ODH: Sales decline and profit slump
Orascom Development Holding AG (ODH) generated sales of CHF 109.4 million in the first half of 2016, 33.5 percent less than in the same period last year (164.5%). In addition, the group slipped into the red with CHF 41.3 million.
The reasons for the drop in sales were the reduction in land sales, which still amounted to CHF 42.8 million in the same period of 2015, as well as lower revenues in the hotels in Egypt, ODH writes in an ad hoc release. The results were also impacted by currency losses of CHF ten million, it added.
ODH's gross profit amounted to seven million CHF, the net loss excluding minority interests was 41.3 million CHF. In the prior-year period, the company still posted a profit of CHF four million. Adjusted EBITDA in the first half of the year was positive at CHF 8.1 million.
ODH added that it was currently operating in an environment characterized by ongoing travel restrictions and political and economic uncertainties in core markets. Sales in the hotel segment, for example, are suffering from declining tourism revenues in Egypt. In contrast, hotels in Oman and the United Arab Emirates are performing successfully, according to the company.
Meanwhile, the holding company is reorganizing itself: The current segment structure will be transformed into a destination-based structure in order to give more responsibility to the individual destinations, improve operational efficiency, shorten decision-making paths and increase transparency, ODH says. ODH has also worked out a term sheet with the banks for debt refinancing; finalization of the corresponding agreements is expected to be completed in the third quarter of 2016. (ah)
