Release Date: November 14, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Orascom Development Holding AG (XSWX:ODHN, Financial) reported a healthy growth in revenues, operating profits, and adjusted net profit for the first nine months of 2024.
- The company achieved a 77% increase in sales in local currency and a 24% increase in hard currency, with total revenue up 49% and gross profits up 61%.
- The real estate segment saw a 32% increase in sales, with a strong deferred revenue balance, indicating future revenue potential.
- The hospitality segment maintained flat revenues despite currency devaluation, with a slight improvement in operating profit and a 35% adjusted EBITDA margin.
- The commercial assets segment showed a 12% topline growth and a 70% increase in profits, highlighting improved profitability and recurring revenue growth.
Negative Points
- The devaluation of the Egyptian Pound against the Swiss Franc and US Dollar resulted in a CHF40 million net profit decrease.
- The FTI bankruptcy led to a CHF9 million impact, and an accounting adjustment for a UAE asset sale resulted in an CHF11 million write-down.
- The company's net profit was negatively affected by foreign exchange adjustments, with a reported decline despite underlying growth.
- Interest rates in Egypt and globally have increased, impacting finance costs and overall profitability.
- Geopolitical tensions in the Middle East pose potential risks to business operations, although no immediate impact was reported.
Q & A Highlights
Q: Is there going to be a dividend for 2024 paid in mid-2025 as mentioned at Investura?
A: Ashraf Nessim, CFO: We need to upstream the cash from Egypt to ODH first, either by paying a dividend from Egypt or repaying a shareholder loan. For 2024, paying a dividend from ODH to shareholders might be difficult, but it could be possible by the end of 2025.
Q: Regarding the CHF33 million land sale, will it be booked in the fourth quarter, and how does this transaction compare with previous ones?
A: Ashraf Nessim, CFO: The profitability will be in the 90% range. Revenue recognition depends on delivering the land to the client, which could happen either by year-end or in Q1 2025.
Q: Can you provide an outlook for 2025 regarding sales and profitability? Also, how are geopolitical tensions in the Middle East affecting your business?
A: Omar El Hamamsy, CEO: We expect 2025 to be strong with continued growth across all segments. Currently, geopolitical tensions have not impacted our business significantly, with El Gouna occupancy at 82%, mostly from foreign guests.
Q: Will the revenue recognition of the recent land sale be in this year or Q1 2025, considering the cash flow will be over five years?
A: Ashraf Nessim, CFO: Revenue recognition is independent of cash collection. It will occur when the land is delivered to the client, potentially in Q4 2024 or by Q1 2025.
Q: Are there any marketing presentations planned for the rest of 2024?
A: Omar El Hamamsy, CEO: Not for the rest of 2024, but we plan to have more in 2025.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
