Orascom Development Holding AG — Earnings Release 2011

Mar 30, 2012

News Details

Ad-hoc | 30 March 2012 06:58

2011 results impacted by extraordinary events but adjusted operating result (adjusted EBITDA) still positive. Orascom Development remains positioned to return to growth once the MENA region improves.

Orascom Development Holding AG / Key word(s): Final Results

30.03.2012 06:58

Release of an ad hoc announcement pursuant to Art. 53 KR

Press Release

2011 results impacted by extraordinary events but adjusted operating result
(adjusted EBITDA) still positive. Orascom Development remains positioned to
return to growth once the MENA region improves.

• Group revenues declined by 50% to CHF 256.1 million

• Reported EBITDA loss of CHF 40.1 million

• Adjusted EBITDA of CHF 42.7 million

• Funding of destinations secured for 2012

Altdorf/Cairo, 30 March 2012 - Results of Orascom Development in 2011 were
affected by political events in the MENA region (Middle East and North
Africa) and extraordinary transactions. These transactions amounted to CHF
82.8 million and include provisions (CHF 57.1 million), revaluations of
investment properties (CHF 8.7 million), legal fees (CHF 5.0 million)
resulting from the above mentioned events as well as currency revaluations
from the appreciation of the Swiss Franc (CHF 12.0 million). Consolidated
revenues declined by 50% to CHF 256.1 million (2010: CHF 516.1 million) and
EBITDA also fell below last year's CHF 178.1 million to a loss of CHF 40.1
million. Adjusted for extraordinary transactions, an EBITDA of CHF 42.7
million resulted. Reported net loss (after non-controlling interests)
amounted to CHF 69.7 million (2011: profit of CHF 94.9 million).

Key figures (in CHF million) 2011 2010 % Change y/y
Total revenues 256.1 516.1 (50%)
EBITDA (reported) (40.1) 178.1 (123%)
EBITDA (adjusted) 42.7 178.1 (76%)
Net profit / (loss) after non-
controlling interest (69.7) 94.9 (173%)
EPS - Basic and diluted (in CHF) (2.46) 3.88 (163%)
2,093
Total assets (on balance sheet) 2,083.2 .4 (1%)
1,193
Shareholder's equity 1,095.2 .1 (8%)
Net debt 1 456.8 235.3 94%
Net asset value per share (in CHF) 2 29.93 35.29 (15%)

1 Net debt it total debt less cash and cash equivalent
2 Net asset value is shareholders' equity excluding non-controlling
interest divided by the number of shares outstanding

Main Business Segments
Hotels
The hotel segment remained profitable in 2011. Revenues decreased by 29% to
reach CHF 136.3 million (2010: CHF 193.1 million) or 53% of Group revenues.
Segment EBITDA decreased by 50% to CHF 31.3 million with a 23.0% margin
(2010: CHF 62.4 million, 32.3% margin). The decline in revenues and EBITDA
is a combination of: (a) a month with virtually zero occupancy in El Gouna
and Taba Heights, (b) pre-opening costs for 80 new rooms opened in 2011 and
(c) a shift of hotel guests from five start hotels into four star hotels.
Occupancy rates reached 56% (2010: 76%) mainly due to a drop in room
occupancies in Egypt; occupancy in Jordan was mildly lower and higher in
the UAE. Average Room Rates (ARR) declined to CHF 57 (2010: CHF 65). By the
end of 2011, the Group operated 6,589 hotel rooms, up from 6,509 a year
earlier, due to the opening of the Sifawy hotel in Jebel Sifah, Oman (55
rooms), La Maison Bleue in El Gouna, Egypt (12 rooms) and an expansion of
our hotel in The Cove, UAE (11 rooms).

Real Estate and Construction
Segment revenues decreased by 71% and reached CHF 67.0 million (2010: CHF
229.0 million) or 26% of Group revenues. Revenues in particular were
affected by a 50 days halt in construction activities in Egypt and a
slowdown in demand for homes in the MENA region. Segment EBITDA decreased
to CHF 14.9 million with a 22.3% margin (2010: CHF 113.0 million, 49.4%
margin). By the end of 2011, deferred income amounted to CHF 262.2 million
(2010: CHF 227.9 million).

Main Countries and Destinations
Egypt
The Group exerted severe efforts with its banks to reschedule debt
installments for its operations in Egypt. As at end 2011, we succeeded to
reschedule installments of CHF 38.7 million by extending the maturity of
existing loans by 6-12 months after the original maturity date. El Gouna
remained a save destination during the turmoil in Egypt and was able to
achieve an occupancy rate of 57%. Furthermore, Orascom Development opened
the Boutique Hotel Maison Bleue hotel (12 rooms) in El Gouna.

