Cairo, Egypt: Sixth of October Development & Investment Company “SODIC” has released its consolidated financial results for the nine months ended 30th of September 2022.

Operational & Financial Highlights

    • Gross contracted sales EGP 11.8 billion, up 119% YoY
    • Cancellations 8% of gross contracted sales
    • Cash collections EGP 4.37 billion
    • Timely delivery of 845 units
    • Revenues EGP 4.65 billion, up 40% YoY
    • Gross profit: EGP 1.48 billion, up 40% YoY, reflecting a gross profit margin of 32%
    • Operating profit: EGP 603 million, up 29% YoY, implying an operating profit margin of 13%
    • Net profit after tax and non-controlling interests EGP 434 million, up 27% YoY, delivering a net profit margin of 10%

Operational Review;

SODIC sold 1,735 units during the first nine months of 2022, generating gross contracted sales of EGP 11.8 billion, an increase of 119% over EGP 5.39 billion of gross contracted sales recorded during the first nine months of 2021.

Gross contracted sales during the period were diversified between SODIC’s main markets, with West Cairo accounting for 25% of sales mainly driven by The Estates Residences which was launched in the first quarter of the year and has generated 10% of SODIC’s gross contracted sales during the first nine months of 2022. East Cairo contributed 31% of the period’s gross contracted sales on the back of robust sales on both SODIC East and Villette. While continued strong performance of June led to the North Coast accounting for 44% of sales during the period.

Cancellations of EGP 917 million were recorded during the first nine months of 2022, representing 8% of the period’s gross contracted sales. This compares to a cancellation rate of 16% during the same period in 2021.

Cancellations were negatively affected by cancellations of EGP 576 million on SODIC’s 464 acres project in New Zayed due to the project’s temporary suspension. The project was relaunched in September 2022 and has since recorded some EGP 388 million in gross sales, however, due to its suspension the project has accounted for 63% of the cancellations during the period. Excluding cancellations on the 464 acres project during the suspension, cancellations would stand at 3% of gross contracted sales.

Net cash collections reached EGP 4.37 billion for the period, with delinquencies at 6.9%. This compares to collections of EGP 3.64 billion and a delinquency rate of 8.5% recorded during the same period in 2021.

SODIC delivered some 845 units during the period, of which 672 were in East Cairo projects, while West Cairo and North Coast projects accounted for 162 and 11 of the delivered units respectively. This compares to 570 units delivered during the first nine months of the previous year.

Deliveries on 655-acre flagship East Cairo project SODIC East started during the year, with the company delivering 292 units as of 30th of September 2022

CAPEX spent on construction during the period amounted to EGP 2 billion, compared to EGP 2.1 billion spent during the same period last year.

Financial Review;

Income Statement

Revenues of EGP 4.65 billion were recorded during the first nine months of 2022, representing a 40% increase compared to EGP 3.31 billion of revenues recorded during the same period last year. Revenues were mainly driven by deliveries in East Cairo projects which contributed 77% of the period’s delivered value, led by Villette’s Sky Condos and SODIC East, which respectively contributed 32% and 26% of the period’s delivered value. Furthermore, West Cairo and North Coast projects contributed 22% and 1% of the delivered value during the nine months period respectively.

Gross profit increased 40% YoY on the back of higher revenues to record EGP 1.48 billion, implying a gross profit margin of 32%. This compares to a gross profit of EGP 1.05 billion and a gross profit margin of 32% recorded during the first nine months of 2021.

Operating profit for the nine-month period amounted to EGP 603 million, reflecting an operating profit margin of 13%. This represents a 29% growth over an operating profit of EGP 469 million and an operating profit margin of 14% recorded during the same period last year.

Net profit after tax and non-controlling interests came in at EGP 434 million, growing 27% from the EGP 342 million recorded during the first nine months of 2021, and reflecting a net profit margin of 10%.

Balance Sheet

SODIC continues to maintain a strong liquidity position with total cash and cash equivalents amounting to EGP 2.07 billion.

Bank leverage remains low, with bank debt to equity standing at 0.44x. Bank debt outstanding amounted to EGP 3.17 billion as of 30 September 2022. SODIC has been gradually increasing leverage mainly to enhance returns. Debt to equity amounted to 0.38x at year-end 2021, with EGP 2.55 billion of outstanding debt; and to 0.37x at year-end 2020, with EGP 2.3 billion of outstanding debt.

Total receivables stood at EGP 25.9 billion, of which EGP 6.1 billion are short-term receivables providing strong cash flow visibility for the company. A total of EGP 2.92 billion of receivables are reported on the balance sheet, reflecting only the receivables relating to delivered units already recognized as revenue. On the other hand, some EGP 22.98 billion of receivables related to undelivered units are disclosed in the footnotes.

SODIC’s total backlog of unrecognized revenue stood at EGP 29.50 billion as of 30 September 2022, providing strong revenue visibility for the company.

-Ends-

About SODIC

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). For more information, please visit www.sodic.com.