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MarketScreener Homepage  >  Equities  >  Swiss Exchange  >  Orascom Development Holding AG    ODHN   CH0038285679

ORASCOM DEVELOPMENT HOLDING AG

(ODHN)
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Orascom Development : 9M 2020 financial Statements

11/16/2020 | 03:47am EST

Orascom

Development

Holding AG

Condensed Consolidated Interim Financial Statements (unaudited)

9 Months 2020

Contents

Page

Unaudited condensed consolidated statement of comprehensive income

F-3

Unaudited condensed consolidated statement of financial position

F-5

Unaudited condensed consolidated statement of changes in equity

F-7

Unaudited condensed consolidated statement of cash flow

F-8

Notes to the unaudited condensed interim consolidated financial statements

F-9 to F-28

F-2

Unaudited condensed consolidated statement of comprehensive income for the period ended 30 September 2020

CHF

Notes

Three months ended

Nine months ended

30 September

30 September

30 September

30 September

2020

2019

2020

2019

CONTINUING OPERATIONS

Revenue

7

96,356,640

102,251,398

260,414,686

325,217,116

Cost of sales

(83,696,930)

(86,842,519)

(221,860,128)

(264,574,377)

Gross profit

12,659,710

15,408,879

38,554,558

60,642,739

Investment income

1,345,468

2,640,213

4,105,367

7,902,936

Other gains

8

941,393

3,065,557

1,561,803

13,849,961

Administrative expenses

(9,956,169)

(10,474,074)

(29,369,479)

(35,543,004)

Finance costs

9

(9,049,069)

(9,556,090)

(26,935,698)

(30,426,113)

Share of losses of associates

17

(2,252,243)

(2,904,102)

(5,440,137)

(8,586,373)

Other losses

10

2,182,827

(195,070)

(40,269)

(1,836,949)

(Loss)/profit before tax

(4,128,083)

(2,014,687)

(17,563,855)

6,003,197

Income tax expenses

11

(3,250,494)

(4,400,597)

(9,059,750)

(13,963,367)

(Loss) for the period

7

(7,378,577)

(6,415,284)

(26,623,605)

(7,960,170)

Other comprehensive income, net of

income tax

Items that will not be reclassified

subsequently to profit or loss

Net (loss)/gain on revaluation of financial

233

109

(541)

108

assets at FVTOCI

233

109

(541)

108

Items that may be reclassified

subsequently to profit or loss

Exchange differences arising on translation

(9,269,596)

11,624,742

(23,803,224)

20,242,535

of foreign operations

26

(9,269,596)

11,624,742

(23,803,224)

20,242,535

Total other comprehensive income for the

(9,269,363)

11,624,851

(23,803,765)

20,242,643

period, net of tax

Total comprehensive income for the period

(16,647,940)

5,209,567

(50,427,370)

12,282,473

F-3

Unaudited condensed consolidated statement of comprehensive income - continued

for the period ended 30 September 2020

CHF

Notes

Three months ended

Nine months ended

30 September

30 September

30 September

30 September

2020

2019

2020

2019

(Loss)/profit attributable to:

Owners of the Parent Company

(8,272,681)

(7,919,885)

(25,381,009)

(13,927,741)

Non-controlling interests

894,104

1,504,601

(1,242,596)

5,967,571

(7,378,577)

(6,415,284)

(26,623,605)

(7,960,170)

Total comprehensive income attributable

to:

Owners of the Parent Company

(15,644,284)

235,127

(44,296,333)

(3,022,038)

Non-controlling interests

(1,003,656)

4,974,440

(6,131,037)

15,304,511

(16,647,940)

5,209,567

(50,427,370)

12,282,473

Earnings per share from continuing

operations

Basic

12

(0.21)

(0.20)

(0.63)

(0.35)

Diluted

12

(0.21)

(0.20)

(0.63)

(0.35)

Samih O. Sawiris

Ashraf Nessim

Chairman of the Board

CFO

F-4

Unaudited condensed consolidated statement of financial position

at 30 September 2020

CHF

Notes

30 September 2020

31 December 2019

ASSETS

NON-CURRENT ASSETS

Property, plant and equipment

14

794,712,519

814,451,407

Investment property

15

28,546,079

30,161,887

Goodwill

16

2,987,390

3,081,944

Investments in associates

17

53,885,537

29,284,086

Non-current receivables

18

56,453,199

36,513,680

Deferred tax assets

2,404,380

2,352,131

Other financial assets

902,158

943,625

Total non-current assets

939,891,262

916,788,760

CURRENT ASSETS

Inventories

19

545,122,502

516,395,245

Trade and other receivables

18

109,112,112

118,231,167

Current receivables due from related parties

20

28,264,482

41,169,545

Other current assets

21

65,150,659

56,492,356

Cash and bank balances

22

197,793,964

185,991,795

945,443,719

918,280,108

Assets held for sale

23

5,492,692

5,785,704

Total current assets

950,936,411

924,065,812

Total assets

1,890,827,673

1,840,854,572

F-5

Unaudited condensed consolidated statement of financial position - continued

at 30 September 2020

CHF

Notes

30 September 2020

31 December 2019

EQUITY AND LIABILITIES

CAPITAL AND RESERVES

Issued capital

24

202,968,745

202,968,745

Reserves

25-26

423,160,317

442,571,528

(Accumulated losses)

(262,074,431)

(239,082,062)

Equity attributable to owners of the Parent Company

364,054,631

406,458,211

Non-controlling interests

158,408,487

160,335,858

Total equity

522,463,118

566,794,069

NON-CURRENT LIABILITIES

Borrowings

29

380,946,655

374,413,961

Trade and other payables

27

366,503,535

345,173,802

Contract liabilities

94,076,877

97,054,504

Notes payable

51,281

40,751

Provisions

24,288,441

27,192,198

Retirement benefit obligation

791,941

791,977

Deferred tax liabilities

25,500,073

25,147,388

Total non-current liabilities

892,158,803

869,814,581

CURRENT LIABILITIES

Trade and other payables

27

38,914,804

43,250,598

Borrowings

29

54,529,201

55,451,462

Due to related parties

27,333,250

26,559,334

Current tax liabilities

17,220,315

20,395,981

Provisions

7,082,075

6,386,658

Other current liabilities

28

330,575,508

251,633,863

475,655,153

403,677,896

Liabilities directly associated with assets held for

23

550,599

568,026

sale

Total current liabilities

476,205,752

404,245,922

Total liabilities

1,368,364,555

1,274,060,503

Total equity and liabilities

1,890,827,673

1,840,854,572

Samih O. Sawiris

Ashraf Nessim

Chairman of the Board

CFO

F-6

Unaudited condensed consolidated statement of changes in equity

for the period ended 30 September 2020

Share-based

PP&E

Investments

Foreign

Reserve from

Attributable

Non-

Issued

Share

Treasury

General

currency

common

(Accumulated

to owners of

CHF

payment

revaluation

revaluation

controlling

Total

Capital

premium

shares

reserve

translation

control

losses)

the Parent

reserve

reserve

reserve

interests

reserve

transactions

Company

Balance at 1 January 2019

202,049,630

833,948,897

(5,207,662)

