Orascom Development Holding AG — Earnings Release 2013

May 28, 2013

News Details

Ad-hoc | 28 May 2013 07:00

Orascom Development Holding AG: 1Q 2013 Earnings Release

Orascom Development Holding AG / Key word(s): Interim Report

28.05.2013 07:00

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

Press Release

Weaker Real Estate & Construction result and FX-losses drive 1Q 2013 loss

• First quarter 2013 revenues decline by 7.8% to CHF 57.9 million

• Weaker Real Estate & Construction result and FX-losses drive CHF 19.1
  million net loss

• Hotel performance continues to improve

• First successful monetization transaction executed in Egypt (around CHF
  5 million)

• Cost-savings program launched to lower costs by CHF 40-45 million over
  next 2-3 years

• Closing of Andermatt transaction in 2Q 2013 will reduce indebtedness

Altdorf/Cairo, 28 May 2013 - For the first quarter of 2013 Orascom
Development Holding AG (Orascom Development) reports a 7.8% decrease in
consolidated revenues to CHF 57.9 million (1Q 2012: CHF 62.9 million). The
decrease is a result of fewer real estate units being sold and delivered to
clients in Egypt and Oman. The Gross profit margin decreased from 12.1% a
year ago to 4.8%.

The net loss after minorities of CHF 19.1 million is also attributable to
foreign exchange losses in the amount of CHF 6.7 million from
USD-denominated loans in Egypt. Compared to the prior year period (1Q 2012
loss: CHF 4.0 million), Orascom Development capitalized significantly less
administrative expenses due to less construction activities in Egypt and
Oman.

As a result of the previously announced Andermatt Swiss Alps transaction as
well the planned sale of our participations in Mauritius and Romania,
assets in the amount of CHF 454 million were reclassified to assets held
for sale. All operations related to Andermatt Swiss Alps and its
subsidiaries resulted in a loss from discontinued operations of CHF 3.5
million.

In the first quarter of 2013 the operating cash flow after interest and
taxes was a negative CHF 40.0 million (1Q 2012: - CHF 10.1 million).
However, a substantial part of this loss is due to real estate inventory
built-up in Switzerland and cash flow timing differences from the Acuro
transaction.

Key Figures (in CHF million) 1Q 2012 1Q 2013 Delta
Total revenues 62.9 57.9 -7.8%
Gross Profit 7.6 2.8 -63.1%
Gross Profit-Margin (%) 12.1% 4.8%
Net income / (loss) after (4.0) (19.1)
minorities
Operating cash flow after (10.1) (40.0)
interest/taxes
Total assets ¹ 2,082.7 2,113.0 1.5%
Equity ratio (%) ¹ 46.9% 45.0%
Net debt ¹ 502.2 525.0 4.5%

¹ For 2012 as per 31.12.2012

Main Business Segments

Hotels
Hotel revenues during the first quarter of 2013 increased by 2.3% from CHF
34.1 million to CHF 34.9 million, equivalent to 60.2% of Group revenues.
The operating result (EBITDA) increased by 4.2% to CHF 8.1 million (23.3%
margin). Occupancy rates went up to 56% (1Q 2012: 52%) as operations in
Taba Heights and other Red Sea destinations witnessed higher customer
demand. TrevPAR (Total Revenues per Available Room) increased to CHF 58 (1Q
2012: CHF 56). At the end of the reporting period, Orascom Development
operated 6,654 hotel rooms.

Real Estate and Construction
Revenues in the real estate and construction segment amounted to CHF 11.0
million, a decrease of 29.2% compared to the previous year (1Q 2012: CHF
15.6 million) and equivalent to 19.0% of Group revenues. The decrease is
mainly a result of fewer real estate units being sold and delivered to
clients in Egypt and Oman. Accordingly the segment's EBITDA declined to -
CHF 5.1 million. Contracted real estate sales during the first quarter of
2013 amounted to CHF 18.9 million compared to CHF 27.4 million a year ago.
In total, 119 units were sold (1Q 2012: 136 units).

The year 2013
Business performance at the beginning of the year
During the first four months of this year hotel revenues were roughly at
the same level as a year ago. Overall, the visibility regarding hotel
performance for the rest of the year remains low. Contracted real estate
sales were around 20% lower, albeit at unchanged square meter prices.

Andermatt Swiss Alps transaction update
As announced on 27 March 2013, Samih O. Sawiris will become majority
shareholder of Andermatt Swiss Alps with a 51% share, while Orascom
Development remains shareholder with a 49% share. During the second quarter
of 2013 we expect the closing of the transaction and deconsolidation of
Andermatt Swiss Alps. As a consequence the Group's indebtedness will
substantially be reduced.

First monetization success and launch of cost-savings program
As announced with full year results, Orascom Development intends to focus
on its core destinations in Egypt, Oman and Montenegro as well as on
selling non-strategic assets and investments over the next 24 months. As a
first milestone Orascom Development successfully executed a sale-and-lease
back transaction in El Gouna resulting in a cash inflow of around CHF 5
million. We expect similar transactions to take place over the next couple
of months.

During the first quarter of 2013 Orascom Development further launched a
comprehensive cost-savings program which aims to reduce the cost base by
CHF 40-45 million over the next 2-3 years.

Financial statements and presentation
The associated financial statements and presentation can be found on
Orascom Developments' website www.orascomdh.com under the Investor
Relations section.

Telephone conference today at 2:00 pm CET
A telephone conference for analysts and investors will be held in English
today at 2:00 pm CET. CEO Gerhard Niesslein will present 1Q 2013 results
and will be available to answer questions. A registration is not required.
Dial-in details are as follows:

• Password: 7377 9993

• International: +44 1452 555 566

• Switzerland Toll Free: 0800 828 006

• Egypt Toll Free: 0800 000 0318

• UK Toll Free: 0800 694 0257

• US Toll Free: 1866 966 9439

A replay of the conference call will be available for one week with the
following dial in details:

• Access Code: 7377 9993

• International Replay: +44 1452 550 000

• UK Local Call Replay: 0845 245 52 05

• USA Toll Free Replay: 1866 247 42 22

About Orascom Development Holding AG
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 and Romania). The Group currently operates six destinations;
three in Egypt El Gouna, Taba Heights and Haram City, The Cove in United
Arab Emirates and Jebel Sifah and Salalah Beach in Oman. Orascom
Development has a dual listing, with a primary listing on the SIX Swiss
Exchange and a secondary listing on the EGX Egyptian Exchange.

Contact for Investors and Media:
Till Leisner
Head of Group Controlling & Investor Relations
Tel: +41 41 874 88 07
Email: ir@orascomdh.com or media@orascomdh.com

Disclaimer & Cautionary Statement

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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.

28.05.2013 News transmitted by EquityStory AG.
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Language: English
Company: Orascom Development Holding AG
Gotthardstraße 12
6460 Altdorf
Switzerland
Phone: +41 41 874 17 17
Fax: +41 41 874 17 07
E-mail: ir@orascomdh.com
Internet: www.orascomdh.com
ISIN: CH0038285679
Swiss Security Number: A0NJ37
Listed: SIX

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