Orascom

Development
Holding AG
Condensed Consolidated
Interim Financial Statements
(unaudited)

3 Months 2020
Contents Page

Unaudited condensed consolidated statement of comprehensive income F-3

Unaudited condensed consolidated statement of financial position F-5

Unaudited condensed consolidated statement of changes in equity F-7

Unaudited condensed consolidated statement of cash flow F-8

Notes to the unaudited condensed interim consolidated financial statements F-9 to F-27

F-2
Unaudited condensed consolidated statement of comprehensive income
for the period ended 31 March 2020

CHF Notes Three months ended Three months ended

31 March 2020 31 March 2019

CONTINUING OPERATIONS

Revenue 7 92,860,147 98,134,780

Cost of sales (78,140,517) (76,121,376)
Gross profit 14,719,630 22,013,404
Investment income 1,361,067 1,827,791
Other gains 8 662,405 4,222,448
Administrative expenses (9,580,567) (11,500,155)
Finance costs 9 (8,974,811) (10,745,538)
Share of losses of associates 17 (299,843) (2,321,779)
Other losses 10 (42,112) (33,506)
(Loss)/profit before tax (2,154,231) 3,462,665
Income tax expenses 11 (2,069,797) (2,413,422)
(Loss)/profit for the period 7 (4,224,028) 1,049,243
Other comprehensive income, net of income tax
Items that will not be reclassified subsequently
to profit or loss
Net gain on revaluation of financial assets at
(620) 129
FVTOCI
(620) 129
Items that may be reclassified subsequently to
profit or loss
Exchange differences arising on translation of
(836,910) 9,407,230
foreign operations 26
(836,910) 9,407,230
Total other comprehensive income for the
(837,530) 9,407,359
period, net of tax
Total comprehensive income for the period (5,061,558) 10,456,602

F-3 3
Unaudited condensed consolidated statement of comprehensive income - continued
for the period ended 31 March 2020

CHF Notes Three months ended Three months ended

31 March 2020 31 March 2019

(Loss)/profit attributable to:

Owners of the Parent Company (4,931,591) (1,991,099)
Non-controlling interests 707,563 3,040,342
(4,224,028) 1,049,243

Total comprehensive income attributable to:

Owners of the Parent Company (5,877,242) 4,241,514
Non-controlling interests 815,684 6,215,088
(5,061,558) 10,456,602

Earnings per share from continuing operations

Basic 12 (0.12) (0.05)
Diluted 12 (0.12) (0.05)

Samih O. Sawiris Ashraf Nessim

Chairman of the Board CFO

F-4 4
Unaudited condensed consolidated statement of financial position
at 31 March 2020

CHF Notes 31 March 2020 31 December 2019

ASSETS

NON-CURRENT ASSETS
Property, plant and equipment 14 819,586,316 814,451,407
Investment property 15 30,101,076 30,161,887
Goodwill 16 3,138,165 3,081,944
Investments in associates 17 29,261,579 29,284,086
Non-current receivables 18 30,219,041 36,513,680
Deferred tax assets 2,384,685 2,352,131
Other financial assets 928,203 943,625
Total non-current assets 915,619,065 916,788,760

CURRENT ASSETS
Inventories 19 545,668,280 516,395,245
Trade and other receivables 18 110,508,573 118,231,167
Current receivables due from related parties 20 43,319,087 41,169,545
Other current assets 21 65,014,825 56,492,356
Cash and bank balances 22 183,307,330 185,991,795
947,818,095 918,280,108

Assets held for sale 23 5,837,927 5,785,704

Total current assets 953,656,022 924,065,812

Total assets 1,869,275,087 1,840,854,572

F-5 5
Unaudited condensed consolidated statement of financial position - continued
at 31 March 2020

CHF Notes 31 March 2020 31 December 2019

EQUITY AND LIABILITIES

CAPITAL AND RESERVES

Issued capital 24 202,968,745 202,968,745
Reserves 25-26 440,480,986 442,571,528
(Accumulated losses) (241,704,800) (239,082,062)
Equity attributable to owners of the Parent Company 401,744,931 406,458,211
Non-controlling interests 164,883,880 160,335,858

Total equity 566,628,811 566,794,069

NON-CURRENT LIABILITIES
Borrowings 29 387,121,755 374,413,961
Trade and other payables 27 363,904,515 345,173,802
Contract liabilities 98,824,984 97,054,504
Notes payable 52,679 40,751
Provisions 27,192,198 27,192,198
Retirement benefit obligation 791,755 791,977
Deferred tax liabilities 25,782,329 25,147,388
Total non-current liabilities 903,670,215 869,814,581

CURRENT LIABILITIES
Trade and other payables 27 39,180,800 43,250,598
Borrowings 29 38,773,084 55,451,462
Due to related parties 24,678,220 26,559,334
Current tax liabilities 22,415,632 20,395,981
Provisions 6,175,584 6,386,658
Other current liabilities 28 267,174,353 251,633,863
398,397,673 403,677,896
Liabilities directly associated with assets held for
23 578,388 568,026
sale
Total current liabilities 398,976,061 404,245,922

Total liabilities 1,302,646,276 1,274,060,503

Total equity and liabilities 1,869,275,087 1,840,854,572

Samih O. Sawiris Ashraf Nessim

Chairman of the Board CFO

F-6 6
Unaudited condensed consolidated statement of changes in equity
for the period ended 31 March 2020

Foreign Reserve from Attributable

Share-based PP&E Investments Non-
Issued Share Treasury General currency common (Accumulated to owners of
CHF payment revaluation revaluation controlling Total
Capital premium shares reserve translation control losses) the Parent
reserve reserve reserve interests
reserve transactions Company

