ODH delivers strong results with revenue reaching CHF 689.7 million in FY 2022 and net profit of CHF 51.3 million, the highest since 2013.

Ad hoc announcement pursuant to Art. 53 LR.

Orascom Development Holding (“ODH”) (SIX ODHN.SW) has released its consolidated financial results for FY 2022.

ODH delivers strong results with revenue reaching CHF 689.7 million in FY 2022 and net profit of CHF 51.3 million, the highest since 2013.

Key Highlights of FY 2022 vs. FY 2021

• Total revenues up by 28.1% to CHF 689.7 million, with a further improvement in revenue mix
• Adjusted EBITDA recorded a 42.6% increase to CHF 186.7 million and a margin of 27.1%
• Net profit increased by 440.0% to CHF 51.3 million 
• Net real estate sales up by 7.5% to CHF 714.2 million, highest ever real estate figure in ODH’s history

Key Highlights of Q4 2022 vs. Q4 2021

• Total revenues up by 38.1% to CHF 230.4 million
• Adjusted EBITDA up by 75.9% to CHF 65.6 million and a margin of 28.5%
• Net profit increased by 35.4 times to CHF 17.7 million
• Net real estate sales increased by 10.9% to CHF 243.5 million in Q4 2022

Altdorf, 30 March 2022 – Orascom Developments financial results 2022 show record figures across many key metrics despite various challenging economic market conditions. The company’s top line, bottom line, and real estate sales figures were the highest in more than ten years. FY 2022 figures demonstrate our continued commitment to delivering high revenue growth with substantial margin improvements. The strength in margins, which are in line with our short- and medium-term trajectory, demonstrates the quality of our underlying portfolio, and improving revenue mix across our business segments.  ODH’s results in 2022 reflect not only resilience in testing times, but the company’s agility in swiftly responding to changing market conditions. In light of the devaluation of the Egyptian pound, we continue to monitor market dynamics and assess the situation from a position of strength and experience, and we will continue to follow our strategy which proved to be successful in previous cycles.

Financial Review 

FY 2022:

Total revenues reached CHF 689.7 million, up by a solid 28.1% vs. FY 2021. Gross profit increased by 36.0% to CHF 212.1 million (FY 2021: CHF 155.9 million) with a gross margin of 30.8% vs. 29.0% in FY 2021. Adj. EBITDA increased by 42.6% to CHF 186.7 million (FY 2021: CHF 130.9 million). Other gains and losses reported a loss of CHF 59.6 million vs. a loss of CHF 25.6 million in FY 2021 resulting from the devaluation of the Egyptian currency. Our share of associates reported a profit of CHF 23.7 million vs. a loss of CHF 4.8 million in FY 2021. The enhanced performance in the associates was mainly driven by the improved performance of our share in Andermatt Swiss Alps, whereby the company reported a net profit of CHF 16.9 million vs. a net loss of CHF 5.1 million in FY 2021. Finance costs increased by 14.9% to CHF 37.8 million (FY 2021: CHF 32.9 million) due to the increase in interest rates. This operational excellence was reflected in our bottom-line figures whereby net income increased by 440.0% to reach CHF 51.3 million (FY 2021: CHF 9.5 million). Our cash flow from operations increased by 9.6% to reach CHF 75.5 million in FY 2022. Total cash and cash equivalent balance reached CHF 181.2 million, and net debt reached CHF 286.6 million during FY 2022 and our net debt to Adj. EBITDA reached 1.5x in FY 2022 vs. 1.7x in FY 2021.

Q4 2022:

ODH achieved a very solid fourth quarter, continuing at a steady pace of growth compared to pre-pandemic levels. Revenues increased by 38.1% to CHF 230.4 million in Q4 2022. Gross profit increased by 57.5% to CHF 70.1 million in Q4 2022 with a gross margin of 30.4% vs. CHF 44.5 million and a margin of 26.7% in Q4 2021. Our enhanced margins signal our operational excellence despite global challenging market conditions in 2022. Adj. EBITDA reached CHF 65.6 million, up 75.9% in Q4 2022 and a margin of 28.5%. In line with this background, net profit increased by 35.4x to reach CHF 17.7 million (Q4 2021: CHF 0.5 million).