2,499,999

1,435,587

(173,174)

4,916,868

(335,768,166)

(72,519,921)

(222,499,010)

408,683,048

167,080,465

575,763,513

Profit/(loss) for the period

-

-

-

-

-

-

-

-

-

(13,927,741)

(13,927,741)

5,967,571

(7,960,170)

Other comprehensive income for the period, net of income tax

-

-

-

-

-

108

-

10,905,595

-

-

10,905,703

9,336,940

20,242,643

Total comprehensive income for the period

-

-

-

-

-

108

-

10,905,595

-

(13,927,741)

(3,022,038)

15,304,511

12,282,473

Acquisition of treasury shares

-

-

(1,359,553)

-

-

-

-

-

-

-

(1,359,553)

-

(1,359,553)

Disposal of treasury shares

-

-

1,895,609

-

-

-

-

-

-

814,634

2,710,243

-

2,710,243

Share-based payments (note 25)

-

2,473,088

-

3,018,134

-

-

-

-

-

-

5,491,222

-

5,491,222

Recycling of foreign exchange difference on disposal of subsidiary

-

-

-

-

-

-

-

48,511

-

-

48,511

48,511

Disposal of non-controlling interests of consolidated subsidiary

-

-

-

-

-

-

-

-

-

-

-

20,017

20,017

Non-controlling

interests'

share

in

equity

of

consolidated

-

-

-

-

-

-

-

-

-

-

-

1,894,152

1,894,152

subsidiaries

Balance at 30 September 2019

202,049,630

836,421,985

(4,671,606)

5,518,133

1,435,587

(173,066)

4,916,868

(324,814,060)

(72,519,921)

(235,612,117)

412,551,433

184,299,145

596,850,578

Balance at 1 January 2020

202,968,745

839,761,415

(4,722,455)

3,524,187

5,133,570

(173,065)

4,916,868

(333,349,071)

(72,519,921)

(239,082,062)

406,458,211

160,335,858

566,794,069

(Loss) for the period

-

-

-

-

-

-

-

-

-

(25,381,009)

(25,381,009)

(1,242,596)

(26,623,605)

Other comprehensive income for the period, net of income tax

-

-

-

-

-

(541)

-

(18,914,783)

-

-

(18,915,324)

(4,888,441)

(23,803,765)

Total comprehensive income for the period

-

-

-

-

-

(541)

-

(18,914,783)

-

(25,381,009)

(44,296,333)

(6,131,037)

(50,427,370)

Acquisition of treasury shares

-

-

(2,775,349)

-

-

-

-

-

-

-

(2,775,349)

-

(2,775,349)

Disposal of treasury shares due

to

vesting

of

share-based

-

-

1,375,230

(3,572,252)

-

-

-

-

-

2,197,022

-

-

-

payments (note 25)

Other disposal of treasury shares

-

-

2,989,789

-

-

-

-

-

-

191,618

3,181,407

-

3,181,407

Share-based payments (note 25)

-

274,788

-

261,656

-

-

-

-

-

-

536,444

-

536,444

Share-based payments subsidiaries

-

950,251

-

-

-

-

-

-

-

-

950,251

315,114

1,265,365

Non-controlling

interests'

share

in

equity

of

consolidated

-

-

-

-

-

-

-

-

-

-

-

3,888,551

3,888,551

subsidiaries

Balance at 30 September 2020

202,968,745

840,986,454

(3,132,785)

213,591

5,133,570

(173,606)

4,916,868

(352,263,854)

(72,519,921)

(262,074,431)

364,054,631

158,408,486

522,463,117

F-7

Unaudited condensed consolidated statement of cash flow

for the period ended 30 September 2020

CHF

Notes

Nine months ended

Nine months ended

30 September 2020

30 September 2019

Cash generated from operations

32,123,056

41,680,627

Interest paid

(5,248,003)

(19,406,739)

Income tax paid

(8,478,131)

(23,000,224)

Net cash generated from / (used in) operating

18,396,922

(726,336)

activities

CASH FLOWS FROM INVESTING ACTIVITIES

Payments for property, plant and equipment

(21,828,469)

(39,076,648)

Proceeds from sale of financial assets

2,310,319

24,407,701

Proceeds from disposal of subsidiary

-

133,381

Interest received

4,018,849

3,856,675

Net cash (used in) investing activities

(15,499,301)

(10,678,891)

CASH FLOWS FROM FINANCING ACTIVITIES

Payments for treasury shares

(2,775,349)

(1,359,553)

Proceeds from treasury shares

3,181,407

2,710,243

Non-controlling interests shares in changes

of

3,888,551

1,894,152

equity for consolidated subsidiaries

Repayment of borrowings

(6,252,144)

(34,549,744)

Proceeds from borrowings

16,821,872

7,388,773

Net cash generated from / (used in) financing

14,864,337

(23,916,129)

activities

Net increase/(decrease) in cash and cash equivalents

Cash and cash equivalents at the beginning of the period

Effects of exchange rate changes on the balance of cash held in foreign currencies

17,761,958(35,321,356)

185,991,795138,267,680

(5,959,789)8,509,380

Cash and cash equivalents at the end of the

22

197,793,964

111,455,704

period

F-8

Notes to the unaudited condensed consolidated interim financial statements

1. Description of business

Orascom Development Holding AG ("ODH" or "the Parent Company"), a limited company incorporated in Altdorf, Switzerland, is a public company whose shares are traded on the SIX Swiss Exchange.

The Company and its subsidiaries (the "Group") is a leading developer of fully integrated towns that include hotels, private villas and apartments, leisure facilities such as golf courses, marinas and supporting infrastructure. The Group's diversified portfolio of projects is spread over seven jurisdictions (Egypt, UAE, Oman, Switzerland, Morocco, Montenegro and United Kingdom), with primary focus on touristic towns and recently primary housing. The Group currently operates eleven destinations, five in Egypt (El Gouna, Taba Heights, Fayoum, Makadi Heights and O West), The Cove in the United Arab Emirates, Jebel Sifah and Hawana Salalah in Oman, Luštica Bay in Montenegro, Cornwall in the UK and Andermatt in Switzerland.

