SODIC reports higher revenues in 2022: Real estate giant SODIC’s revenues rose 13% y-o-y to EGP 7.8 bn in 2022, according to the company’s full-year earnings release (pdf). The increase was driven by deliveries in East Cairo projects, with Villette Sky Condos and SODIC East accounting for a combined 50% of the developer’s unit deliveries by value last year.

Earnings fell as SODIC prepares for more deval-induced inflation: The company’s net income fell 60% y-o-y to EGP 520 mn after it set aside some EGP 542 mn worth of provisions “for the potential future impact of the recent currency devaluation, which has impacted development costs across the industry, on the company’s future revenue backlog,” the release reads. Setting those provisions aside, normalized net income would have come in at EGP 941 mn — down some 14% from 2021 (pdf).

REMEMBER- Real estate players have seen their margins squeezed as the devaluation of the EGP and import difficulties on the back of an FX crunch send raw materials prices soaring. The government is granting developers a 20% deadline extension on their projects, part of a basket of measures to help soften the blow to the sector.

Sales rocketed in terms of both number and value of units sold: SODIC’s gross contracted sales almost doubled to a record EGP 21.3 bn in 2022 on the back of a 65% increase in unit sales. West Cairo contributed 37% of the sales, buoyed by the relaunch of its Karmell residential project in 4Q 2022. East Cairo accounted for 35% of gross contracted sales while the North Coast generated the remainder.

SOUND SMART- For more real estate companies, sales ≠ revenues. Most book a sale when you sign a contract to buy a home, but only record (some or all of) the value of the unit they sold you when they (a) deliver the unit to you or (b) hit a percentage of completion on a project.

This is SODIC’s first set of full-year results since it was acquired by our Emirati neighbors. The UAE’s Aldar and ADQ together acquired 85.5% of SODIC in late 2021 for EGP 6.1 bn.

SPEAKING OF WHICH- Aldar Properties reported a record AED 3.1 bn in net income in 2022 on revenues of AED 11.2 bn, according to the company’s earnings release (pdf). Aldar Development saw its revenues rise 38% y-o-y to AED 7 bn, buoyed in part by SODIC’s contribution, along with new project launches and higher inventory sales, according to the release.

Aldar Development’s overall sales nearly doubled y-o-y to hit AED 14.4 bn in 2022 — the company’s highest-ever figure for annual sales — “driven by strong demand for existing inventory and new development launches.” The group’s development revenue backlog also almost tripled to AED 17.6 bn, “providing strong visibility on the group’s revenue across both the UAE and Egypt with revenue recognition expected over the next 2-3 years.”