1H 2018 Results
Agenda 1H 2018 Key Highlights & Destination Progress Page 3 1H 2018 Financials and KPIs Highlights Page 8 1H 2018 Financials and KPIs Appendix Page 13 2
Group Key Highlights 1H 2018 Orascom Development Egypt; remains on track with stellar results operationally and financially. Revenues increased by 39.8% to EGP 1.5 billion vs. EGP 1.1 billion in 1H 2017. Adjusted EBITDA soared by 45.9% to reach EGP 653.8 million vs. EGP 448.1 million in 1H 2017. Net Profits increased to EGP 184.6 million vs. adjusted net income of EGP 62.9 million in 1H 2017 (1H 2017 reported profits was EGP 176.3 million which included a one-off gain from a settlement of borrowings amounting to EGP 113.4 million). Real Estate Net sales increased by 65% to EGP 1.2 billion in 1H 2018 vs. EGP 719 million in 1H 2017 with more contribution from El Gouna and Makadi Heights. Our new real estate launch in Makadi Heights was a huge success recording net sales of EGP 110.5 million vs. EGP 0.5 million in 1H 2017. Real Estate revenues increased by 53.8% to EGP 462.2 million vs. EGP 300.5 million in 1H 2017. Deferred revenue balance jumped by 70.5% to EGP 2.2 billion vs. EGP 1.3 billion in 1H 2017 in addition to a deferred interest income of EGP 225.7 million. (Details in Appendix). Hotels Hotels revenues increased by 40% to EGP 628.3 million vs EGP 448.8 million in 1H 2017 accompanied by a 55.7% increase in the GOP to EGP 270.2 million. Town Management Revenues continued to increase this quarter recording a total of EGP 261.1 million, a 37.1% increase over EGP 190.5 million in 1H 2017. 3
Group Key Highlights 1H 2018 Corporate Updates Sold 7,955 sqm land plot in El Gouna for USD 1 million (USD 130 per sqm) to construct the first office building and lease it to a German based company. Finalizing the contract for our revenue share agreement with NUCA on the 1,000 feddan plot in West Cairo, expected within the coming 2 months. Finalizing the documentation for the sale of our earlier communicated 3 hotels in Makadi and Tamweel Group which together will result in total cash proceeds of c. 800 million and working with banks on the repayment of EGP 1 billion of debt. Continuing to hold advanced discussions to acquire a land plot in North Coast, marking our first entrance into second home markets. 4
El Gouna 1H 2018 Updates Net sales increased by 52.2% to EGP 1.1bn in 1H 2018 Financials & KPIs 1H 2018 1H 2017 % Chg Hotels GOP increased by 51.3%% to EGP 270.9mn vs. EGP 179.1mn Hotels in 1H 2017. Number of rooms 2,477 2,468 0.4% In April, we launched “Ancient Sands Villas” the phase inventory Occ. for available rooms (%) 80 75 6.7% was USD 22.7mn & managed to sell almost USD 10mn to date. TRevPAR (EGP) 1,178 851 38.4% Finalized the renovation works in Turtles Inn hotel and continuing GOP PAR (EGP) 604 403 48.9% with the other hotels to be finalized during 2018. Total Revenues (EGPmn) 531.4 382.8 38.8% Sold a 7,955 sqm land plot for a total value of USD 1mn (USD Real Estate 130/sqm) to construct the 1 st office building and lease it to a Net Contracted Units (EGPmn) 1,073 705 52.2% German based company. No of Contracted Units 166 129 28.7% El Gouna Football Club succeeded to get back to the Egyptian 1 st Avg. Selling Price (EGP/m 2 ) 39,381 33,026 19.2% Division League and for that we finalized the renovation across El Total Revenues (EGPmn) 458 299.1 53.1% Gouna stadium and now is ready to host international events. Destination Management Planning to host the 2 nd edition of El Gouna Film Festival in Total Revenues (EGPmn) 243.7 172.6 41.2% September 2018 after the great success of the 1 st edition. El Gouna Total Total Revenues (EGPmn) 1,233.1 854.5 44.3% 5
