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ODE’s net profit for FY 2023 increased by 63.5% y-o-y to EGP 3.1 billion, driven by record sales of EGP 19.4 billion and strong performance across the recurring income portfolio despite the challenging operating environment.
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Key Highlights of FY 2023 vs. FY 2022
Solid revenue growth of 49.2% in FY 2023, reaching an all-time high of EGP 15.3 billion.
Adj. EBITDA increased by 47.1% y-o-y to EGP 5.8 billion in FY 2023, with a margin of 37.6%.
Strong top-line growth filtered down to the Company’s bottom line, which expanded by 63.5% year over year to EGP 3.1 billion with an associated net profit margin of 20.4%.
Our hospitality revenues are up by 94.5% y-o-y to exceed the EGP 3.0 billion mark in FY 2023.
Net real estate sales for FY 2023 recorded EGP 19.4 billion, the highest in the company’s history, with a 75% increase year over year.
Real estate cash collection increased by 81.2% to reach EGP 10.1 billion.
Key Highlights of Q4 2023 vs. Q4 2022
Total revenue increased by 38.6% to reach EGP 5.0 billion.
Adj. EBITDA up 28.4% to record EGP 1.8 billion, with a margin of 36.0%.
Net profit indicates substantial growth, a remarkable increase of 187.8%, reaching EGP 1.1 billion.
Net real estate sales for Q4 2023 increased by 65.9% to reach EGP 6.4 billion.
Cairo, 11 March 2024 – ODE has faced a challenging business environment during the 2023 financial year due to several headwinds. However, our diversified business model enabled our core underlying business to deliver an outstanding performance despite rising inflation, geopolitical instability, and the devaluation of the EGP affecting our operational results. We have shown remarkable resilience in testing times, and our agility in responding swiftly to changing market conditions has allowed us to maintain our growth trajectory. We finished the year strong, breaking financial and operational records thanks to our dynamic and flexible business model that enabled us to adjust strategies and introduce new products to cater to our customers’ needs. As we continue to monitor market dynamics, we are confident that our experience and strength will allow us to navigate any future challenges successfully. In 2024, we plan to accelerate profitable growth, create a more agile and cost-efficient business, and generate additional shareholder value. We will continue to follow our successful strategy from previous cycles, and we are confident that our unwavering commitment to excellence will enable us to achieve our goals.
Financial Review:
FY 2023:
ODE recorded a total revenue of EGP 15.3 billion during FY 2023, up 49.2% y-o-y. ODE’s profitability prevailed against the challenging operating environment, with gross profit rising 45.7% y-o-y to EGP 5.5 billion and a gross profit margin of 35.8%. The boost in revenues and gross profit reflects our operational excellence despite the inflationary environment and is also a result of the acceleration of our construction activities, with real estate revenues reaching EGP 10.0 billion, an increase of 36.2% vs. FY 2022. Furthermore, ODE experienced exceptional growth in its recurring income segments, including hotels and commercial assets. These segments contributed EGP 4.9 billion to the total revenue, marking an impressive 68.5% y-o-y increase. This positive trend continued down across the income statement with Adj. EBITDA up by 47.1% y-o-y to reach EGP 5.8 billion with a margin of 37.6%. Other gains and losses reported a loss of EGP 336.9 million. The FX loss is mainly attributed to the portion of foreign currency debt due to the devaluation of EGP. Our finance costs increased by 189.3% to reach EGP 1.1 billion in FY 2023 due to the increase in interest rates. This operational excellence was reflected in our bottom-line figures, with net income up by 63.5% to reach EGP 3.1 billion in FY 2023 (FY 2022: EGP 1.9 billion). This impressive feat is a testament to ODE’s commitment to excellence and growth.
Strong Balance Sheet:
Our cash and cash equivalent balance reached EGP 5.5 billion during FY 2023. Total bank debt, excluding ODH debt, stood at EGP 7.7 billion in FY 2023 (FY 2022: EGP 5.6 billion), and net debt reached EGP 2.2 billion. The increase in debt is mainly a result of the depreciation of EGP against foreign currencies—our net debt to Adj. EBITDA stands at 0.4x in FY 2023.
