Ad hoc announcement pursuant to Art. 53 LR.

Orascom Development Holding (“ODH”) (SIX ODHN.SW) has released its consolidated financial results for 9M 2024.

Targeted implementation of the strategic roadmap leads to improved operational and financial performance, with revenues up by 7.6% to CHF 437 million and adj. EBITDA is up by 16.5% to CHF 129 million, with a margin of 29.5%.

Altdorf, 14 November 2024 – In 9M 2024, ODH exhibited strong operational and financial performance amidst a challenging environment characterized by the ongoing conflict in Gaza, geopolitical tensions in the Middle East, and economic instability. Our results underscore effective management in a complex macroeconomic landscape. The Egyptian Pound (EGP) devaluation has impacted our financial results with a non-cash foreign exchange loss of CHF 40.5 million. Our diversified business strategy has proven resilient against inflationary pressures, supported by innovation and operational effectiveness. This approach has led to significant revenue growth and improved adj. EBITDA and expanding margins. 

Key Financial Highlights for Q3 2024:

• Total revenue: In Q3 2024, revenue decreased by 14.3% to CHF 130.5 million. Notably, our revenue and net profit figures for Q3 2023 were positively impacted by CHF 11.5 million generated from land sales. Conversely, no land sales were made in Q3 2024.


• Strong bottom-line performance: Overall bottom-line performance reported a profit of CHF 7.8 million (Q3 2023: CHF 10.2 million).


• Real estate sales: Real estate sales during Q3 2024 remained strong and reached CHF 206.3 million, A growth of 3.3% from CHF 199.8 million in Q3 2023.

Key Financial Highlights for 9M 2024: 

• Robust revenue growth: Up by 7.6% to CHF 437.0 million, driven by a robust increase in real estate, land sale activities, and the enhanced business performance of our recurring income segments.


• Gross profit: Up by 9.3% to CHF 134.6 million, with a margin of 30.8%. This growth occurred despite rising material costs due to the prevailing inflationary environment.


• Real estate revenues: Reached CHF 244.9 million, a 3.7% increase compared to 9M 2023 figures.


• Land revenues: Reached CHF 27.5 million, mainly from a landmark sale in El Gouna during Q2 2024.


• Recurring income segments: demonstrated strong performance, with revenues up 3.9% to CHF 164.6 million.


• Remarkable adj. EBITDA improvement: Increased by 16.5% to CHF 128.8 million, with a margin of 30% vs. 27%, underscoring ODH’s commitment to operational excellence.


• Finance costs: Increased by 26.4% to CHF 44.0 million, primarily due to the rise in interest rates, which will start to decline moving forward as interest rates have started to go down.


• Strong adjusted net income performance: ODH reported an adjusted net income of CHF 44.8 million, representing a 15.5% increase compared to CHF 38.8 million in 9M 2023. This figure excludes all other gains and losses, including foreign exchange fluctuations and non-operational one-off transactions.


• Cash from operations: Increased by 269.2% to CHF 111.5 million during 9M 2024, driven by improved operational performance across all business segments. This robust growth underscores our commitment to operational excellence.

However, when accounting for one-off items, ODH experienced a net loss of CHF 17.1 million, compared to a net profit of CHF 27.8 million reported in 9M 2023. The main factors contributing to this loss included:

• Foreign exchange translation losses: One-off foreign exchange losses amounted to CHF 40.5 million, primarily driven by the devaluation of the EGP against other currencies.


• Other losses: CHF 11.0 million mainly coming from the sale of RAK in UAE. 


• Share of losses from associates: CHF 7.3 million losses from our associates.

It is important to note that these losses are accounted as non-cash items and do not adversely impact the company’s cash flows, reflecting our constant commitment to operational efficiency and financial stability.

Group Real Estate: Achieved the highest ever 9M real estate sales figures, with net real estate sales up by an impressive 32% to CHF 617 million.

