Orascom Development Holding AG: has released its consolidated financial results for 9M 2022

Orascom Development Holding AG / Key word(s): 9 Month figures/9 Month figures Orascom Development Holding AG: has released its consolidated financial results for 9M 2022 16-Nov-2022 / 07:00 CET/CEST Release of an ad hoc announcement pursuant to Art. 53 LR The issuer is solely responsible for the content of this announcement. Ad hoc announcement pursuant to Art. 53 LR. Orascom Development Holding (“ODH”) (SIX ODHN.SW) has released its consolidated financial results for 9M 2022. Remarkably strong top-line and bottom-line results with total revenues up 23.6% to CHF 459.4 million and net profit up 273.3% to CHF 33.6 million during 9M 2022. Key Highlights of 9M 2022 vs. 9M 2021 Total revenues up by 23.6% to CHF 459.4 million, with a further improvement in revenue mix Adjusted EBITDA recorded a 29.4% increase to CHF 121.1 million Net profit increased by 273.3% to CHF 33.6 million Net real estate sales up by 5.8% to CHF 470.8 million Received a preliminary non-binding offer for Orascom for Real Estate, the owner of the O West project for an indicative and preliminary equity value of approx. EGP 2.5 billion Key Highlights of Q3 2022 vs. Q3 2021 Total revenues up by 29.5% to CHF 188.9 million Adjusted EBITDA up by 53.5% to CHF 54.5 million and a margin of 28.9% Net profit increased by 245.9% to CHF 12.8 million Net real estate sales increased by 2.8% to CHF 171.2 million in Q3 2022 Altdorf, 16 November 2022 – In the third quarter, ODH continued to demonstrate robust business execution across all segments, and our revenues, Adj. EBITDA, and net profit continued to increase as planned. The strength in margins, which are in line with our medium-term trajectory, demonstrates the quality of our underlying portfolio, an improving revenue mix. Despite challenging market conditions, ODH underwent a major financial, operational, and organizational transformation to become more financially resilient and operationally agile. This was made possible thanks to our commitment to enhancing our operating and business activities while optimizing costs. Financial Review 9M 2022: The Group continued to deliver better results across all three major business segments. Total revenues reached CHF 459.4 million, up by a solid 23.6% vs. 9M 2021. Gross profit increased by 27.7% to CHF 142.1 million (9M 2021: CHF 111.3 million) with a gross margin of 30.9% vs. 30.0% in 9M 2021. Adj. EBITDA increased by 29.4% to CHF 121.1 million (9M 2021: CHF 93.6 million). Other gains and losses reported a loss of CHF 23.5 million vs. a loss of CHF 5.8 million in 9M 2021. Our share of associates reported a profit of CHF 11.0 million vs. a loss of CHF 10.2 million in 9M 2021. The enhanced performance in the associates was mainly driven by the better performance of our share in Andermatt Swiss Alps, whereby the company reported a profit of CHF 7.1 million in 9M 2022 vs. a loss of CHF 12.3 million in 9M 2021. Finance costs increased by 11.8% to CHF 27.4 million (9M 2021: CHF 24.5 million) due to the increase in interest rates. This operational excellence was reflected in our bottom-line figures whereby net income increased by 273.3% to reach CHF 33.6 million (9M 2021: CHF 9.0 million). Our cash flow from operations increased by 54.9% to reach CHF 57.0 million in 9M 2022. Total cash and cash equivalent balance reached CHF 201.0 million, and net debt reached CHF 266.0 million during 9M 2022. Q3 2022: Our third quarter results demonstrated strong sequential and y-o-y growth in revenue, Adj. EBITDA and net profit, driven by growth in the real estate segment and the improvement of our hospitality segment.  