2. Statement of compliance

The Group applies International Financial Reporting Standards (IFRS). The unaudited condensed consolidated interim financial statements have been prepared in accordance with the requirements of IAS 34, Interim Financial Reporting, and should be read in conjunction with the audited consolidated financial statements for the year ended 31 December 2019.

3. Basis of preparation

The unaudited condensed consolidated interim financial statements include all the subsidiaries controlled by the Parent Company and are presented in Swiss Francs (CHF).

The preparation of interim financial statements requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses, as well as the disclosure of contingent liabilities.

Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

Critical judgments made by management in the application of IFRS and key sources of estimation uncertainties were the same as those applied to the consolidated financial statements of the year ended 31 December 2019.

F-9

4. Adoption of new and revised International Financial Reporting Standards

4.1. Standards and interpretations effective in the current period

The following revised standards are effective for the current period:

Revised Standards

IFRS 3

Definition of a business (Amendments)

IFRS 7

Pre-replacement issues in the context of the IBOR reform (Amendments)

IFRS 9

Pre-replacement issues in the context of the IBOR reform (Amendments)

IAS 1

Definition of material (Amendments)

IAS 8

Definition of material (Amendments)

IAS 39

Pre-replacement issues in the context of the IBOR reform (Amendments)

These amended Standards have not had any significant impact on the unaudited condensed consolidated financial statements.

4.2. Standards and interpretations not yet adopted

At the date of authorization of these unaudited condensed consolidated interim financial statements, the Group has not adopted the following amended standard that has been issued but is not yet effective. It will be effective for annual periods beginning on or after the dates described below.

New and Revised Standards and Interpretations

Effective from

IFRS 16

Covid-19-related rent concessions (Amendments)

1 January 2021

IAS 1

Classification of liabilities as current or non-current (Amendments)

1 January 2022

IAS 16

Proceeds before intended use (Amendments)

1 January 2022

IAS 37

Cost of fulfilling a contract (Amendments)

1 January 2022

Various

Amendments regarding replacement issues in the context of IBOR reform (IFRS

1 January 2021

7, IFRS 9, IFRS 16 and IAS 39)

Various

Annual improvements to IFRS Standards 2018-2020 (IFRS 9 and IFRS 16)

1 January 2022

The Group is currently assessing whether these changes will impact the consolidated financial statements in the period of initial application. However, the Group does not expect any major changes from this amended Standard.

5. Significant accounting policies

The unaudited condensed consolidated interim financial statements have been prepared on the historical cost basis except for financial instruments that are measured at fair value or amortized cost, as appropriate, and investment properties that are measured at fair value. Historical cost is generally based on the fair value of the consideration given in exchange for assets. The Group is not subject to any significant seasonality or cyclicality. The same accounting policies, presentation and methods of computation are followed in these unaudited condensed consolidated interim financial statements as were applied in the preparation of the Group's consolidated financial statements for the year ended 31 December 2019.

F-10

6. Subsidiaries

The Group is comprised of the Parent Company and its subsidiaries operating in different countries. There have been no major changes in the group structure since 31 December 2019.

The group controls its subsidiaries directly and indirectly.

7. Segment information

The Group has four reportable segments which are its strategic divisions. The strategic divisions offer different products and services and are managed separately because they require different skills or have different customers. For each of the strategic divisions, the Country CEOs and the Head of Segment review the internal management reports at least on a quarterly basis.

The accounting policies of the reportable segments are the same as the Group's accounting policies described in the consolidated financial statements for the year ended 31 December 2019. Segment result represents the result by each segment without allocation of central administration costs and directors' salaries, share in associates' results, gain recognised on disposal of interest in former associates, investment income, other gains and losses, finance costs and income tax expense, as included in the internal management reports that are regularly reviewed. This measure is considered being most relevant for the purpose of resources allocation and assessment of segment performance.

F-11

CHF

Total segment revenue

Inter-segment revenue

Revenue external customers 1)

Segment result

30/09/2020

30/09/2019

30/09/2020

30/09/2019

30/09/2020

30/09/2019

30/09/2020

30/09/2019

Hotels

48,268,612

122,808,178

(319,388)

(853,084)

47,949,224

121,955,094

(18,814,138)

20,571,110

Real estate and construction

149,505,433

166,882,849

-

(6,695)

149,505,433

166,876,154

42,344,251

47,758,827

Land sales

28,933,202

-

-

-

28,933,202

-

20,258,658

826,701

Destination management

36,434,993

38,347,345

(15,325,278)

(17,174,319)

21,109,715

21,173,026

(5,927,433)

(6,295,259)

Other operations

20,983,663

25,810,000

(8,066,551)

(10,597,158)

12,917,112

15,212,842

(4,073,256)

(5,781,814)

284,125,903

353,848,372

(23,711,217)

(28,631,256)

260,414,686

325,217,116

33,788,082

57,079,565

Unallocated items 2):

Share of losses of associates

(5,440,137)

(8,586,373)

Other gains/losses

3,856,060

14,614,890

Investment income

1,087,956

2,084,974

Central administration costs and directors' salaries

(29,369,479)

(35,543,004)

Finance costs

(21,486,337)

(23,646,855)

(Loss)/profit before tax

(17,563,855)

6,003,197

Income tax

(9,059,750)

(13,963,367)

(Loss) for the period

(26,623,605)

(7,960,170)

  1. Of the total revenue of CHF 260.4 million (2019: CHF 325.2 million), CHF 102.3 million (2019: CHF 171.0 million) are recognised at point in time and CHF 158.1 million (2019: CHF 154.2 million) are recognised over time
  2. For the purpose of segment reporting, part of the amounts reported in the statement of comprehensive income for these items have been allocated in this note to their relevant segments.

