Orascom Hotels & Development reports FY2015 Results

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OHD 2015 net income more than doubles, boosted by sale of land
Orascom Hotels & Development (OHD) has reported its financial results for 2015. Revenue grew 24% to reach EGP1,773 million, while net income more than doubled to reach EGP229 million. Profitability was boosted by the closure of two sub-development agreements, covering 110,196 sqm of land, for a combined value of USD22 million. Four new projects were launched in El Gouna, with a total value of USD93.4 million. Total contracted sales for the period totaled EGP695 million, up 74% Y-o-Y. Revenue from sale of land reached EGP541 million, up from EGP105 million in 2014, while that from the real estate segment totaled EGP286 million, down 39% Y-o-Y. Revenue from the hotels segment grew 6% to reach EGP576 million. Occupancy rates for the hotel portfolio averaged 54% (2014: 48%), while average room rate grew 7% to reach EGP345, driven by El Gouna hotels. On the balance sheet, the company’s net-debt-equity reached 0.91x in December 2015, down from 1.1x in 2014. The company plans to capitalise on the initiative recently issued by the CBE allowing companies operating in the tourism space to obtain a three-year grace period on principle and interest payments. OHD had rescheduled its outstanding debt, obtaining two years in grace period, before the launch of the CBE initiative.    
 
As for 2016 plans, management has indicated that the company is planning to launch Fanadir Bay project with a total sales value of USD60 million and a number of launches in Fayoum, with a total inventory of USD3.9 million. The company is also considering entering the first- and second-home markets in Cairo and the North Coast. For the hospitality segment, Ancient Sands Hotel (El Gouna) and Byoum Hotel (Fayoum) are set to be opened in 2Q2016. Also, strict cost-cutting measures are under way, across all hotels in Egypt, which would range from centralisation of services to the suspension of operations at some hotels, and reducing fixed costs. (Company disclosure)

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