30.03.2016, 12:45
Orascom Development Holding AG: Gives Guidance for FY 2015, and Reports FY 2015 Results for its Egyptian Largest Subsidiary
OREANDA-NEWS. Orascom Hotels and Development (OHD) continues its positive momentum recording a 23.6% increase in revenues reaching EGP 1,772.6 million compared to EGP 1,434.6 million in FY 2014 and a huge boost in profitability, with a net income of EGP 228.9 million in FY 2015 compared to EGP 100.0 million in FY 2014. The high margins associated with the land sub-development agreements was the main contributor to the boost in profitability. During 2015, we signed two new sub-development agreements to sub-develop 110,196 m2 of land in El Gouna for a total value of USD 22.0 million.
Achieved the real estate net sales target of the year and accelerated construction activities. New Contracted Sales witnessed an increase of 73.7% over the same period last year reaching EGP 694.9 million compared to EGP 400.0 million in FY 2014.
Political and economic grounds in Egypt have witnessed more stability with the kick-off of the long-awaited parliamentary elections and the 4.2% increase in GDP figures for FY 2014/2015, providing positive news for the Egyptian economy.
This improvement has been clearly reflected in our real estate sales, whereby we were able to achieve our communicated target for the year. The boost was mainly driven by the significant increase in El Gouna sales reaching EGP 663.8 million in FY 2015 compared to EGP 376.8 million in FY 2014.
The successful execution of the newly adapted strategy of offering a diversification of the usual product mix, with different price brackets; appealing to a larger pool of clientele, allowed us to launch 4 new projects in El Gouna with a total inventory of USD 93.4 million and helped us tap into a new target age.
Accelerating construction activities was one of the main focuses of the year, which will allow earlier recognition of revenues and earlier cash collection of the 10% client delivery payment. We are planning to deliver Joubal lagoon project that was launched in November 2014 during Q2 2016, 6 months ahead of schedule. We have reached 75% of construction for Byoum hotel in Fayoum, expected to be opened in Q2 2016 and will commence the construction of Makadi's club house facilities in Q2 2016.
The segment's revenue reached EGP 268.2 million vs. EGP 441.9 million in FY 2014 and deferred revenue has increased by 67.0% to reach EGP 685.2 million in FY 2015 versus EGP 410.4 million in FY 2014. We continue to properly manage our real estate collections reaching EGP 427.0 million in 2015.
Hotels segment closed the year on a positive note with revenues increasing by 6.1% to reach EGP 576.0 million (FY 2014: EGP 542.9 million), yet still severely impacted by the ongoing bans on Taba and the Russian aircraft crash in the Sinai Peninsula.
The optimization strategies that we applied in 2014 across our hotel portfolio, and the strong performance of the first 9 months, set the stones for a successful operation of the segment through September 2015. Those strategies helped us close the year positively and limited the magnitude of the challenges that the world tourism witnessed in 2015 especially after the Russian aircraft incident that took place in October 2015.
Total occupancy reached 54% versus 48% in FY 2014 and TRevPAR increased by 21.9% from EGP 265 to EGP 323 in FY 2015, as a result of the continued hotel refurbishments, the reviewed contracting strategy introduced in 2014 and the opening of new food and beverage outlets across El Gouna and Makadi hotels. El Gouna continued to benefit from its safe haven and has been outperforming the competition, closing the year at an occupancy of 67% compared to 59% in FY 2014 and a TRevPAR growing from EGP 386 to EGP 439 in FY 2015. On the other hand, Makadi, operated at 30% of its capacity as of December 2015 post the Russian travel bans.
Foreign exchange losses and one-off tax provision, impacted our Hotels' EBITDA further this year to reach EGP 17.6 million in FY 2015 compared to EGP 140.4 million in FY 2014. 2014 EBITDA included a one-off gain of EGP 21 million resulting from the waiver of the current account with Garranah and Taba insurance for an amount of EGP 71 million.
