Q1 2017 Results May 2017
Agenda Q1 2017 Company Highlights Page 3 Q1 2017 Destination Progress and Outlook Page 5 Financial Review Page 11 2
Key Highlights Q1 2017 Enhanced operational performance across all business segments resulting a 73.9% increase in total revenues to reach EGP 493.8mn vs. EGP 284.0mn in Q1 2016. Net sales increase by 113.2% to EGP 185.3 million in Q1 2017 from EGP 86.9 million in Q1 2016. Hotels GOP reached EGP 69.4 million vs. a loss of 0.6 million in Q1 2016 and El Gouna remains the top performer in the market. Hotel revenues more than doubled to EGP 200.9 million vs. EGP 85.6 million in Q1 2016. Real estate revenues reached EGP 126.4 million, a 32.9% increase over EGP 95.1 million in Q1 2016. Adjusted EBITDA increased by 158.9% to reach EGP 178.4mn compared to EGP 68.9mn in Q1 2016. Net profit attributable for OHD shareholders during the period reached EGP 31.8 million vs. a net loss of EGP 96.8 million in Q1 2016. In El Gouna, we successfully implemented a new hotel management strategy in Jan. 2017 coupled with renovations of some of the hotels in the destination. Currently studying several land opportunities in New Cairo and the North Coast for first and second homes markets. 3
Agenda Q1 2017 Company Highlights Page 3 Q1 2017 Destination Progress and Outlook Page 5 Financial Review Page 11 4
Business Segments Q1 2017 Adj. EBITDA 1 Revenue EBITDA (EGP mn) Q1 2017 Q1 2016 Δ in % Q1 2017 Q1 2016 Q1 2017 Q1 2016 Hotels 200.9 85.6 134.7% 163.4 (47.9) 67.4 (7.9) Real Estate 126.4 95.1 32.9% 85.4 137.1 80.0 54.4 Land - - - 0.9 39.2 0.5 0.1 Destination 35.6 25.8 38.0% (10.6) (1.1) (10.2) (1.1) Management Other Operations 2 130.9 77.5 68.9% 56.0 32.6 57.5 30.0 Corporate & - - - (47.4) (169.1) (16.8) (6.6) Unallocated Items OHD Group 493.8 284.0 73.9% 247.7 (9.2) 178.4 68.9 1 Adjusted EBITDA: EBITDA adjusted for non cash items (which includes provisions & impairments, other gains and losses, FX gains & share in associates) 2 Other Operations includes revenues from Tamweel Group with the amount of EGP 79.4mn vs. EGP 46.7mn in Q1 2016 5
El Gouna, Egypt Q1 2017 Highlights and Outlook: In April we launched phase 2 of “ Tawila ” project with a total inventory of USD 22.0mn and contracts + reservation 33.0% of the project to date. Transferred some of the hotel rooms of Ocean View, Fanadir and Mosaique into real estate products and sold successfully. Launched phase 1 of the first co-working area “G - Space” - rented out. Hosted two International Squash Championships for which we have built 4 new courts. Started renovation works on the majority of our hotels, some of which to be done by December 2017. Net Sales increased by 131.9% y-o-y to reach EGP 178.3mn vs. EGP 76.9mn in Q1 2016. Hotels GOP increased by 735.6% to EGP 72.7mn vs. EGP 8.7mn in Q1 2016. Financials & KPIs Q1 17 Q1 16 % Chg Hotels Occ. for available rooms (%) 74 53 39.6% 125.9% TRevPAR (EGP) 750 332 717.5% GOP PAR (EGP) 327 40 Total Revenues (EGP mn) 169.4 73.7 129.8% Real Estate Net Contracted Units (EGP mn) 178.3 76.9 131.9% No of Contracted Units 41 34 20.6% Avg. Selling Price (EGP/m 2 ) 28,246 19,865 42.2% Total Revenues (EGP mn) 124.8 65.1 91.7% Deferred Revenue (EGP mn) 918.3 645.4 42.3% 6
Fayoum, Egypt Q1 2017 Highlights and Outlook : Planning to launch new products with a total inventory of EGP 60.5mn n in Q2 17. Financials & KPIs Q1 17 Q1 16 % Chg Real Estate Net Contracted Units (EGP mn) 6.5 1.5 333.3% No of Contracted Units 133.3% 7 3 Avg. Selling Price (EGP/m 2 ) 10,052 6,500 54.6% Total Revenues (EGP mn) - - - Deferred Revenue (EGP mn) 17.1 26.7 (36.0%) Hotels Occ. for available rooms (%) 55 432 TRevPAR (EGP) GOP PAR (EGP) (9) Total Revenues (EGP mn) 1.9 7
Makadi, Egypt Q1 2017 Highlights and Outlook: Planning to finalize the construction of the club house by the end of 2017. Hotels in Makadi were rented to FTI group since January 2017 for EUR 3.3mn per annum. Financials & KPIs Q1 17 Q1 16 % Chg Hotels 10.4 1 (16.3) N.A EBITDA (EGP mn) Net Contracted Units (EGP mn) 1.0 2.4 (58.3%) No of Contracted Units 3 8 (62.5%) Avg. Selling Price (EGP/m 2 ) 4,979 4,485 11.0% Total Revenues (EGP mn) 0.8 0.9 (11.1%) Deferred Revenue (EGP mn) 0.1 5.2 (98.1%) Net Contracted Units (EGP mn) 1.0 2.4 (58.3%) 1 Recognized revenues from the lease contract. 8
