EQS Group-Ad-hoc: Orascom Development Holding AG / Key word(s): 9 Month figures/9 Month figures
Orascom Development Holding AG reports strong sequential and year-over-year growth in revenues reaching CHF 371.6 million for the 9M 2021 and net profits of 9.0 million
16-Nov-2021 / 07:00 CET/CEST
Release of an ad hoc announcement pursuant to Art. 53 LR
The issuer is solely responsible for the content of this announcement.
Ad hoc announcement pursuant to Art. 53 LR.
Orascom Development Holding ("ODH") (SIX ODHN.SW) has released its consolidated financial results for 9M 2021.
Orascom Development Holding reports strong sequential and year-over-year growth in revenues reaching CHF 371.6 million for the 9M 2021 and net profits of 9.0 million.
Key Highlights of 9M 2021 vs. 9M 2020
- Total revenues up 42.7% to CHF 371.6 million.
- Adj. EBITDA up 131.1% to CHF 93.6 million with a margin of 25.2%.
- Net profit of CHF 9.0 million vs. a net loss of CHF 26.6 million in 9M 2020.
- Cash from operations up 14.6% to CHF 36.8 million.
- Net real estate sales up 51.1% to CHF 444.9 million.
Key Highlights of Q3 2021 vs. Q3 2020
- Total revenues up 51.3% to CHF 145.9 million.
- Adj. EBITDA up 166.9% to CHF 35.5 million with a margin of 24.3%.
- Net profit of CHF 3.7 million vs. a net loss of CHF 7.4 million in Q3 2020.
- Net real estate sales up 62.3% to CHF 166.5 million.
Altdorf, 16 November 2021 - Orascom Development continued its solid execution recording another consecutive positive quarter for the year. The team managed to deliver strong top and bottom-line results while increasing the Group's cash balance by the end of the 9M 2021. The positive momentum is a solid testament of ODH's diversified portfolio and business lines.
Financial Review
9M 2021
The Group was able to deliver better results across all three major business segments. With the world slowly moving back to normalcy, workplaces reopening, sporting events resuming, and travelers finally getting back to the sky, all helped to positively contribute to our operational performance. For the 9M 2021, total revenue reached CHF 371.6 million, an increase of 42.7% vs. the CHF 260.4 million reported in 9M 2020. Gross profit reached CHF 111.3 million with a margin of 30.0% in 9M 2021 vs. CHF 65.3 million and a margin of 25.1% in 9M 2020. When comparing ODH's revenue figures to pre-pandemic levels, the company still saw a strong growth of 14.3% vs. the 9M 2019. ODH continued to wisely manage its cost base resulting in a 2.1% decrease of SG&A expenses to CHF 28.3 million in 9M 2021. Adj. EBITDA grew by 131.1% to CHF 93.6 million compared to CHF 40.5 million in 9M 2020 and finance costs decreased by 8.9% to CHF 24.5 million in 9M 2021. This operational excellence was reflected in our bottom-line figures, whereby net profit reached CHF 9.0 million vs. a loss of CHF 26.6 million in 9M 2020. The Company had CHF 226.7 million in cash and cash equivalents, total debt of CHF 457.9 million and a net debt of CHF 231.2 million as of September 30, 2021. We also managed to generate CHF 36.8 million in cash flow from operations, a 14.6% increase over the same period last year.
Q3 2021
Our third quarter results demonstrated strong sequential and year-over-year growth in revenue, Adj. EBITDA and net profit, driven by growth in the real estate segment and the improvement of our hospitality segment. For the quarter, ODH total revenue reached CHF 145.9 million, an increase of 51.3% compared to the CHF 96.4 million reported in Q3 2020. Gross profit increased by 87.2% to CHF 40.8 million in Q3 2021 with a gross margin of 28.0% vs. CHF 21.8 million and a margin of 22.6% in Q3 2020. Adj. EBITDA was up by 166.9% to CHF 35.5 million with a 24.3% margin vs. CHF 13.3 million and a margin of 13.8% in 9M 2020. Net profit reached CHF 3.7 million vs. a net loss of CHF 7.4 million in Q3 2020.