F-12

CHF

30/09/2020

31/12/2019

Hotels

549,197,284

611,977,090

Real estate and construction

1,128,059,102

1,036,807,079

Land sales

179,162,706

185,513,725

Destination management

119,259,291

97,356,310

Other operations

95,331,917

85,222,157

Segment assets before elimination

2,071,010,300

2,016,876,361

Inter-segment elimination

(680,415,912)

(684,876,543)

Segment assets after elimination

1,390,594,388

1,331,999,818

Unallocated assets

494,740,593

503,069,050

Assets held for sale

5,492,692

5,785,704

Consolidated total assets

1,890,827,673

1,840,854,572

Hotels

314,328,192

344,300,119

Real estate and construction

821,821,168

760,023,194

Land sales

29,546,279

37,653,899

Destination management

148,357,993

120,724,113

Other operations

66,465,718

55,405,788

Segment liabilities before elimination

1,380,519,350

1,318,107,113

Inter-segment elimination

(420,538,770)

(423,577,845)

Segment liabilities after elimination

959,980,580

894,529,268

Unallocated liabilities

407,833,376

378,963,209

Liabilities directly associated with assets held for sale

550,599

568,026

Consolidated total liabilities

1,368,364,555

1,274,060,503

Total segment result of CHF 33.8 million (2019: CHF 57.1 million) mainly decreased due to the following:

  • Tourism business continues to be profoundly impacted by Covid-19. While ODH acknowledges that the full recovery from the pandemic will take time, the current pick up in local travel reinforces the Group's view that when people feel safe, travelling demand returns quickly. Group occupancy has improved steadily reaching 16% in Q3, up from 2% in Q2. TREVPAR has increased since its low point of CHF 3 in Q2, to CHF 20 in Q3 2020 and GOPPAR, losses reduced notably from CHF (16) to CHF (4).
    With 22 of 31 from the Group Hotels in operation, total revenue reached CHF 10.7 million in Q3 2020, compared to CHF 38.1 million in Q3 2019.
    Our flagship Red Sea Resort, El Gouna leads the recovery contributing with revenue of CHF 5.2 million representing 48% of the Group's total revenue. Occupancy rates improved from 1% in Q2 2020 to 19% in Q3 2020. TREVPAR increased from CHF 3 in Q2 2020 to CHF 21 in Q3 2020, leading to a positive GOPPAR of CHF 1, up from a loss of CHF (18) in Q2 2020.

F-13

In Q3 2020, Taba Heights Hotel revenues reached CHF 0.6 million. Occupancy rates reached 10% up from 1% in Q2 2020. TREVPAR increased from CHF 0.4 to CHF 5 with a decline in GOPPAR losses, from CHF (7) to CHF (5).

Hawana Salalah Hotels continue to be severely impacted by global and local travel restrictions. In Q3, our Hotels reported occupancy of 6% and GOPPAR losses CHF (23). The travel ban inside Oman was lifted on October 1, yet a night-time lockdown and the Supreme Committee's decision to prohibit the use of beaches throughout the day announced on October 9 negatively impacted the booking pace. In Hawana Salalah, we concentrate our efforts on minimizing costs to the lowest possible levels while attracting local business through awareness campaigns and targeted sales promotions.

The Cove, Ras Al Khaimah, was our best performing destination. In Q3 2020, the Hotel's revenue reached CHF 3.2 million. Occupancy rates reached 36% up from 13% in Q2 2020. TREVPAR increased to CHF 73 from CHF 19. The Hotel reported a positive GOPPAR of CHF 8 from loss of CHF (9) in Q2 2020.

In Montenegro, the international travel ban was lifted on 1 July 2020. As the country remained on the EU Commission's Red Zone, volume from our traditional source markets remained weak. In Q3, occupancy rates reached 33%, compared to 9% in Q2 2020. TREVPAR increased to CHF 100 from CHF 75 in Q2 2020. The Hotel reported a GOPPAR loss of CHF (2) from CHF (349) in Q2 2020.

The COVID-19 pandemic will continue to have a significant adverse effect on our business. Unprecedented measures to try to contain the virus will continue to impact the global travel trade. We remain confident that implemented cost saving initiatives and our ability to create increasing local demand for our destinations will help us to bridge the gap until international travel recovers.

  • The real estate and construction segment revenue was also lower compared to prior year period due to curfew and other restrictions imposed by the Governments of the various countries. However, this segment has not been impacted as significantly as the hotel segment by the Covid-19 pandemic.
  • During Q3 2020, the Group as part of its land bank monetization strategy, sold 63,589 m2 of land for two additional school development projects in O West. The total value of the two deals is CHF 16.3 million.
    Already during Q2 2020, the Group completed two land sales in Egypt. As an extension for the "Mangroovy for Hotels" project, the Group has sold 40,654.5 m2 of land in El Gouna. The land plot will encompass mixed-use services for the owner's residences and hotel guests. The total value of the deal is CHF 6.4 million. Further, the Group, as part of its land bank monetization strategy, sold 27,722 m2 of land for 2 additional school development projects in O West.

8. Other gains

In the first nine months of 2020, other gains of CHF 1.6 million (2019: CHF 13.8 million) are due to foreign exchange gains of CHF 0.7 million and various small items of CHF 0.9 million.

In the first nine months of 2019, the gains were mainly due to net foreign exchange gains and gain on disposal of subsidiary.

F-14

9. Finance cost

In the first nine months of 2020, no finance cost was capitalized on qualifying assets (projects under construction and work in progress). Overall, finance cost decreased by CHF 3.5 million from CHF 30.4 million to CHF 26.9 million compared to the first nine months of 2019 due to a decrease in interest rates in Egypt in addition to a general decrease in Libor rates.

10. Other losses

In the first nine months of 2020, other losses of CHF 0.04 million (2019: CHF 1.8 million) are mainly due to various small items.

In the first nine months of 2019, there was an impairment loss of CHF 1.6 million on related party receivables as well as a loss on disposal of property, plant and equipment of CHF 0.2 million.

11. Income taxes

Tax expense recognised during the period amounted to CHF 9.1 million (2019: CHF 14.0 million). These accruals are based on the estimated average annual effective income tax rate expected for the full year, applied to the pre-tax income for the nine-month period.

The Group operates in different jurisdictions under different tax laws. The main operating entities' tax positions are as follows:

  • Egypt
    The Egyptian subsidiaries fulfil all their requirements according to the tax laws in Egypt.
  • Oman
    The subsidiaries in Oman fulfil all their requirements according to the tax laws in Oman.
  • Switzerland
    The Company fulfils the conditions for taxation as a holding company in Switzerland.

12. Earnings per share

The calculation of the basic and diluted earnings per share from continuing operations is based on the following data:

CHF

Three months ended

Nine months ended

30/09/2020

30/09/2019

30/09/2020

30/09/2019

Earnings (for basic and diluted earnings per share)

(Loss) for the period attributable to owners of the parent

Number of shares

Weighted average number of ordinary shares for the purpose of basic and diluted earnings per share

(8,272,681)

(7,919,885)

(25,381,009)

(13,927,741)

39,985,665 39,766,198 39,976,915 39,747,173

Earnings per share from continuing operations

(0.21)

(0.20)

(0.63)

(0.35)

F-15

13. Dividends

During the interim period, no dividends were declared or paid to shareholders.

