Outstanding set of results exceeding targets

Net Profit Margins and Land bank double in 2015

Cairo, Egypt, March 16, 2016

SODIC "Sixth of October Development & Investment Company" released its consolidated financial results for the twelve months ending 31st of December 2015.

Consolidated Income Statement Figures for the period ending 31st of December 2015:

Revenues: EGP 1.47 billion

Net Profit: EGP 310.7 million

Net Profit Margin: 21%

Consolidated Balance Sheet Figures as at 31st of December 2015:

Accounts Receivable: EGP 6.9 billion

Cash Balance: EGP 2 billion

Solid Operational Performance

2015 witnessed a strong sales momentum across all projects with net contracted sales reaching EGP 4.4 billion, c. 43% Y-o-Y growth. Eastown and Villette contributed to 63% of the year's net contracted sales reflecting growing demand on East Cairo. Sales within SODIC West reached EGP 928 million representing 21% of net contracted sales for the year. The launch of the first phase of Caesar, SODIC's first secondary home project in the North Coast, contributed EGP 671 million to the years' achieved sales. Cancellations remained at a low level of 5%.

Cash Collections reached c. EGP 2.4 billion, displaying a growth of 17% over the same period last year with delinquencies remaining low at 5%, contributing positively to the year end's cash balance of c. EGP 2 billion.

Deliveries came in ahead of targets with 721 units delivered across all projects, c.94% of which are within SODIC West developments. This number compared to 490 units delivered in 2014.

In line with its strategy to grow its recurring revenue stream, SODIC opened The Hub in May 2015 with occupancy reaching 55% by year end. The Hub revenues are expected to contribute to the Company's top line starting 2016. Upon reaching its full occupancy, this asset will be generating around EGP 30 million in recurring revenues per annum.

Land Bank Doubles in 2015

In line with its expansion strategy, SODIC acquired three land plots in 2015, adding a total of 3.3 million sqm to the Company's land bank and bringing SODIC's undeveloped land bank to 6 million sqm. The acquisitions marked both SODIC's first secondary home project as well as its first co-development venture.

In February 2015, a 441,000 sqm plot (100 acres) was acquired in the North Coast on which Caesar has been launched. In September 2015, a 126,000 sqm plot (30 acres) was acquired in 6th of October through a government auction. Finally as the year closed SODIC acquired a 2.75 million sqm plot (655 acres) in East Cairo by way of a co-development agreement with Heliopolis Housing & Development Company, entitling SODIC to 70% of residential revenues and 69.8% of retail/commercial revenues. The award letter was received in December 2015 and the co-development contract with Heliopolis Housing was signed in March 2016.

Financial Review

Improved profitability; impressive net profit growth

SODIC recorded revenues of c. EGP 1.47 billion and gross profit margin reached 41%, 600bps higher compared to the same period last year. Net profit came in at c.EGP 310.7 million with a margin of 21%, double that of last year.

The evident improvement in profitability levels is attributed mainly to the delivery of high margin units in Westown Residences, Allegria and the Strip, in addition to the high interest income and other income generated throughout the year.

The year ended with a positive net cash balance with a total cash balance of EGP 2 billion and EGP 1.2 billion in total bank debt. SODIC's healthy balance sheet remains supportive to its expansion strategy. Receivables continued to grow in line with the strong growth in contracted sales reaching c. EGP 6.9 billion by year end.

2016 Outlook

SODIC will continue to launch new phases within its existing projects in West and East Cairo and the North Coast, with a new project coming online during the second half of the year on the recently acquired 30 acres plot. 2016 will also mark the beginning of Eastown Residences' first deliveries.

SODIC continues to avidly pursue opportunities to grow and expand its land bank. Commenting on the results, SODIC's Managing Director Magued Sherif said "the coming period is all about growth. We are bullish about the future and look forward to building on SODIC's solid track record and expanding our land bank and product offering."

-Ends-

About SODIC
SODIC is one of the region's leading real estate development companies and is currently developing a number of large and diversified projects in Egypt. SODIC's developments range from residential projects of different types to retail, commercial and large scale mixed-use city centers in east and west Cairo. SODIC is listed on the Cairo Stock Exchange (Ticker OCDI). For more information please visit www.sodic.com

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Engy Emad
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© Press Release 2016