Balance at 1 January 2019 202,049,630 833,948,897 (5,207,662) 2,499,999 1,435,587 (173,174) 4,916,868 (335,768,166) (72,519,921) (222,499,010) 408,683,048 167,080,465 575,763,513

Profit/(loss) for the period - - - - - - - - - (1,991,099) (1,991,099) 3,040,342 1,049,243

Other comprehensive income for the period, net of income tax - - - - - 129 - 6,232,484 - - 6,232,613 3,174,746 9,407,359

Total comprehensive income for the period - - - - - 129 - 6,232,484 - (1,991,099) 4,241,514 6,215,088 10,456,602

Acquisition of treasury shares - - (373,829) - - - - - - - (373,829) - (373,829)

Disposal of treasury shares - - 813,402 - - - - - - 532,505 1,345,907 - 1,345,907
Share-based payments (note 25) - - - 750,000 - - - - - - 750,000 - 750,000
Non-controlling interests’ share in equity of consolidated
- - - - - - - - - - - 4,303,538 4,303,538
subsidiaries
Balance at 31 March 2019 202,049,630 833,948,897 (4,768,089) 3,249,999 1,435,587 (173,045) 4,916,868 (329,535,682) (72,519,921) (223,957,604) 414,646,640 177,599,091 592,245,731

Balance at 1 January 2020 202,968,745 839,761,415 (4,722,455) 3,524,187 5,133,570 (173,065) 4,916,868 (333,349,071) (72,519,921) (239,082,062) 406,458,211 160,335,858 566,794,069

Profit/(loss) for the period - - - - - - - - - (4,931,591) (4,931,591) 707,563 (4,224,028)

Other comprehensive income for the period, net of income tax - - - - - (620) - (945,031) - - (945,651) 108,121 (837,530)

Total comprehensive income for the period - - - - - (620) - (945,031) - (4,931,591) (5,877,242) 815,684 (5,061,558)

Acquisition of treasury shares - - (1,889,560) - - - - - - - (1,889,560) - (1,889,560)

Disposal of treasury shares due to vesting of share-based
- - 1,269,440 (3,297,456) - - - - - 2,028,016 - - -
payments (note 25)
Other disposal of treasury shares - - 1,836,892 - - - - - - 280,837 2,117,729 - 2,117,729
Share-based payments (note 25) - 274,788 - 218,893 - - - - - - 493,681 - 493,681
Share-based payments subsidiaries - 442,112 - - - - - - - - 442,112 146,609 588,721
Non-controlling interests’ share in equity of consolidated
- - - - - - - - - - - 3,585,729 3,585,729
subsidiaries
Balance at 31 March 2020 202,968,745 840,478,315 (3,505,683) 445,624 5,133,570 (173,685) 4,916,868 (334,294,102) (72,519,921) (241,704,800) 401,744,931 164,883,880 566,628,811

F-7 7
Unaudited condensed consolidated statement of cash flow
for the period ended 31 March 2020

CHF Notes Three months ended Three months ended

31 March 2020 31 March 2019

Cash generated from operations 13,906,057 7,645,096

Interest paid (3,610,899) (1,378,134)
Income tax paid (132,488) (2,015,425)
Net cash generated from operating activities 10,162,670 4,251,537

CASH FLOWS FROM INVESTING ACTIVITIES

Payments for property, plant and equipment (9,075,271) (11,971,449)
Proceeds from sale of financial assets 1,408,239 -
Interest received 1,213,504 1,069,856
Net cash used in investing activities (6,453,528) (10,901,593)

CASH FLOWS FROM FINANCING ACTIVITIES

Net cash flow on treasury shares 228,169 972,078
Non-controlling interests shares in changes of
3,585,729 -
equity for consolidated subsidiaries
Repayment of borrowings (11,155,242) (3,886,390)
Proceeds from borrowings 667,499 1,698,163
Net cash used in financing activities (6,673,845) (1,216,149)
Net decrease in cash and cash equivalents (2,964,703) (7,866,205)
Cash and cash equivalents at the beginning of the
185,991,795 138,267,680
period
Effects of exchange rate changes on the balance
280,238 (238,517)
of cash held in foreign currencies
Cash and cash equivalents at the end of the
22 183,307,330 130,162,958
period

F-8 8
Notes to the unaudited condensed consolidated interim financial statements

1. Description of business
Orascom Development Holding AG (“ODH” or “the Parent Company”), a limited company incorporated in
Altdorf, Switzerland, is a public company whose shares are traded on the SIX Swiss Exchange.
The Company and its subsidiaries (the “Group”) is a leading developer of fully integrated towns that
include hotels, private villas and apartments, leisure facilities such as golf courses, marinas and supporting
infrastructure. The Group’s diversified portfolio of projects is spread over seven jurisdictions (Egypt, UAE,
Oman, Switzerland, Morocco, Montenegro and United Kingdom), with primary focus on touristic towns
and recently primary housing. The Group currently operates eleven destinations, five in Egypt (El Gouna,
Taba Heights, Fayoum, Makadi and O-West), The Cove in the United Arab Emirates, Jebel Sifah and Salalah
Beach in Oman, Luštica Bay in Montenegro, Cornwall in the UK and Andermatt in Switzerland.

2. Statement of compliance
The Group applies International Financial Reporting Standards (IFRS). The unaudited condensed
consolidated interim financial statements have been prepared in accordance with the requirements of
IAS 34, Interim Financial Reporting, and should be read in conjunction with the audited consolidated
financial statements for the year ended 31 December 2019.

