REG - Amer Group Hldg Co Amer Group - 87SD Amer Group - AMER - FY2017 Results <Origin Href="QuoteRef">AMER.CA</Origin>

Amer Holding Co SAEAnnouncement

05/02/2018 17:05

RNS Number : 9517D
Amer Group Holding Company S.A.E
05 February 2018
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Amer Group to announce its FY-2017 consolidated results with a gross profit of 36.5% YoY.
FY-2017 Revenues reached EGP 2,155 Million compared to EGP 2,444 Million in FY-2016. The decrease in revenue is primarily related to the decrease in the hotel and PVC revenues.
Gross Profit reached EGP 786 Million, with a Gross Profit Margin of 36.5%.
Net Profit after Taxes and Minority Interest reached EGP 89.9 Million, with a Net Profit Margin of 4.2%.
Total Assets reached EGP 5,661 Million, almost flat when compared to December 31, 2016.
Bank Balances & Cash amounted to EGP 755 Million compared to EGP 893 Million in December 31, 2016.
Total debt decreased 21% to reach EGP 348 Million vs. EGP 439 Million in December 31, 2016.
Land liability increased from EGP 37.3 Million in December 31, 2016 to EGP 93 Million in December 31, 2017
Debt-to-equity ratio recorded 0.19x in FY-2017 vs. 0.24x in December 31, 2016.
Amer Group (AMER, CA on EGX and AMGR on LSE), the Master regional developer of large-scale, mixed-use-family-oriented communities, has released its unaudited consolidated financial results for the financial period ending December 31, 2017 recording EGP 2,155 Million consolidated revenues. We have also achieved a net profit of EGP 89.9 Million. 
Bank Balances & Cash on the Balance Sheet reached EGP 755 Million in December 31, 2017 while total debt decreased to EGP 348 Million with a debt-to-equity ratio of 0.19x, a ratio that highlights the Groups robust and highly liquid financial position. Amer Group continues to ensure highest margin of safety to its shareholders by following a conservative debt policy even through periods of growth.
Amer Group is currently diversifying its exposure across different segments, focusing on generating recurring revenues through the operations of ongoing business in various sectors including Real Estate investment, Malls, Restaurants and Hotels & Vacations. It has also explored new business opportunities in complimentary fields and new other investments.
               
     
Financial Performance
Managements' analysis of the Group's financial and operational performance follows, while Amer Group's full consolidated financial statements for FY-2017 are presently available for download at www.amer-group.com.
                   
Amer Group FY-2017 Revenues amounted to EGP 2,155 Million compared to EGP 2,444 Million in FY-2016. It is worth noting that the real estate division continues to represent the largest portion of revenues accounting for 60% of total revenues, Porto Vacation Club (PVC) 21%, the Restaurant Division contributed to 12%, the Hotels Division 4%, and the remaining percentage from other activities. 
Gross Profit reached EGP 786 Million in FY-2017 vs. EGP 710 Million in FY-2016, an increase of 11% on a YoY basis. The Gross Profit Margin reached 36.5% compared to Gross Profit Margin of 29.0% in FY-2016. Cost of revenues in FY-2017 reached EGP 1,368.4 Million with cost margin of 63.5% vs. 71.0% in FY-2016.
Net Profit after Taxes and Minority Interest for FY-2017 recorded EGP 93 Million compared to EGP 184.5 Million in FY-2016, a decrease of 49.6% YoY driven by Finance Cost increase (from EGP 115 Million in FY-2016 to EGP 158 Million in FY-2017), in addition to the decrease of revenue from PVC segment in addition to the increase in Selling and Marketing Expenses.
Total Equity in FY-2017 reached EGP 1,803.5 Million compared to EGP 1,800.9 Million in December 31, 2016.
Land liability in FY-2017 registered an increase of EGP 56 Million on top of the existing EGP 37 Million, which makes a total Land Liability of EGP 93 Million in FY-2017. The increase in Land Liability was due to additional costs to be paid by Amer Group to Matrouh Governorate for the extension of the BUA in Golf Porto Marina as requested by Amer Group. 
  