Revenues increased by 29.5% to CHF 188.9 million in Q3 2022. Gross profit increased by 53.4% to CHF 62.6 million in Q3 2022 with a gross margin of 33.1% vs. CHF 40.8 million and a margin of 28.0% in Q3 2021. Our enhanced margins signal our operational excellence despite global challenging market conditions in 2022. Adj. EBITDA reached CHF 54.5 million, up 53.5% in Q3 2022 and a margin of 28.9%. In line with this background, net profit increased by 3.5x to reach CHF 12.8 million (Q3 2021: CHF 3.7 million). Group Real Estate: Strong and sustained demand was witnessed for our real estate products pushing our sales to CHF 470.8 million. New sales for Q3 2022 reached CHF 171.2 million, a 2.8% increase vs. Q3 2021. That brings our 9M 2022 real estate sales value to CHF 470.8 million, a 5.8% increase over 9M 2021. In local currency, the net real estate sales performance of the largest Egyptian subsidiary of the Group (ODE) has improved during 9M 2022. Yet, this operational enhancement was not totally reflected in ODH’s value of contracted units when being translated into CHF because of the EGP currency devaluation. We also continued to increase our average selling prices per sqm across all destinations. Real estate revenues increased by 10.2% to CHF 299.0 million (9M 2021: CHF 271.4 million), benefiting from the increase in our construction pace across our projects. Adj. EBITDA were up by 8.2% to CHF 116.7 million in 9M 2022. Total deferred revenue from real estate that is yet to be recognized until 2026 increased by 11.5% to CHF 813.4 million in 9M 2022. Total real estate portfolio receivables also increased by 10.2% to CHF 1.1 billion and real estate cash collections were up by 19.7% to CHF 258.6 million in 9M 2022. Group Hotels: Q3 2022 surpasses pre-pandemic levels, with significant increase in revenues and GOP across all our hotels.   A summer season wrapped-up on a positive note.  The appetite for travel continued to recover; the demand increased across all customer segments; and the Group continued to implement its newly designed B2C approach. These results once again demonstrated the strength and durability of our Hospitality business model, as total revenues during Q3 2022 increased by 43.2% to CHF 39.8 million (Q3 2021: CHF 27.8 million) pushing our GOP to CHF 13.7 million, a 103.1% increase (Q3 2021: CHF 6.7 million). The summer season ended on a strong base, as guests traveled further, stayed longer, and spent more at our hotels. Accelerating TRevPAR growth expanded our operating leverage and led us to generate CHF 9.5 million of Adj. EBITDA during Q3 2022 up 111.1% vs. Q3 2021. Revenues for the hotels during the 9M 2022 increased by 83.5% to CHF 100.4 million (9M 2021: CHF 54.7 million), GOP also increased by 241.7% to CHF 32.5 million (9M 2021: CHF 9.5 million). The segment Adj. EBITDA increased by 8.7x to CHF 20.8 million (9M 2021: CHF 2.4 million) on the back of further improvements in operational efficiencies. Group Destination Management: Maintained its improved operational performance, with revenues up 31.9% to CHF 60.0 million. The destination management segment continued to grow in a very healthy way, both from a margin perspective as well as from a revenue perspective reaping the benefits of the successful restructuring implementation. Revenues increased by 31.9% to CHF 60.0 million (9M 2021: CHF 45.5 million), while Adj. EBITDA more than doubled to CHF 7.0 million in 9M 2022 from 9M 2021. Details on Destinations El Gouna, Red Sea: New real estate sales during Q3 2022 grew by 9.3% to CHF 65.5 million. That brings our 9M 2022 sales value to CHF 170.8 million (9M 2021: CHF 177.5 million). We managed to increase the real estate average selling prices by 4.9% to CHF 3,690/sqm vs. 9M 2021. Capitalizing on the huge demand on our real estate products, we launched two new real estate projects “Kamaran” and “Miramar Residences” with a total inventory of USD 118.0 million. Our solid construction pace keeps us on track with our planned delivery of 285 units for FY 2022. Real estate revenues were up by an 8.6% to CHF 131.0 million (9M 2021: CHF 120.6 million). El Gouna hotels' revised business model which demonstrated special focus on the direct business conversions at higher average daily rates delivered good quarterly results, benefiting from the destination’s leading local and regional market positioning.  