In Q3 2024, ODH recorded noteworthy achievements in real estate sales. The new real estate sales reached CHF 206.3 million, contributing to a total sales value of 9M 2024 of CHF 617.3 million, marking an extraordinary 31.9% increase compared to the previous year's corresponding period. This growth in sales was attributed to a rise in average selling prices, while the number of units sold remained consistent with the previous year at 1,546 units. The collective increase in sales and construction pace enhanced the Group’s real estate revenue by 3.7% to CHF 244.9 million in 9M 2024—additionally, the Adj. EBITDA increased by 1.8% to CHF 83.4 million in 9M 2024, showcasing a margin of 34.1% and reaffirming our dedication to operational excellence. Moreover, the total deferred revenue from real estate reached CHF 780.9, providing substantial visibility of our real estate revenue across all destinations over the next 3-4 years.

Group Hotels: Despite the ongoing challenges in the Middle East, we have demonstrated unwavering strength and resilience, consistently maintaining our revenues stable at CHF 107.6 million and achieving a 34% Adj. EBITDA margin ODH Hotels' established business model again yielded favorable results despite prevailing macroeconomic and geopolitical challenges worldwide. Our hotels maintained steady revenues of CHF 107.6 million, consistent with the previous year. The ability of our hotels to uphold high occupancy rates and improve room rates has been pivotal in driving this growth despite being affected by the devaluation of the EGP, which impacted the financial performance of our Egyptian hotels when reported in CHF. In EGP, total Egyptian hotel revenues increased by 29.1%, whereas in CHF, a 9% decline was attributable to the EGP devaluation. We have successfully achieved a healthy margin and achieved strong financial results. In 9M 2024, our GOP reached CHF 41.9 million—additionally, the adj. EBITDA remained solid, increasing by 2.3% to CHF 36.2 million in 9M 2024, with an improved margin of 33.6% compared to 32.9%, driven by continuous improvements in operational efficiencies. This resilient financial performance highlights our hotels' ability to navigate a challenging market environment.

Recurring income from commercial assets: Strong growth, with revenues increasing by 12% to CHF 57 million

The commercial assets segment plays a crucial role in providing a steady cash flow, offering essential support to the group during unexpected circumstances. In Q3 2024, the revenue reached CHF 20.5 million, reflecting a 7.3% increase. These outcomes have driven the commercial assets segment revenue to CHF 57 million, marking a 12% growth compared to 9M 2023—furthermore, the Adj. EBITDA outpaced revenue growth, underscoring our operational excellence—the Adj. EBITDA surged by 70.0% to CHF 10.2 million, resulting in a margin of 17.9%, a significant improvement from the 11.8% reported in 9M 2023.

Subsequent events:

Sale of a land plot in El Gouna: Sold 110,000 sqm of land to an Egyptian developer, Hassan Allam Properties, for a total value of approximately CHF 33 million, to be paid over five-year installments.

CHF 100 million bond refinancing issuing: Successfully issued a bond worth CHF 100 million with a 4.0% coupon and a five-year tenor. The bond is listed on the SIX Swiss Exchange and has been placed with a diverse group of institutional investors, retail investors, wealth management clients, and family offices.

International Finance Corporation (IFC) USD 100 million loan: The largest subsidiary in Egypt, Orascom Development Egypt (ODE), successfully signed a USD 155 million loan facility with the IFC. This loan facility will primarily be used to partially refinance ODE’s existing debt and fund potential growth opportunities for the hotel business line in El Gouna and planned capital expenditures for renovating the hotels in El Gouna. The financing will lower the company’s credit spreads and extend the maturity of the debt, thereby improving ODH’s debt profile. The new loan facility includes a 2.5-year grace period and an 8.5-year tenor.