Subsequent events
The Board of Directors of OHD has resolved pursuant to Orascom Development Holdings (ODH's) recommendation to appoint Mr. Khaled Bichara, ODH's CEO, as a Member of the Board of Directors and the ad-interim CEO of OHD, representing ODH. Dr. Manal Hussein will resume her role as the Chairwoman of the Board. The announced changes were effective as of the 1st of February 2016.
Outlook for FY 2016
Corporate
After we have received approvals from all banks on the initial rescheduling agreement to get a 2 years grace period, the CBE issued a new initiative allowing tourism companies to obtain a 3 years grace period on principal and interest. Accordingly, we are re-negotiating with the banks, making use of this initiative, expecting to get it finalized by Q2 2016.
Real Estate
We will continue executing on the new development strategy, offering a wider range of products across our destinations. In El Gouna, we are planning to launch Fanadir Bay project with a total inventory of USD 60.0 million. The project targets second home ownership with a focus on luxurious yet comfortable living with the unique location of the bay and sea view units. We will also launch new products in Fayoum with a total inventory of USD 3.9 million. In Makadi, we are currently finalizing the design for the Clubhouse and will proceed to permits in order to commence construction by Q2 2016. We are also studying the possibility of entering the first and second home markets in Cairo and the North Coast.
Hotels
On track with the construction of Ancient Sands hotel in El Gouna, and Byoum hotel in Fayoum, planned to open by Q2 2016. We are studying the implementation of strict cost cutting measures across our hotels in Egypt. From centralization of services to suspension of operations at some hotels, minimizing fixed costs, or even changing in the meal plans, all possibilities are being tackled.
About Orascom Hotels and Development (OHD)
Orascom Hotels and Development is the largest subsidiary of Orascom Development Holding. OHD is an integrated developer of resort towns in Egypt, with a vertically-integrated business model involving the development of residential units, hotels, and recreational facilities such as golf courses, town centers, and marinas, in addition to supporting infrastructure, such as hospitals, schools, and utilities. OHD currently owns a land bank of 45.7 million square meter and 25 hotels with a total of 5,955 rooms within three operating destinations. El Gouna, on the Egyptian Red Sea Coast in Hurghada, Taba Heights, on the Sinai Peninsula and Makadi in Hurghada. OHD also holds an 87% stake in Tamweel, a financial services company providing mortgage, leasing, and insurance, among other services.
Achieved the real estate net sales target of the year and accelerated construction activities. New Contracted Sales witnessed an increase of 73.7% over the same period last year reaching EGP 694.9 million compared to EGP 400.0 million in FY 2014.
Political and economic grounds in Egypt have witnessed more stability with the kick-off of the long-awaited parliamentary elections and the 4.2% increase in GDP figures for FY 2014/2015, providing positive news for the Egyptian economy.
This improvement has been clearly reflected in our real estate sales, whereby we were able to achieve our communicated target for the year. The boost was mainly driven by the significant increase in El Gouna sales reaching EGP 663.8 million in FY 2015 compared to EGP 376.8 million in FY 2014.
The successful execution of the newly adapted strategy of offering a diversification of the usual product mix, with different price brackets; appealing to a larger pool of clientele, allowed us to launch 4 new projects in El Gouna with a total inventory of USD 93.4 million and helped us tap into a new target age.
Accelerating construction activities was one of the main focuses of the year, which will allow earlier recognition of revenues and earlier cash collection of the 10% client delivery payment. We are planning to deliver Joubal lagoon project that was launched in November 2014 during Q2 2016, 6 months ahead of schedule. We have reached 75% of construction for Byoum hotel in Fayoum, expected to be opened in Q2 2016 and will commence the construction of Makadi's club house facilities in Q2 2016.
The segment's revenue reached EGP 268.2 million vs. EGP 441.9 million in FY 2014 and deferred revenue has increased by 67.0% to reach EGP 685.2 million in FY 2015 versus EGP 410.4 million in FY 2014. We continue to properly manage our real estate collections reaching EGP 427.0 million in 2015.
