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Sodic revenue falls in H1 on poor project delivery

CAIRO, August 12, 2020

Leading Egyptian developer Sodic has registered a major drop in its revenues for the first half which fell to E£1.07 billion ($67 million) from E£2.02 billion ($126 million) last year.
 
Revenues for the period were negatively affected by lower YoY deliveries and were mainly driven by East Cairo projects Eastown Residence and Villette, amounting to 49% and 19% of the delivered value respectively.
 
Gross profit reached E£325 million for the period, implying a gross profit margin of 30% compared to E£630 million and a margin of 31% during same period last year.
 
Operating profit amounted to E£100 million with an operating profit margin recorded at 9%, this compares to E£325 million and a margin of 16% during the same period, with the decline mainly attributable to the decline in revenues, said the company in a statement.
 
Net profit after tax and non-controlling interest amounted to E£68 million, reflecting a margin of 6%, this compares to E£336 million at a net profit margin of 17% during the same period in 2019.
 
Total cash and cash equivalents amounted to E£3.52 billion, it stated.
 
Bank leverage remains low with bank debt to equity at 0.38x. Bank debts outstanding were recorded at E£2 billion, it added.
 
Sodic delivered some 256 units of which 67% were in East Cairo projects, namely Eastown Residences and Villette. This compares to 441 units delivered during the same period in 2019; as the Covid-19 restrictions reduced client handover visits, as well as the majority of the expected unit deliveries for 2020 being scheduled for the second half of the year. 
 
The Egyptian developer saw a rise in deliveries last month with 161 units delivered across all projects. The company spent E£1.58 billion on construction in the first half of the year.
 
East Cairo represented 40% of the period’s gross contracted sales, mainly from Villette which contributed 29%. West Cairo represented 60%, driven by Sodic’s newest projects The Estates and VYE, which combined contributed 43% to the gross contracted sales during the period, with Allegria Residences contributing another 10%, it added.
 
Cancellations of E£320 million were recorded during the period, representing 17% of gross contracted sales, said the developer. 
 
The cancellation rate was negatively affected by the exceptionally high cancellations during Q1 2020 due to the Covid-19 outbreak in Egypt and has been improving since then, reaching 10% during July 2020 and continuing to trend downwards, it added.-TradeArabia News Service



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