Orascom Development Holding AG: Operational improvements across all destinations result in revenue growth of 79.5% in local currency in Egypt [more]

Wednesday, 15 November 2017

EQS-Adhoc: Orascom Development Holding AG: Operational improvements across all destinations result in revenue growth of 79.5% in local currency in Egypt

EQS Group-Ad-hoc: Orascom Development Holding AG / Key word(s): Quarter
Results/9-month figures
Orascom Development Holding AG: Operational improvements across all
destinations result in revenue growth of 79.5% in local currency in Egypt

15-Nov-2017 / 07:00 CET/CEST
Release of an ad hoc announcement pursuant to Art. 53 KR
The issuer is solely responsible for the content of this announcement.

Orascom Development Holding (ODH): Operational improvements across all
destinations result in revenue growth of 79.5% in local currency in Egypt

* A 25.5% increase in net real estate sales to reach CHF 86.1 million with
more contribution coming from El Gouna, Hawana Salalah, Sifah and
Luštica Bay.

* Revenues back to growth to reach CHF 170.8 million vs. CHF 169.9 million
in 9M 2016.

* A 69.0% increase in hotels gross operating profits (GOP) to CHF 31.6
million vs. CHF 18.7 million in 9M 2016.

* Adjusted EBITDA increased by 15.8% to CHF 16.1 million in 9M 2017.

* Cash from operations continues to be positive for 9M 2017.

Altdorf, 15 November 2017 -The largest Egyptian subsidiary of the Group
(Orascom Development Egypt) has continued to record operational success with
a 79.5% increase in revenues, in local currency, compared to 9M 2016
accompanied by a huge boost in its profitability. 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 against the Swiss
Franc. As a result, reported revenues increased by 0.5% to reach CHF 170.8
million in 9M 2017 vs. CHF 169.9 million in 9M 2016.

Adjusted EBITDA for the period increased by 15.8% to reach CHF 16.1 million
vs. CHF 13.9 million in 9M 2016. The net loss attributable to shareholders
for the reporting period was substantially reduced by 50.1% on the back of
the enhanced operational performance across all business segments and
amounted to CHF 30.3 million vs. a net loss of CHF 60.7 million in 9M 2016.

In addition, ODH has signed a sale and lease back agreement for its
514-room's hotel 'Citadel Azur' located in Sahl Hashish with Corplease
Group, one of the largest and leading leasing companies in Egypt. The total
transaction value is USD 18.0 million to be repaid over 6 years with a
residual value of 40.0% at the end of the tenor. The proceeds of the
transaction shall be used to renovate the hotel and to fund ODH's plans in
Oman and Montenegro.

The new hotels strategy continues to boost operational profitability across
the Hotel's segment resulting in a 5.4% increase in revenues to CHF 90.5
million and a 69.0% increase in gross operating profits (GOP) to CHF 31.6
million vs. CHF 18.7 million in 9M 2016.

The tourism sector in Egypt continued its uptrend since the beginning of the
year. Tourism revenues increased by 211.8% y-o-y to USD 5.3bn in 9M 2017 vs.
USD 1.7 billion in 9M 2016. The increase in tourism revenues came on the
back of increased arrivals of 55.3% y-o-y to 5.9 million.

In El Gouna, the new strategy implemented at the beginning of the year has
proven its great success recording a boost in the hotels operational
efficiency. Occupancy rate increased by 36.4% to reach 75% vs. 55% in 9M
2016 and TRevPAR increased by 9.1% to reach CHF 48 vs. CHF 44 in 9M 2016.
Hotels GOP surged by 163.3% to reach CHF 15.8 million compared to CHF 6.0
million in 9M 2016. We are also progressing with the renovation works of
Sheraton, Bellevue, Movenpick, Captains' Inn, Turtles' Inn and Ali Pasha
Hotels, some of which will be finalized by year-end.

Taba Heights remains the most challenging destination for the group due to
the extended travel bans on Sinai and the political unrest facing the area.
Nevertheless, our efforts towards reviving the destination helped us curb
the GOP losses from CHF 1.3 million in 9M 2016 to CHF 0.3 million in 9M
2017. We re-opened another 100 rooms in Bay View Hotel out of the existing
394 rooms. To date we have 1,260 operating rooms out of 2,365 rooms compared
to only 718 rooms operating in 9M 2016. Occupancy for the operating rooms
reached 31% in 9M 2017.

In Sahl Hashish, Citadel Azur Hotel occupancy rate increased by 38.1% to
reach 58% in 9M 2017 compared to 42% in 9M 2016, also GOP increased by 31.6%
to reach CHF 2.5 million in 9M 2017 compared to CHF 1.9 million in 9M 2016.

In Fayoum, Byoum Lakeside Hotel continued its positive momentum and reported
an occupancy of 39% during 9M 2017 vs. 27.0% in 9M 2016.

