Orascom Development Holding AG / Key word(s): 9 Month figures/9 Month figures
ODH ("Orascom Development Holding") (SIX ODHN.SW) has released its consolidated financial results for 9M 2020.
Orascom Development Holding reports resilient performance, despite the challenges brought by Covid-19, recording CHF 260.4 million of revenues, CHF 29.9 million of cash flow from operations and a cash balance of CHF 197.8 million.
Key Highlights Q3 2020
- Total revenues decreased by 5.8% to CHF 96.4 million
- EBITDA stood at CHF 12.0 million, with a 12.4% margin
- Net real estate sales up 6.0% to CHF 102.6 million
Key Highlights of 9M 2020
- Total revenues reached 260.4 million
- Adj. EBITDA stood at CHF 40.5 million, with a 16.0% margin
- Real estate sales of CHF 294.4 million
- Real Estate receivables portfolio increased by 24.2% to CHF 704.2 million
- Real Estate deferred revenue balance also grew by 25.2% to CHF 535.8 million
- Cash flow from operations of CHF 32.1 million
- The Group increased its cash balance to CHF 197.8 million as of 9M 2020, reflecting a strong liquidity position
- Working with the Egyptian banks to restructure the current debt securing more flexible terms
Altdorf, 16 November 2020 - ODH's performance has been swiftly improving since the beginning of June 2020, following the easing of restrictions and precautionary measure previously imposed in relation to Covid-19 in the countries where we operate. With the resumption of economic activity and the lifting of the pre-set restrictive orders, the markets started witnessing some positive rebound, reflected in Q3 2020 operational and financial results Operational figures are slowly improving month over month and the Group's ability to accelerate construction progress has been positively reflecting on real estate revenue figures. ODH witnessed continued demand for real estate product offerings in El Gouna, O West, Makadi and Jebal Sifah, which helped boost sales figures for the quarter. The Group continued to prudently manage its costs and successfully pushed forward cash management efforts, maintaining a strong liquidity stance. The real estate and town management segments have remained relatively resilient; hotel operations continued to face pressure, due to the subsequent travel restrictions and quarantine requirements that were re-instated in certain European countries.
Nine Months 2020:
It is worth mentioning that last year bottom-line figures included CHF 10.2 million of FX gains compared to CHF 0.7 million of FX gains in 9M 2020. ODH continued its prudent cash management and business optimization initiatives, further fortifying the Group's balance sheet and maintaining an enhanced liquidity stance. Total cash balance reached CHF 197.8 million as of 9M 2020, an increase of 6.3% from CHF 186.0 million in FY 2019. Total debt reached CHF 435.5 million, while net debt balance reached CHF 237.7 million in 9M 2020 (FY 2019: CHF 243.9 million). ODH continued to generate positive cash flow from operations reaching CHF 32.1 million in 9M 2020 (9M 2019: CHF 41.7 million).
Real estate revenues decreased by 10.4% to CHF 149.5 million compared to CHF 166.9 million in 9M 2019. The segment EBITDA also decreased by 8.1% to CHF 44.3 million in 9M 2020 (9M 2019: CHF 48.2 million), as more apartment units were sold this year compared to more villas, with immediate land revenues in 9M 2019. Total deferred revenue from real estate that is yet to be recognized until 2024 increased by 25.2% to CHF 535.8 million in 9M 2020 compared to CHF 428.0 million in 9M 2019. Total real estate portfolio receivables increased by 24.2% to CHF 704.2 million in 9M 2020.
Tourism business continues to be profoundly impacted by Covid-19. While ODH acknowledges that the full recovery from the pandemic will take time, the current pick up in local travel reinforces the Group's view that when people feel safe, travelling demand returns quickly. ODH is continuing to implement several cost saving initiatives across its hotels and continues to increase efforts to create local demand for all destinations until international travel recovers. In 9M 2020, ODH's hotel portfolio included 7,150 rooms (including Andermatt), of which 47% were open (3,386 rooms). In 9M 2020, the hotels segment reported a 60.7% decline in revenues, to CHF 48.0 million (9M 2019: CHF 122.0 million), while the Group was able to successfully maintain a positive GOP figure on the back of the implemented cost saving initiatives. GOP reached CHF 1.2 million in 9M 2020 (9M 2019: CHF 43.6 million). The segment's adj. EBITDA reported a loss of CHF 1.9 million compared to a profit of CHF 38.0 million in 9M 2019.
Group Destination Management: Continues its resilient performance, in spite of the challenges raised by Covid-19
Due to the numerous uncertainties associated with Covid-19 and the limited visibility on the severity and duration of the pandemic, the Group still stands with its earlier position and abstains from providing full-year guidance on its 2020 results. However, ODH remains diligent in providing updates of the evolving situation during all results calls and market communications as needed.