Revenues increased by 26.8% to CHF 19.3 million (Q3 2021: CHF 15.2 million). Hotels’ occupancy levels increased from 52% to 77% in Q3 2022. For 9M 2022, hotels’ revenue soared by 76.6% to CHF 53.5 million (9M 2021: CHF 30.3 million) and occupancy rates reached 69% (9M 2021: 37%). GOP, on the other hand, soared by 124.3% to CHF 24.9 million during 9M 2022. Foreigners represented 72% of our total hotels' occupancy during Q3 2022 and 78% for 9M 2022. Moving to the hotel’s development side, we are progressing with the renovation process across four hotels, with plans to be finalised during Q4 2022. Town management continued its positive momentum with revenues up 24.7% to CHF 47.0 million (9M 2021: CHF 37.7 million). Total revenues for El Gouna were up by a solid 22.7% to CHF 231.5 million in 9M 2022 (9M 2021: CHF 188.6 million). O West, Egypt: Real estate sales during 9M 2022 reached CHF 185.1 million, a 37.8% increase vs. 9M 2021. We were able to increase our real estate average selling prices by 13.5% to CHF 1,976/sqm vs. 9M 2021. On the development side, we are speeding up our construction pace, whereby we completed the construction of 444 villas and are progressing with the construction of 1,015 apartments and 236 villas, with plans to start delivering 710 units in Q1 2023. The construction work at O West Club is progressing. The club will be partially open by Q3-2023. To date, we have 3,015 members in the club, which will provide a steady recurring income stream. On the other hand, we received a preliminary non-binding offer for Orascom for Real Estate, the owner of the O West project for an indicative and preliminary equity value of approx. EGP 2.5 billion. Total revenues of O West increased by 44.9% to CHF 101.7 million (9M 2021: CHF 70.2 million). Andermatt Swiss Alps, Switzerland: Interest in Andermatt, Switzerland, has continued to flourish. Net real estate sales increased by 5.6% to CHF 117.6 million (9M 2021: CHF 111.4 million). Average selling prices have considerably grown at 17.4% to CHF 17,280/sqm vs. 9M 2021. Real estate revenues doubled to CHF 80.8 million (9M 2021: CHF 40.4 million). The Chedi Andermatt Hotel reported a 70% occupancy while the Radisson Blu Hotel Reussen’s occupancy reached 52% in 9M 2022. Overall, the occupancy for Andermatt hotels reached 57% (9M 2021: 54%). Total hotels revenues reached CHF 42.3 million (9M 2021: CHF 43.5 million). Total revenues for Andermatt Swiss Alps increased by 23.0% to CHF 123.1 million (9M 2021: CHF 100.1 million). Makadi Heights, Egypt: In Makadi Heights, real estate sales started to pick up during Q3 2022, with real estate sales increasing by 2.5% to CHF 16.3 million. While 9M 2022 real estate sales reached CHF 32.5 million (9M 2021: CHF 49.7 million), as we purposefully slowed sales until we resolved the land concern issue with the TDA in June 2022.  We were able to increase our average selling prices by 13.1% to CHF 1,967/sqm vs. 9M 2021. Real Estate revenues reached CHF 17.2 million (9M 2021: CHF 24.8 million). Total revenues from Makadi Heights destination reached CHF 18.6 million (9M 2021: CHF 25.7 million). Luštica Bay, Montenegro: As for Luštica Bay, The Chedi’s Hotel summer season successfully came to an end. The Hotel reported an occupancy of 52% during 9M 2022, up from 45% in 9M 2021. Total revenues witnessed a 25.0% increase to CHF 6.0 million vs. 9M 2021. Net real estate sales reached CHF 39.0 million during 9M 2022. Real estate revenues reached CHF 15.1 million in 9M 2022. A lot of progress can be seen at the construction front in the destination. We started the construction of 197 units in the “Centrale” and the “Marina Village” areas, and hand over 62 units in both areas, with plans to hand over 16 more units during Q4 22. With more construction progress, revenues are expected to kick in more over the coming quarters. Town management revenues increased by 145.5% to CHF 5.4 million during 9M 2022. Total revenues from Luštica Bay reached CHF 26.5 million (9M 2021: CHF 28.1 million). Hawana Salalah, Oman: Hawana Salalah continued to witness a positive change of events, operationally and financially, with COVID-19 restrictions being lifted. Net real estate sales continued to increase, with net sales up 157.9% to CHF 27.6 million (9M 2021: CHF 10.7 million). Real estate revenues reached CHF 12.2 million in 9M 2022. Our hotels achieved notable growth in revenues, up 5.2x to CHF 16.6 million in 9M 2022. While the GOP reached CHF 1.9 million in 9M 2022 vs. the negative CHF 4.0 million in 9M 2021. Total revenues