3. Basis of preparation
The unaudited condensed consolidated interim financial statements include all the subsidiaries controlled
by the Parent Company and are presented in Swiss Francs (CHF).
The preparation of interim financial statements requires management to make judgements, estimates
and assumptions that affect the application of policies and reported amounts of assets and liabilities,
income and expenses, as well as the disclosure of contingent liabilities.
Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed
on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate
is revised if the revision affects only that period, or in the period of the revision and future periods if the
revision affects both current and future periods.
Critical judgments made by management in the application of IFRS and key sources of estimation
uncertainties were the same as those applied to the consolidated financial statements of the year ended
31 December 2019.

F-9 9
4. Adoption of new and revised International Financial Reporting Standards

4.1. Standards and interpretations effective in the current period

The following revised standards are effective for the current period:

Revised Standards

IFRS 3 Definition of a business (Amendments)

IFRS 7 Pre-replacement issues in the context of the IBOR reform (Amendments)
IFRS 9 Pre-replacement issues in the context of the IBOR reform (Amendments)
IAS 1 Definition of material (Amendments)
IAS 8 Definition of material (Amendments)
IAS 39 Pre-replacement issues in the context of the IBOR reform (Amendments)

These amended Standards have not had any significant impact on the unaudited condensed consolidated
financial statements.

4.2. Standards and interpretations not yet adopted

At the date of authorization of these unaudited condensed consolidated interim financial statements, the
Group has not adopted the following amended standard that has been issued but is not yet effective. It
will be effective for annual periods beginning on or after the dates described below.

New and Revised Standards and Interpretations Effective from

IAS 1 Classification of liabilities as current or non-current (Amendments) 1 January 2022

The Group is currently assessing whether these changes will impact the consolidated financial statements
in the period of initial application. However, the Group does not expect any major changes from this
amended Standard.

5. Significant accounting policies

The unaudited condensed consolidated interim financial statements have been prepared on the historical
cost basis except for financial instruments that are measured at fair value or amortized cost, as
appropriate, and investment properties that are measured at fair value. Historical cost is generally based
on the fair value of the consideration given in exchange for assets. The Group is not subject to any
significant seasonality or cyclicality. The same accounting policies, presentation and methods of
computation are followed in these unaudited condensed consolidated interim financial statements as
were applied in the preparation of the Group's consolidated financial statements for the year ended
31 December 2019.

6. Subsidiaries
The Group is comprised of the Parent Company and its subsidiaries operating in different countries. There
have been no major changes in the group structure since 31 December 2019.

F-10 10
The group controls its subsidiaries directly and indirectly.

7. Segment information
The Group has four reportable segments which are its strategic divisions. The strategic divisions offer
different products and services and are managed separately because they require different skills or have
different customers. For each of the strategic divisions, the Country CEOs and the Head of Segment review
the internal management reports at least on a quarterly basis.

The accounting policies of the reportable segments are the same as the Group’s accounting policies
described in the consolidated financial statements for the year ended 31 December 2019. Segment result
represents the result by each segment without allocation of central administration costs and directors’
salaries, share in associates’ results, gain recognised on disposal of interest in former associates,
investment income, other gains and losses, finance costs and income tax expense, as included in the
internal management reports that are regularly reviewed. This measure is considered being most relevant
for the purpose of resources allocation and assessment of segment performance.

F-11 11
 CHF Total segment revenue Inter-segment revenue Revenue external customers 1) Segment result

31/03/2020 31/03/2019 31/03/2020 31/03/2019 31/03/2020 31/03/2019 31/03/2020 31/03/2019

Hotels 35,799,701 46,422,162 (254,730) (218,801) 35,544,971 46,203,361 4,797,011 12,036,745

Real estate and construction 44,267,477 44,754,794 - (3,249,355) 44,267,478 41,505,439 10,975,848 12,670,042
Land sales - - - - - - (122,434) (397,137)
Destination management 12,697,536 9,791,791 (5,515,120) (4,076,180) 7,182,415 5,715,611 (1,626,943) (2,536,506)
Other operations 9,467,460 8,542,994 (3,602,177) (3,832,625) 5,865,283 4,710,369 (1,154,718) (789,569)
102,232,174 109,511,741 (9,372,027) (11,376,961) 92,860,147 98,134,780 12,868,764 20,983,575
2)
Unallocated items :
Share of losses of associates (299,843) (2,321,779)
Other gains/losses 1,761,149 5,335,339
Investment income 382,198 422,895
Central administration costs and directors’ salaries (9,580,567) (11,500,155)
Finance costs (7,285,932) (9,457,210)
(Loss)/profit before tax (2,154,231) 3,462,665
Income tax (2,069,797) (2,413,422)

(Loss)/profit for the period (4,224,028) 1,049,243

1)
Of the total revenue of CHF 92.9 million (2019: CHF 98.1 million), CHF 43.1 million (2019: CHF 59.3 million) are recognised at point in time and CHF 49.8 million (2019 CHF
38.8 million) are recognised over time
2)
For the purpose of segment reporting, part of the amounts reported in the statement of comprehensive income for these items have been allocated in this note to their
relevant segments.