Q4 2023:
With solid operating and financial results, ODE’s fourth quarter underlines our execution capabilities and strength despite significant headwinds. Our topline performance remained strong, with a notable increase of 38.6% to EGP 5.0 billion (compared to Q4 2022: EGP 3.6 billion). Gross profit increased by 26.0% to reach EGP 1.7 billion in Q4 2023, with a gross profit margin of 34.3%—additionally, our Adj. EBITDA increased by 28.4% to reach EGP 1.8 billion, with a margin of 36.0%. As a result, our net profit increased by a remarkable 187.8% to reach EGP 1.1 billion.
Group Real Estate: Another record new sales during FY 2023 of EGP 19.4 billion, a growth of 74.9% y-o-y
ODE has achieved a new record high for its real estate sales in the year-end results. During Q4 2023, net real estate sales increased by 65.9% to reach EGP 6.4 billion, up from EGP 3.8 billion in Q4 2022. This brings the company’s new real estate sales during FY 2023 to EGP 19.4 billion, a growth of 74.9% y-o-y, a new all-time high. This tremendous achievement was driven by the resilient portfolio of projects and strategic measures taken to introduce unparalleled offerings across all projects while maintaining growth momentum and profitability margins. Our group has seen continued growth in sales, which has allowed us to increase both the average selling price and the number of units sold across all our destinations. Regarding real estate sales, O West has been the largest contributor, accounting for 47% of the total sales in FY 2023. El Gouna followed closely with 39%, and Makadi Heights with 14%. On the development side, our solid construction pace kept us on track with our planned unit delivery for FY 2023, with 1,071 delivered units across all our projects. Our real estate revenue has seen a positive performance, increasing by 36.2% to EGP 10.0 billion. Additionally, Adj. EBITDA has increased by 24.2% to EGP 3.9 billion. During FY 2023, we experienced an 81.2% increase in real estate cash collections, which amounted to EGP 10.1 billion. Furthermore, the total deferred revenue from real estate that will not be recognized until 2027 has increased by 48.2% to EGP 22.6 billion.
Group Hotels: A quantum leap in the hospitality portfolio, with a 94.5% increase in revenues to surpass the EGP 3.0 billion mark, with foreign guests representing 81% of our occupancy in FY 2023
With solid growth in 2023, our hotels’ positive performance throughout the year reflects our resilience and leadership across markets amidst various global macro and geopolitical challenges, especially in the Middle East. Our hotels’ success can be attributed to our commitment to delivering exceptional guest experiences and our ability to adapt rapidly to changing market conditions. Our strategy is to continue offering the best experiences for our guests, attract new ones, and retain loyal ones, taking advantage of the global travel growth trend. The demand for our hotels remained robust throughout the year, with 1.7 million guests enjoying our unique product offerings, a significant increase of 14% compared to FY 2022. On a quarterly basis, our hotels witnessed a strong quarter despite headwinds, with revenues of EGP 763.7 million, a 56.9% increase compared to Q4 2022’s EGP 486.7 million. This pushed our GOP to EGP 401.0 million, a 52.4% increase from Q4 2022, leading us to generate EGP 352.2 million of Adj. EBITDA is up 90.1% from Q4 2022’s EGP of 185.3 million. For FY 2023, our hospitality revenue increased by 94.5% to EGP 3.0 billion, up from EGP 1.6 billion in FY 2022—our Adj. EBITDA was also up 141.6% to EGP 1.3 billion, by a whopping 43.5% margin.
Recurring income commercial assets: The company maintained its improved operational performance, with revenues up 38.7% to EGP 1.9 billion.
Our commercial assets segment continues to be a reliable source of cash flow and an essential aspect of financing the group’s growth and shielding our operations from the cyclical slowdowns caused by unpredictable events. Total revenue from our recurring income commercial assets continues to flourish, and we have secured more recurring revenue streams, with revenues up by 38.7% to reach EGP 1.9 billion, with Adj. The EBITDA of EGP 565.5 million is up 42.5% vs. 2022. Adj. EBITDA grew ahead of revenue due to a rich calendar of events across destinations, signaling our operational excellence owing to the successful restructuring implementation, which improved the quality and profitability of our services and amenities.
