November 2015 Agenda 9M 2015 Highlights & Destinations Update - - PowerPoint PPT Presentation

November 2015 9M 2015 Results

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9M 2015 Highlights & Destinations Update Page 3 Strategy update & Financial review Page 5 Business segments Page 11 Outlook 2015 Page 18

Agenda

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Key messages from OHD 9M 2015 results

• A huge boost in profitability, with a net income 1 increase of EGP 290.0 million in 9M 15, almost 10 times more than the

9M 14 net income of EGP 27.1 million, and an EBITDA of EGP 592.6 million in 9M 15 vs EGP 375.1 million in 9M 14.

• Real Estate sales during the 9M 15 reached EGP 571.7 million, 166% more than 9M 2014 which reached EGP 214.8

million.

• Our Hotel segment performance continued its positive trend, with revenue growing from EGP 385.1 million to EGP 440.4

million and average occupancy rate reaching 53% vs 48% in 9M 14

• Signed a new sub-development agreement with Hassan Allam Properties Company to sub-develop 100,000 m2 of land in

El Gouna for a total value of USD 20 million and have received 15% of the total deal value.

• On track with our debt reduction target, and we expect to finalize the ongoing bank negotiations and agree on the
• ptimum debt refinancing package before year-end
• The extent of the impact expected on our hotels’ operations post the recent events in Sharm El Sheikh is still unclear.

However we are planning to compensate Russian lost business in Makadi from other source markets until the situation returns back to its normal pace.

1 Attributable to the shareholders of the company

• Planning to capitalize on the Government communicated initiatives towards the tourism industry and tourism players in

the market

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9M 2015 Highlights & Destinations Update Page 3 Strategy update & Financial review Page 5 Business segments Page 11 Outlook 2015 Page 18

Agenda

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Income Statement

(EGP mn) 9M 2015 9M 2014 Revenue 1,447.6 1,127.4 Cost of sales (822.3) (877.0) Gross profit 625.3 250.4 Gross profit margin 43.2% 22.2% Investment income 45 18.6 Other gains and losses (95.9) 53.3 Administrative expenses (47.5) (45.8) Finance costs (173.2) (172.4) Share of gains / (losses) of associates (16.2) (7.2) Provisions (30) (0.2) Profit / (loss) before tax 307.5 96.7 Income tax expense (37.4) (55) Net profit for the period 270.1 41.7 Attributable as follows : OHD shareholders 290.0 27.1 Non-controlling interests (19.9) 14.6 Basic EPS (EGP) 1.31 0.12

Notes

Revenues increased by 28% mainly due to the increase in hotel’s operations & the recognition of the second and third parcels of El Sewedy land deal and the new Allam land deal done in El Gouna. Gross profit margin increased mainly due to the high margins associated with the land segment. The increase in investment income was mainely due to the increase in interest income on the time deposits from the earlier sale of 15% in OHD. The decrease in other gains and losses was mainly due to foreign exchange losses. The share of loss in associates was due to losses incurred in OHC. Provisions related to contingent laibilities expected to be setteled during the coming period.

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Balance sheet

(EGP mn)

• 30. 9.15

31.12.14 Property, plant and equipment 3,817 3,743 Inventories 647 649 Receivables 1,271 848 Cash and bank balances 750 463 Investments in associates 99 115 Other assets 899 1,334 Total assets 7,483 7,152 Borrowings 3,251 3,227 Payables 263 273 Provisions 248 230 Other liabilities 960 925 Total liabilities 4,722 4,655 Non-controlling interests 491 514 Equity attributable to ODH shareholders 2,270 1,983 Total liabilities and equity 7,483 7,152

Notes

Increase in PPE was due to the increase in Tamweel’s business activity and the construction of the new Ancient Sands hotel in El Gouna. Receivables significantly increased due to the increase in operating activities, with the main contribution coming from the land segment. Increase in cash and bank balances was mainly due to the cash received from the parent company “ODH” (EGP 418 mn) resulting from its 15% stake sale in our company, accordingly the other assets decreased by the same amount. Total borrowings increased mainly due to the increase in foreign exchange rates. The increase was partially

• ffset by loan repayments during the period.