14. Property, plant and equipment

Nine months ended 30 September 2020

Property,

Property

Right-of-use

plant and

under

Total

CHF

assets

equipment (i)

construction

Opening net book value at 01/01/2020

594,285,369

173,038,549

47,127,489

814,451,407

Additions

4,003,465

24,036,851

2,018,600

30,058,916

Transfer from projects under construction

1,515,990

(1,515,990)

-

-

Depreciation and amortization

(17,955,663)

-

(3,318,550)

(21,274,213)

Net foreign currency exchange differences

(22,724,284)

(5,119,814)

(679,493)

(28,523,591)

Closing net book value at 30/09/2020

559,124,877

190,439,596

45,148,046

794,712,519

Nine months ended 30 September 2019

Property,

Property

Right-of-use

plant and

under

Total

CHF

assets (ii)

equipment (i)

construction

Opening net book value at 01/01/2019

555,378,032

204,829,346

28,527,575

788,734,953

Additions

6,282,391

32,794,257

-

39,076,648

Disposal of subsidiary

(1,418,339)

-

-

(1,418,339)

Transfer to investment property (note 15)

-

(1,498,965)

-

(1,498,965)

Transfer to inventory

-

(8,279,058)

-

(8,279,058)

Transfer from projects under construction

8,106,615

(8,106,615)

-

-

Depreciation and amortization

(18,718,278)

-

(1,721,247)

(20,439,525)

Net foreign currency exchange differences

20,698,096

383,478

300,646

21,382,220

Closing net book value at 30/09/2019

570,328,517

220,122,443

27,106,974

817,557,934

  1. Includes freehold land, buildings, plant and equipment, furniture and fixtures
  2. The opening balance of the comparative period is CHF 11.8 million higher than shown in the consolidated financial statements of Q3 2019 as further leases were identified later in 2019.

F-16

15. Investment property

The following table summarizes the movements, which have occurred, during the current period on the carrying amount of investment property:

CHF

30/09/2020

31/12/2019

Balance at 1 January

30,161,887

7,328,798

Addition

-

516,623

Transfer from property, plant and equipment (note 14)

-

14,860,153

Revaluation gain on transfer from property, plant and equipment

-

4,188,579

(through OCI)

Revaluation gain (through P&L)

-

3,142,696

Foreign currency translation adjustments

(1,615,808)

125,038

Balance at the end of the period/year

28,546,079

30,161,887

The fair values at 30 September 2020 were determined based on an internal valuation model performed by Group management in 2019. In estimating the fair value of the investment properties, management considers the current use of the properties as their highest and best use.

The internal valuation model relies on the Discounted Cash Flow (DCF) method to determine the fair value of the investment property. The Discounted Cash Flow (DCF) approach describes a method to value the investment property using the concepts of the time value of money. All future cash flows are estimated and discounted to give them a present value. This valuation method is in conformity with the International Valuation Standards. The same method was used for any previous external valuations. As investment property only consists of a few properties in Egypt, management has decided to use an internal valuation model due to efficiency and cost saving reasons.

For the valuation of the investment property which is situated in Egypt the model used cash flow projections based on financial budgets for the next five years and an average discount rate of 18.4% (cost of equity). For the terminal value, a perpetual growth rate of 2% was used.

For the valuation of the investment property which is situated in Oman an average discount rate of 12.4% (cost of equity) was used. As projections for 25 years were used, no perpetual growth rate was included.

For the valuation of the investment property in Montenegro an average discount rate of 10.0%, consisting of a risk-free rate of 3% and market premium of 7%, was used. The beta used was 1.

16. Goodwill

The following table shows the carrying amount of goodwill recognized in the condensed consolidated interim financial statements:

CHF

30/09/2020

31/12/2019

Balance at the beginning of the period / year

3,081,944

2,810,549

Effect of foreign currency exchange difference

(94,554)

271,395

Balance at the end of the period / year

2,987,390

3,081,944

F-17

17. Investments in associates

Details of the Group's associates are as follows:

Name of associate

Place of

Ownership

Carrying value

incorporation

interest

(CHF)

30/09/2020

30/09/2020

31/12/2019

Andermatt Swiss Alps AG

Switzerland

49.00%

29,376,449

4,574,323

Jordan Company for Projects and

Jordan

18.33%

8,170,669

9,697,902

Touristic Development

New City Housing and Development

Cairo

35.25%

3,296,543

3,406,936

Red Sea for Construction & Development

Cairo

40.20%

13,041,876

11,604,925

Orascom for Housing and Establishments

Cairo

39.90%

-

-

Total

53,885,537

29,284,086

Below is a summary of the financial information with respect to the Group's associates as at 30 September 2020:

CHF

30/09/2020

Total assets

960,697,333

Total liabilities

(828,855,320)

Net assets

131,842,013

Group's share of net assets of associates

53,885,537

Total revenue

269,167,770

Total profit/(losses) for the period

(11,517,629)

Group's share of losses

(5,440,137)

Andermatt-Swiss Alps AG ("ASA")

On 25 June 2013, the Group lost control over ASA due to various capital increases in ASA in which the Group did not fully participate. With a remaining share of interest of 49% in ASA, the investment is classified as investment in associates.

The fair value of ASA on initial recognition as investment in associates is based on a third-party valuation which supported the transaction price paid by Mr. Samih Sawiris.

On 23 June 2020, the share capital of ASA was increased by CHF 70 million. The Group participated in this capital increase according to its interest of 49% by contributing CHF 34.3 million.

ASA is not subject to any restrictions on transferring funds to ODH whether resulting from regulatory requirements, borrowing arrangements or contractual arrangements between ASA and ODH.

F-18

Jordan Company for Projects and Touristic Development ("JPTD")

JPTD is investing in property, destination management and development in Aqaba in Jordon. Since 2008 the Group exercised significant influence with their two active board members out of eleven leading to changes in the JPTD's Executive Management and provision of essential technical information.

New City Housing and Development ("NCHD")

In June 2014, the Group lost control over NCHD as they did not participate in the capital increase of NCHD. With a remaining share of interest of 35.25% in NCHD, the investment is classified as investment in associates.

Red Sea for Construction & Development ("RSCD")

During 2016, RSCD, of which the Group held a direct interest of 0.4% as well as an indirect interest of 14% through OHC, increased its share capital from EGP 25 million to EGP 50 million. Of these EGP 25 million, the Group invested EGP 20 million (CHF 2.2 million), resulting in a total interest of 40.20%. Hence, the investment is classified as an associate.

