For the third quarter of 2012 Orascom Development Holding AG (Orascom Development) (ODHN.CA) reports a 3.7% increase in consolidated revenues to CHF 57.7 million (Q3/ 2011: CHF 55.7 million).
The gross profit for the period und review declined from CHF 8.2 million to CHF 5.2 million. The net loss (after minorities) amounted to CHF 31.9 million (3Q 2011: CHF 5.2 million) mainly driven by extraordinary non-cash items such as impairments and transaction losses. For the first nine month of 2012 Orascom Development reports consolidated revenues of CHF 189.6 million, gross profit of CHF 17.3 million and a net loss of CHF 59.1 million.
At the same time, Orascom Development was able to achieve a positive operating cash flow (before interests and taxes) of CHF 24.9 million in the third quarter of 2012, an improvement of CHF 15.4 million compared to the same period last year. Operating cash flow for the first nine month of 2012 amounted to CHF 49.0 million. The group’s cash position at the end of September 2012 was CHF 114.2 million.
Main Business Segments:
Hotels
Hotel revenues in the first nine month of 2012 increased by 24.8% and reached CHF 104.5 million (9M 2011: CHF 83.7 million). Segment EBITDA surged by 2.5% to CHF 22.2 million with a 21.3% margin (9M 2011: CHF 21.7 million, 25.9% margin). The drop in the EBITDA margin is primarily a result of mandatory salary increases and general cost inflation in Egypt.
Occupancy rates increased to 55% (9M 2011: 54%) mainly due to a higher occupancy rate in El Gouna. TRevPAR (Total Revenues per Available Room) increased to CHF 57 (9M 2011: CHF 52). By the end of September, Orascom Development operated 6,654 hotel rooms (end September 2011: 6,522 rooms) mainly due to the opening of the Sifawy and Juweira hotels in Oman.
Real Estate and Construction
During the first nine month of 2012 Orascom Development reported contracted sales of CHF 203.6 million (thereof CHF 131.9 million from the Acuro transaction in Switzerland) compared to CHF 92.9 million a year ago. In addition, Orascom Development reported CHF 45.4 million of real estate reservations. Overall, segment revenues increased by 15.5% to CHF 47.8 million (9M 2011: CHF 41.4 million). Segment EBITDA of negative CHF 4.2 million was impacted by provisions for cancelled units in Egypt and Oman and provisions for doubtful receivables in Egypt (EBITDA 9M 2011: CHF 21.5 million).
Main Countries and Destinations:
Egypt
A milestone was reached in October when the Technische Universitat Berlin (TUB) opened its satellite campus in El Gouna. In Taba Heights the marina was successfully reopened which facilitates access to the well-know ancient city of Petra and to the Saint Catherine’s Monastery. In Orascom Development’s budget housing project Haram City stepped-up marketing efforts and the activation of a governmental low income housing program helped to further reduce the real estate inventory. For Egypt as a total Orascom Development achieved CHF 21.2 million of real estate sales (9M 2011: CHF 23.1 million).
Oman
In Jebel Sifah, the Sifawy hotel reported a 30% occupancy rate during the first nine months of 2012 while a reduction in vacancies of commercial shops compared to the same period of last year was achieved. In Salalah Beach, the opening of Juweira Hotel in July 2012 resulted in a average 46% occupancy rate, while Orascom Development successfully completed the funding for the Rotana Hotel (399 rooms) for its opening in March 2014. In both destinations combined, real estate sales reached CHF 11.5 million versus CHF 8.9 million a year ago.
Switzerland
Orascom Development sold 73 apartments to Acuro, a real estate investment vehicle, for a base purchase price of CHF 122.7 million plus a variable pricing component from sales proceeds. Orascom Development retains ownership of the Chedi Hotel which will open as planned for the 2013/2014 winter season. Construction works for the first two apartment buildings on the Podium are ongoing, while the core and shell of the first villa was finished in November. The expansion of the Ski Arena made substantial progress as the tender offer for shareholders of the ski companies was successfully completed. As of September 2012, Orascom Development reported CHF 159.5 million of real estate sales compared to CHF 58.3 million a year
ago.
Morocco
During the first nine month of 2012 and subject to certain conditions Orascom Development signed contracts with third parties to develop a Club Med hotel. As of September 2012, CHF 0.2 million of contracted real estate sales were realized (9M 2011: CHF 2.6 million).
Montenegro
During 2012, Orascom Development launched pre-sales in its beach-front resort resulting in contracted real estate sales of CHF 11.0 million and reservations with a value of CHF 7.2 million. The construction of the
access road has been completed and the driving range of the upcoming golf course has been opened.
Outlook Full-year 2012
Despite the current events in Egypt, Orascom Development expects a slight increase in hotel occupancy rates for December 2012 compared to last year.
Further, Orascom Development is cautiously optimistic regarding real estate sales and reservations in the fourth quarter of 2012.
Overview of extraordinary items during 9M 2012
The following table provides an overview of the extraordinary items in the first nine months of 2012. For further information, please refer to footnote 8 of the 9M 2012 financial report.