Makadi & Taba Heights 1H 2018 Updates Financials & KPIs 1H 2018 1H 2017 % Chg Makadi Heights: Real Estate We launched a new project in April 2018 with a total Net Contracted Units (EGPmn) 110.5 0.5 - inventory of EGP 200.0mn which was a huge success. No of Contracted Units 81 1 - Avg. Selling Price (EGP/m 2 ) 15,718 4,984 215.4% * Finalizing the documentation of the sale of the 3 hotels Total Revenues (EGPmn) 3.3 1.2 175% in addition to a land plot for EV of c. EGP 882.6 million. Destination Management ODE’s stake will result in total cash proceeds of EGP 492.8 Total Revenues (EGPmn) 5.5 3.6 52.8% million. The sale will also result in the deconsolidation of Hotels* EGP 260.1 million of debt. Total Revenues (EGPmn) 37.3 29.4 26.9% Makadi Heights Total Total Revenues (EGPmn) 46.1 34.2 34.8% Financials & KPIs 1H 2018 1H 2017 % Chg Taba Heights: Hotels Taba Heights remains the most challenging destination Number of rooms 2,365 2,365 - due to the extended travel bans on Sinai. Number of rooms available 1,260 992 27% Nevertheless we successfully curbed the GOP losses Occ. for available rooms (%) 22 24 (8.3%) from EGP 7.9mn to EGP 6.1mn in 1H 2018 and TRevPAR (EGP) 184 148 24.3% revenues increased by 74.9% to EGP 41.8mn vs. EGP GOP PAR (EGP) (27) (47) (42.6%) 23.9mn in 1H 2017. Total Revenues (EGPmn) 41.8 23.9 74.9% Destination Management 12.1 14.4 (16%) Total Revenues (EGPmn) Taba Heights Total Total Revenues (EGPmn) 53.9 38.3 40.7% 6
Agenda 1H 2018 Key Highlights & Destination Progress Page 3 1H 2018 Financials and KPIs Highlights Page 8 1H 2018 Financials and KPIs Appendix Page 13 7
Income Statement Notes (EGP mn) Q2 2018 Q2 2017 1H 2018 1H 2017 Revenue 1,528.8 873.9 599.9 1 1,093.7 Revenues and gross profit increased due to the 1 enhanced operational performance across all Cost of sales (496.7) (344.7) (917.6) (653.0) business segments. Gross profit 377.2 255.2 611.2 440.7 1 Investment income increased mainly due to: 2 Gross profit margin • The increase in real estate cash collection. 43.2% 42.5% 40.0% 40.3% • Increase in interest income on bank deposits. Investment income 42.5 21.7 2 89.1 37.0 Administrative expenses (46.5) (27.2) (7.2) (29.6) Other gains and losses for 1H 2018 includes: 3 Adj. EBITDA 392.5 269.7 653.8 448.1 • FX losses of EGP 41.1mn. Adj. EBITDA margin 44.9% 44.9% 42.8% 41.0% • Other gains of EGP 18mn. Other gains/losses (50.0) 23.4 (23.0) 92.2 3 While 1H 2017 figures included: Share of associates (0.1) (1.0) 0.5 (0.5) gain/losses • Gains in relation to settlement of borrowings in the amount of EGP 113.4mn. EBITDA 342.4 292.1 631.3 539.8 • FX losses of EGP 15mn. Depreciation (113.7) • Other losses in the amount of EGP 6.1mn. (58.0) (57.6) (109.0) Finance costs (132.6) (103.8) (237.8) (198.8) 4 Increase in Finance costs mainly due to: 4 Income tax expense (50.3) (30.3) (95.2) (55.7) 5 • Increase in interest rates Q-o-Q. Net profit for the period 101.5 100.4 184.6 176.3 Income Tax expense increased due to the 5 Attributed as follows: increase of the profitability of the company. ODE shareholders 81.7 85.6 144.0 117.4 Non-controlling interest 19.8 14.8 40.6 58.9 0.05 Basic EPS (EGP) 0.08 0.11 0.11 8
Balance Sheet Notes (EGP mn) 30.06.18 31.12.17 Property, plant and equipment 3,512.4 3,481.0 1 PPE increased mainly due to the increase in 1 construction activities in El Gouna. Inventory 747.0 624.6 2 Receivables 1,614.7 1,578.9 Inventory increased mainly due to the 2 acceleration of the construction of real estate Cash and bank balances 959.5 1,257.8 units in El Gouna. Investments in associates 113.2 112.8 Asset and liabilities held for sale include the 3 Other assets 986.1 1,025.0 following: Non-current assets held for sale 2,105.5 1,976.9 • Tamweel Group. 3 • Makadi hotels. Total assets 10,038.4 10,057.0 Borrowings 4,286.6 4,425.4 Borrowings decreased mainly due to 4 4 • (-) Payment of EGP 218mn. Payables 378.7 363.1 • (+) Capitalized interest of EGP 48mn Provisions • (+) FX gain amounting EGP 31.2mn. 297.9 292.9 Other liabilities 1,431.0 1,345.7 5 Other liabilities increased mainly due to Increase 5 of advanced payments from real estate sales. Liabilities related to assets held 1,781.9 1,689.7 3 for sale Total liabilities 8,176.1 8,116.8 Non-controlling interests 494.9 460.2 Equity attributable to ODE 1,367.4 1,480.0 shareholders Total liabilities and equity 10,038.4 10,057.0 9
Financing Profile Current debt currency Current Maturity as of 1H 2018 in %, as of 30.06.18 Cost of Debt is 10.3% 6% 1,133 18% 931 EGP 757 USD 641 EUR 76% 374 368 50 32 -- CF 2018 2019 2020 2021 2022 2023 2024 2025 Debt by currency after ODE Rescheduling 8% 11% EGP Maturity Profile after ODE Rescheduling in 2018 USD Cost of Debt is 9.5% EUR 1,191 81% 600 475 456 431 302 30.6.18 31.12.17 50 -- Equity ratio (%) 18.6% 19.3% Cost of debt (%) 10.3% 10.1% 2018 2019 2020 2021 2022 2023 2024 2025 10
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