Egypt's biggest listed developer Talaat Moustafa Group (TMG) posted a 34 per cent slide in third-quarter net profit on Wednesday, the first results from the firm since a legal row over its flagship project erupted.

TMG's $3 billion Madinaty project has been mired in a legal row since September when a court upheld a ruling that a sale of state land to TMG was illegal because there was no auction.

The court's decision rattled investors and led to copycat challenges to other state land sales.

The government scrapped the original contract and said it would return the land to the company under a new deal on the same terms based on its right to act in the national interest.

But analysts have been watching for any sign that the drawn-out Madinaty dispute is prompting clients to hold back from buying TMG homes.

The firm did not release home reservations or sales for the third quarter, but posted net profit for the first nine months of 863.6 million Egyptian pounds ($150.3 million), down from 938.8 million pounds in the same period of 2009.

It said third-quarter net profit was 201.1 million pounds, compared to 304.2 million pounds last year. Building has already started on the Madinaty project, meant to include shops, hotels, homes, schools and a golf course.

The plot makes up about two thirds of TMG's land. The firm has said it signed the new contract to replace the scrapped deal on Monday.-Reuters