F-12 12
 CHF 31/03/2020 31/12/2019

Hotels 614,160,123 611,977,090

Real estate and construction 1,086,391,832 1,036,807,079
Land sales 186,766,798 185,513,725
Destination management 116,823,590 97,356,310
Other operations 90,436,581 85,222,157
Segment assets before elimination 2,094,578,924 2,016,876,361
Inter-segment elimination (704,102,441) (684,876,543)
Segment assets after elimination 1,390,476,483 1,331,999,818
Unallocated assets 472,960,677 503,069,050
Assets held for sale 5,837,927 5,785,704

Consolidated total assets 1,869,275,087 1,840,854,572

Hotels 340,869,828 344,300,119

Real estate and construction 808,480,929 760,023,194
Land sales 37,932,460 37,653,899
Destination management 141,198,583 120,724,113
Other operations 58,788,837 55,405,788
Segment liabilities before elimination 1,387,270,637 1,318,107,113
Inter-segment elimination (425,637,871) (423,577,845)
Segment liabilities after elimination 961,632,766 894,529,268
Unallocated liabilities 340,435,122 378,963,209
Liabilities directly associated with assets held for sale 578,388 568,026

Consolidated total liabilities 1,302,646,276 1,274,060,503

Total segment result of CHF 12.9 million (2019: CHF 21.0 million) mainly decreased due to the following:
• Hotel revenues in January and February 2020 remained on an impressive growth trajectory in line with
budgeted figures. GOP margins improved by 11% year-on-year across the Group.
With the onset of Covid-19 and the subsequent travel ban, all countries were heavily affected by the
global pandemic. Most hotels closed during the course of March, leading to a decline in revenues of
23%, from CHF 46.2 million to CHF 35.5 million. GOP performance was negatively affected by 40%,
from CHF 20.1 million to CHF 12.0 million, quarter-on-quarter.
In Egypt, Hotels reported a revenue of CHF 16.3 million, compared to CHF 18.8 million in Q1 2019.
GOP totalled CHF 5.2 million, compared to CHF 8.5 million for the same period in the previous year.
In Oman, all major tour operators cancelled their operation as of 11 March 2020. In Q1 2020, Oman
Hotels reported a revenue decline of 21%, from CHF 17.8 million to CHF 14.0 million. GOP declined by
34%, from CHF 8.9 million to CHF 5.9 million, quarter-on-quarter.

F-13 13
 Ras El Kheima, already challenged by the general increase in supply, reported revenues of CHF 5.1
million, compared to CHF 7.9 million in Q1 2019, with GOP decreasing by 2.0 million from CHF 1.5
million, compared to Q1 2019 GOP of CHF 3.5 million.
In Montenegro, the effect of the pandemic during the first quarter was limited, resulting in a decline
of CHF 60 thousand in revenues, from CHF 196 thousand to CHF 137 thousand. We expect to see a
recovery of leisure traffic to the area during summer.

Implementing a program of strict sanitation and hygiene measures according to international

guidelines and in line with requirement of local governments, the Group has recently announced the
gradual re-opening of select hotels across some of our destinations.

In Egypt, the Group has started to receive bookings for the 2020 winter season from its European
feeder markets, with numbers gradually improving over the last weeks. Demand from its tour
operator partners for Q4 2020 in Oman also continues to remain strong.
• The real estate and construction segment was more or less unchanged compared to prior year period.
Unlike the hotel segment, this segment has not yet been impacted by the Covid 19 pandemic.

8. Other gains
In the first three months of 2020, other gains of CHF 0.7 million (2019: CHF 4.2 million) are due to the
following reasons:
• Net foreign exchange gains of CHF 0.4 million
• Other gains of CHF 0.3 million
In the first three months of 2019, the gains were mainly due to net foreign exchange gains.

9. Finance cost
In the first three months of 2020, no finance cost was capitalized on qualifying assets (projects under
construction and work in progress). Overall, finance cost decreased by CHF 1.7 million from CHF 10.7
million to CHF 9.0 million compared to the first three months of 2019.

10. Other losses

In the first three months of 2020 and 2019, there were no significant losses

11. Income taxes

Tax expense recognised during the period amounted to CHF 2.1 million (2019: CHF 2.4 million). These
accruals are based on the estimated average annual effective income tax rate expected for the full year,
applied to the pre-tax income for the three-month period.

F-14 14
The Group operates in different jurisdictions under different tax laws. The main operating entities’ tax
positions are as follows:
• Egypt
The Egyptian subsidiaries fulfil all their requirements according to the tax laws in Egypt.
Oman
The subsidiaries in Oman fulfil all their requirements according to the tax laws in Oman.

• Switzerland
The Company fulfils the conditions for taxation as a holding company in Switzerland.

12. Earnings per share

The calculation of the basic and diluted earnings per share from continuing operations is based on the
following data:
CHF Three months ended Three months ended
31/03/2020 31/03/2019
Earnings (for basic and diluted earnings per share)
(Loss) for the period attributable to owners of the parent (4,931,591) (1,991,099)
Number of shares
Weighted average number of ordinary shares
39,894,961 39,713,143
for the purpose of basic and diluted earnings per share
Earnings per share from continuing operations (0.12) (0.05)

13. Dividends
During the interim period, no dividends were declared or paid to shareholders.

F-15 15
14. Property, plant and equipment
Property, Property
Three months ended 31 March 2020 Right-of-use
plant and under Total
CHF assets
equipment (i) construction

Opening net book value at 01/01/2020 594,285,369 173,038,549 47,127,489 814,451,407

Additions 2,642,010 8,485,736 33,084 11,160,830
Transfer from projects under construction 332,305 (332,305) - -
Depreciation and amortization (6,023,558) - (1,067,881) (7,091,439)
Net foreign currency exchange differences 3,144,644 (1,435,155) (643,971) 1,065,518

Closing net book value at 31/03/2020 594,380,770 179,756,825 45,448,721 819,586,316

Property, Property
Three months ended 31 March 2019 Right-of-use
plant and under Total
CHF assets (ii)
equipment (i) construction

Opening net book value at 01/01/2019 555,378,032 204,829,346 28,527,575 788,734,953

Additions 2,306,650 7,147,232 - 9,453,882
Transfer from projects under construction 32,635 (32,635) - -
Depreciation and amortization (7,421,697) - (49,779) (7,471,476)
Net foreign currency exchange differences 10,584,004 1,613,421 70,872 12,268,297

Closing net book value at 31/03/2019 560,879,624 213,557,364 28,548,668 802,985,656

(i) Includes freehold land, buildings, plant and equipment, furniture and fixtures
(ii) The opening balance of the comparative period is CHF 11.8 million higher than shown in the
consolidated financial statements of Q1 2019 as further leases were identified later in 2019.