Group Real Estate Segment: Strong and sustained demand for our real estate products drove our net sales for the 9M 2021 to CHF 444.9 million, an increase of 51.1% y-o-y.
New sales for the Q3 2021 reached CHF 166.5 million, a 62.3% increase compared to CHF 102.6 million in 3Q 2020. As a result, our 9M 2021 sales value reached CHF 444.9 million, a 51.1% increase over 9M 2020. The increase in sales across all destinations was a factor of both, our ability to increase the average selling prices and the number of units sold which increased by 46.8% to 1,207 units in 9M 2021. Real Estate revenues increased by 81.5% to CHF 271.4 million in 9M 2021 (9M 2020: CHF 149.5 million). Adj. EBITDA increased by 127.2% to CHF 107.9 million (9M 2020: CHF 47.5 million). Total deferred revenue from real estate that is yet to be recognized until 2026 increased by 36.1% to CHF 729.2 million in 9M 2021, and total real estate portfolio receivables increased by 41.9% to CHF 999.3 million in 9M 2021. As for the real estate cash collections, they also increased by 46.0% to CHF 211.0 million during 9M 2021.
Group Hotels Segment: Results improved during Q3 with travel demand returning strongly as vaccines continues to roll out.
The appetite for travel accelerated further during Q3 2021 and the travel momentum was strongly visible through the months of October and November. While the speed of recovery continued to differ from one destination to the other, we are mostly content with the growth in the overall occupancy levels and TRevPARs. It has been such a positive sight to see our teams welcome more guests back into our hotels, with domestic leisure bookings leading our occupancies, followed by MICE (Meetings, Incentives, Conferences and Exhibitions) business events and slight uptick from our foreign tourists returning back to our destinations. Q3 2021 results improved with revenues increasing by 159.8% to CHF 27.8 million (Q3 2020: CHF 10.7 million) and GOP reaching CHF 5.8 million in Q3 2021 vs. negative CHF 2.3 million in Q3 2020. Although leisure travel continues to lead the recovery, we are also very optimistic regarding the influence of the continual improvements in business transient and in the growing number of tour operators' groups. Accelerating TRevPAR growth expanded our operating leverage and led us to generate a positive CHF 4.5 million of Adj. EBITDA in Q3 2021 vs. negative CHF 3.9 million in Q3 2020. Revenues for the hotels segment increased by 14.0% to CHF 54.7 million during 9M 2021 (9M 2020: CHF 48.0 million), GOP increased by 7.1x to CHF 8.5 million in 9M 2021, while Adj. EBITDA reached CHF 2.4 million in 9M 2021 vs. the negative CHF 1.9 million in 9M 2020.
Group Town Management Segment: Continued with its enhanced operational performance, benefiting from the successful restructuring implementation and the recovery in the hospitality sector.
Town Management continued to grow significantly and thus secured more recurring revenue streams despite the headwinds caused by the pandemic. Revenues during 9M 2021 increased by 33.8% to CHF 45.5 million from CHF 34.0 million in 9M 2020, while Adj. EBITDA reached CHF 3.5 million in 9M 2021 vs. the negative CHF 1.8 million in 9M 2020. The notable increase in revenues was a consequence of the implementation of a rich calendar of events in the different destinations, which improved the quality and profitability of our services and amenities. Additionally, during October 2021, we were able to successfully host the 5th edition of El Gouna Film Festival from the 14th till the 22nd of October 2021 at El Gouna Conference and Culture Centre with more than 1,000 attendees from media, local and international celebrities. Our hotel's occupancy at the time reached 100%.
Details on Destinations
El Gouna, Red Sea
El Gouna continues to affirm its position as the «destination of choice» and records a 57.8% increase in net real estate sales to CHF 177.5 million in 9M 2021 (9M 2020: CHF 112.5 million). We continued to increase our average selling prices to reach CHF 3,516/sqm, a 5.4% increase vs. 9M 2020. During Q3 2021, we added new inventory of USD 42.4 million to "Cyan" and "Ancient Sands", our two real estate projects offering a mix of standalone units. Our solid construction pace keeps us on track with our planned delivery of 278 units for the FY 2021. Real estate revenues benefited from the accelerated construction and increased by 28.2% to CHF 120.6 million in 9M 2021 (9M 2020: CHF 94.1 million).