In 2020, RSCD distributed dividends to shareholders. The Group's share in the distribution amounted to CHF 2.9 million and was received through settlement of related party balances (note 31).

18. Trade and other receivables

Trade and other receivables increased by CHF 10.8 million mainly due to sales for the O-West project. The increase was partly netted-off by collections in the real estate segment in Egypt and Oman as well as due to foreign exchange losses during the period.

19. Inventories

Inventory consists of construction work in progress (CHF 76.7 million), land held for development under purchase agreements (CHF 418.3 million), right-of-use inventory (CHF 17.5 million) as well as other inventory which includes construction work materials, hotel inventory and finished units (CHF 32.6 million).

Construction work in progress includes work for contracted units of CHF 8.0 million as well as work for uncontracted units of CHF 12.1 million whereas other inventory includes completed but uncontracted units of CHF 16.3 million besides construction work materials and hotel inventory.

The main reasons for the increase in inventory compared to 31 December 2019 is work in progress in Egypt and Oman as well as land in relation to O-West project. The increase was partly netted-off by foreign exchange losses.

F-19

20. Current receivables due from related parties

The decrease in receivables due from related parties of CHF 12.9 million is mainly due to collections and net foreign exchange losses during the period. The decrease was partly netted off by additional receivables incurred.

21. Other current assets

Other current assets mainly consist of advances and prepayments (CHF 29.2 million), sales commissions (CHF 21.5 million), VAT and withholding tax receivables (CHF 5.7 million), deposits (CHF 2.4 million), as well as other debtors (CHF 6.3 million). Compared to 31 December 2019, the increase is mainly due to increases in advance payments to suppliers as well as sales commissions.

22. Cash and cash equivalents

For the purposes of the consolidated cash flow statement, cash and cash equivalents include cash on hand, demand deposits and balances at banks. Cash equivalents are short-term, highly liquid investments of maturities of three months or less from the acquisition date, that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

Management's plans to manage liquidity shortages and related uncertainty

ODH is a unique group with an exceptional record of accomplishment and a very promising future. The Group has been growing its revenue stream from all its destinations and enhancing its bottom-line figures.

Management has undertaken several precautionary measures in light of the current global circumstances and economic downturn. These measures purpose is to reduce spending and preserve cash to the longest period possible to ensure stability of the Group's destinations, in order to enable the destinations to resume their operations and planned investments once the business is back to meet the Group's planned strategic and financial targets. Additionally, we took advantage of the 6 months debt service postponements initiatives granted by the banks in all our destinations and we started benefiting from the government initiatives to support the tourism companies in the destinations in which we operate.

In Q4 2019, ODH successfully issued a CHF 100 million bond. The proceeds of the bond will be used for further development of the destinations in Oman and Montenegro and for general corporate purposes.

Additionally, the Group has a diversified portfolio of businesses, which includes Real estate, Hotels, Town management, Rental portfolio, and Land monetization. And during 2020 the Group has secured CHF 32.2 million of cash inflows through its school development agreements that was signed in O West. In addition to that the Group has managed to sell a small land plot in El Gouna for CHF 6.4 million.

In April 2019, the Chairman signed a new letter of commitment to avail up to CHF 15 million until the end of December 2019. Of the amount previously committed in April 2018, a total net amount of CHF 8.7 million was drawn down by the Group during 2019. During the nine months of 2020, a further net amount of CHF 1.8 million was draw-down.

Management believes that these plans are enough to substantially mitigate the liquidity risk and confirms on the strength of ODH business model and financial position.

F-20

23. Assets held for sale

CHF

30/09/2020

31/12/2019

ASSETS HELD FOR SALE

Related to Makadi (i)

5,492,692

5,785,704

Balance at the end of the period / year

5,492,692

5,785,704

LIABILITIES ASSOCIATED WITH ASSETS HELD FOR SALE

Related to Makadi (i)

(550,599)

(568,026)

Balance at the end of the period / year

(550,599)

(568,026)

  1. Planned disposal of Makadi
    During 2017, ODE, the largest Egyptian subsidiary of the Group, has signed the final offer for the sale of 100% of its equity stake in Makadi Gardens, Royal Azur and Club Azur ("Royal and Makadi").
    A contract was signed with a related party at an amount of USD 24.2 million (CHF 23.8 million) and all required procedures to finalize the sale and transfer of ownership of the Royal company were finalized in Q4 2018. As a result, ODE lost control on Royal for Investment and Touristic and derecognised the disposal group excluding the Makadi garden hotel from its financial statements as of December 2018.
    The required procedures to finalize the sale of the Makadi garden hotel are still in process. Therefore, this part of the disposal group is still classified as disposal group for the period ended 30 September 2020.
    The disposal group does not qualify as discontinued operation as it is neither separate major line of business nor geographical area of operations.
    The non-current assets held for sale and the liabilities associated with non-current assets held for sale were reclassified from the following categories of assets and liabilities:

CHF

30 September 2020

31 December 2019

Non-current assets

Investment property

5,492,692

5,785,704

Total assets

5,492,692

5,785,704

Non-current liabilities

Deferred tax liabilities

(550,599)

(568,026)

Total liabilities

(550,599)

(568,026)

Net assets

4,942,093

5,217,678

24. Issued and paid-up capital

Issued and paid-up capital as of 30 September 2020 amounts to CHF 202,968,745 and is divided into 40,593,749 registered ordinary shares with a par value of CHF 5.00 per share.

F-21

25. Share-based payment reserve Agreements with current CEO

ODH has entered into an employee contract with its new CEO, Omar El Hamamsy, effective as of 1 September 2020. As part of the compensation agreement, the CEO will receive contingent payments based on market capitalization development of the ODH shares. Herewith, the CEO will receive between 2% and 5% of the increase of the market capitalization whenever reaching an additional market capitalization milestone of CHF 100 million up to a cap for the market capitalization of CHF 2 billion. The contingent renumeration will be paid in cash or shares at the discretion of the Company.

As at grant date (1 September 2020) a Binominal Option Pricing Model was used to calculate the fair value of the contingent compensation. A fair value of the underlying share of CHF 9.11, duration of 6.33 years, volatility of 39% and a risk-free rate of 0% were the major assumptions used in the valuation. The resulting fair value of CHF 3.25 million is recognised over the vesting period of 6.33 years on a linear basis. The expense for the period of CHF 42,705 is recognised within share-based payment reserve (part of equity).

A second contingent compensation based on financial metrics is not yet active and financial metrics first need to be defined by no later than 31 December 2022.