F-16 16
15. Investment property
The following table summarizes the movements, which have occurred, during the current period on the
carrying amount of investment property:

CHF 31/03/2020 31/12/2019

Balance at 1 January 30,161,887 7,328,798

Addition - 516,623
Transfer from property, plant and equipment (note 14) - 14,860,153
Revaluation gain on transfer from property, plant and equipment
- 4,188,579
(through OCI)
Revaluation gain (through P&L) - 3,142,696
Foreign currency translation adjustments (60,811) 125,038

Balance at the end of the period/year 30,101,076 30,161,887

The fair values at 31 March 2020 were determined based on an internal valuation model performed by
Group management in 2019. In estimating the fair value of the investment properties, management
considers the current use of the properties as their highest and best use.
The internal valuation model relies on the Discounted Cash Flow (DCF) method to determine the fair value
of the investment property. The Discounted Cash Flow (DCF) approach describes a method to value the
investment property using the concepts of the time value of money. All future cash flows are estimated
and discounted to give them a present value. This valuation method is in conformity with the International
Valuation Standards. The same method was used for any previous external valuations. As investment
property only consists of a few properties in Egypt, management has decided to use an internal valuation
model due to efficiency and cost saving reasons.

For the valuation of the investment property which is situated in Egypt the model used cash flow
projections based on financial budgets for the next five years and an average discount rate of 18.4% (cost
of equity). For the terminal value a perpetual growth rate of 2% was used.

For the valuation of the investment property which is situated in Oman an average discount rate of 12.4%
(cost of equity) was used. As projections for 25 years were used, no perpetual growth rate was included.
For the valuation of the investment property in Montenegro an average discount rate of 10.0%, consisting
of a risk-free rate of 3% and market premium of 7%, was used. The beta used was 1.

16. Goodwill
The following table shows the carrying amount of goodwill recognized in the condensed consolidated
interim financial statements:

CHF 31/03/2020 31/12/2019

Balance at the beginning of the period / year 3,081,944 2,810,549

Effect of foreign currency exchange difference 56,221 271,395

Balance at the end of the period / year 3,138,165 3,081,944

F-17 17
17. Investments in associates
Details of the Group’s associates are as follows:

Place of Ownership Carrying value

Name of associate
incorporation interest (CHF)

31/03/2020 31/03/2020 31/12/2019

Andermatt Swiss Alps AG Switzerland 49.00% 2,869,242 4,574,323

Jordan Company for Projects and

Jordan 18.33% 9,451,754 9,697,902
Touristic Development
New City Housing and Development Cairo 35.25% 3,017,865 3,406,936
Red Sea for Construction & Development Cairo 40.20% 13,922,718 11,604,925
Orascom for Housing and Establishments Cairo 39.90% - -

Total 29,261,579 29,284,086

Below is a summary of the financial information with respect to the Group’s associates as at 31 March
2020:

CHF 31/03/2020

Total assets 997,595,458

Total liabilities (912,246,536)
Net assets 85,348,922

Group’s share of net assets of associates 29,261,579

Total revenue 102,588,298

Total profit/(losses) for the period 123,147

Group’s share of losses (299,843)

Andermatt-Swiss Alps AG (“ASA”)

On 25 June 2013, the Group lost control over ASA due to various capital increases in ASA in which the
Group did not fully participate. With a remaining share of interest of 49% in ASA, the investment is
classified as investment in associates.
The fair value of ASA on initial recognition as investment in associates is based on a third-party valuation
which supported the transaction price paid by Mr. Samih Sawiris.
ASA is not subject to any restrictions on transferring funds to ODH whether resulting from regulatory
requirements, borrowing arrangements or contractual arrangements between ASA and ODH.

F-18 18
Jordan Company for Projects and Touristic Development (“JPTD”)
JPTD is investing in property, destination management and development in Aqaba in Jordon. Since 2008
the Group exercised significant influence with their two active board members out of eleven leading to
changes in the JPTD’s Executive Management and provision of essential technical information.

New City Housing and Development (“NCHD”)

In June 2014, the Group lost control over NCHD as they did not participate in the capital increase of NCHD.
With a remaining share of interest of 35.25% in NCHD, the investment is classified as investment in
associates.

Red Sea or Construction & Development (“RSCD”)

During 2016, RSCD, of which the Group held a direct interest of 0.4% as well as an indirect interest of 14%
through OHC, increased its share capital from EGP 25 million to EGP 50 million. Of these EGP 25 million,
the Group invested EGP 20 million (CHF 2.2 million), resulting in a total interest of 40.20%. Hence, the
investment is classified as an associate.

18. Trade and other receivables

Trade and other receivables decreased by CHF 14.0 million mainly due to increase in collections in the real
estate segment and due to decrease in revenue during the period.