Details on Destinations

El Gouna, Red Sea:

New real estate sales grew by 47.4% to CHF 216.6 million in 9M 2024 despite being affected by the EGP devaluation. The average selling prices were up 30.5%, reaching CHF 4,687/sqm during 9M 2024, while Q3 2024 prices were up by 74.5% to CHF 6,076/sqm. In EGP currency, net sales grew by 109.7% to EGP 10.5 billion, the highest ever since inception, while average selling prices were also up by 85.7% to EGP 226,206/sqm vs. 9M 2023, while Q3 2024 average selling prices soared by 148.1% to EGP 293,209/sqm. International sales recorded 44% of total real estate sales during 9M 2024. Meanwhile, on the construction side, El Gouna is progressing rapidly with construction activities, with plans to deliver 384 units this year, of which 228 were already delivered to clients. Real estate revenues during 9M 2024 reached CHF 95.5 million.

Moving to the hospitality segment, in 9M 2024, El Gouna Hotel’s revenues experienced a 5.5% to CHF 61.3 million compared to 9M 2023 despite being impacted by the tension in the Middle East and the EGP devaluation, where in EGP currency, the hotel's revenues increased by 50%. The occupancy rate reached 69% (9M 2023: 73%). Despite the devaluation of EGP, we increased the hotels’ ARRs to CHF 88, resulting in a 7.3% increase compared to 9M 2023, while in EGP, the ARRs were up by 50%. Meanwhile, the GOP reached CHF 32.2 million, the same as last year. Foreigners occupied 80% of hotel occupancy during 9M 2024. El Gouna’s commercial assets witnessed a 10.7% increase in revenue, reaching CHF 40.5 million. El Gouna's total revenues experienced a 6.1% increase, reaching CHF 224.8 million compared to 9M 2023's figures, while in local currency, revenues were up by 51.0%.

O West, Egypt:

Net real estate sales remained solid despite being impacted by the EGP devaluation, reaching CHF 179.6mn in 9M 2024 compared to 9M 2023. However, average selling prices increased 16.9% to CHF 1,902/sqm compared to 9M 2023. In EGP currency, O West has achieved a 37.6% increase in net real estate sales, reaching EGP 8.7 billion, with average selling prices up 66.2% to EGP 91,764/sqm. A commercial building within the O West commercial strip was sold for approximately CHF 6.0 million. The construction pace has accelerated, and 472 villas were delivered during 9M 2024, with plans to hand over 684 more units in 2024. The O West Club construction is progressing steadily and is expected to be partially operational before the end of 2024, with over 4,750 members to date providing steady recurring income. O West's total revenues grew by 15.1% to CHF 75.3 million; in EGP, total revenues increased by 63.6% compared to 9M 2023.

Luštica Bay, Montenegro:

In Q3 2024, Luštica Bay achieved strong sales results, generating CHF 40.8 million, signifying a significant 92.5% increase compared to Q3 2023. This outstanding performance propelled total sales to CHF 84.0 million, marking a 90.0% surge compared to 9M 2023. Luštica Bay successfully sold 121 units during 9M 2024, reflecting a 70.4% increase compared to last year. The average selling price for the real estate products reached CHF 7,511/sqm, representing an 8.7% increase. Total real estate revenues increased by 80.8% to CHF 17.9 million. The Chedi Hotel exhibited strong performance during the summer season, with an occupancy rate of 63% in Q3 2024, compared to 60% in Q3 2023. At the same time, the 9M 2024 occupancy reached 44% vs. 42% in 9M 2023. Total revenues from Luštica Bay experienced a 34.7% increase to CHF 30.3 million.

Hawana Salalah and Jebal Sifah, Oman:

In 2024, the onset of Oman's monsoon season, known as the \"Khareef,\" was delayed until mid-October, impacting hotel occupancy rates. Despite this, hotels in Hawana Salalah have demonstrated positive performance, achieving a 22.0% increase in revenues from CHF 28.7 million in 9M 2023 to CHF 35.0 million in 9M 2024. Occupancy rates rose by two percentage points to 58% in 9M 2024. Shifting the focus to the real estate sector, net real estate sales continued to climb, reaching CHF 30.7 million, reflecting a 60.7% increase. Additionally, average selling prices rose by 16.2% to CHF 2,957/sqm. Notably, progress in construction and real estate delivery remains ongoing across various projects, with 73 units being delivered out of the planned 115 units scheduled for handover in 2024. Total revenues from Hawana Salalah rose by 9.6% to CHF 50.1 million.

