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Wednesday, 16 November 2016

SODIC earnings surge in 3Q/9M2016

SODIC reported a 38% y-o-y increase in net profit after minority interest to EGP 108 mn in 3Q2016 on revenues of EGP 530 mn, up 74% y-o-y, according to the company’s earnings release. The growth in revenues reflects the delivery of the first phases of Eastown Residences, which began in May and accounted for 30% of the value delivered in 9M2016. Gross profit margin for the quarter reached c.34% compared to c.38% during 2015. Profitability for the period has been weighed down by the strong contribution of Eastown deliveries that accounted for 38% of the quarter’s delivered value and resulted in the 400 bps differential between both quarters, as the first units of the project carry lower margin units. Backlog stood at EGP 11 bn compared to EGP 8 bn last year providing strong earnings visibility for the coming three years. Managing Director Magued Sherif told Al Borsa. SODIC has already sold 95% of the houses offered on sale this year and is on target to have completed the delivery of 935 units by 2016’s end. According to Reuters, Sherif also said SODIC took the decision to raise the prices of its residential units by 20-30% following the EGP float and is also delaying three new projects from 4Q2016 to 1H2017. SODIC is also looking for new opportunities in the North Coast. EFG Hermes recently declared that SODIC is still “one of its preferred names” in the sector despite the recent rally in its share price post the float.

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