19. Inventories
Inventory consists of construction work in progress (CHF 67.5 million), land held for development under
purchase agreements (CHF 429.0 million), right-of-use inventory (CHF 17.5 million) as well as other
inventory which includes construction work materials, hotel inventory and finished units (CHF 31.7
million).

Construction work in progress includes work for contracted units of CHF 6.6 million as well as work for
uncontracted units of CHF 13.1 million whereas other inventory includes completed but uncontracted
units of CHF 14.3 million besides construction work materials and hotel inventory.
The main reasons for the increase in inventory compared to 31 December 2019 is work in progress in
Egypt and Oman, land in relation to O-West project as well as foreign exchange gains.

20. Current receivables due from related parties

Increase in receivables due from FTI is the main reason for the increase of current receivables due from
related parties of CHF 2.1 million compared to 31 December 2019.

F-19 19
21. Other current assets
Other current assets mainly consist of advances and prepayments (CHF 27.4 million), sales commissions
(CHF 19.3 million), VAT and withholding tax receivables (CHF 6.9 million), deposits (CHF 2.6 million), as
well as other debtors (CHF 8.8 million). Compared to 31 December 2019, the increase is mainly due to
increases in advance payments to suppliers as well as sales commissions.

22. Cash and cash equivalents

For the purposes of the consolidated cash flow statement, cash and cash equivalents include cash on
hand, demand deposits and balances at banks. Cash equivalents are short-term, highly liquid investments
of maturities of three months or less from the acquisition date, that are readily convertible to known
amounts of cash and which are subject to an insignificant risk of changes in value.

Management’s plans to manage liquidity shortages and related uncertainty

ODH is a unique group with an exceptional record of accomplishment and a very promising future. The
Group has been growing its revenue stream from all its destinations and enhancing its bottom-line figures.

Management has undertaken several precautionary measures in light of the current global circumstances
and economic downturn. These measures purpose is to reduce spending and preserve cash to the longest
period possible to ensure stability of the Group’s destinations, in order to enable the destinations to
resume their operations and planned investments once the business is back to meet the Group’s planned
strategic and financial targets. Additionally, we managed took the advantage of the 6 months debt service
postponements initiatives granted by the banks in all our destinations and we started benefiting from the
government initiatives to support the tourism companies in the destinations in which we operate.
In Q4 2019, ODH successfully issued a CHF 100 million bond. The proceeds of the bond will be used for
further development of the destinations in Oman and Montenegro and for general corporate purposes.
Additionally, the Group has a diversified portfolio of businesses, which includes Real estate, Hotels, Town
management, Rental portfolio, and Land monetization. And during 2020 the Group has secured CHF 32.2
million of cash inflows through its school development agreements that was signed in O West. Also, the
Group has already identified specific land plots for the purpose of sale or sub-development of certain
projects that might include – but are not limited to – new hotels, conference centres, schools, universities,
hospitals, business parks and aqua parks. Facilities that are needed in everyday life and would be adding
more value to the destinations, will provide additional cash for the group.
In April 2019, the Chairman signed a new letter of commitment to avail up to CHF 15 million until the end
of December 2019. Of the amount previously committed in April 2018, a total net amount of CHF 8.7
million was drawn down by the Group during 2019. No further draw-down were made in 2020.
Management believes that these plans are enough to substantially mitigate the liquidity risk and confirms
on the strength of ODH business model and financial position.

F-20 20
23. Assets held for sale

CHF 31/03/2020 31/12/2019

ASSETS HELD FOR SALE

Related to Makadi (i) 5,837,927 5,785,704

Balance at the end of the period / year 5,837,927 5,785,704

LIABILITIES ASSOCIATED WITH ASSETS HELD FOR SALE

Related to Makadi (ii) (578,388) (568,026)

Balance at the end of the period / year (578,388) (568,026)

(i) Planned disposal of Makadi

During 2017, ODE, the largest Egyptian subsidiary of the Group, has signed the final offer for the sale
of 100% of its equity stake in Makadi Gardens, Royal Azur and Club Azur (“Royal and Makadi”).
A contract was signed with a related party at an amount of USD 24.2 million (CHF 23.8 million) and all
required procedures to finalize the sale and transfer of ownership of the Royal company were finalized
in Q4 2018. As a result, ODE lost control on Royal for Investment and Touristic and derecognised the
disposal group excluding the Makadi garden hotel from its financial statements as of December 2018.
The required procedures to finalize the sale of the Makadi garden hotel are still in process. Therefore,
this part of the disposal group is still classified as disposal group for the period ended 31 March 2020.
The disposal group does not qualify as discontinued operation as it is neither separate major line of
business nor geographical area of operations.
The non-current assets held for sale and the liabilities associated with non-current assets held for sale
were reclassified from the following categories of assets and liabilities:

CHF 31 March 2020 31 December 2019

Non-current assets
Investment property 5,837,927 5,785,704
Total assets 5,837,927 5,785,704
Non-current liabilities
Deferred tax liabilities (578,388) (568,026)
Total liabilities (578,388) (568,026)
Net assets 5,259,539 5,217,678

24. Issued and paid-up capital

Issued and paid-up capital as of 31 March 2020 amounts to CHF 202,968,745 and is divided into
40,593,749 registered ordinary shares with a par value of CHF 5.00 per share.