Taba Heights, Egypt Q1 2017 Highlights and Outlook: Re-opened 100 rooms in El Wekala Resort. To date we have 818 rooms operating out of the 2,365 rooms vs. 442 rooms in Q1 16. We successfully curbed the GOP losses from EGP 5.0mn in Q1 16 to EGP 6.2mn in Q1 17. Financials & KPIs Q1 17 Q1 16 % Chg Hotels Total Revenues (EGP mn) 9.1 2.2 313.6% 23 15 Occ. For total rooms (%) 53.3% Occ. for available rooms (%) 9 3 200.0% 128 TRevPAR (EGP)* 90 42.2% 138.5% GOP PAR (EGP)* (65) (155) * The KPIs are for the operating rooms. 9
Agenda Q1 2017 Highlights Page 3 Q1 2017 Destination Progress and Outlook Page 5 Financial Review Page 11
Income Statement Notes (EGP mn) Q1 2017 Q1 2016 Revenue 493.8 284.0 Revenues and gross profit margin increased 1 1 due to the enhanced operational performance Cost of sales (366.5) (261.0) in all business segments. Gross profit 127.3 23.0 Gross profit margin 25.8% 8.1% 1 Other gains and losses includes: 2 Investment income 15.3 11.7 Profits from: • Gains in relation to settlement of Other gains and losses 71.0 (67.4) 2 borrowings in the amount of EGP 114.0mn. Administrative expenses (17.8) (15.1) Losses from: • FX of EGP 40.0mn. Finance costs (95.0) (59.6) 3 • Other items in the amount of EGP 3.0mn. Share of associates 0.5 (1.4) 4 profit/losses Increase in Finance costs mainly due to: 3 Profit/(loss) before tax 101.3 (108.8) • Increase in foreign loans when translated to Current tax 5 (25.4) (9.1) EGP. • Increase of interest rates. Net profit/(loss) for the 75.9 (117.9) period The share of associates increased mainly due to 4 Attributed as follows: the enhanced operations of the associate companies. OHD shareholders 31.8 (96.7) Non-controlling interest 44.1 (21.2) Income Tax expense increased due the increase 5 of the profitability of the company. Basic EPS (EGP) 0.14 (0.44) 11
Balance Sheet Notes (EGP mn) 31.03.17 31.12.16 Property, plant and equipment 3,673.5 3,814.3 1 PPE decreased mainly due to the reclassification 1 of the 3 rented hotels in Makadi to investment Inventories 601.2 586.0 property. Receivables 1,379.7 1,428.4 Other assets increased mainly due to the increase 2 Cash and bank balances 769.3 871.1 in the investment property as a result of renting Investments in associates 109.9 109.3 the 3 hotels in Makadi. Other assets 1,205.7 940.4 2 Asset held for sale and liabilities held for sale 3 increased mainly due to the increase in Tamweel Non-current assets held for sale 1,564.2 1,349.4 3 activities during the period. Total assets 9,303.5 9,098.9 Borrowings 4,468.4 4,647.4 Payables 340.3 352.7 Provisions 313.6 317.9 Other liabilities 1,188.7 1,087.7 Liabilities related to assets held 1,347.9 1,117.6 3 for sale Total liabilities 7,658.9 7,523.3 Non-controlling interests 395.8 355.7 Equity attributable to OHD 1,248.8 1,219.9 shareholders Total liabilities and equity 9,303.5 9,098.9 12
Cash Flow Statement Notes (EGP mn) Q1 2017 Q1 2016 Cash from operations 15 105 1 Decline in cash flow from operations 1 mainly due to the acceleration of the Interest paid (7) (33) construction activity in the real estate Taxes paid (9) (1) segment. Operating Cash Flow 1 (1) 71 Payments for PP&E increased mainly 2 Payments for PP&E (164) (66) due to the increase in Tamweel activity 2 during the period. Other items 15 11 Change in Borrowings mainly resulting 3 Investing Cash Flow (149) (55) from: Change in Borrowings 3 68 19 (-) Debt repayment of EGP 184mn. (+) Loan proceeds related to Tamweel by Financing Cash Flow 68 19 EGP 168.0mn & others EGP 4mn. Net change in cash/equivalents (82) 35 (+) Proceeds from other shareholders Cash & bank balances beginning of EGP 80mn. 895 821 period Cash and bank balances end of 813 856 period 13
Financing Profile 1 Total debt by currency Interest expense by currency in %, as of 31.03.17 in %, as of 31.03.17 4% 6% 17% 37% 59% 77% EGP USD EUR EGP USD EUR 31.03.17 31.12.16 Equity ratio (%) 2 17.7% 17.3% Weighted average cost of debt (%) 7.90% 7.75% 1 All debt figures exclude debt relating to Tamweel Mortgage Finance 2 Equity Ratio = Total Equity/Total Assets 14
IR Dashboard Investor Relations Contact: Sara El Gawahergy Head of Investor Relations Tel Dir +20 (0) 22 461 89 61 Mobile CH: +41 41 874 1711 sara.elgawahergy@orascomdhcom ir@orascomdh.com www.orascomhd.com 15
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