SODIC’s net income up 89% y-o-y for 4Q2021
Real estate giant SODIC’s net income nearly doubled during 4Q 2021, rising 89% y-o-y to EGP 518 mn, according to the company’s latest earnings release (pdf). Revenues rose 81% for the quarter to record EGP 3.6 bn. For the full year, net income was up 5% to EGP 860 mn, while revenues rose 24% to EGP 6.9 bn.
What drove the growth? Strong revenue growth in both the fourth quarter and the full year was driven by deliveries at East Cairo projects, which made up 84% of deliveries by value in the fourth quarter, and three-quarters of deliveries by value over the year. But the surge in revenues didn’t fully trickle down to SODIC’s bottomline in 2021, as margins were impacted by “one-off costs” and a “sharp decline” in net finance income due to lower interest rates.
REMEMBER- For real estate companies, sales ≠ revenues. They book a sale when you sign a contract to buy a home. But they only record (some or all) of the value of the unit it sold you when it (a) delivers the unit to you or (b) hits a percentage completion on a total project.
Sales: SODIC sold 928 units with a gross contracted sales value of almost EGP 6 bn during the fourth quarter, marking a 59% y-o-y increase in the number of units sold and an 81% rise in sales value. The company set new annual records for both number and value of units sold in 2021, selling 1.7k units for a total EGP 11.4 bn — up 54% in value on 2020. The growth came despite the temporary suspension of sales at the company’s New Zayed project in West Cairo, after the Housing Ministry decided to move it to a new location.
SODIC is under new management: The release is the SODIC’s first since an Emirati consortium of real estate giant Aldar Properties and Abu Dhabi sovereign wealth fund ADQ acquired 85.5% of the company for EGP 6.1 bn in December. The Aldar-ADQ consortium “has communicated its objective to advance SODIC’s position as a leading national developer by scale and reputation, growing the company’s portfolio of mixed-use residential communities in Greater Cairo, the North Coast, and other major markets,” the release read.
Arabian Cement returns to the black: Arabian Cement recorded net income of EGP 52 mn in 4Q 2021 after posting a EGP 78 mn in the same quarter in 2020, according to the company’s latest earnings release (pdf). Revenues were up 44% to EGP 774 mn during the October-December period as market prices began to recover from an extended supply glut.