Other liabilities increased due to the increase in the customer advanced payments, resulting from the new real estate sales.

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Cash Flow statement

(EGP mn) 9M 2015 9M 2014 Cash from operations 331 211 Interest paid (142) (83) Taxes paid (40) (28) Operating Cash Flow 149 100 Payments for PP&E (176) (66) Other items 45 (2) Investing Cash Flow (131) (68) Change in Borrowings (147) 12 Proceeds from parent company 418 Other items (2) (2) Financing Cash Flow 269 10 Net change in cash/equivalents 287 42 Cash and bank balances beginning of period 463 251 Cash and bank balances end of period 750 293

Notes

Improvement in cash flow from operations:

• Enhanced operating activities (RE and hotels &

land segment).

• Deconsolidation of OHC & its subsidiaries .

Payments for PP&E increased mainly due to the increase in Tamweel activity during the period and the construction of Ancient Sands Hotel in El Gouna Change in Borrowings mainly resulting from: (-) The repayment of short term loans of EGP 215mn (+) Increase in Tamweel business activities This amount represents cash received from the parent company “ODH” as result of its 15% stake sale in our company (this amount is included in the cash from operations in the audited financial statements)

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Key debt metrics

3,078 3,128 3,113 3,124 3,227 3,251

175 163 166 145

2,500 2,700 2,900 3,100 3,300 3,500 FY 13 1Q 14 2Q14 3Q14 FY 14 3Q 15

OHD Disposal groups

Total debt development 2

EGP mn

On target to reduce debt, currently negotiating an optimum debt refinancing package which is expected to finalize during the end of the year

MTL maturity profile 1

EGP mn, as of 30.09.15 100 200 300 400 500 600 700 2015 2016 2017 2018 2019 2020 2021 2022

1 Total outstanding debt of existing loans ending at each corresponding year excluding Tamweel, before rescheduling 2 Debt Includes Tamweel 3 Planned outstanding debt including overdraft facilities and excluding Tawmeel , after paying off EGP 413 mn

100 200 300 400 500 600 700 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

Debt maturity profile after rescheduling 3

EGP mn, as of 30.09.15

Comments

• Paid off all capitalized interest for the year 2014.
• On track with the debt repayment target, expected to

finalize the new debt refinancing package by year end.

• OHD maintains relationship with 10 banks.

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Financing profile 1

Collateralization profile

in %, as of 30.09.15 Hotels 51% Shares 19% Others 12% Nil 18% Secured 82% Unsecured 18%

Interest payments by currency

in %, as of 30.09.15

Total debt by currency

in %, as of 30.09.15

50% 46% 4% EGP USD EUR 32% 58% 10% EGP USD EUR

1 All debt figures exclude debt relating to Tamweel Mortgage Finance

2 Equity Ratio = Total Equity/Total Assets 3 Excluding Tamweel

30.09.15 31.12.14 Equity ratio (%)2 36.4% 34.9% Weighted average cost of debt (%)3 7.56% 7.60%

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9M 2015 Highlights & Destinations Update Page 3 Strategy update & Financial review Page 5 Business segments Page 11 Outlook 2015 Page 18

Agenda

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Business Segments 9M 2015

Revenue EBITDA (EGP mn) 9M 2015 9M 2014 Δ in % 9M 2015 9M 2014 Hotels 440.4 385.1 14.4% 17.41 52.11 Real Estate 214.1 397.1 (46.1)% 158.2 156.6 Land 514.5 94.2 446.2% 498.5 84.5 Destination Management 74.3 63.8 16.5% (0.5) 12.6 Other Operations 204.3 187.2 9.1% 74.9 65.7 Corporate & Unallocated Items