Segment Analysis: Real Estate Investment (60% of total FY-2017 Revenues)
The Real Estate segment is an integral part amongst Amer Group various Lines of Business. Though it is no longer a real estate developing vehicle but rather a real estate investment and urban development arm, it plans to generate high quality of projected revenue streams. The Real Estate market remains strong in Egypt where demand is high amid shortage of property and where Egyptian buyers favor real estate asset investment as a hedge against current economic environment.
Amer Group principally builds its two-year projections for the real estate division on three main revenue streams: (i) delivering its current backlog that reached EGP 1,970 Million as of December 31, 2017; (ii) selling the inventory that exists in its developments, which recorded as of December 31, 2017 a total of 567 units; and (iii) concluding revenue sharing agreements with third parties in its capacity as Master Developer.
Amer Group recorded EGP 1,245 Million as Real Estate revenues for FY-2017 compared to EGP 1,255 Million registered in FY-2016 following the delivery of 1,256 units in December 31, 2017.
Management achieved new Real Estate sales of 530 units in FY-2017 with Real Estate sales amount of EGP 847 Million in FY-2017, which is in line with the adopted strategy to move toward Real Estate investment rather than regular Real Estate sales.
The Group has previously secured revenue share agreements with Porto Group. The agreements encompass the developing of 570 K Sqm, both residential and commercial units in Porto Matrouh (phase 2), Golf Porto Marina (Phase 4), and Golf Porto Sokhna (Phase 4) based on a revenue share agreement equivalent to 20% for each of the three projects. 
Amer Group continues to explore a variety of Land parcels in order to secure excellent Land opportunities that will be added to its existing Land Bank, which has reached a total of 5.5 Million Sqm (out of which 2 Million Sqm are un-developed land). We have made good progress on this matter and we are in the process of finalizing a strong pipeline of longer-term strategic lands.
Real Estate LoB
Item
Units
FY-2016
FY-2017
Change
Total Number of Units
#
16,901
17,423 
3%
Units sold
#
587
530
-10%
Units delivered
#
1,977
1,256
36%
Revenues Recognized
EGP mn
1,255
1,245
-1%
Operating Profit 
EGP mn
135
229
74%
Operating Profit Margin 
%
11%
18%
Segment Analysis: Restaurants (12% of total FY-2017 Revenues)
Amer Group owns and operates family-friendly restaurants under both licensed global and regional brand names and its owned proprietary brands. 
Restaurants LoB
Item
Units
FY-2016
FY-2017
Change
Operational Restaurants
#
57
46
-19%
Total Available Seats
#
7,413
7,071
-5%
Average Spend per Cover
EGP
172
223
30%
Segment Revenues
EGP mn
253.2
254.5
1%
Operating Profit
EGP mn
-20.3
-16.0
-21%
Operating Profit Margin
%
-
-
Amer Group Restaurant Segment registered a slight YoY increase of 1% in FY-2017 revenues recording EGP 254.5 Million compared to EGP 253.2 Million in FY-2016. 
Operating profit loss recorded EGP 16.0 Million in FY-2017 compared to a loss of EGP 20.3 Million in FY-2016 due to the lower revenues coupled with the hike in the restructuring and operating costs.
A new restaurants chain "Mama" has been added to the group's chain of restaurants. The new chain belongs to the new restaurants' management company, one of the group's subsidiaries. 
Segment Analysis: Hotels (4% of total FY-2017 Revenues)
Amer Group owns 6 Hotels scattered across its developments.The Group concluded an agreement with Accor Hotels to manage properties in Porto Sokhna and Porto Marina. The Group is in the process of concluding new agreements to manage other new properties in Porto Matrouh Beach Resort and Porto South Beach.
Hotels LoB
Item
Units
FY-2016
FY-2017
Change
Available Rooms
room nights
132,133
44,810
-66%
Room Revenue
EGP mn
95.75 
50.13 
-48%