Hotels' occupancy levels increased from 33% at a TREVPAR of CHF 40 in Q2 2021, to 52% at a TREVPAR of CHF 64 in Q3 2021. While conversion continued to be driven by the transient local business, demand from the international market did gain momentum and we see a strong come back from our main source market particularly West Europe. During Q3 2021, the share of international business represented 40%. A number of B2C and B2B marketing campaigns is currently running or in the making to capitalize on the hype. During Q3, we achieved a meaningful sequential increase in revenue, Q3 2021 revenues increased by 15.4% to CHF 6.1 million. 9M 2021 hotels revenue increased by 47.8% to CHF 30.3 million (9M 2020: CHF 20.5 million). The continuous implementation of cost saving, and cash preservation measures resulted in an overall positive GOP of CHF 11.1 million in 9M 2021 up 484.2% (9M 2021: CHF 1.9 million). While occupancy rates reached 37% in 9M 2021 up from 27% in 9M 2020. Town management revenues were up by 35.6% in 9M 2021 to CHF 37.7 million (9M 2020: CHF 27.8 million). Total revenues for El Gouna were up 28.0% to CHF 188.6 million in 9M 2021 (9M 2020: CHF 147.3 million).
O West, Egypt
O West recorded CHF 134.3 million in sales for the 9M 21, a growth of 5.9% compared to CHF 126.8 million in 9M 20 which included CHF 31.1 million of land sales. Excluding those land sales, net sales would have increased by 40.3% to CHF 134.2 million in 9M 2021 vs. CHF 95.7 million in 9M 20. We also managed to increase our average selling prices by 21.4% to CHF 1,741/sqm. To date, we launched CHF 175.4 million of new inventory in "Hill Side" & "Club Residence" projects. Foundation stone has been laid for the construction of O West Club. Total revenues of O West increased by 80.5% to CHF 70.2 million in 9M 21 (9M 20: CHF 38.9 million) on the back of the accelerated construction progress with plans to deliver some of the units ahead of schedule.
Makadi Heights, Egypt
Makadi Heights, our rising star destination on the Red Sea, has continued to deliver excellent sales performance since the beginning of 2021. Net sales increased by 146.0% to CHF 49.7 million from CHF 20.2 million in 9M 2020. We also managed to increase average selling prices/sqm by 73.6% from 9M 2020, to CHF 1,739/sqm.
At the end of September, we launched a new real estate project, "Ria", with a total inventory of CHF 41.3 million, which offers a mix of standalone units. Real estate revenues increased by 313.3% to CHF 24.8 million in 9M 21 thanks to the continuous construction acceleration. Total revenues of Makadi increased by 272.5% to CHF 25.7 million in 9M 21 (9M 20 CHF 6.9 million).
Jebel Sifah, Oman
Jebal Sifah managed to maintain healthy sales volumes through the 9M 2021, despite the current lockdowns. Net real estate sales were up 66.2% to CHF 24.6 million in 9M 2021 (9M 2020: CHF 14.8 million). Construction progress and real estate deliveries are continuing at a steady speed across multiple projects. Total real estate revenues increased by 448.6% to CHF 20.3 million in 9M 2021 (9M 2020: CHF 3.7 million). In Q2 2021, we launched a new real estate project, "Sifah Oasis", with an inventory value of c. CHF 18.0 million, and we are adding CHF 48.0 million of inventory across the "Beachfront" and "Sifah Farms" projects during Q4. Occupancy rates for the hotel reached 39% coupled by a 30.0% increase in hotels' revenue to CHF 1.3 million in 9M 2021. As part of the new and improved community experiences, we are working on a series of events, especially on weekends, to attract more guests. Total revenues for Sifah increased by 278.7% to CHF 23.1 million in 9M 2021 (9M 2020: CHF 6.1 million).