Details on the Destinations
El Gouna:
El Gouna has reinforced its status as a prime destination by achieving a 111.5% increase in net real estate sales, amounting to EGP 2.6 billion in Q4 2023 vs. EGP 1.2 billion in Q4 2022. This impressive feat has led to a substantial rise in the value of real estate sales for FY 2023, which reached EGP 7.6 billion, marking a 71.2% increase from EGP 4.4 billion in FY 2022. Furthermore, the average selling price has significantly increased, reaching EGP 128,697/sqm, a 78.6% increase compared to FY 2022. On the construction front, El Gouna has expedited the pace and delivered 388 units throughout 2023, with plans to deliver c. 370 more units in 2024. El Gouna’s real estate revenues have increased by 30.1% in 2023 and reached EGP 5.0 billion.
As for our hospitality arm, El Gouna Hotels’ proven business model delivered good results, building on its leading market positioning and strong ties with leading European tour operators, ultimately resulting in growth in the Hotels’ bottom-line operational and financial outcomes. The occupancy rate for FY 2023 increased to 72% (FY 2022: 70%). Foreigners represented 84% of our total hotel occupancy during Q4 2023 and 82% for FY 2023. Strong occupancies and significant growth in hotel ARRs, both in EGP and USD terms, drove the hospitality revenue up by a whopping 88.4% y-o-y to EGP 2.6 billion during FY 2023, despite the current situation in Gaza. Our ARRs were up by 78.5% to EGP 2,922 per night. Meanwhile, GOP for El Gouna hotels increased by 111.9% to EGP 1.5 billion. On the development side, we have completed partial renovation work across the Sheraton and Ocean View hotels. We are also progressing with the construction process for adding 29 new rooms in Casa Cook El Gouna Hotel by 2024. On the commercial assets side, we achieved a 36.3% increase in revenue to EGP 1.8 billion (compared to EGP 1.3 billion in FY 2022). El Gouna’s revenues were up by 49.6% to EGP 9.8 billion in FY 2023 (compared to EGP 6.5 billion in FY 2022).
O West, Egypt:
O West has continued to expand its leading position in West Cairo, recording EGP 2.8 billion in sales during Q4 2023. This marked a growth of 25.9% compared to Q4 2022. With this, O West’s total real estate sales have reached EGP 9.2 billion, reflecting a remarkable 59.7% increase from FY 2022, the highest sales ever since the project’s launch. The increase in sales has enabled the company to raise the average selling prices and the number of units sold. The number of units sold rose by 27.4%, reaching 1,059 units, while the average selling prices have increased by a solid 50.9% to EGP 57,739/sqm compared to FY 2022. On the development side, O West accelerated its construction and buying of raw materials to mitigate possible inflation, delivering 283 units in 2023. The company plans to have over 1,000 units delivered in FY 2024. The construction of O West Club is progressing steadily and is scheduled to become partially operational during the first half of 2024. This will provide ODE with a steady recurring income stream. O West’s total revenues increased by 38.2% to EGP 4.0 billion.
Makadi Heights, Egypt:
Makadi Heights has experienced a significant surge in real estate sales, with an increase of 165.6% to EGP 904.1 million compared to Q4 2022. This brings our total real estate sales during FY 2023 to EGP 2.7 billion, a staggering increase of 181.9% compared to FY 2022, marking the highest sales since the launch of the destination. The number of units sold during FY 2023 increased by 93.8% to 434, while the average selling prices continued to rise, reaching EGP 52,344/sqm, an increase of 47.3% compared to FY 2022. We continued accelerating our real estate construction activities and delivered all 400 planned units during FY 2023, with plans to deliver approximately 500 units in 2024. Real estate revenues increased by 62.5% to reach EGP 964.9 million (FY 2022: EGP 593.7 million). Commercial asset revenues also increased by 69.4% to EGP 68.7 million in FY 2023. Henceforth, the total revenues from Makadi Heights increased by 64.5% to exceed EGP 1.0 billion.
Taba Heights, Egypt:
Taba Heights continues to pose a challenge for the group. Despite this, continuous efforts to restore the destination’s position on the international travel map have yielded positive results. Unfortunately, the war on Gaza in October 2023 disrupted this progress. Our focus is minimizing the cash burn rate in the short and medium term while ensuring that the destination can operate once tourism resumes. We remain committed to implementing a prudent approach in our efforts to mitigate the impact of the current crisis. Total revenues from Taba during FY 2023 reached EGP 479.7 million, up 135.3% vs. FY 2022. To date, we have only one hotel operating out of the six hotels with minimal occupancy.