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Cairo, Egypt: Sixth of October Development & Investment Company “SODIC” has released its consolidated financial results for the financial year ending 31st of December 2019.
- Revenues EGP 5,329 million up 42%
- Gross profit EGP 1,466 million up 20%
- Gross profit margin 27%
- Operating profit EGP 702 million up 109%
- Operating profit margin 13%
- Net profit EGP 719 million, a growth of 60%
- Net profit margin 13%
- Record gross sales of EGP 7.3 billion up 32%
- Timely deliveries of 1,176 units versus 1,079 in 2018
- Cash collections EGP 4.6 billion up 7%
Consolidated Balance Sheet Figures as at 31st of December 2019:
- Accounts Receivable: EGP 13.1 billion
- Cash and cash equivalents balance: EGP 4.0 billion
Financial Review; 42% growth in revenues, receivables surpass EGP 13 billion
Revenues of EGP 5,329 million were recorded during the full year 2019 compared to EGP 3,726 million recorded during the same period last year, reflecting a strong growth of 42% mainly driven by deliveries in East Cairo projects Villette and Eastown, amounting to 44% and 21% of the delivered value during the period respectively.
Gross profit reached EGP 1,466 million, up 20% and recording a gross profit margin of 27% compared to 33% in 2018. The decline in gross margins is mainly due to the early phases of Villette being the largest contributor to revenues having accounted for 44% of total delivered value.
Operating profit increased 109% to EGP 702 million, recording an operating profit margin of 13% for 2019 versus 9% for 2018. Net profits attributable to equity holders grew 60% to EGP 719 million in 2019 reflecting a margin of 13% and an EPS 2.06 EGP.
SODIC continues to maintain a strong liquidity position with total cash and cash equivalents amounting to EGP 4.0 billion. Bank leverage stood at 0.34x debt to equity with EGP 1.9 billion of debt outstanding. During the year the company signed several new facilities including EGP 1 billion to partially finance the construction of EDNC, SODIC’s flagship commercial asset in East Cairo. The increase in debt exposure comes on the back of the company’s strategy to create a sizable investment portfolio of prime assets that will contribute to its recurring income in the future.
Receivables of EGP 13.1 billion increased by 12% providing strong cash flow visibility, with delinquency rates at a low rate of 6%. 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 quarter were EGP 17.7 billion providing strong revenue visibility for the company.
Operational Review; Record sales of EGP 7.3 billion with a 32% increase YoY
Gross contracted sales for the year 2019 increased by 32% delivering a record EGP 7.3 billion versus EGP 5.5 billion for the same period last year. Sales were mainly driven by the strong performance of SODIC’s projects in core markets West & East Cairo. West Cairo projects contributed to 59% of gross sales in 2019 with VYE & The Estates being the main engines of growth for the year. Commercial sales contributed to circa 17% of gross sales during the year having generated circa EGP 1.2 billion.
Cancellations were recorded at 8.32% of gross sales in 2019, this compares to 8% recorded in 2018. Due to delays in launching new phases of Malaaz as a result of permitting delays in the North Coast, Malaaz had higher cancellations negatively affecting SODIC’s cancellation rate. The project contributed c. 22% of cancellations in 2019, excluding the effect of Malaaz would bring the cancellation rate to 6.5%, in line with historical average.
Net cash collections increased by 7% to reach EGP 4.6 billion during the year with delinquencies at 6%. SODIC delivered some 1,176 units during the year, this compares to 1,079 units delivered in 2018. East Cairo projects accounted for 703 of the delivered units, while delivering 394 and 79 units in West Cairo and the North Coast respectively.
Dividends proposal
SODIC’s Board of Directors has proposed a cash dividend distribution of EGP 0.55, a 10% increase over 2018 dividend per share subject to the approval of the Ordinary General Assembly. The proposed dividend is a testament to the company’s commitment to have a sustainable distribution to shareholders supported by SODIC’s liquid balance sheet, solid financial performance, and strong cash flows.
Guidance for 2020
Management is targeting gross contracted sales EGP 8.4 billion - a growth of 15%. This includes sales from Malaaz and excludes any non-residential sales in line with the company’s strategy to largely retain prime non-residential assets to contribute to recurring income in the future. This targeted sales in 2019 represents a 38% increment to 2019 residential sales.
The company expects to deliver some 1,150 units with an estimated value of EGP 5 billion, while expenditure on construction is expected at EGP 3.7 billion. Commenting on the results and the performance of the year Magued Sherif SODIC’s Managing Director said “2019 was a record year for SODIC. We are very excited about the year ahead and have full confidence in the demand for SODIC’s diverse offerings across its markets”.
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.
For further information, please contact:
Engy Emad
Senior Media Relations Manager
TRACCS Egypt
Mobile: 010 0900 2207
Email: engy.emad@traccs.net
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