EARNINGS WATCH- Sodic reports strong growth in contracted sales, guides for 15% sales growth this year: Sodic’s net profit rose 60% in 2019 to EGP 719 mn from EGP 449 mn the year before, the company said in its full-year earnings release (pdf). Revenue growth was driven by deliveries in East Cairo projects Villette and Eastown, the company noted, as Sodic closed the year with revenues of EGP 5.3 bn, up 42% from the previous year.

Notably, Sodic is guiding for 15% sales growth this year with gross contracted sales of EGP 8.4 bn in the forecast, suggesting that the company is proving resilient in what some observers believe is a challenging market. The company noted that the diversity of its current land bank should allow it to mitigate concentration risk and allow “the company as a whole be more resilient to interruptions in any specific market.”

Why “sales” ≠ “revenue”: Readers should note that in the real estate industry, revenue is effectively a lagging indicator. Recognition policies vary from one developer to another, but a “sale” is typically defined as a new contract signed, while revenues are recognized when contracted units are delivered or reach a specific construction milestone.

Sodic is also guiding that it expects to deliver some 1,150 units in 2020 with an estimated value of EGP 5 bn, while expenditure on construction is expected at EGP 3.7 bn.

Dividend: The board of directors also suggested distributing dividends of EGP 0.55 per share upon the approval of general assembly, a 10% increase from the year before.

Edita net profit rises 19.3% y-o-y in 2019: Leading snack food maker Edita’s net profit rose 19.3% y-o-y in 2019 to EGP 362.3 mn, according to the company’s earnings release (pdf). The company’s top-line growth was “driven by higher volumes and improved price mix,” according to the release. Revenues for the year reached EGP 4.03 bn, up 6.6% y-o-y.

In 2020, Edita is looking to “build on the foundations laid over the last twelve months to drive sustainable revenue growth and expand across the local and regional snack foods markets,” Chairman Hani Berzi said. The company plans to focus this year on rolling out new products while investing in its distribution capabilities to boost its market share. Edita also expects its new factory in Morocco to be operational this year, with construction having kicked off in 4Q2019.

Edita has also announced the launch of an upsized HoHos Cream product with a retail price of EGP 2 per pack, according to a press release (pdf), continuing a string of new product announcements in recent weeks. The company has also rebranded its uncoated Mini HoHos products. The company’s cakes segment, which includes Twinkies, HoHos, Tiger Tail, and Todo products, “continues to be the largest contributor of revenues” for the leading snackfoods maker.

GB Auto posted net profits of EGP 42.7 mn in 2019, down 92.2% y-o-y from EGP 544.8 mn in 2018, according to an earnings release (pdf). Revenues during the year dipped 0.9% to EGP 25.4 bn. The company’s Auto & Auto-Related (A&AR) segment recorded revenues dipped 4.8% y-o-y to EGP 21.1 bn, “a modest decrease despite the adverse regulatory environment that led to price instability in the PC market in Egypt and placed constraints on both consumers and manufacturers in the [two- and three-wheelers] market.”

Looking ahead: Ghabbour expects price stability “in the PC division as the market volatility from regulatory changes subside” in 2020, following a year of external challenges that undermined “an otherwise strong market.” The company is also pushing ahead with a digitization drive across its operations this year.

The earnings news came as GB Auto said in a regulatory filing (pdf) that it will no longer represent Hyundai’s passenger cars’ division in Iraq following the Korean automaker’s decision to shift to a multi-distributor model. The company, which had a 25% market share in Iraq last year with Hyundai, said its operations would be unsustainable under the new model. GB Auto will continue operating in the country until it clears its inventory, which might not happen until mid-2020.

TMG reports 10% increase in net profits: Talaat Moustafa Group’s net profits increased 10% y-o-y in 2019 to EGP 1.87 bn, up from EGP 1.7 bn a year earlier, the company revealed in its earnings statement (pdf). Consolidated revenues for the year came in at EGP 11.7 bn, up 7% y-o-y, from EGP 10.9 bn.