Hawana Salalah, Oman
The first nine months of 2021 have been challenging for the destination given the constant closures and measures set by the government due to Covid-19. Hotels' occupancy reached only 9% in 9M 2021 with only one hotel out of the three being opened. Hotels' revenues were down 76.5% to CHF 3.2 million (9M 2020: CHF 13.6 million). The reopening of the international borders at the end of Q3 gave us positive expectations for Q4, as charter flights coming from East Europe are set to resume. Real estate sales during 9M 2021 recorded a slight 2.9% increase to CHF 10.7 million (9M 2020: CHF 10.4 million), and real estate revenues reached CHF 14.3 million (9M 2020: CHF 18.7 million). Moreover, during Q3, we launched a new real estate project, "Azure", with inventory of CHF 13.5 million. Total revenues for Hawana decreased by 42.9% to CHF 19.4 million (9M 20: CHF 34.0 million).
Lu?tica Bay, Montenegro
Lu?tica Bay has continued its positive sales momentum since the beginning of 2021. The destination sales were up 5.4x to CHF 47.7 million in 9M 21 from CHF 8.8 million in 9M 20. The additional activities implemented to enhance Lu?tica's overall appeal supported by the regional sales efforts contributed to the general improvement of the destination. Real estate revenues increased by 78.8% to CHF 21.1 million (9M 20: CHF 11.8 million). The Chedi Hotel witnessed a strong summer season drawing considerable attention and interest from local and international markets reporting 79% occupancy rate during Q3 21 vs. 33% in Q3 2020. While occupancy for the whole 9M 2021 reached 45% up from 18% in 9M 2020. Total revenues for the Chedi increased by 4x to CHF 4.8 million in 9M 21. Total revenues for Lu?tica increased by 97.9% to CHF 28.1 million (9M 20: CHF 14.2 million).
Update on compensation claim of the Egyptian Ministry of Environment
On September 2nd, 2021, a decision was issued by the Egyptian Prime Ministry Office to form a committee to study the dispute file. Then, on October 18th, 2021, the company submitted all technical and supporting documents related to this matter. However, to date, the company has not received any response from the committee.
Outlook 2021: Path towards a sustained recovery
With the world returning to normalcy and hotels operations picking up, we enter Q4 with more optimism and expect a positive pick up from our hospitality segment. We are continuing to accelerate our real estate construction, ultimately increasing the real estate segment's revenues. We will also leverage on our town management's operation and steady growth. Further expanding the number of residents, demonstrating our successes in disciplined deliveries and correct targeting across all destinations.
We expect demand from our traditional source markets that feed into El Gouna, to increase further during Q4 2021 and 2022. The German speaking markets, being our most important source markets traditionally, showed steady increase of demand and in spite of the booking pattern being still quite last minute we are able to drive the targeted yield per customer. The strong comeback of Russian business to the Hurghada region helps us to unlock higher package rates across El Gouna's Hotels in general. Furthermore, we continue campaigning strongly on the local market to balance the uncertainty of Covid related demand pattern internationally. Visibility for Taba Heights is still uncertain as Charter operations between Russia and Taba haven't eventuated yet. We anticipate the first aviation program to start prior to year-end. We've welcomed the first German guests in Taba in November and are about to sign a contract with a Tour Operator from Ukraine which should support the winter business immediately. In Oman, the lifting of entry restrictions has enabled us to gradually re-open our hotels in Salalah. Fanar, our biggest property is fully operational with charter arrivals expected to increase over the coming months. Our remaining 2 hotels are being prepared for opening once business intake from Central Europe becomes more visible.
Additionally, the Group will continue to keep a close eye on protecting its cash balance and monitoring its costs. Our efforts are still focused on the recovery of the tourism sector. With global business trends improving across the world. We are optimistic and confident that tourism is now on its path to normality.
About Orascom Development Holding AG:
ODH 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. ODH's diversified portfolio of destinations is spread over 7 jurisdictions (Egypt, UAE, Oman, Switzerland, Morocco, Montenegro, and United Kingdom), with primary focus on touristic destinations. ODH currently operates nine destinations: four in Egypt (El Gouna, Taba Heights, Makadi Heights and Byoum), The Cove in the United Arab Emirates, Jebel Sifah and Hawana Salalah in Oman, Lu?tica Bay in Montenegro, and Andermatt in Switzerland. The shares of ODH are listed on SIX Swiss Exchange. ODH recently launched O West, the latest addition to its portfolio and its first project in Cairo, Egypt, located in the Sixth of October City.