Food Revenue
EGP mn
38.85 
23.15 
-40%
Other Revenue
EGP mn
19.89 
3.96 
-80%
Total Revenue
EGP mn
154.5
77.2
-50%
Operating Profit 
EGP mn
13.4
-12.5
-
Operating Profit Margin 
%
9%
-
In FY-2017, revenues for the Hotels segment recorded EGP 77.2 Million vs. EGP 154.5 Million. 
The Operating result for the period recorded a loss amounted to EGP 12.5 Million compared to a profit of EGP 13.4 Million in FY-2016. 
Segment Analysis: Porto Vacation Club - PVC (21% of total FY-2017 Revenues)
Amer Group views Porto Vacation Club (PVC) as an important driver of high margins revenues. PVC enables customers to share ownership and use of fully-furnished vacation accommodations, which gives the purchaser a right to use a property for a specific period of time. For many purchasers, vacation ownership is an attractive alternative rather than owning a second-home or resorting to regular hotel accommodation.
PVC
Item
Unit
FY-2016
FY-2017
Difference
Revenues
EGP mn
616.6
271.4
-56%
Net Profit
EGP mn
174.0
45.2
-74%
Net Profit Margin
28%
17%
We generate most of our revenues from three primary sources: (i) selling vacation ownership products, which is the core business of PVC segment; (ii) the collection of maintenance fee for managing our resorts and; (iii) the collection of service fee for renting vacation inventory on behalf of the PVC members.
As of December 31, 2017, the PVC memberships reached a total of 22,848. According to the agreed accounting standards (Accounting Standard No. 11 from the EAS), Amer Group has started to record revenues for PVC segment in 2015. The Group has recorded EGP 271.4 Million in FY-2017. 
The future continues to be bright with opportunities that complement our commitment for growth. We recently announced plans for new destinations (Porto Marina - North Coast) that would also include new on-site sales locations.
Segment Analysis: Malls 
Amer Group's Malls division operates six malls in four locations around Egypt, including Porto Marina Mall, Golf Marina Mall, Porto Matrouh, Mega Mall, Sky Mall and Waterfront Mall. The division produces revenues primarily through the renting of commercial units.
Malls LoB
Item
Units
FY-2016
FY-2017
Change
Gross Leasable Area (GLA)
sqm
46,602 
59,223 
27%
Aveg. Occupancy Rate
%
50%
44%
-
Revenues**
EGP mn
30.7
50.1
63%
Operating Profit 
EGP mn
8.9
12.8
44%
Operating Profit Margin 
%
29%
26%
** Revenues for the Mall Segment were registered under Other Income in 1H-2017 Financial Statement
As of 1H-2017, Amer Group has adopted a new financial instrument registering the revenues of the Malls segment under Other Income. The Malls Segment's Revenues recorded EGP 50.1 Million in FY-2017 compared to EGP 30.7 Million in FY-2016. The Operating result recorded a profit of EGP 12.8 Million compared to a profit amounted to EGP 8.9 Million in FY-2016.
Amer Group Balance Sheet for FY-2017
Item (EGP)
31-DEC-17
31-DEC-16
Non-current Assets
Fixed Assets
703,909,029 
854,706,543 
Projects Under Construction 
57,530,071 
104,838,887 
Investment Property Assets
219,245,929 
293,087,888 
Intangible Assets
141,313 
141,313 
Investments in Associates
- 
5,001,000 
Down Payment for Purchase of Investments in Companies 
5,001,000 
34,550,752 
Restricted Deposits due to Units Owners
671,204,374 
653,495,849 
Total Non-current Assets
1,657,031,716 
1,945,822,232 
Current Assets
Development Properties
2,306,887,273 
2,446,179,568 
Inventories
26,557,726 
21,879,139 
Accounts & Notes Receivables
536,118,172 
269,459,045 
Prepayments & Other Receivables
379,289,998 
314,694,650 
Bank Balances & Cash
755,384,589 
893,057,958 
Total Current Assets
4,004,237,758 
3,945,270,360 
Total Assets
5,661,269,474 
5,891,092,592 
Current Liabilities
Provisions
6,002,379 
3,045,926 
Bank Overdrafts
42,323,457 
38,410,342 
Land Purchase Liability
42,299,022 
37,410,342 
Advances from Customers
1,373,857,173 
1,620,510,942 
Accounts & Notes Payable
441,002,787 