Oman’s second destination, Jebal Sifah, saw real estate sales increase by 50% to CHF 17.1 million during 9M 2024. Additionally, the number of contracted units increased by 103.6% compared to 9M in 2023, reaching 57 units sold. Total revenues from Jebal Sifah reached CHF 21.2 million during 9M 2024, an increase of 9.3% compared to 9M 2023.

Makadi Heights, Egypt:

The destination has consistently demonstrated strong sales performance since the onset of 2024. Notably, net sales surged by 56.3% to CHF 82.5 million in 9M 2024, marking the highest sales figures achieved since its establishment. Concurrently, the average selling prices rose 23.1% to CHF 1,698/sqm. Moreover, the number of units sold increased by 22.8%, with 404 units sold in 9M 2024, while real estate revenues saw a 15.2% increase to CHF 18.2 million in 9M 2024, attributed to the accelerated pace of construction. International sales constituted 63% of the total real estate sales during 9M 2024. In EGP currency, net sales soared by 124.7% to reach EGP 4.0 billion, accompanied by a 75.2% rise in the average selling price to EGP 81,949/sqm compared to 9M 2023. Total revenues from Makadi Heights experienced a 15% increase, amounting to CHF 19.9 million. However, in EGP, revenues exhibited a 62.8% increase compared to the 9M 2023 figures.

Presentation:

The associated financial statements and presentation can be found under the IR section of Orascom Developments’ website under the following links: https://www.orascomdh.com/investor-relations

Telephone conference today at 2:00 CET (Zurich Time):

Orascom Development invites you to its 9M 2024 results conference call on 14 November 2024 at 2:00 PM CET (Zurich Time). Chief Executive Officer Omar El Hamamsy, Chief Financial Officer Ashraf Nessim, and Director of Investor Relations Ahmed Abou El Ella will present 9M 2024 results and will be available to answer questions. Registration is not required.

Dial-in details are as follows:

Click here for the webinar link

Event number: 977 8417 0527

Event password: 244461

A call recording will be available after the call

Contact for Investors:      

Ahmed Abou El Ella     

Group Director of Investor Relations    

Tel: +20 224 61 89 61

Mobile: +20 122129 5555      

Email: ir@orascomdh.com

About Orascom Development Holding AG:

Orascom Development Holding (ODH) is a leading developer of fully integrated towns, including hotels, private villas, apartments, leisure facilities such as golf courses, marinas, and supporting infrastructure. Orascom Development Holding’s diversified portfolio is spread over seven jurisdictions (Egypt, UAE, Oman, Switzerland, Morocco, Montenegro, and the United Kingdom). The group currently operates ten destinations: five in Egypt (El Gouna, Taba Heights, Makadi Heights, O-West, and Byoum), The Cove in the United Arab Emirates, Jebel Sifah and Hawana Salalah in Oman, Luštica Bay in Montenegro, and West Carclaze Garden Village in the United Kingdom. The shares of ODH are listed on the SIX Swiss Exchange.

For more information, please visit https://www.orascomdh.com/

For media inquiries, please contact: Odcomms@orascomdh.com

Disclaimer & Cautionary Statement:

This press release may contain forward-looking statements based on current assumptions and forecasts of ODH management. Known and unknown risks, uncertainties, and other factors could lead to material differences between any forward-looking statements made here and the actual development, particularly ODH's results, financial situation, and performance. ODH accepts no responsibility for updating or adapting forward-looking statements to future events or developments.