Contact for Investors:
Sara El Gawahergy
Head of Investor Relations
Head of Strategic Projects Management
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
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NEITHER THE COMPANY NOR ANY RELATED COMPANIES, DIRECTORS, OFFICERS, REPRESENTATIVES OR EMPLOYEES THEREOF SHALL IN ANY EVENT BE LIABLE AS TO THIRD PARTIES (INCLUDING INVESTORS) FOR ANY INVESTMENTS OR BUSINESS DECISIONS ADAPTED OR ACTS PERFORMED BY THEM ON THE BASIS OF THE INFORMATION ANY STATEMENTS CONTAINED HEREIN OR FOR ANY CONSEQUENTIAL, SPECIAL OR SIMILAR DAMAGES DERIVED THEREFROM. ANY MARKET INFORMATION AND COMPANY'S COMPETITIVE POSITION DATA INCLUDING MARKET PROJECTIONS USED IN THIS DOCUMENT HAVE BEEN DERIVED FROM IN COMPANY'S STUDIES, MARKET RESEARCH REPORTS, PUBLICLY AVAILABLE DATA AND INDUSTRY PUBLICATIONS. ALTHOUGH THE COMPANY HAS NO REASON TO BELIEVE THAT THIS INFORMATION OR THESE REPORTS ARE INACCURATE IN ANY MATERIAL, RESPECT, THE COMPANY HEREBY STATUS THAT IT HAS NOT INDEPENDENTLY CHECKED ANY COMPETITIVE POSITION, MARKET SHARE, MARKET VOLUME, MARKET GROWTH OR OTHERS. PERFORMANCE OR ACHIEVEMENTS, AND MAY CONTAIN WORDS SUCH AS "UNDERSTANDS", "ANTICIPATES", "EXPECTS", "ESTIMATES" "IT IS LIKELY" OR OTHER TERMS OR EXPRESSIONS WITH SIMILAR MEANING. THESE STATEMENTS ARE SUBJECT TO A NUMBER OF RISKS, UNCERTAINTIES AND ASSUMPTIONS. THE COMPANY CAUTIONS READERS THAT CERTAIN RELEVANT FACTORS MIGHT BE THE CAUSE FOR ACTUAL RESULTS TO DIFFER FROM THE PLANS, GOALS, EXPECTATIONS, ESTIMATES AND INTENTIONS EXPRESSED IN THIS DOCUMENT. NEITHER THE COMPANY NOR ANY RELATED COMPANIES, DIRECTORS, OFFICERS, REPRESENTATIVES OR EMPLOYEES THEREOF SHALL IN ANY EVENT BE LIABLE AS TO THIRD PARTIES (INCLUDING INVESTORS) FOR ANY INVESTMENTS OR BUSINESS DECISIONS ADAPTED OR ACTS PERFORMED BY THEM ON THE BASIS OF THE INFORMATION ANY STATEMENTS CONTAINED HEREIN OR FOR ANY CONSEQUENTIAL, SPECIAL OR SIMILAR DAMAGES DERIVED THEREFROM. ANY MARKET INFORMATION AND COMPANY'S COMPETITIVE POSITION DATA INCLUDING MARKET PROJECTIONS USED IN THIS DOCUMENT HAVE BEEN DERIVED FROM IN COMPANY'S STUDIES, MARKET RESEARCH REPORTS, PUBLICLY AVAILABLE DATA AND INDUSTRY PUBLICATIONS. ALTHOUGH THE COMPANY HAS NO REASON TO BELIEVE THAT THIS INFORMATION OR THESE REPORTS ARE INACCURATE IN ANY MATERIAL, RESPECT, THE COMPANY HEREBY STATUS THAT IT HAS NOT INDEPENDENTLY CHECKED ANY COMPETITIVE POSITION, MARKET SHARE, MARKET VOLUME, MARKET GROWTH OR OTHERS.
ORASCOM DEVELOPMENT HOLDING AG 