Hotels segment closed the year on a positive note with revenues increasing by 6.1% to reach EGP 576.0 million (FY 2014: EGP 542.9 million), yet still severely impacted by the ongoing bans on Taba and the Russian aircraft crash in the Sinai Peninsula.
The optimization strategies that we applied in 2014 across our hotel portfolio, and the strong performance of the first 9 months, set the stones for a successful operation of the segment through September 2015. Those strategies helped us close the year positively and limited the magnitude of the challenges that the world tourism witnessed in 2015 especially after the Russian aircraft incident that took place in October 2015.
Total occupancy reached 54% versus 48% in FY 2014 and TRevPAR increased by 21.9% from EGP 265 to EGP 323 in FY 2015, as a result of the continued hotel refurbishments, the reviewed contracting strategy introduced in 2014 and the opening of new food and beverage outlets across El Gouna and Makadi hotels. El Gouna continued to benefit from its safe haven and has been outperforming the competition, closing the year at an occupancy of 67% compared to 59% in FY 2014 and a TRevPAR growing from EGP 386 to EGP 439 in FY 2015. On the other hand, Makadi, operated at 30% of its capacity as of December 2015 post the Russian travel bans.
Foreign exchange losses and one-off tax provision, impacted our Hotels' EBITDA further this year to reach EGP 17.6 million in FY 2015 compared to EGP 140.4 million in FY 2014. 2014 EBITDA included a one-off gain of EGP 21 million resulting from the waiver of the current account with Garranah and Taba insurance for an amount of EGP 71 million.
Subsequent events
The Board of Directors of OHD has resolved pursuant to Orascom Development Holdings (ODH's) recommendation to appoint Mr. Khaled Bichara, ODH's CEO, as a Member of the Board of Directors and the ad-interim CEO of OHD, representing ODH. Dr. Manal Hussein will resume her role as the Chairwoman of the Board. The announced changes were effective as of the 1st of February 2016.
Outlook for FY 2016
Corporate
After we have received approvals from all banks on the initial rescheduling agreement to get a 2 years grace period, the CBE issued a new initiative allowing tourism companies to obtain a 3 years grace period on principal and interest. Accordingly, we are re-negotiating with the banks, making use of this initiative, expecting to get it finalized by Q2 2016.
Real Estate
We will continue executing on the new development strategy, offering a wider range of products across our destinations. In El Gouna, we are planning to launch Fanadir Bay project with a total inventory of USD 60.0 million. The project targets second home ownership with a focus on luxurious yet comfortable living with the unique location of the bay and sea view units. We will also launch new products in Fayoum with a total inventory of USD 3.9 million. In Makadi, we are currently finalizing the design for the Clubhouse and will proceed to permits in order to commence construction by Q2 2016. We are also studying the possibility of entering the first and second home markets in Cairo and the North Coast.
Hotels
On track with the construction of Ancient Sands hotel in El Gouna, and Byoum hotel in Fayoum, planned to open by Q2 2016. We are studying the implementation of strict cost cutting measures across our hotels in Egypt. From centralization of services to suspension of operations at some hotels, minimizing fixed costs, or even changing in the meal plans, all possibilities are being tackled.
About Orascom Hotels and Development (OHD)
Orascom Hotels and Development is the largest subsidiary of Orascom Development Holding. OHD is an integrated developer of resort towns in Egypt, with a vertically-integrated business model involving the development of residential units, hotels, and recreational facilities such as golf courses, town centers, and marinas, in addition to supporting infrastructure, such as hospitals, schools, and utilities. OHD currently owns a land bank of 45.7 million square meter and 25 hotels with a total of 5,955 rooms within three operating destinations. El Gouna, on the Egyptian Red Sea Coast in Hurghada, Taba Heights, on the Sinai Peninsula and Makadi in Hurghada. OHD also holds an 87% stake in Tamweel, a financial services company providing mortgage, leasing, and insurance, among other services.
Комментарии