• (155.9)2

3.62 OHD Group 1,447.6 1,127.4 28.4% 592.6 375.1

1 A One-off provision expense taken with an amount of EGP 26 mn in 9M 15 compared to a one-off gain with an amount of EGP 23 mn in 9M 14. 2 The increase in losses resulted from an FX loss of EGP 89 mn in addition to the share of losses of associates amount of EGP 16 mn in 9M 15

compared to a one-off gain from OHC deemed loss of control in the 9M 14 with and amount of EGP 75 mn

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Value of contracted units (EGP mn) Number of contracted units Average Selling Price (EGP/m2) Value of deferred Revenue (EGP mn) Destination 9M 15 9M 14 9M 15 9M 14 9M 15 9M 14 9M 15 9M 14 El Gouna 549.7 197.3 163 59 20,381 18,484 612.3 247.0 Fayoum

• 24.9

32.1 Makadi 7.5 17.5 18 46 5,171 4,582 4.1 15.3 Gardania 14.5

• 3
• 10,077
• OHD Group

571.7 214.8 184 105 19,033 14,692 641.3 294.4 Numbers net of cancellations: OHD Group

497.6 164.4 148 74

Real Estate KPIs 9M 2015 & Deferred Revenue

Revenue Recognition Schedule (EGP mn)

Destination Deferred Revenue Balance Q4 2015 2016 2017 2018 El Gouna 612.3 29.1 197.8 202.9 182.5 Fayoum 24.9

• 19.3

5.6

• Makadi

4.1 0.7 3.5

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Real estate performance update and outlook

Performance Update

• Net sales in 9M15 has significantly increased by 203% to reach EGP 497.6 mn compared to EGP 164.4 mn in 9M14.
• Cash Collections from real estate sales in 2015 to date reached EGP 323.3mn.
• Launched new phases of Joubal and Sabina, with a total inventory of USD 50 million

Outlook

• Accelarating the construction of all launched projects during 2014, expecting to deliver Joubal, 6 months ahead of

schedule.

• We are continuing with our land bank monetization strategy bringing in potential investors to invest in value

adding projects in our destinations.

• Planned to launch a total inventory of USD 30 million during 4Q 15, represented in the Water Side Condos project,

introducing the new concept of rental management.

• We are planning to launch new products in Makadi, to include single family homes, that haven’t been introduced
• before. In parallel, we are also speeding up the construction activity in the destination starting with the club

house facility with plans to deliver two apartments buildings in 2017.

• Finalizing the construction of the hotel in Byoum, Fayoum, expected to be operational by end 1Q 16.

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Hotels summary

Hotels 3Q 15 3Q 14 Change 9M 15 9M 14 Change Occupancy rate (%) 60 64

• 4 Ppt

53 48 5 Ppt TRevPar (EGP) 373 329 13.4% 313 252 24.2% GOP PAR (EGP) 1 73 71 3.0% 45 36 25.0% Revenues (EGP mn) 167.7 153.7 9.1% 440.4 385.1 14.4% EBITDA (EGP mn) 3.6 44.3 (EGP 40.7mn) 17.4 52.1 (EGP 34.7mn) Adjusted EBITDA (EGP mn) 30.7 28.7 EGP 2.0mn 44.8 43.1 EGP 1.7mn

1 GOP PAR: Gross Operating Profit Per Available Room

Continued efforts to promote the Hotels performance afforded a 14.4% increase in revenues during the 9M 15 vs. 9M 14

Commentary

• Taba Heights’ continue to suffer operating losses due to the travel bans imposed by the European countries
• Hotels’ EBITDA in 9M 15 was affected by foreign exchange losses and a one-off tax provisions of EGP 36 mn
• The EBITDA for 9M 14 included a one-off gain of EGP 21 mn resulting from the waiver of the current account with Garranah
• Government dictated an increase in the service charge and utility tariffs, which negatively affected the hotel’s GOP

