SODIC’s 1Q2018 sales growth driven by launch of “cornerstone of future recurring income portfolio”
EARNINGS WATCH- SODIC reported a net profit after tax and minority interest of EGP 212 mn in 1Q2018, with a net profit margin of 41%, the company said in its earnings release (pdf). Net contracted sales grew 9% y-o-y to EGP 1.2 bn, largely driven by a pickup in sales of non-residential developments, as the quarter witnessed the launch of the Eastown District New Cairo, which “is expected to be the cornerstone of SODIC’s recurring income portfolio in the future,” once it’s complete in 2021. Deliveries also remained on track in 1Q2018, with 167 units handed over on time or ahead of schedule, and the company expects it will meet its targets for the year, according to Managing Director Magued Sherif. “We begin the year with exciting developments on our land bank as we continue to deliver on our expansion and diversification strategy,” he said, noting that new land acquisitions — including 1.3 mn sqm of land in the North Coast, that should drive as much as EGP 15 bn in sales, and a 500-acre plot in West Cairo —brought the company’s total “land bank to 8 mn sqm, putting over 10 years of inventory visibility in all our markets.”
A potential merger with Madinet Nasr Housing and Development (MNHD) could almost double that figure, as the agreement “would leverage on the strengths of the two companies in their respective target markets and accelerate the monetization of a consolidated land bank of 14 mn sqm,” he said. SODIC and MNHD had reportedly started talks about a potential merger back in April.