Agreements with former CEO

As of 7 May 2019, the Company concluded a new employment contract with CEO Khaled Bichara, retroactively replacing and terminating the previous contract as of 1 January 2019. The contingent remuneration accrued under the old contract was settled by a one-offlump-sum payment of CHF 3 million, which was paid through the issuance of 183,823 shares based on the fair value of the share at grant date of CHF 16.32. The new agreement was approved by the Annual General Meeting on 7 May 2019. As at 31 January 2020, all compensation agreements were terminated due to the death of the CEO Khaled Bichara.

As part of the new employment contract, the CEO received a share-based compensation. The share-based compensation was in form of restricted share awards ("RSAs") with a fair value at grant date of CHF 16.32 per RSA which proved for a staggered allocation of a total of 2.5% of the outstanding ODH shares (a total of 1,012,248 shares) over the next five years. Each RSA constituted a contingent right to receive one share in the Company upon vesting of the RSAs. The RSAs were agreed to vest in five equal tranches over a period of five years on 1 January each year. The first tranche of 202,050 shares vested on 1 January 2020. The shares were distributed out of treasury shares which led to the respective reclassifications within equity.

As this share-based payment was a replacement of the superseded contract, the incremental fair value of the new contract at grant date, which was based on the market price of the listed shares, was recognised over the vesting period within profit or loss on top of the share-based payment expense of the superseded contract, resulting in total personnel expense of CHF 0.2 million for January 2020 (2019: CHF 0.8 million) which is recognised as an increase in share-based payment reserve. As at 30 June 2020, CHF 0.2 million are shown as a separate share-based payment reserve within equity as the shares for one month of 2020 are still due to be distributed and the termination of the agreement still needs to be finalised.

Further, the CEO received another 2.5% of the outstanding ODH shares (a total of 1,010,050 shares) directly from the Chairman. Such a transaction needs to be accounted for as if the shares were received

F-22

from the Company. As the shares were granted for a vesting period of five years, the total fair value at grant date of CHF 16.5 million, which was based on the market price of the listed shares, was spread over the original vesting period. After 31 January 2020, no further amounts were recognised as the shares, in accordance with the contract, will be returned to the Chairman upon the passing away of the CEO. Hence, CHF 0.3 million (2019: none) were recognised in profit or loss for January 2020 with the corresponding amount recognised as share premium directly in equity. As not all procedures in relation to the termination are finalised, the amounts recognised in share premium in relation to these granted shares remain in share premium.

26. Foreign currency translation reserve

In the first nine months of 2020, the Swiss Franc strengthened against the Egyptian Pound by 3% and against the USD by 5%. This resulted in a net loss for the period recognised in other comprehensive income of CHF 23.8 million.

27. Trade and other payables

Trade payables mainly increased by CHF 17.0 million due to release of discounting of unpaid portion of acquired land in relation to O West project in Cairo. The increase was partly netted-off by net foreign exchange gains.

28. Other current liabilities

Other current liabilities consist of advances from customers (CHF 112.5 million), shareholders' current account (CHF 96.9 million), accrued expenses (CHF 57.5 million), deposits from others (CHF 14.1 million) and other liabilities (CHF 49.6 million).

Other current liabilities increased by CHF 78.9 million mainly due to the increase in shareholders' current account for the financing of the capital increase in ASA (refer to note 17) as well as due to increases in advances from customers and in accrued expenses compared to 31 December 2019. These increases were partly netted-off by net foreign currency gains.

29. Borrowings

Total borrowings increased by CHF 5.6 million due to new loans in Egypt, Oman, Montenegro and UK.

On 15 March 2020, due to the current condition of Covid-19 Virus, the Central Banks of Egypt, Oman and UAE launched to postpone all loans due instalments, principle and interests, for a period of 6 months with no additional fees applied for late payments.

Accordingly, the Group carried out all procedures in coordination with all banks and financial institutions to postpone all credit dues from instalments and interests to benefit from the initiative of the Central Bank.

F-23

30. Assets and liabilities measured at fair value

Fair value of financial instruments carried at amortised cost

Except as detailed in the following table, management considers that the carrying amounts of financial assets and financial liabilities recognised in the consolidated financial statements approximate their fair values.

30 September 2020

31 December 2019

CHF

Carrying amount

Fair value

Carrying amount

Fair value

Financial liabilities

Borrowings/bank loans

435,475,856

437,578,765

429,865,423

432,459,403

Valuation techniques and assumptions applied for the purposes of measuring fair value

The fair values of financial assets and financial liabilities are determined as follows:

  • The fair values of financial assets with standard terms and conditions and traded on active liquid markets are determined with reference to quoted market prices (includes unlisted and listed equity investments classified as at FVTPL and FVTOCI respectively).
  • The fair values of other financial assets and financial liabilities (excluding those described above) are determined in accordance with generally accepted pricing models based on discounted cash flow analysis. Specifically, significant assumptions used in determining the fair value of the following financial assets and liabilities are set out below.

The valuation techniques and assumption applied for investment property are explained in note 15.

Fair value measurements recognised in the consolidated statement of financial position

The following table provides an analysis of assets and liabilities that are measured subsequent to initial recognition at fair value, grouped into Levels 1 to 3 based on the degree to which the fair value is observable.

  • Level 1: fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities.
  • Level 2: fair value measurements are those derived from inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
  • Level 3: fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).

F-24

30 September 2020

CHF

Level 1

Level 2

Level 3

Total

Financial assets at FVTOCI

Listed and unlisted shares measured at FV

1,531

-

900,627

902,158

1,531

-

900,627

902,158

Other assets at fair value

Investment property 1)

-

-

28,546,079

28,546,079

-

-

28,546,079

28,546,079

31 December 2019

CHF

Level 1

Level 2

Level 3

Total

Financial assets at FVTOCI

Listed and unlisted shares measured at FV

2,183

-

941,442

943,625

2,183

-

941,442

943,625

Other assets at fair value

Investment property 1)

-

-

30,161,887

30,161,887

-

-

30,161,887

30,161,887

There were no transfers between Level 1 and 2 in the period. The unlisted financial assets at FVTOCI were measured at fair value based on a method that combined the earning and net equity book values of the companies.

