SODIC generates EGP1.07bn for the 1st half of 2020
SODIC recorded revenues of EGP 1.07 billion for the first half of the year compared to EGP 2.02 billion during the same period in 2019. Revenues for the period were negatively affected by lower YoY deliveries and were mainly driven by East Cairo projects Eastown Residence andVillette, amounting to 49% and 19% of the delivered value respectively.
Gross profit reached EGP 325 million for the period, implying a gross profit margin of 30% compared to EGP 630 million and a margin of 31% during same period last year.
Operating profit amounted to EGP 100 million with an operating profit margin recorded at 9%, this compares to EGP 325 million and a margin of 16% during the same period, with the decline mainly attributable to the decline in revenues.
Net profit after tax and non-controlling interest amounted to EGP 68 million, reflecting a margin of 6%, this compares to EGP 336 million at a net profit margin of 17% during the same period in 2019.
Total cash and cash equivalents amounted to EGP 3.52 billion.
Bank leverage remains low with bank debt to equity at0.38x. Bank debts outstanding were recorded at EGP 2 billion.
Receivables of EGP 13 billion provide strong cash flow visibility, of which EGP 3.9 billion are short term receivables.
Client deposits represents the backlog of unrecognized revenues from contracted sales of units that are to be delivered over the coming three to four years. Client deposits as of the end of the period were EGP 18.6 billion providing strong revenue visibility for the company.
Operational Review: Residential sales hold strong, July sales bring YTD Gross Sales to 2019 levels despiteCOVID19
SODIC sold 383 units bringing gross contracted sales to EGP 1.89 billion, down 26% from EGP 2.54 billion for the same period last year. Gross contracted sales from residential units were EGP 1.83 billion, almost flat compared to EGP 1.86 billion in the same period last year. Commercial sales contributed only 3.2% to the gross contracted sales versus 27% of gross contracted sales during the same period in 2019, in line with the company’s strategy to largely retain prime non-residential assets to contribute to the company`s recurring income in the future. Strong sales performance in July has brought the seven month gross sales value to 2019 levels despite the negative impact ofCOVID19.
East Cairo represented 40% of the period’s gross contracted sales, mainly fromVillettewhich contributed 29%. West Cairo represented 60%, driven bySODIC’snewest projects The Estates andVYE, which combined contributed 43% to the gross contracted sales during the period, withAllegriaResidences contributing another 10%.
Cancellations of EGP 320 million were recorded during the period, representing 17% of gross contracted sales. The cancellation rate was negatively affected by the exceptionally high cancellations duringQ12020 due to theCOVID-19 outbreak in Egypt and has been improving since then, reaching 10% during July 2020 and continuing to trend downwards.
Net cash collections reached EGP 1.85 billion during the period with delinquencies at 13%. This compares to collections of EGP 2.31 billion and a delinquency rate of 7% recorded during the same period last year. Delinquencies increased as a result ofCOVID-19, but decreased in June compared to April and May as the situation stabilized and economic activity resumed.
SODIC delivered some 256 units of which 67% were in East Cairo projects, namely Eastown Residences andVillette. This compares to 441 units delivered during the same period in 2019; as theCOVID-19 restrictions reduced client handover visits, as well as the majority of the expected unit deliveries for 2020 being scheduled for the second half of the year. Deliveries increased during July to 161 units delivered across all projects. The company spent EGP 1.58 billion on construction in the first half of the year.
SODIC is one of the region’s leading real estate development companies, currently developing a number of diversified projects in Egypt.SODIC’sdevelopments in East and West Cairo and Egypt’s North Coast range from residential, retail and commercial projects to large scale mixed-use developments. SODIC is listed on the Egypt’s Stock Exchange (TickerOCDI).