Group Real Estate: Recorded the highest net real estate sales in ODH history.

New sales for Q4 2022 reached CHF 243.4 million, a 10.8% increase from CHF 219.6 million in Q4 2021. That brings FY 2022 net real estate sales value to CHF 714.2 million, a 7.5% increase over FY 2021. In Egyptian currency, the net real estate sales performance of the Egyptian subsidiary ODE has improved during FY 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. The outstanding sales result of FY 2022 and the Group’s ability to beat its own already unprecedented sales record is a solid testimony to its market leadership, underpinned by its successful track record, brand equity, and trust in the quality of its developments and state-of-the-art urban communities extended by its clientele. This sales result is also a solid testimony to the accuracy of the Group’s sales and pricing strategy and well-tailored diversification of its real estate product portfolio. Real estate revenues increased by 21.7% to CHF 463.5 million (FY 2021: CHF 380.9 million) and Adj. EBITDA increased by 20.0% to CHF 174.8 million in FY 2022. Total deferred revenue from real estate that is yet to be recognized until 2027 reached CHF 696.6 million in FY 2022. 

Group Hotels: Q4 2022 surpasses pre-pandemic levels, with significant increase in revenues and GOP across all our hotels.  

The Group’s proven business model once again delivered pleasing quarterly results, despite a challenging regional economic environment. Our hotels exhibited solid growth during 2022, primarily driven by strong average daily rates and enduring leisure demand. With further room for occupancy to increase, we look forward to steady growth. Total revenues during Q4 2022 increased by 29.4% to CHF 42.2 million (Q4 2021: CHF 32.6 million) pushing our GOP to CHF 18.3 million, a 53.8% increase. (Q4 2021: CHF 11.9 million). Both the summer and winter seasons completed with promising results, as guests traveled further, stayed longer, and spent more time at our hotels. Accelerating TRevPAR growth expanded our operating leverage and led us to generate CHF 12.1 million of Adj. EBITDA during Q4 2022 up 98.4% vs. Q4 2021. Revenues for the hotels during FY 2022 increased by 63.2% to CHF 142.5 million (FY 2021: CHF 87.3 million); GOP also increased by 138.5% to CHF 50.8 million (FY 2021: CHF 21.3 million). The segment Adj. EBITDA increased by 285.9% to CHF 32.8 million (FY 2021: CHF 8.5 million) on the back of further improvements in operational efficiencies.

Group Destination Management: Maintained its improved operational performance, with revenues up 19.1% to CHF 83.7 million.

The destination management segment continued to grow in a very healthy way, both from a margin perspective as well as from a revenue and EBITDA perspective, reaping the benefits of the successful restructuring implementation. Revenues increased by 19.1% to CHF 83.7 million (FY 2021: CHF 70.3 million), while Adj. EBITDA increased by 134.0% to CHF 12.4 million in FY 2022. The notable increase in revenues were supported by the implementation of a rich calendar of events in the different destinations and improving the quality and profitability of our amenities.

Details on Destinations

El Gouna, Red Sea:

New real estate sales during FY 2022 reached CHF 223.9 million (FY 2021: CHF 235.7 million). In Egyptian Pounds (EGP), the net real estate sales performance of El Gouna has increased by 9.5% vs. FY 2021. Yet, this operational enhancement was not reflected when being translated into CHF because of the EGP currency devaluation. We managed to increase the real estate average selling prices by 2.1% to CHF 3,641/sqm vs. FY 2021. Our solid construction pace kept us on track and managed to deliver all 285 planned units for FY 2022. Real estate revenues were up by an 19.8% to CHF 195.0 million (FY 2021: CHF 162.8 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 2.1% to CHF 19.9 million (Q4 2021: CHF 19.5 million). Hotels’ occupancy levels increased from 69% to 73% in Q4 2022. For FY 2022, hotels’ revenue soared by 47.1% to CHF 73.4 million (FY 2021: CHF 49.9 million) and occupancy rates reached 70% (FY 2021: 45%). GOP increased by 65.6% to CHF 37.1 million during FY 2022. Foreigners represented 85% of our total hotels' occupancy during Q4 2022 and 80% for FY 2022. Moving to the hotel’s development side, we are progressing with the renovation process across three hotels, with plans to be finalised during Q1 2023 and opened the Chedi Gouna Hotel during December 2022. Town management continued its positive momentum with revenues up 17.1% to CHF 65.6 million (FY 2021: CHF 56.0 million). Total revenues for El Gouna were up by a solid 24.3% to CHF 334.0 million in FY 2022 (FY 2021: CHF 268.7 million).

