been incorporated to keep hotels at the forefront of the festival in terms of recovery, while protecting ODH’s positioning in the long-term market.
Destination control continued its functionality with revenues that increased 4.5% to CHF 18.7 million in 1S 2020 (1S 2019: CHF 17.9 million).
In line with the Group’s strategic concept of accelerating the monetization of its territorial reserve, we have sold a plot of 40,654.5 m2 in El Gouna to “Mangroovy for Hotels” as an extension of its project. The grounds will come with other types of apartments and guests. The total price of the transaction is 6.4 million francs.
First domestic market: O West, the sets contacted through Egypt Net were affected by the restrictions imposed after the pandemic and reached 92.5 million francs in the first half of 2020 (first half of 2019: 160.6 million francs). Revenue for the first half of 2020 includes CHF 31.1 million in advertising sales (school progression agreements). In addition, 213 new clubs have been added to the O West Club (the club’s payment is CHF 8.6K), bringing the total number of O West Club clubs to 1148. Total real estate sales in O West reached 6.2 million francs in 1S 2020 to 23.8 million francs in the first half of 2019. The Group continues to increase the speed of the structure and has effectively received all the structure permissions for Phase 1 of the target. We have also signed the contract to build the first phase, which will come with 445 villas, which are scheduled to be delivered until the end of June 2021.
In 2020, ODH signed 3 school progression agreements, the educational domain agreements that have effectively been concluded since the beginning of 2020 have secured a total of 32.2 million francs in money for ODH. The revenue from the agreements begins to begin in the current quarter of 2020 (1S 2020: 7.8 million francs), the rest will remain in the coming quarters. O West’s total sales reached CHF 14.0 million in the first half of 2020 (1S 2019: CHF 23.8 million).
Hawana Salalah, Oman Despite the demanding situations created through Covid-19, there is a strong commitment to continue delivering on time. Forest Island allocation has already begun delivery of its 200-unit out-of-unit out-of-units games and full delivery is expected by the end of the year. The speed of the structure with the other genuine “Lily and Laguna Gardens” property assignments is also accelerating, with timely delivery scheduled for the second and fourth quarters of 2021. The construction of Phase I of the fourth 5-star beachfront hotel is advancing, and the opening is expected. at the end of the fourth quarter of 2021. Real estate revenues reached CHF 13.2 million in 1S 2020 (1S 2019: CHF 20.5 million) and net real estate sales reached CHF 8.4 million at CHF 1S 2020 (1S 2019: CHF 21.9 million).
In Oman, all tour operators cancelled operations from March 11, following strong functionality in the early months of the winter season. Dhofar governorate, where Hawana Salalah’s assignment is located, is blocked until further notice, with no access from other provinces due to the Covid-19 pandemic. Salalah Rotana Resort and Fanar Hotel -Residences reopened on 1 July only for the apartment in Dhofar Governorate, while the Juweirah Boutique Hotel remains closed. Hotel sales decreased by 42.9% to CHF 13.3 million (1S 2019: CHF 23.3 million), however, hotels controlled to maintain a positive GOP of CHF 3.6 million, compared to CHF 9.3 million at 1S 2019 and occupancy rates reached 37% at 1S in 2020 as the inter-country blockade is still in force , the prospective visibility of the call for the summer and Khareef seasons remains very limited. Array, the interest of major European markets in the winter season remains remarkable. The hotel’s restaurants, swimming pools and Hawana Water Park are still closed. Overall, hawana Salalah’s overall sales were affected by hotel closures and decreased by 37.9% to 27.7 million Swiss francs in the first half of 2020 (first quarter of 2019: 44.6 million Swiss francs).
Luetica Bay, Montenegro Chedi Lustica Bay has developed an extended entertainment program for the summer season. Montenegro first reported almost 0 cases of Covid-19 and allowed hotels to open from 15 June. Unfortunately, July has noticed a structure in The rate of new infections and new travel restrictions in the region during the summer months is foreseen. Despite the effects of the pandemic, the structure of two new apartment structures (23 apartments) in the Centrale district and a structure (10 apartments) in Marina Village have been completed. In addition, the complete paintings have been completed at the main marina, adding the lighthouse and the main design of the golf course. Real estate revenues reached 8.0 million Swiss francs in the first half of 2020. Total sales in Lu-tica Bay, Montenegro, decreased by 32.2% to 8.6 million Swiss francs in the first half of 2020 (first half of 2019: 12.7 million Swiss francs).