from Hawana Salalah increased by 62.4% to CHF 31.5 million (CHF 19.4 million in 9M 2021). The Cove, UAE: The Hotel’s occupancy rates reached 61% in 9M 2022 up from 49% in 9M 2021. On the operational level, our GOP increased by 23.3% to CHF 3.7 million vs. 9M 2021. Total revenues for The Cove increased by 21.4% to CHF 15.9 million (9M 2021: CHF 13.1 million). Jebel Sifah, Oman: Net real estate sales reached CHF 12.1 million in 9M 2022 (9M 2021: CHF 24.6 million). We managed to increase our average selling prices by 29.9% to CHF 2,975/sqm vs. 9M 2021. Construction progress and real estate deliveries in Jebel Sifah are continuing at a steady speed. Total revenues for Jebal Sifah reached CHF 18.5 million in 9M 2022 (9M 2021: CHF 23.1 million). Business Updates 2022: While the current state of the global business environment is uncertain and poses some operational challenges, we are confident that our strategies and business fundamentals will carry us forward through these challenging times. As always, we will continue closely monitoring macroeconomic and global inflationary pressures' effects on consumer purchasing power and our business. We will also continue to keep a close eye on our cash balance and monitor costs. We will remain focused on expanding our operations, protecting our profitability, and unlocking new value for our shareholders. While the situation remains highly fluid, the outlook is subject to extraordinary uncertainty. The management is closely monitoring the market developments. The key areas we are focusing on for our core lines of business for 2022: Hospitality Segment: In Egypt, we will be focusing our efforts on attracting more tour operators from our traditional German-source markets that feed into El Gouna. Will continue campaigning staunchly in the local market to balance the international uncertainty demand pattern. We will finalize the renovation works by Q4 2022; across some of our hotels in El Gouna (Sheraton, Chedi, Steigenberger, Ocean View) to increase our ARRs. In Oman, the lifting of entry restrictions has enabled us to gradually re-open our hotels in Salalah, with charter arrivals expected to increase over the coming months. In Ras al Khaimah, we will renovate 204 rooms, with plans to be completed by Q4 2022. Real Estate Segment: Continue fast-tracking our construction pace to meet contractual dates or deliver before time, thus increasing revenues and mitigating any potential inflationary effect on costs. Continue increasing the average selling prices across all destinations to absorb the escalation in prices of raw materials, while closely examining construction & infrastructure costs to guarantee high-value engineering & procurement savings. Maximizing cross-selling synergies between our destinations.  Town Management Segment: Provide attractive offerings for startups and entrepreneurs, encouraging them to come and settle in our destinations. Focus on extra work by strengthening our home offerings through introducing standard home renovation packages tailored for the owners with better payment terms. Contact for Investors: Ashraf Nessim          Chief Financial Officer    Mobile: [phone] Tel: [phone]      Email: [e-mail]        Ahmed Abou El Ella          Investor Relations Director    Mobile: [phone]      Email: [e-mail]        Philippe Blangey   Partner        Dynamics Group AG Tel: [phone] Email: [e-mail]     Disclaimer and 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 of law. If this applies to you, you are not authorized to access or use any 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’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’s results of operations and on whether Orascom Development Holding will achieve its targets. Orascom Development Holding 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.                                   End of Inside Information

Language:	English
Company:	Orascom Development Holding AG
	Gotthardstraße 12
	6460 Altdorf
	Switzerland
Phone:	[phone]
Fax:	[phone]
E-mail:	[e-mail]
Internet:	www.orascomdh.com
ISIN:	CH0038285679
Valor:	A0NJ37
Listed:	SIX Swiss Exchange
EQS News ID:	1488677

End of Announcement	EQS News Service

1488677  16-Nov-2022 CET/CEST