F-21 21
25. Share-based payment reserve
As of 7 May 2019, the Company concluded a new employment contract with CEO Khaled Bichara,
retroactively replacing and terminating the previous contract as of 1 January 2019. The contingent
remuneration accrued under the old contract was settled by a one-off lump-sum payment of CHF 3
million, which was paid through the issuance of 183,823 shares in based on the fair value of the share at
grant date of CHF 16.32. The new agreement was approved by the Annual General Meeting on 7 May
2019. As at 31 January 2020, all compensation agreements were terminated due to the death of the CEO
Khaled Bichara.
As part of the new employment contract, the CEO received a share-based compensation. The share-based
compensation was in form of restricted share awards (“RSAs”) with a fair value at grant date of CHF 16.32
per RSA which proved for a staggered allocation of a total of 2.5% of the outstanding ODH shares (a total
of 1,012,248 shares) over the next five years. Each RSA constituted a contingent right to receive one share
in the Company upon vesting of the RSAs. The RSAs were agreed to vest in five equal tranches over a
period of five years on 1 January each year. The first tranche of 202,050 shares vested on 1 January 2020.
The shares were distributed out of treasury shares which led to the respective reclassifications within
equity.
As this share-based payment was a replacement of the superseded contract, the incremental fair value of
the new contract at grant date, which was based on the market price of the listed shares, was recognised
over the vesting period within profit or loss on top of the share-based payment expense of the superseded
contract, resulting in total personnel expense of CHF 0.2 million for January 2020 (2019: CHF 0.8 million)
which is recognised as an increase in share-based payment reserve. As at 31 March 2020, CHF 0.4 million
are shown as a separate share-based payment reserve within equity as the shares for one month of 2020
are still due to be distributed and the termination of the agreement still needs to be finalised.
Further, the CEO received another 2.5% of the outstanding ODH shares (a total of 1,010,050 shares)
directly from the Chairman. Such a transaction needs to be accounted for as if the shares were received
from the Company. As the shares were granted for a vesting period of five years, the total fair value at
grant date of CHF 16.5 million, which was based on the market price of the listed shares, was spread over
the original vesting period. After 31 January 2020, no further amounts were recognised as the shares, in
accordance with the contract, will be returned to the Chairman upon the passing away of the CEO. Hence,
CHF 0.3 million (2019: none) were recognised in profit or loss for January 2020 with the corresponding
amount recognised as share premium directly in equity. As not all procedures in relation to the
termination are finalised, the amounts recognised in share premium in relation to these granted shares
remain in share premium.

26. Foreign currency translation reserve

In the first three months of 2020, the Swiss Franc weakened against the Egyptian Pound by 2% and
remained unchanged against the USD. This resulted in a net loss for the period of CHF 0.8 million.

F-22 22
27. Trade and other payables
Trade payables mainly increased due to release of discounting of unpaid portion of acquired land in
relation to O West project in Cairo.

28. Other current liabilities

Other current liabilities consist of advances from customers (CHF 91.7 million), shareholders’ current
account (CHF 56.2 million), accrued expenses (CHF 51.2 million), deposits from others (CHF 15.8 million)
and other liabilities (CHF 52.3 million).

Other current liabilities increased mainly due to increases in advances from customers and in accrued
expenses compared to 31 December 2019.

29. Borrowings
Total borrowings decreased by CHF 4.0 million with the only major differences being reclassification of
loans in Egypt from non-current to current.
On 15 March 2020, due to the current condition of Covid-19 Virus, the Central Bank of Egypt launched to
postpone all loans due instalments, principle and interests, for a period of 6 months with no additional
fees applied for late payments.
Accordingly, the Group carried out all procedures in coordination with all banks and financial institutions
to postpone all credit dues from instalments and interests to benefit from the initiative of the Central
Bank.

30. Assets and liabilities measured at fair value

Fair value of financial instruments carried at amortised cost

Except as detailed in the following table, management considers that the carrying amounts of financial
assets and financial liabilities recognised in the consolidated financial statements approximate their fair
values.
31 March 2020 31 December 2019
CHF Carrying amount Fair value Carrying amount Fair value
Financial liabilities
Borrowings/bank loans 425,894,839 434,395,688 429,865,423 432,459,403

Valuation techniques and assumptions applied for the purposes of measuring fair value

The fair values of financial assets and financial liabilities are determined as follows:
• The fair values of financial assets with standard terms and conditions and traded on active liquid
markets are determined with reference to quoted market prices (includes unlisted and listed equity
investments classified as at FVTPL and FVTOCI respectively).

F-23 23
• The fair values of other financial assets and financial liabilities (excluding those described above) are
determined in accordance with generally accepted pricing models based on discounted cash flow
analysis. Specifically, significant assumptions used in determining the fair value of the following
financial assets and liabilities are set out below.
The valuation techniques and assumption applied for investment property are explained in note 15.

Fair value measurements recognised in the consolidated statement of financial position

The following table provides an analysis of assets and liabilities that are measured subsequent to initial
recognition at fair value, grouped into Levels 1 to 3 based on the degree to which the fair value is
observable.

• Level 1: fair value measurements are those derived from quoted prices (unadjusted) in active markets
for identical assets or liabilities.
• Level 2: fair value measurements are those derived from inputs, other than quoted prices included
within Level 1, that are observable for the asset or liability, either directly (i.e. as prices) or indirectly
(i.e. derived from prices).
• Level 3: fair value measurements are those derived from valuation techniques that include inputs for
the asset or liability that are not based on observable market data (unobservable inputs).

31 March 2020
CHF Level 1 Level 2 Level 3 Total
Financial assets at FVTOCI
Listed and unlisted shares measured at FV 1,570 - 926,633 928,203
1,570 - 926,633 928,203
Other assets at fair value
Investment property 1) - - 30,101,076 30,101,076
- - 30,101,076 30,101,076

31 December 2019
CHF Level 1 Level 2 Level 3 Total
Financial assets at FVTOCI
Listed and unlisted shares measured at FV 2,183 - 941,442 943,625
2,183 - 941,442 943,625
Other assets at fair value
Investment property 1) - - 30,161,887 30,161,887
- - 30,161,887 30,161,887

There were no transfers between Level 1 and 2 in the period. The unlisted financial assets at FVTOCI were
measured at fair value based on a method that combined the earning and net equity book values of the
companies.
1)
The reconciliation for investment property is shown in note 15.