Details on Destinations
El Gouna, Red Sea
In Egypt, as per governmental decree, hotels are still restricted to 50% of their total capacity since June 2020. Hotels were still impacted by the travel bans restrictions due to Covid-19. More than 95% of the hotels' guests are locals (foreign guest are mainly from Eastern European countries). The travel warnings are still in place from all Central European countries except Switzerland and France. Tour operators' flights, which used to represent 70% of the hotel's occupancy have not yet resumed. Nevertheless, the hotels segment witnessed a positive uptick in revenues and occupancy in Q3 2020, with the relaxed measures implemented by the government. Q3 2020 revenues reached CHF 5.2 million up from CHF 0.7 million in Q2 2020 and occupancy rates also improved from 1% in Q2 2020 to 19% in Q3 2020 (Q3 2019: 81%). During 9M 2020 revenues decreased by 62.5%, from CHF 54.6 million in 9M 2019 to CHF 20.5 million in 9M 2020. GOP reached CHF 1.9 million in 9M 2020 (9M 2019: CHF 26.1 million). The hotels TRevPAR decreased by 64.6% to CHF 28 compared to CHF 79 in 9M 2019. Occupancy rates for total rooms reached 27% in 9M 2020 (9M 2019: 83%). ARR increased by 7.5% to CHF 72 (9M 2019: CHF 67). As of November 2020, a new product placement approach will be implemented to increase the potentials within this market. The tactical approach aims at reaching out to the bracket of affluent Egyptian travellers who are not much familiar with the destination capitalizing on the suppressed need for travel.
Destination management continued to be resilient despite Covid-19 impact with revenues slightly down by 1.1% to CHF 27.8 million in 9M 2020 (9M 2019: CHF 28.1 million). The decrease was mainly due to the suspension of all events and festivals across the destination, which was then resumed as of September 21st, 2020.
A total of 336 new memberships were added to O West Club (membership fee is CHF 8,6k), bringing the total no. of memberships in the club to 1,271, securing a steady recurring income flow once it is opened. In September 2020. Total real estate revenues from O West reached CHF 14.9 million in 9M 2020 (9M 2019: CHF 27.7 million). During Q3 2020, O West managed to book CHF 14.8 million of land revenue coming from the remaining agreements that were signed in 2020. Total revenues of O West increased by 40.4% to CHF 38.9 million in 9M 2020 (9M 2019: CHF 27.7 million).
Hawana Salalah, Oman
The completion of the amenities of the project are well underway. Construction of Lily and Laguna Gardens projects are in full throttle, with early handover planned to commence in Q2 2021 and Q4 2021, respectively. Net real estate sales were affected by the lockdown imposed on The Governorate of Dhofar until October 1st, 2020, where Hawana Salalah project is located. Net sales decreased by 60.2% to CHF 10.4 million in 9M 2020 (9M 2019: CHF 26.1 million).
Hawana Salalah Hotels continue to be severely impacted by global and local travel restrictions. Revenues decreased by 55.1% to CHF 13.6 million (9M 2019: CHF 30.3 million). In 9M 2020, our hotels in Salalah reported an occupancy rate of 26% vs. 55% in 9M 2019. TRevPAR decreased by 55.3% to CHF 46 (9M 2019: CHF 103) and GOP reached CHF 1.3 million (9M 2019: CHF 10.5 million). The travel ban inside Oman was lifted on October 1st, 2020; but with the recent increase in Covid-19 cases, the Sultanate of Oman has re-entered into night-time lockdown (from 8:00pm to 5:00am) effective October 9th, 2020 until October 24th, 2020. The curfew applies to both the public and to commercial outlets. Beaches will also be closed until further notice. We are now concentrating our efforts to optimize the hotels cost management and attracting local business through awareness campaigns and targeted sales promotions. Hotel's occupancy to date is limited, depending mainly on the Salalah-based market, with minimal interest from Muscat residents. Juweira Boutique Hotel re-opened its doors on October 4th, while Al Fanar Hotel has temporarily closed its operations.
Net real estate sales were significantly impacted by Covid-19 and decreased by 65.1% to CHF 8.8 million in 9M 2020 (9M 2019: CHF 25.2 million). Outstanding reservations reached CHF 9.1 million. The conversion of reservations into contracts is taking longer than usual due to the travel restrictions imposed by the pandemic. Construction in the destination is progressing on track, with plans to deliver 45 units during 2020 of which already 33 units were finalized and delivered in the Centrale and the Marina Village areas. In addition, the finishing works on the main marina, including the lighthouse and the main golf course design were completed. Real estate revenues reached CHF 11.8 million in 9M 2020 (9M 2019: CHF 18.9 million). Total revenues for Luštica Bay, decreased 42.0% to CHF 14.2 million in 9M 2020 (9M 2019: CHF 24.5 million).
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 & Hawana Salalah in Oman, Luštica Bay in Montenegro, & Andermatt in Switzerland. ODH recently launched O West, the latest addition to its portfolio and its first project in Cairo, Egypt, located in the 6th of October City.
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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.
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Orascom Development Holding AG
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