Back to the complete issue
Thursday, 2 June 2022

Palm Hills’ net income rises 44% in 1Q 2022

Palm Hills Developments’ (PHD) bottom line surged 44% y-o-y in 1Q 2022, driven by a strong increase in sales, the real estate developer said in its latest earnings release (pdf). The company reported net income of EGP 295 mn, supported by a 47% increase in revenues which reached EGP 2.9 bn during the January-March period, reflecting increased past sales of primary and secondary homes as well as commercial units.

New sales in 1Q 2022 grew 62% y-o-y to EGP 5.5 bn during the quarter, driven by an increase in average selling prices and a steep rise in volumes, which almost doubled from 1Q 2021. Sales of residential property grew 63% to EGP 4.7 bn, while commercial property sales were up 59% to EGP 853 mn. PHD’s Badya project in Sixth of October accounted for 41% of its residential sales, more than quadrupling to EGP 1.9 bn during the three-month period.

SOUND SMART- In real estate, sales ≠ revenues. Real estate companies 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. So revenues are composed of sales from past periods, while sales in a given quarter will be recognized as revenues in the future when units are completed or delivered.

The company is confident it will maintain growth through the current economic headwinds: “Real Estate has always been and will continue to be a primary hedging tool against inflation even during periods with attractive interest rates,” Executive Chairman Yasseen Mansour said. The company will continue to ramp up construction spending to counter potential cost inflation and plans to deliver more than 500 units in Badya this year.

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2022 Enterprise Ventures LLC.

Enterprise is available without charge thanks to the generous support of HSBC Egypt (tax ID: 204-901-715), the leading corporate and retail lender in Egypt; EFG Hermes (tax ID: 200-178-385), the leading financial services corporation in frontier emerging markets; SODIC (tax ID: 212-168-002), a leading Egyptian real estate developer; SomaBay (tax ID: 204-903-300), our Red Sea holiday partner; Infinity (tax ID: 474-939-359), the ultimate way to power cities, industries, and homes directly from nature right here in Egypt; CIRA (tax ID: 200-069-608), the leading providers of K-12 and higher level education in Egypt; Orascom Construction (tax ID: 229-988-806), the leading construction and engineering company building infrastructure in Egypt and abroad; Moharram & Partners (tax ID: 616-112-459), the leading public policy and government affairs partner; Palm Hills Developments (tax ID: 432-737-014), a leading developer of commercial and residential properties; Mashreq (tax ID: 204-898-862), the MENA region’s leading homegrown personal and digital bank; Industrial Development Group (IDG) (tax ID:266-965-253), the leading builder of industrial parks in Egypt; Hassan Allam Properties (tax ID:  553-096-567), one of Egypt’s most prominent and leading builders; and Saleh, Barsoum & Abdel Aziz (tax ID: 220-002-827), the leading audit, tax and accounting firm in Egypt.