The Gulf hotels in Oman and UAE continued their positive momentum since the
beginning of the year and recorded a 4.6% increase in GOP to reach CHF 13.6
million in 9M 2017 compared to CHF 13.0 million in 9M 2016. Their
contribution to the total segment revenues continued to increase to reach
CHF 44.0 million representing 48.6% out of a total segment revenue of CHF
90.5 million in 9M 2017.

At Hawana Salalah, the successful European market penetration and the
growing demand from the regional market, allowed a GOP to increase by 20.7%
to reach CHF 7.0 million compared to CHF 5.8 million in 9M 2016 and
occupancy rates of 68% vs. 64% in 9M 2016.

In UAE, we managed to open the new 142 hotel rooms by the end of June 2017,
thus bringing the total number of hotel rooms to 491 vs. 346 rooms in 9M
2016. Occupancy for the operating rooms reached 70% vs 78% in 9M 2016.

Overall, the new hotel strategy designed to elevate the operational
profitability levels across the segment continued to prove its success,
which was reflected in the total segment's results. Revenues increased by
5.4% to CHF 90.5 million in 9M 2017 vs. CHF 85.9 million in 9M 2016 while
the Adjusted EBITDA more than doubled to CHF 27.3 million vs. CHF 12.4
million in 9M 2016.

Net contracted sales increased by 25.5% to reached CHF 86.1 million during
the 9M 2017, with a noticeable boost in sales of Q3 2017 alone recording an
increase of 70.8% to reach CHF 34.5 million vs. CHF 20.2 million in Q3 2016.

El Gouna continued its solid performance on the back of targeted sales and
marketing activities in addition to new product offerings and managed to be
our top contributor in terms of sales. Net sales reached CHF 52.7 million
compared to CHF 54.2 million in 9M 2016.

Overall in Egypt, we continued to prove our trust and commitment to our
clients with our timely construction activity, delivering our projects
within 2 years from contracting, making us by far the fastest developer in
Egypt.

In Jebel Sifah, Oman sales has continued its positive momentum since Q4
2016. Net sales reached CHF 8.9 million compared to CHF 0.2 million in 9M
2016 on the back of the great success and the huge demand on the Golf Lake
Residence real estate project that was launched in November 2016 with a
total inventory of CHF 21.8 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
31.8 million. Net sales reached CHF 10.3 million in 9M 2017 compared to CHF
0.8 million in 9M 2016.

It is important to note that all the units delivered in Oman during the
period-included earlier units that incurred cost of overrun. Moving forward,
all new deliveries of the new launches will have a positive margin on the
destinations results.

In Luštica Bay, Montenegro, 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. In, addition, sales started to pick up on
the back of the successful launch of Centrale Phase 1; the town center
concept, with approximately 60% contracted and reserved units out of the
total inventory of EUR 11.0 million. Net sales in Luštica increased by 9.2%
reached CHF 13.1 million vs. CHF 12.0 million in 9M 2016.

Total real estate revenues increased by 11.8% to CHF 49.4 million in 9M 2017
vs. CHF 44.2 million in 9M 2016 on the back of increased unit deliveries
especially in El Gouna and Luštica Bay. Total deferred revenue from real
estate that is yet to be recognized until 2021 increased by 14.7% to reach
CHF 178.5 million in 9M 2017 compared to CHF 155.6 million in 9M 2016.

Continuous efforts towards increasing the destination's livelihood has
reflected positively on our Destination Management.

We successfully hosted the first edition of El Gouna Film Festival (GFF) in
September 2017, with more than 1,000 attendees. Our hotel's occupancy at the
time reached 100% and for that event, we have built four new high standard
international cinemas and finished the party venue that will be later used
to host all seasonal parties and weddings.

In Jebal Sifah, Oman we opened the 9 holes golf course and the infinity
pool, which was launched in October 2017. Also, we hosted the first Foot
Golf event in November 2017 with more than 500 attendees. We are also
hosting the XDubai Spartan Race in November 24, 2017 with expected attendees
of 3,500.

Outlook for FY 2017

Real Estate

In El Gouna, in Q4 2017 we launched a new high-end real estate project
overlooking the marina 'Abu Tig Hill' with a total inventory of USD 22.0
million and are progressing very well with their reservations. We are at
advanced discussions with private owners of a land plot in the North Coast
in Egypt to enter the second home market soon. 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 18.0 million and are positively progressing with the
new Central phase launches in Lustica Bay, Montenegro.

Hotels

In El Gouna, we are continuing with the 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 to
increase the product offerings for the different cliental. 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 is quickly progressing, with plans to be finalized and
opened in July 2018.

Destination Management

Following the great success of Phase I of G-space, we are planning to launch
Phase II by mid-December 2017 to offer more private offices, meeting rooms
and a large chill out area. We started the construction of Phase I expansion
plan of Abydos Marina to add 10 new berths to be finalized before end of
2017. We are also in negotiations with an international company to lease an
office building in El Gouna. In Hawana Salalah, Oman we are finalizing the
construction of the water park project with plans to be launched in December
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

629283 15-Nov-2017 CET/CEST