Switzerland
At our Swiss destination Andermatt we managed to achieve several
milestones. We completed the shell of the Hotel The Chedi Andermatt,
concluded one-third of the construction work of the Podium and finalized
the seeding works at the 18-hole course. The Group was able to achieve real
estate sales of CHF 70.9 million.

Oman
In Jebel Sifah, the Group completed the construction of the marina and the
commercial area with shops and apartments. During September 2011, the first
hotel in Jebel Sifah, the Sifawy Boutique Hotel, with 55 rooms and suites
was launched.

In Salalah Beach, we completed the destination entrance and roads and built
the marina which contains 174 berths. About 30% of the new hotel Rotana
(396 rooms) has been built. We further plan to open the Juweira Hotel (65
rooms) during the second quarter of the current business year.

Morocco
During the first quarter of 2011, Orascom Development launched the first
phase of real estate sales in Chbika, Morocco. In 2011, the company sold 31
units with a value of CHF 4.5 million. Furthermore, we commenced the
construction of the town marina during the previous year.

Performance improvements initiated
Uncertainties regarding the political progress in the MENA region, the
global economic development and international credit markets continue.
Nevertheless, Orascom Development expects a more dynamic development in the
second half of the year. While we remain committed to our proven business
model, we created different initiatives to tackle these challenges to
become more efficient, effective and transparent. During January 2012,
credit agreements of CHF 125 million were finalized, which will enable the
Group - together with existing cash reserves and credit lines, to finance
all activities planned for 2012. The capital expenditure program for 2012
was reduced by 20-25% from previously announced CHF 180-190 million to CHF
140-150 million. Further, Orascom Development successfully prolonged its
debt maturities at the beginning of 2012. To further diversify its
destinations, the Group intends to work more closely with co-investors and
sub-developers.

Outlook 2012
Orascom Development estimates that the diversification of its revenues
across different geographical areas will continue and thereby broaden its
operations and diversify the risk. During January and February 2012
occupancy rates (45-50%) and Average Rooms Rates (CHF 55-60) in our hotel
portfolio remained broadly at the same levels as in the same period of last
year. Real Estate sales (total value of contracted units) of CHF 23.4
million during January and February 2012 were slightly ahead when compared
to the same period last year (CHF 20.0 million).

Earnings release and presentation

The associated earnings release and presentation can be found on Orascom
Developments' website www.orascomdh.com under the Investor Relations
section. The Annual Report 2011 will be published on 4 April 2012.

Telephone conference today at 3:00 pm CET

A telephone conference for analysts and investors will be held in English
today at 3:00 pm CET. CEO
Dr. Gerhard Niesslein and CFO Mahmoud Zuaiter present the results 2011 and
will be available to answer questions. A registration is not required.

Dial-in details are as follows:

• Conference password: 60 39 30 55

• International: +44 (0) 1452 55 55 66

• UK Toll Free: 0800 694 0257

• Switzerland Toll Free: 0800 828 006

• US Toll Free: 1866 966 9439

• Egypt Toll Free: 0800 000 0318

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Information and Explaination of the Issuer to this News:

About the Group
Orascom Touristic Establishments (OTE) was established in 1989 setting the
first step in building the Group's track record in the development of
integrated towns. After some name changes and reorganization, the main
business was held under Orascom Hotels & Development (OHD). Since the
settlement of the public exchange offer by Orascom Development for OHD in
May 2008, Orascom Development Holding AG (Orascom Development) became the
new parent of OHD. Orascom Development has a dual listing, with a primary
listing on the SIX Swiss Exchange and a secondary listing on the EGX
Egyptian Exchange. Orascom Development is a leading developer of fully
integrated destinations that include hotels, private villas and apartments,
leisure facilities such as golf courses, marinas and supporting
infrastructure. Orascom Development's diversified portfolio of destinations
is spread over nine jurisdictions (Egypt, UAE, Jordan, Oman, Switzerland,
Morocco, Montenegro, United Kingdom, Montenegro and Romania), with primary
focus on touristic destinations and budget housing. The Group currently
operates five destinations; three in Egypt El Gouna, Taba Heights and Haram
City, The Cove in United Arab Emirates and Jebel Sifah in Oman.

Investor Relations Contacts
Till Leisner
Head of Group Controlling & Investor Relations
Tel: +41 41 874 88 07
Email: ir@orascomdh.com

Mamdouh Abdel Wahab
Relations Director Investor
Egypt Mobile: +20 122 315 3200
Email: ir@orascomdh.com

Media Contact
Philippe Blangey
Tel: +41 41 874 17 11
Email: media@orascomdh.com

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

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Language: English
Company: Orascom Development Holding AG
Gotthardstraße 12
6460 Altdorf
Switzerland
Phone: +41 41 874 17 11
Fax: +41 41 874 17 12
E-mail: ir@orascomdh.com
Internet: www.orascomdh.com
ISIN: CH0038285679
Swiss Security Number: A0NJ37
Listed: SIX

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