O West, Egypt:

O West continues to affirm its leading position in West Cairo. New real estate sales for Q4 2022 reached CHF 104.5 million, a 7.8% increase vs. Q4 2021. That brings our FY 2022 sales value to CHF 289.6 million, a 25.3% increase vs. FY 2021. We also managed to increase our average selling prices by 8.3% to CHF 1,934/sqm vs. FY 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 townhouses, with plans to start delivering 710 units in Q2 2023. We started the construction of 119 units in the O West Business District. The construction work at O West Club is progressing and is expected to be partially open by Q3-2023. Total revenues of O West increased by 46.4% to CHF 146.0 million in FY 2022 (FY 2021: CHF 99.7 million).

Luštica Bay, Montenegro:

The destination witnessed extra-ordinary progress during 2022. The additional activities to enhance the overall appeal of the destination, supported by the regional sales efforts, contributed to the general improvement. Net real estate sales increased by 54.3% to CHF 90.1 million (FY 2021 CHF 58.4 million) achieving the highest sales ever since the project launch. Our average selling prices have also increased by 11.7% to CHF 5,685/sqm vs. FY 2021. Construction works are moving on plan which is evident by the construction of 138 units in the “Centrale” and “Marina Village” areas and managed to hand over 79 units in both areas during 2022. On the hotel side, The Chedi Hotel witnessed a 17.5% increase in revenues to CHF 6.7 million vs. FY 2021, driven by a joint charter operation with FTI. Occupancy rates reached 46% during FY 2022 (FY 2021: 45%), coupled with a 3.9% increase in ARR to CHF 186 (FY 2021: CHF 179). Additionally, our town management revenues increased by 123.3% to CHF 6.7 million during FY 2022. Total revenues from Luštica Bay increased by 11.8% to CHF 44.5 million (FY 2021: CHF 39.8 million).

Andermatt Swiss Alps, Switzerland:

Interest in Andermatt, Switzerland, has continued to flourish, whereby net real estate sales reached an all-time high up 24.0% to CHF 151.3 million (FY 2021: CHF 122.0 million). Average selling prices have considerably grown by 16.9% to CHF 17,280/sqm vs. FY 2021. Real estate revenues increased by 2.3% to CHF 125.2 million (FY 2021: CHF 122.4 million). Moving to the hotel side, The Chedi Andermatt reported a 68% occupancy while Radisson Blu Hotel Reussen’s occupancy reached 48%. Overall, the occupancy for Andermatt hotels reached 55% (FY 2021: 53%). Total hotels revenues reached CHF 55.7 million (FY 2021: CHF 58.1 million). Total revenues for Andermatt Swiss Alps increased by 0.2% to CHF 180.9 million (FY 2021: CHF 180.5 million).  

Hawana Salalah, Oman:

Hawana Salalah continued to witness a positive change of events, operationally and financially, especially after COVID-19 restrictions were lifted. Our real estate products have rebounded after the removal of all pandemic related restrictions, whereby net real estate sales increased by 254.8% to CHF 36.9 million (FY 2021: CHF 10.4 million). Real estate revenues reached CHF 20.2 million in FY 2022. Our hotels achieved a notable growth in revenues as demand started to pick up again. Total hotel revenues increased by 291.3% to CHF 27.0 million (FY 2021: CHF 6.9 million). While GOP reached CHF 4.9 million in FY 2022 vs. negative CHF 4.6 million in FY 2021. Occupancy rates increased to 41% in FY 2022 vs. 13% in FY 2021. Total revenues from Hawana Salalah increased by 63.8% to CHF 51.1 million (CHF 31.2 million in FY 2021) benefiting from the rise in demand of the hospitality segment.

