EQS-Adhoc: Orascom Development Holding AG: Substantial operational improvements in first half-year 2017 [more]

Tuesday, 15 August 2017

EQS-Adhoc: Orascom Development Holding AG: Substantial operational improvements in first half-year 2017

EQS Group-Ad-hoc: Orascom Development Holding AG / Key word(s): Half Year
Results/Half Year Results
Orascom Development Holding AG: Substantial operational improvements in
first half-year 2017

15-Aug-2017 / 07:00 CET/CEST
Release of an ad hoc announcement pursuant to Art. 53 KR

Orascom Development Holding (ODH): Substantial operational improvements in
first half-year 2017

* Revenues nearly unchanged at CHF 108.6 million despite significant
revenue growth in local currency in Egypt

* EGP devaluation of 50.0% vs Swiss Franc in 1H 2017

* Adjusted EBITDA increased by 34.1% to CHF 11.0 million

* Gross profit surged by 11.7% to reach CHF 24.9 million

* Significant increase in the hotels' occupancy and room rates

* 153.1% increase in Hotels Gross Operating Profits (GOP)

* Net real estate sales of CHF 51.6 million with more contribution coming
from El Gouna, Sifah and Luštica

* Successfully completed the Delisting of ODH's EDRs from the Egyptian
Stock Exchange

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

Real Estate

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.

Hotels

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.

Destination Management

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: ir@orascomdh.com

Contact for Media Relations:
Philippe Blangey
Partner
Dynamics Group AG
Tel: +41 432 68 32 35
Email: prb@dynamicsgroup.ch

End of ad hoc announcement

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: SIX Swiss Exchange

End of Announcement EQS Group News Service

601393 15-Aug-2017 CET/CEST