478,758,431 
Term Loans
46,945,417 
68,328,884 
Income Tax Payable
23,648,410 
23,801,418 
Accrued Expenses & Other Payables
858,139,533 
791,393,469 
Total Current Liabilities
2,834,218,178 
3,061,615,432 
Working Capital
1,170,019,580 
883,654,928 
Total Invested Funds
2,827,051,296 
2,829,477,160 
Financed as Follows:
Equity 
Share Capital
1,003,099,822 
911,908,929 
Translation of Foreign Entity
238,983,361 
246,542,676 
Legal Reserve
50,733,848 
50,733,848 
General Reserve
12,055,859 
12,055,859 
Other Reserves
7,976,113 
7,976,113 
Retained Earnings
483,561,791 
551,676,535 
Minority Interest
7,122,856 
20,077,961 
Total Equity
1,803,533,650 
1,800,971,921 
Non-current Liabilities
Term Loans
258,950,260 
332,519,795 
Land Purchase Liability
50,655,446 
- 
Deposits due to Units Owners
671,204,374 
653,495,849 
Notes Payable
- 
1,643,000 
Deferred Tax Liability
42,707,566 
40,846,595 
Total Non-current Liabilities 
1,023,517,646 
1,028,505,239 
Total Equity & Long Term Liabilities 
2,827,051,296
2,829,477,160 
Amer Group Income Statement for FY-2017
Item (EGP)
FY-2017
FY-2016
Change
Revenue
2,154,773,832 
2,443,731,220 
-12%
Cost of Revenue
(1,368,415,694)
(1,734,098,263)
-21%
Gross Profit
786,358,138 
709,632,957 
11%
Selling and Marketing Exp
(225,438,453)
(126,672,398)
78%
General and Admin Exp
(268,127,839)
(265,122,112)
1%
Other Income
161,387,987 
108,109,659 
49%
Other Operating Exp
(196,248,272)
(124,037,065)
58.2%
Operating Profit
257,931,561
301,911,041 
-15%
Finance Cost
(203,816,579)
(115,084,633)
77%
FX Gain (Loss)
64,305,553 
47,125,140 
36%
Profit for the Year Before Tax
118,420,535 
233,951,548
-49%
Income Tax
(25,443,042)
(49,498,295)
-49%
Profit for the Year
 92,977,493
184,453,253 
-49.6%
Riad Refaat
Ola Tayel
Chief Financial Officer
Investor Relations Director
Riad.refaat@amer-group.com
ola.tayel@amer-group.com
About Amer Group
Established in 2007, Amer Group is the Middle East and North Africa's leading developer of large-scale mixed-use family-friendly destinations that combine upscale residential, retail and office space in addition to world-class restaurants. Amer Group operates across four primary interlinked lines of business, including Real Estate, Mall, Restaurants and Hotels; other wholly-owned Amer subsidiaries offer facilities management, sales and vacation club services, among others, to Amer developments. Listed on the Egyptian Exchange (EGX) under the symbol AMER.CA, Amer Group is headquartered in Cairo, The company takes pride in developing new communities; creating jobs; and embracing family values at all of its developments. In 2008, the lead shareholders donated 33% of its shares to an Egyptian endowment to support funding for charity projects. The endowment's shareholding following the company's IPO stands currently at 11%; all returns support charities as part of the Group's mission to support social investing. Learn more about our Group and our projects at amer-Group.com.
Disclaimer
Statements contained in this document that are not historical facts are based on current expectations, estimates, projections, opinions and beliefs of Amer Group. Such statements involve known and unknown risks, uncertainties and other factors; undue reliance should not be placed thereon, Certain information contained herein constitutes "targets" or "forward-looking statements" which can be identified by the use of forward-looking terminology such as "may", "will", "seek", "should", "expect", "anticipate", "project", "estimate", "intend", "continue" or "believe" or the negatives thereof or other variations thereon or comparable terminology. Actual events or results or the actual performance of Amer Group may differ materially from those reflected or contemplated in such targets or forward-looking statements. The performance of Amer Group is subject to risks and uncertainties.

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