Orascom Development Holding AG — Earnings Release 2012

Mar 27, 2013

News Details

Ad-hoc | 27 March 2013 06:30

Orascom Development Holding AG: Full Year 2012 Results

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

27.03.2013 06:30

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

Press Release

Funding of Andermatt destination fully secured until 2017. Samih O. Sawiris
also commits to fund the expected cash deficit of Orascom Development in
2013. Full-Year 2012 net loss of CHF 97.2 million significantly impacted by
extraordinary items.

• Orascom Development and Samih O. Sawiris agreed to strengthen the
  capital base of Andermatt Swiss Alps. As a result, Samih O. Sawiris
  will become 51% shareholder by converting his loans to Orascom
  Development into equity of Andermatt Swiss Alps. Furthermore, he
  commits at least CHF 150 million to fully fund the project until 2017.

• In addition, Samih O. Sawiris commits to fund the expected CHF 60
  million operational cash deficit of Orascom Development in 2013.

• Extraordinary items of CHF 45.1 million and real estate related
  provisions of CHF 27.3 million resulted in a net loss of CHF 97.2
  million in 2012 for Orascom Development.

Altdorf/Cairo, 27 March 2013 - For 2012 Orascom Development Holding AG
(Orascom Development) reports a 7.1% increase in consolidated revenues to
CHF 271.9 million (2011: CHF 253.8 million). Gross profit for the period
under review improved from CHF 19.7 million (7.7% margin) to CHF 21.3
million (7.8% margin).

Extraordinary items such as impairments or transaction losses of CHF 45.1
million and provisions for cancelled real estate sales and doubtful
collections of CHF 27.3 million resulted in a net loss after minorities of
CHF 97.2 million (2011: CHF 69.7 million). The Board of Directors will
propose on the upcoming Annual General Meeting to pay no dividend.

Key Figures (in CHF million) FY 2011 FY 2012 % change
Total revenues 253.8 271.9 7.1%
Gross Profit 19.7 21.3 8.4%
Gross Profit-Margin (%) 7.7% 7.8%
Net income / (loss) after minorities (69.7) (97.2)
Operating cash flow after interest/taxes (181.3) (10.9)
Total assets 2'083.2 2'082.6 0.0%
Equity ratio (%) 52.6% 47.0%
Net debt 456.8 502.2 9.9%

Main Business Segments
Hotels
Hotel revenues in the business year 2012 increased by 8.2% from CHF 136.3
million to CHF 147.6 million, equivalent to 54.3% of Group revenues. The
operating result (EBITDA) increased by 17.8% to CHF 36.9 million (25.0%
margin). Occupancy rates went up to 57% (2011: 56%) driven by El Gouna's
improved performance. TrevPAR (Total Revenues per Available Room) increased
to CHF 61 (2011: CHF 57). At the end of the reporting period, Orascom
Development operated 6,654 hotel rooms (2011: 6,589 rooms) after the
opening of the Juweira hotel in Oman.

Real Estate and Construction
Revenues in the real estate segment amounted to CHF 76.4 million, an
increase of 14.1% compared to the previous year (2011: CHF 67.0 million)
and equivalent to 28.1% of Group revenues. Contracted real estate sales in
2012 amounted to CHF 225.9 million (thereof CHF 131.8 million from the
Acuro transaction in Switzerland) compared to CHF 131.5 million a year ago.
In total, 791 units with an average selling price of CHF 3,370 were sold
during the period under review. The segment's EBITDA of negative CHF 11.1
million was a result of provisions of CHF 27.3 million for cancelled units
and doubtful receivables in Egypt and Oman as well as of the reversal of
previously booked profits of the Iskan transaction in Oman (CHF 7.4 million
due to returned units). Adjusted for these extraordinary items, EBITDA for
2012 was CHF 23.6 million compared to CHF 27.6 million in 2011.

Main Countries and Destinations
Egypt
Revenues in Egypt increased from CHF 205.7 million to CHF 210.7 million. A
milestone was reached in the flagship destination in October 2012 when the
'Technische Universität Berlin' opened its satellite campus in El Gouna. In
Taba Heights the marina was successfully re-opened which facilitates access
to the well-know ancient city of Petra in Jordan. Contracted sales in 2012
for Egypt amounted to CHF 31.9 million versus CHF 42.7 million in 2011.

Oman
Revenues in Oman nearly tripled and reached CHF 17.6 million (2011: CHF 6.1
million). The increase was a result of additional real estate units being
delivered to end-customers, the opening of the Juweira Hotel in Salalah
Beach in 2012 and the full-year effect of the Sifawy Hotel in Jebel Sifah.
These hotels reached occupancy rates of 33% and 38% respectively.
Furthermore, construction works are progressing for the Rotana Hotel (399
rooms) for its opening in December 2013. In both destinations combined,
real estate sales reached CHF 14.2 million versus CHF 13.3 million a year
ago.