  1. The reconciliation for investment property is shown in note 15.

Reconciliation of Level 3 fair value measurements of financial assets

Unquoted equity securities

CHF

2020

Opening balance

941,442

Total losses recognized in other comprehensive income

(40,815)

Closing balance

900,627

31. Non-cash transactions

During the nine-month-period, the Group entered into the following non-cash investing and financing activities which are not reflected in the condensed consolidated statement of cash flow:

  • Additional investment in ASA through increase of shareholders' current account (note 17)
  • Additions to property, plant and equipment against other liabilities in the total amount of CHF 8.2 million
  • Proceeds from dividends of CHF 2.9 million through settlement of related party balances (note 17)

F-25

32. Commitments for expenditure

The following commitments for expenditure have been made for the future development of the respective projects:

CHF

30/09/2020

Eco-Bos Development Limited (i)

3,811,561

  1. As per the property management agreement between Eco-Bos and Imerys (shareholder in Eco-Bos),Eco-Bos has the right but not the obligation (American call option maturing in 2030) to purchase part or all of 6.6 million square meters (divided on 7 independent plots), which is currently owned by Imerys Mineral Limited. An annual option premium is paid to retain the rights and the purchase price is calculated based on an agreed dynamic pricing formula. The trigger event of the option(s) is at the full discretion of Eco-Bos and shall only be exercised when building permits are attained. Currently Eco-Bos is in negotiations with the local authorities and other investors and is taking its time to optimize on the best alternatives for the development.

Minimum building obligations

Beside the legally binding commitment for expenditure mentioned above, the following should be considered:

One part of the Group's business is to acquire land for the development of tourism projects. The Group has business opportunity commitments in relation to their projects. In particular the Group has minimum building obligations ("MBOs") for the next five years, which are included in their development agreements ("DAs") with the relevant governments in Oman, Morocco and Montenegro.

The contingent liabilities in relation to MBOs in Oman, Morocco and Montenegro are assessed regularly by the management of the Group.

Management has analyzed the various MBOs and is comfortable with the current status of the MBOs and the minimum investment obligations. Albeit that certain delays have or may potentially occur, all such delays, as described herein, were well founded and are premised on legal grounds in a way that protects the Group from any exposure. The Group has exerted a great deal of negotiations in all destinations to ensure that any delays are communicated to the relevant local authorities and thereby working alongside each concerned government in rescheduling and extending the completion dates. Additionally, the Group has worked on securing finance schemes to accommodate the newly developed restructuring of the investment obligations, or in cases were completion dates are at risk, expending the necessary amounts to comply with the contractual obligations. There have been no significant changes to this matter since 31 December 2019 except for an official letter issued by the Omani Government during this year by virtue of which the Omani Government extends the MBO timeline for Sifah and Salalah projects for one more year therefore, the deadline for completing both projects' MBOs is now 2023 instead of 2022.

33. Litigation

There were no significant open litigations at 30 September 2020.

F-26

34. Subsequent Events Impact of Corona Virus

2020 has been a challenging year not only for ODH but also for the whole world. The Group kicked off 2020 on a positive note and on a path towards stronger and better operational performance across all business segments; however, the momentum was cut short by the unprecedented circumstances that accompanied the Covid-19 outbreak. The pandemic started affecting the Group's operations and normal business conduct in early-March, as global governments took actions to encourage social distancing and implement shelter in place directives. The deterioration accelerated towards the end of March as the pandemic spread further and the number of countries and localities adopting restrictive measures meaningfully increased, of which travel restrictions and flight suspensions around the world have been implemented in addition to halting of all events, conferences and parties and the closure of malls, restaurants and cafes along with many other measures. Governments have instructed the closure of hotels in all touristic destinations in which the Group operates, and others imposed a partial curfew on its citizens.

Nevertheless, the Group was able to respond quickly to the crisis on hand and put together a well- balanced set of initiatives. These measures purpose is to reduce spending and preserve cash to the longest period possible to ensure stability of the Group's destinations, in order to enable the destinations to resume their operations and planned investments once the business is back to meet the Group's planned strategic and financial targets.

Initiatives taken across the board includes:

  1. Reduction in capex to keep only the necessary committed items, making sure not to breach any minimum built obligations.
  2. Reduction in all marketing expenses across all destinations.
  3. Postponement of some of the governments' dues where possible to reflect governments' initiatives to support companies.
  4. Took advantage of the 6 months debt service postponements initiatives granted by the banks in all our destinations.
  5. Took advantage to benefit from the government initiatives to support the tourism companies in the destinations in which we operate.
  6. ODH's Board Members, Executive and Senior Management team, took a partial voluntary reduction in their salaries and compensation for an initial period of three months to help in covering the needs of the hotel staff, which were strongly impacted by Covid-19 pandemic.

The Group's performance has been swiftly improving mostly since beginning of June 2020 and is showing further recovery year to date, following the easing of restrictions and precautionary measure previously imposed in relation to covid-19. Against this backdrop, the Group has managed to limit the impact of covid-19; on its performance by taking immediate steps to protect its resources and, thanks to the Group recent years transformation and the solid financial structure. While the situation was rather challenging, the Group remained focused on the future, working closely with all concerned authorities. All Group hotels in El Gouna and Taba Heights were successfully audited by TÜV NORD, which confirmed Hotels do conform to the guidelines issued by the Ministry of Tourism in Egypt and TÜV Nord Guidelines.

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From the onset of the pandemic, management of the Group been intently focused on maintaining a sound liquidity position, safeguarding long-term value for its shareholders and ensuring its ability to flourish in the coming years while also addressing immediate needs at the Group's destinations to ensure the health and well-being of the guests and clients. Meanwhile, over ODH's 30-years history and track record, the Group has survived numerous challenging times, each one more difficult than the last. Armed with a strong balance sheet and globally diversified portfolio, management of the Group remains confident in navigating through and tiding over this storm giving the confidence to meet all upcoming obligations.

Looking into the fourth quarter, visibility remains limited as demand may be impacted by several factors, especially as the pandemic is still very much present. The repercussions of Covid-19 continue to be an evolving situation with fast changing conditions making it impossible to provide an accurate outlook on its ramifications on operational and financial results. Nevertheless, given the measures taken to face the impacts and challenges of the Covid-19 pandemic, and thanks to a solid liquidity position, management is fully confident of ODH's ability to meet all upcoming obligations. The strength of the balance sheet affords us room for flexibility and will be key in seeing the Group through these turbulent times. Management and the board of directors are in no doubt about the Group's ability to continue as a going concern.

Except for the above matters, there have been no significant events, subsequent to 30 September 2020.

35. Approval of condensed consolidated interim financial statements

The unaudited condensed consolidated interim financial statements were approved by management and the board of directors on 13 November 2020.

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Orascom Development Holding AG Gotthardstrasse 12

CH-6460 Altdorf

Tel: +41 (0) 41 874 17 17

Fax: +41 (0) 41 874 17 07

www.orascomdh.com

Disclaimer

Orascom Development Holding AG published this content on 15 November 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 16 November 2020 08:46:03 UTC


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