Orascom Development Holding AG FY 2016 Results Guidance

Tuesday, 04 April 2017

Orascom Development Holding AG FY 2016 Results Guidance

Orascom Development Holding AG / Key word(s): Miscellaneous/Miscellaneous

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

Press Release: Orascom Development Holding FY 2016 Results Guidance

In 2016, the Group witnessed enhanced operational performance from the Real Estate and Hotels business segments across El Gouna, Oman and Montenegro. Total revenues are expected to be in the range of CHF 235-240 million. However, the significant devaluation of the Egyptian pound following the floatation of the currency in November 2016 had a significant non-cash impact on Orascom Development Holding's income statement that is calculated in Swiss Francs.

The Group's Egyptian subsidiary has debt primarily denominated in US Dollars and Egyptian Pounds. The devaluation of the Egyptian pound against the dollar from 8.88 to 18.0 in late 2016 resulted in substantial revaluations of the debt held in US Dollars at the subsidiary and subsequently led to a non-cash foreign exchange loss on the Group level of approximately CHF 125.0 million. The total currency-related non-cash impact on the Groups income statement is expected to be approximately CHF 157.0 million, which constitutes the majority of the expected net loss attributable to the shareholders in the range of CHF 195-205 million for FY 2016.

Altdorf/Cairo, 4 April 2017 - In line with the strategic decision of being selective with land sales moving forward, the Group did not pursue any land sales in 2016. Accordingly, Orascom Development Holding expects to report revenues of CHF 235-240 million, a 21-23% decrease in its consolidated revenues for FY 2016 compared to the previous year which included land sales revenues of CHF 65.2 million. The two main business segments of the Group (Hotels and Real Estate) recorded better operational results than in the previous year.

The decision taken by the Central Bank of Egypt in November 2016 to float the Egyptian pound in an attempt to stabilize the economy has had a significant impact on a lot of companies that operate in Egypt including the Group. The 102.7% appreciation of the U.S. Dollar against the EGP from 8.88 to 18.0 resulted in substantial revaluations of the debt held in US Dollars at the subsidiary and subsequently negatively impacted the Groups profit and loss statement with a non-cash foreign exchange loss of approximately CHF 125.0 million. Further, the Group's results were also impacted by impairments in the amount of approximately CHF 32.0 million after the floatation of the Egyptian Pound. As a result, Orascom Development Holding expects to report a net loss attributable to the shareholders in the range of CHF 195-205 million for FY 2016. On the other hand, total debt of the Egyptian Subsidiary on the balance sheet of the Group has decreased by 24% from CHF 414.7 million to CHF 315.2 million.

Real Estate Segment

The Group's total net sales increased by 100% to reach CHF 115.2 million vs. CHF 57.3 million in FY 2015. Orascom Development Holding was able to successfully exceed the real estate sales targets of the year across El Gouna, Sifah and Luštica Bay.

Hotels Segment

The Gulf hotels in Oman and UAE witnessed a notable boost in their performance recording a 57.6% increase in GOP growing from CHF 12.7 million to CHF 20.0 million in FY 2016. In Egypt, despite the severe decline in the country's tourism, El Gouna, continued to benefit from its safe haven and has been outperforming the market, resulting in a 14% GOP growth in FY 2016 from last year.

Financial note

It is important to note that when results are normalized for land sales, FX and impairments in both comparative periods, the Adjusted EBITDA would have reached approximately CHF 19.6 million compared to CHF 15.6 million in FY 2015.

The financial information contained in this press release are based on the current assumptions and expectations of the company. They have not yet been audited and are subject to change. The full-fledged FY 2016 audited financial results and statements will be published as announced on the 11th of April, 2017. Management will also hold the earnings conference call on the same day at 4:00 pm CEST.

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 Salalah Beach in Oman, Luštica Bay in Montenegro and Andermatt in Switzerland. Orascom Development has a dual listing, with a primary listing on the SIX Swiss Exchange and a secondary listing on the EGX Egyptian Exchange.

Contact for Investors:
Sara El Gawahergy
Head of Investor Relations
Tel: +202 246 18961
Tel: +41 418 74 17 11
Email: [email protected]

Contact for Media Relations:
Philippe Blangey
Dynamics Group AG
Tel: +41 432 68 32 35
Email: [email protected]

Disclaimer & Cautionary Statement

The information contained in this e-mail, its attachment and in any link to our website indicated herein is not for use within any country or jurisdiction or by any persons where such use would constitute a violation of law. If this applies to you, you are not authorized to access or use any such information. Certain statements in this e-mail and the attached news release may be forward-looking statements, including, but not limited to, statements that are predications of or indicate future events, trends, plans or objectives. Forward-looking statements include statements regarding our targeted profit improvement, return on equity targets, expense reductions, pricing conditions, dividend policy and underwriting claims improvements. Undue reliance should not be placed on such statements because, by their nature, they are subject to known and unknown risks and uncertainties and can be affected by other factors that could cause actual results and Orascom Development Holding's plans and objectives to differ materially from those expressed or implied in the forward-looking statements (or from past results). Factors such as (i) general economic conditions and competitive factors, particularly in our key markets; (ii) performance of financial markets; (iii) levels of interest rates and currency exchange rates; and (vii) changes in laws and regulations and in the policies of regulators may have a direct bearing on Orascom Development Holding's results of operations and on whether Orascom Development Holding will achieve its targets. Orascom Development Holding undertakes no obligation to publicly update or revise any of these forward-looking statements, whether to reflect new information, future events or circumstances or otherwise. It should further be noted, that past performance is not a guide to future performance. Please also note that interim results are not necessarily indicative of the full-year results. Persons requiring advice should consult an independent adviser.

End of ad hoc announcement