United Arab Emirates
Orascom Development's destination The Cove, 100 km away from Dubai, reached
a higher occupancy rate for the fourth year in a row. The occupancy level
of 81% was achieved even though average room rates increased by 16%
resulting in a 11.0% increase in revenues from CHF 26.6 million to CHF 29.5
million.

Switzerland
The sale of 73 apartments to real estate investment vehicle Acuro ensured
the completion of the hotel The Chedi Andermatt for its opening in December
2013. At the same time Orascom Development retained ownership of the hotel.
Construction works for the first two apartment buildings on the Podium
advanced while the core and shell of the first villa was finished in
November. The expansion of the Ski Arena Andermatt-Sedrun made substantial
progress as the tender offer for shareholders of Andermatt Gotthard
Sportbahnen AG and Sedrun Bergbahnen AG was successfully completed. Orascom
Development achieved real estate sales of CHF 163.9 million compared to CHF
70.9 million a year ago.

Montenegro
During 2012, Orascom Development launched pre-sales of its beach-front
resort resulting in contracted real estate sales of CHF 15.4 million. The
construction of the access road has been completed and the driving range of
the upcoming golf course opened during 2012.

Common decision to strengthen capital base of Andermatt Swiss Alps
Yesterday, the Board of Directors of Orascom Development and Samih O.
Sawiris agreed to improve the capitalization of its Swiss subsidiary
Andermatt Swiss Alps (ASA). As a result of the transaction, Samih O.
Sawiris becomes new majority shareholder with a 51% share by converting his
loans to Orascom Development into ASA equity, and will act as new Executive
Chairman of ASA. Orascom Development remains shareholder with a 49% share.
Furthermore, Samih O. Sawiris will invest at least CHF 150 million of new
equity or subordinated loans into ASA in order to secure funding of the
resort Andermatt until 2017. ASA will be deconsolidated in the first half
of 2013. As a consequence of the transaction existing loans between Orascom
Development and Samih O. Sawiris will be fully offset and the indebtedness
of Orascom Development will be reduced. The transaction will improve the
debt-to-equity ratio of Orascom Development and lower interest expenses.

Outlook 2013
Both hotel revenues and real estate sales for the first two months of 2013
were below the same period of last year. For 2013, Orascom Development
remains cautiously optimistic regarding hotel occupancy rates and real
estate sales.

Orascom Development expects the business environment in the mid-term to
remain challenging with hotel performance not reaching the levels of the
period 2008-2010. To improve the cash situation of the company, various
measures are considered. As a first step, the envisaged Andermatt Swiss
Alps transaction will release Orascom Development from further capex
spending and significantly reduce debt levels. Further, Orascom Development
intends to focus on its core destinations (El Gouna, Taba Heights, Jebel
Sifah and Salalah Beach) and on selling non-strategic assets and
participations over the next 24 months. Samih O. Sawiris will fully finance
the expected operating cash deficit of up to CHF 60 million which excludes
discretionary capex and refinancing efforts. To enhance efficiency various
measures were introduced to address all expense items within Orascom
Development.

On April 16, 2013 Andermatt Swiss Alps and General Hotel Management (Chedi
Hotel Management) will inform about the progress of the Andermatt Resort.
An
invitation to this press conference in Andermatt will be sent out during
the
next days.

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.

Media conference today at 10:00 am CET in Zurich
Orascom Development will present its annual results today at a media
conference at 10:00 am CET in the Zunfthaus zur Zimmerleuten, Limmatquai
40, 8000 Zurich. The press conference will be held in German and English
and will be chaired by CEO Gerhard Niesslein and CFO Ahmed El Shamy.

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 and CFO Ahmed El Shamy will
present the FY 2012 results and will be available to answer questions. A
registration is not required. Dial-in details are as follows:

• Password: 232 262 62

• International: +44 1452 555 566

• Swiss 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: 232 262 62

• 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.

Contacts Investor Relations
Till Leisner Sara El Gawahergy
Head of Group Controlling & Investor Relations Investor Relations
Manager
Tel: +41 41 874 88 07 Tel: +2 01 205 205 218
Email: ir@orascomdh.com Email: ir@orascomdh.com

Media Contact
Philippe Blangey
Swiss Media Office
Tel: +41 43 268 32 35
Email: media@orascomdh.com

Disclaimer & Cautionary Statement

The information contained in this e-mail, its attachment and in any link to
our website indicated herein is not for use within any country or
jurisdiction or by any persons where such use would constitute a violation
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such information. Certain statements in this e-mail and the attached news
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.

Contact:
Contact Investor Relations
Till Leisner +41 41 874 88 07
Sara El Gawahergy +2 01 205 20 52 18
ir@orascomdh.com

Contact Media Relations
Daniel Göring +41 41 874 88 33 media@orascomdh.com

27.03.2013 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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