SODIC logged sales of EGP4.1bn with 776 units sold in the 3rd quarter
SODIC sold 776 units during the third quarter bringing gross contracted sales to EGP 4.1 billion, a YoY increase of 23% from EGP 3.34 billion. Residential sales amounted to EGP 3.96 billion, up 62% from EGP 2.45 billion recorded during the same period in 2019.
The positive momentum was maintained as the company entered the fourth quarter, with some EGP 933 million of gross contracted sales recorded during October 2020 bringing the 10 months total to over EGP 5 billion.
West Cairo accounted for 60% of total gross contracted sales during the period driven by the strong performance on the next generation projects; VYE with a contribution of 37%, and the Estates which contributed 10%. East Cairo made up 39% of the period’s gross contracted sales, with Villette generating 24% and SODIC East contributing 10%.
Cancellations of EGP 799 million were recorded during the first nine months of the year, representing 20% of the period’s gross contracted sales. Cancellations were negatively affected during the first quarter by exceptionally high cancellations due to the COVID-19 outbreak in Egypt, and in September due to the cancellation of a bulk sale transaction. Excluding the effect of the cancellation of the bulk transaction, cancellations for the period would amount to 13% of gross contracted sales. Cancellations continue to trend downwards, recording 7% of gross contracted sales for October 2020.
Net cash collections reached EGP 3.1 billion during the period with delinquencies at 9%. This compares to collections of EGP 3.4 billion and a delinquency rate of 7% recorded during the same period last year. Delinquencies increased during the first half of the year as a result of COVID-19, but continued to trend downwards as the situation stabilized and economic activity resumed.
SODIC delivered some 786 units during the period of which 507 units were in East Cairo projects, namely Eastown Residences and Villette. This compares to 752 units delivered during the same period in 2019.
CAPEX spend on construction during the nine months period amounted to EGP 2.4 billion, this compares to EGP 2.1 billion spent during the same period in 2019.
Revenues of EGP 3.15 billion were recorded, 7% lower than EGP 3.41 billion recorded during the same period in 2019. Revenues for the period were mainly driven by East Cairo projects Eastown Residences and Villette, amounting to 42% and 23% of the period’s delivered value respectively, while West Cairo projects contributed a further 28%.
Gross profit grew 13% to reach EGP 1.1 billion for the period, implying a gross profit margin of 35%. Gross profit margins expanded 600 bps YoY supported by a better delivery mix and margin improvement on Villette as the company continues to deliver more advanced phases of the project.
Operating profit grew 33% YoY to amount to EGP 681 million, reflecting an operating profit margin of 22%, an improvement of 700 bps YoY on the back of higher gross profits and an increase in other revenues from cancellations.
Net profit after tax and non-controlling interests increased by 6% YoY to record EGP 536 million. Net profit margins improved 200 bps compared to the same period last year to record 17% as a result of the YoY increase in operating profitability, but was negatively impacted by a 64% decline in net finance income due to the sharp decline in interest rates following CBE rate cuts during the year.
SODIC continues to maintain a strong liquidity position with total cash and cash equivalents amounting to EGP 3.67 billion.
Bank leverage remains low with bank debt to equity at 0.4x. Bank debts outstanding were recorded at EGP 2.2 billion.
Receivables of EGP 13.63 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 18.2 billion providing strong revenue visibility for the company.
SODIC is one of the region’s leading real estate development companies, currently developing a number of diversified projects in Egypt. SODIC’s developments 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 (Ticker OCDI).