Jebel Sifah, Oman Most of the 15 sold apartments of “Jebel Sifah Heights” have been successfully delivered, as well as the finishing touch of their gardening and similar equipment. Construction and inauguration of 11 five units in Phase I of the “The Beachfront” assignment will begin in the early fourth quarter of 2020. Net real estate sales reached 4.9 million Swiss francs in 1S 2020 (1S 2019: CHF 6.7 million). The Sifawy Boutique Hotel resumed operations on July 5, as it had been closed since March 11 due to Covid-19, while the golf course was operational only for golf members, according to government decrees. Residential rental activity is largely activated depending on the local tourism of Muscat residents. All access to the beaches and swimming pools is prohibited. The navy resumed operations on May 23. Total sales of Sifah’s destination reached 3.3 million Swiss francs in the first half of 2020 (first half of 2019: 1.5.4 million Swiss francs). Makadi Heights, Egypt In the last quarter of 2020, more shares were added in the categories “Bayou”, “Jade” and “Sole”. The 3 stages come with fully finished dual villas, independent villas and apartments with a total stock of 9.3 million francs. Net real estate sales fell by 4.5% to CHF 7.1 million (1S 2019: CHF 13.0 million). However, the structure paintings in Phase 2 of the assignment are progressing and plans are expected to be delivered in 2022. As the structure’s progress accelerates, revenue is expected to accrue in the coming quarters. The first football field of the Club House was inaugurated and the structure of the tennis courts was completed. Total sales in Makadi reached CHF 1.2 million (1S 2019: CHF 1.5 million). Taba Heights, Egypt Taba Heights, as the only destination for hotels, has been severely affected by government orders to close all hotels from March 19, 2020 and suspend all foreign flights until July 1, 2020. As a result, only one of the six hotels opened. Strand Beach And Golf Resort has five03 rooms, of which only two and five1 are open, according to five percent of government-ordered capacity. The occupancy rate fell to 14% (1S 2019: 39%). THE GOP losses reached CHF 1.7 million in 1S 2020 (1S 2019: CHF 0.06 million). Total sales at Taba’s destination fell 66.0% to CHF 1.8 million at 1S 2020 (1S 2019: CHF 5.3 million).
The Cove, United Arab Emirates Cove Rotana remained open only to local apartments, with the exception of the era beginning (May 11 to June 15) that was used to disinfect the property. The market situation remains difficult, particularly with the suspension of foreign tourism in the quarter, which resumed on 7 July 2020. Hotel occupancy rate reached 38% in 1S 2020 (1S 2019: 71%) and revenue fell to CHF 5.9 million in 1S 2020 (1S 2019: CHF 15.4 million). The GOP also decreased to CHF 1.1 million (1S 2019: CHF 5.5 million). Since the beginning of July, hotel occupancy rates have been gradually increasing, driven by local calls to outside Dubai on weekends. Eco-Bos in Cornwall, UK On-site paintings have never stopped unlike many other sites in the UK and around the world, although there have been obstacles and delays due to Covid-19. ODH has withdrawn 3.0 million pounds from Shawbrook Bank from the 18 million pounds announced in the past to release the allocation with the 296-home structure. On the plus side, the trend towards faster early retirement and house paints, in addition to low interest rates and mortgage availability, strongly helps Cornwall’s genuine real estate market and specific assignments of our nature.
About Orascom Development Holding AG: ODH is one of the leading developers of fully incorporated destinations that feature hotels, personal villas and apartments, recreational services such as golf courses, marinas and amenities. ODH’s diversified portfolio of destinations is distributed in 7 jurisdictions (Egypt, United Arab Emirates, Oman, Switzerland, Morocco, Montenegro and the United Kingdom), with a significant concentration in tourist destinations. The Group lasts in nine destinations: 4 in Egypt (El Gouna, Taba Heights, Makadi Heights and Byum), The Cove in the United Arab Emirates, Jebel Sifah and Hawana Salalah in Oman, Lu-tica Bay in Montenegro and Andermatt in Switzerland. ODH recently introduced O West, the latest addition to its portfolio and its first assignment in Cairo, Egypt, located in the city on October 6.
Investor Contact: Sara El Gawahergy Head of Investor Relations Responsible for Strategic Project Management Tel: ‘20224 61 89 61 Tel:’ 41418 17 11 Email: [email protected]
Media Relations Contact: Philippe Blangey Partner Dynamics Group AG Tel: ‘41432 32 35 Email: [email protected]
End of hoc announcement
Millions of Swiss francs
July 2020
July 2019
In %
Egypt
44,5
21,9
102,9%
Millions of Swiss francs
July 2020
July 2019
In %
Egypt
44,5
21,9
102,9%
Language:
English
Company:
Orascom Development Holding AG
Gotthardstrasse 12
6460 Altdorf
Switzerland
Phone:
’41 41874 17 17 ‘
Fax:
’41 41874 17 07
Email:
The Internet:
www.orascomdh.com
IT IS IN:
CH0038285679
Value:
A0NJ37
Listing:
Swiss Stock Exchange SIX
EQS News ID:
1120247
End of announcement
EQS Group Press Service