Makadi Heights, Egypt:

Net real estate sales during FY 2022 decreased by 30.3% to CHF 48.0 million (FY 2021: CHF 68.9 million), as we purposefully slowed sales until we resolved the land concern issue with the Tourism Development Authority (TDA) in June 2022.  During 2022, Makadi Heights faced more limitations in terms of construction due to delayed permit approvals from the TDA, which disrupted progress. However, as of the second half of 2022 real estate sales started to pick up. Nevertheless, the continued acceleration of real estate construction activity, coupled with on-track delivery schedules led to the delivery of all 248 planned units. Total revenues from Makadi Heights decreased by 20.3% to CHF 32.1 million in FY 2022.

Jebel Sifah, Oman:

Net real estate sales reached CHF 16.4 million (FY 2021: CHF 27.6 million). We managed to increase our average selling prices by 17.1% to CHF 2,729/sqm vs. FY 2021. Construction progress and real estate deliveries in Jebel Sifah are continuing at a steady speed. Total revenues for Jebal Sifah reached CHF 27.3 million in FY 2022 (FY 2021: CHF 30.1 million).

The Cove, UAE:

The Hotel’s occupancy rates reached 65% in FY 2022 up from 55% in FY 2021. On the operational level, GOP increased by 30.8% to CHF 6.8 million vs. FY 2021. Total revenues for The Cove increased by 18.4% to CHF 23.2 million (FY 2021: CHF 19.6 million).

Outlook 2023:

The fiscal year 2023 started with challenging notes on both global and local fronts as global economic uncertainty intensified with the Russian and Ukrainian conflict. The global economic ramifications have pushed most central banks to raise interest rates. 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 the challenging times.

In 2023, we will continue to navigate the short-term challenges while striving to meet our long-term commitments. Despite the current uncertainties, we remain confident in the outlook for the global hospitality and real estate markets, which has again confirmed its resilience and achieve another year of growth in 2023.

As always, we will remain focused on expanding our operations, protecting our profitability, and unlocking new value for our shareholders. While the situation remains fluid, the outlook is subject to uncertainty. The management is closely monitoring the market developments. Nevertheless, we are continuing to abstain, at least for the time being, from providing guidance for 2023.

About Orascom Development Holding (ODH):
ODH is a leading developer of fully integrated destinations that include hotels, private villas and apartments, leisure facilities such as golf courses, marinas and supporting infrastructure. ODH's diversified portfolio of destinations is spread over 7 jurisdictions (Egypt, UAE, Oman, Switzerland, Morocco, Montenegro, and United Kingdom), with primary focus on touristic destinations. ODH currently operates nine destinations: four in Egypt (El Gouna, Taba Heights, Makadi Heights and Byoum), The Cove in the United Arab Emirates, Jebel Sifah and Hawana Salalah in Oman, Luštica Bay in Montenegro, and Andermatt in Switzerland. The shares of ODH are listed on SIX Swiss Exchange. ODH recently launched O West, the latest addition to its portfolio and its first project in Cairo, Egypt, located in the Sixth of October City.
 
Contact for Investors:
Ashraf Nessim         
Chief Financial Officer   
Mobile: +20 122 213 1612
Tel: +41 418 74 17 11     
Email: ir@orascomdh.com     
 
Ahmed Abou El Ella         
Investor Relations Director   
Mobile: +20 122 129 5555     
Email: ahmed.abouelella@orascomdh.com     
 
Philippe Blangey  
Partner       
Dynamics Group AG
Tel: +41 432 68 32 35
Email: prb@dynamicsgroup.ch  
 
 
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