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Number of hotel rooms Occupancy rate (%) TRevPar (EGP) GOP PAR (EGP) Destination 9M 15 9M 14 9M 15 9M 14 9M 15 9M 14 9M 15 9M 14 El Gouna 2,450* 2,529 66 59 428 366 106 100 Taba Heights 2,365 2,365 19 29 148 129 (66) (36) Makadi 1,113 1,117 69 58 273 211 66 29 Floating Hotels 27 27 10 3 558 156 (216) (511) OHD Group 5,955 6,038 53 48 313 252 45 36

Hotel KPIs 9M and 3Q 2015

Number of hotel rooms Occupancy rate (%) TRevPar (EGP) GOP PAR (EGP) Destination 3Q 15 3Q 14 3Q 15 3Q 14 3Q 15 3Q 14 3Q 15 3Q 14 El Gouna 2,450* 2,529 69 66 473 415 119 126 Taba Heights 2,365 2,365 25 53 200 219 (42) (6) Makadi 1,113 1,117 80 77 354 283 114 55 Floating Hotels 27 27 9 3 447 158 (314) (316) OHD Group 5,955 6,038 60 64 373 329 73 71

* Ocean View Hotel: No of operating rooms in Q3 15 were only 155. whereby, 79 rooms have been converted to residential units

• During the 9M 2015,only 4 hotels were operating (1,756 rooms) in Taba Heights. Whereby, during 9M 2014, all 6 hotels were operating until May 2014, we shut down El Wekala and

Bay View (both representing 609 rooms)

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Hotels performance update and outlook

• Makadi Hotels sustained its positive performance, recording a 106% growth in GOP in 3Q 15 vs. 3Q 14. This

performance resulted from OHM’s take over of management in February 2015. The hotels achieved a GOP of EGP 20mn, representing a 144% increase for 9M 15 vs. 9M 14

• Continued Hotel refurbishments, coupled with the reviewed contracting strategy introduced in 2014 and the new F&B
• utlets across El Gouna Hotels afforded a 14% increase in TRevPAR values in 9M 15 over 9M 14
• Continuing with the cost-cutting measures at Taba Heights. We have downsized operations and have kept only Sofitel

hotel open with 442 rooms. In the 9M 15, net losses generated from Taba Heights hotels alone amounted to EGP 27mn

• Active measures to increase the efficiency of the segment . Converted 79 rooms of Ocean view hotel in El Gouna into

residential units to be sold.

• Progressing with the development of the Ancients Sands hotel in El Gouna and Paradisio in Fayoum. Hotels are due to
• pen in 1Q 16
• Anticipated slowdown in the European business post the Sharm El Sheikh plane crash in October 2015.

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3Q 2015 Highlights & Destinations Update Page 3 Strategy update & Financial review Page 5 Business segments Page 11 Outlook 2015 Page 18

Agenda

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Outlook 2015

• Advanced negotiations with all lenders on an optimum debt refinancing taking into account grace period, pricing,

tenor and currency mix. Expected to be finalized during year end.

• Real Estate Sales continue its positive momentum, very close to achieving the USD 75 million target of the year.
• The preliminary occupancy readings in El Gouna are above 70% for October and above the 70% range for Makadi.
• Finalizing the construction of Ancient Sands Hotel in El Gouna, and Byoum Hotel in El Fayoum which is planned to
• pen by end of Q1 16.
• Accelerating construction activity across all projects. Some of the projects expected to be delivered ahead of

schedule, resulting in early booking of revenues and 10% cash delivery payment

• On progress in terms of real estate development, preparing the needed work on the new Water Side Condos launch

in El Gouna during Q4 15, with a total sellable inventory of USD 30 million.

• Actively seeking measure to compensate this lost business from other source markets until the situation returns to

back to normal pace.

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IR dashboard

Investor Relations Contact:

Sara El Gawahergy Director of Investor Relations Tel Dir +20 (0) 22 461 89 61 Mobile EGY: +20 100 2185651 Mobile CH: +41 41 874 1711 sara.elgawahergy@orascomdhcom ir@orascomdh.com www.orascomhd.com

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