F-24 24
Reconciliation of Level 3 fair value measurements of financial assets

Unquoted equity
securities
CHF 2020

Opening balance 941,442

Total losses recognized in other comprehensive income (14,809)

Closing balance 926,633

31. Non-cash transactions

During the three-month-period, the Group did not enter in any non-cash investing and financing activities
which are not reflected in the condensed consolidated statement of cash flows.

32. Commitments for expenditure

The following commitments for expenditure have been made for the future development of the
respective projects:

CHF 31/03/2020

Eco-Bos Development Limited (i) 3,843,383

(i) As per the property management agreement between Eco-Bos and Imerys (shareholder in Eco-Bos),
Eco-Bos has the right but not the obligation (American call option maturing in 2030) to purchase part
or all of 6.6 million square meters (divided on 7 independent plots), which is currently owned by
Imerys Mineral Limited. An annual option premium is paid to retain the rights and the purchase price
is calculated based on an agreed dynamic pricing formula. The trigger event of the option(s) is at the
full discretion of Eco-Bos and shall only be exercised when building permits are attained. Currently
Eco-Bos is in negotiations with the local authorities and other investors and is taking its time to
optimize on the best alternatives for the development.

Minimum building obligations

Beside the legally binding commitment for expenditure mentioned above the following should be
considered:
One part of the Group’s business is to acquire land for the development of tourism projects. Out of these
business opportunities often no legally binding commitments are incurred. However, the Group has
unbinding non-binding business opportunity commitments in relation to their projects. In particular the
Group has minimum building obligations (“MBOs”) for the next five years, which are included in their
development agreements (“DAs”) with the relevant governments in Oman, Morocco and Montenegro.
The contingent liabilities in relation to MBOs in Oman, Morocco and Montenegro are assessed regularly
by the management of the Group.

F-25 25
Management has analysed the various MBOs and is comfortable with the current status of the MBOs and
the minimum investment obligations. Albeit that certain delays have or may potentially occur, all such
delays, as described herein, were well founded and are premised on legal grounds that would protect the
Group from any exposure. The Group has exerted a great deal of negotiations in all destinations to ensure
that any delays are communicated to the relevant local authorities and thereby working alongside each
concerned government in rescheduling and extending the completion dates. Additionally, the Group has
worked on securing finance schemes to accommodate the newly developed restructuring of the
investment obligations, or in cases were completion dates are at risk, expending the necessary amounts
to comply with the contractual obligations. There have been no significant changes to this matter since
31 December 2019.

33. Litigation
There were no significant open litigations at 31 March 2020.

34. Subsequent Events

Impact of Corona Virus
The Egyptian government has officially allowed the reopening of hotels and resorts on 15 May 2020 for
domestic tourism, after being closed since 19 March 2020, as the Covid-19 pandemic spread across the
world. Accordingly, the Group has gradually been re-opening its hotels in El Gouna since 15 May 2020 and
re-opened Taba Heights Hotels on 21 May 2020. According to the government regulations, hotels will be
permitted to operate at a maximum capacity of 25% until 1 June 2020 then at 50% by June 2020. The
number of residents will be in accordance with guidelines of the World Health Organization (WHO) and
medical measures, ensuring quality of personal protective tools and sterilization materials.

The repercussions of COVID-19 continue to be an evolving situation with fast changing conditions making
it impossible to provide an accurate outlook on its ramifications on operational and financial results.
Management has undertaken several precautionary measures in light of the current global circumstances
and economic downturn. These measures’ purpose is to reduce the negative effects on operations,
financial position and expected cash flows resulting from lower hotel revenues and decrease in operating
cash flow in the tourism and real estate sector.
In addition, the Group has taken several measures to ensure the availability of the necessary liquidity to
continue the company's business such as reducing spending, postponing some capital expenditures and
any new not immediately required investments, in order to preserve cash to the longest period possible.
In addition, the Group is taking advantage of the initiatives announced by governments to support the
private sector to overcome this crisis. Such initiatives include postponing the payment of loan instalments
without any fines, providing credit facilities to support the tourism sector, and postponing the payment
of government dues for specific periods.
Given the measures taken to face the impacts and challenges of the COVID-19 pandemic, management
and the board of directors are in no doubt about the Group’s ability to continue as a going concern.

F-26 26
Capital increase in subsidiaries
The Company will participate in a capital increase for their subsidiary Andermatt Swiss Alps AG. The
Company contributes 49% to the total increase of CHF 70,000,000 in 2020. A respective commitment
agreement to this transaction has been signed by the Company on 24 April 2020.
Financing of UK project
In May 2020, the UK subsidiary of the Group, Eco-Bos Development Limited, secured a GBP 18 million
financing to kick-start its visionary 1,500 home project in Cornwall, UK, with unit sales starting in June
2020.
Except for the above matters, there have been no significant events subsequent to 31 March 2020.

35. Approval of condensed consolidated interim financial statements

The unaudited condensed consolidated interim financial statements were approved by management and
the board of directors on 12 June 2020.

F-27 27
Orascom Development Holding AG

Gotthardstrasse 12

CH-6460 Altdorf

Tel: +41 (0) 41 874 17 17

Fax: +41 (0) 41 874 17 07

www.orascomdh.com