Egypt-based Sodic (Sixth of October Development & Investment Company) has posted a net profit of EGP507 million ($28.7 million) up 98 per cent year-on-year (YoY) for the first nine months of the year.

Net profit margin came in at 29 per cent compared to 22 per cent for the comparable period last year reflecting a margin expansion of 669bps.

Sodic delivered 911 units across nine projects in the nine month period, compared to 588 units delivered in the same period in 2016 driving a rise in revenues by a solid 52 per cent YoY to reach EGP1,757 million for the period. The growth was mainly driven by on schedule deliveries in Eastown Residences and Westown Residences, representing 57 per cent and 24 per cent of the delivered value respectively.

Gross profit for the period came in at EGP666 million reflecting a strong margin of 38 per cent. This represents a margin expansion of 233 bps over the same period last year and comes on the back of the higher profitability across the residential offering as Sodic delivers on more mature phases of the developments.

Operating profit increased by 64 per cent to reach EGP446 million up from EGP271 million for the same period last year. Operating profit margins were recorded at 25 per cent an improvement of 173bps as revenue growth outstrips growth in SG&A.

Cash and cash equivalents balance stood at EGP3.3 billion as of September 30, up 27 per cent from year end 2016. Half of these balances have been invested into treasury bills optimizing income earned.

Net contracted sales for the nine month period came in at EGP3 billion, a decline of 7 per cent versus the same period last year. The sales reflect the limited availability of inventory on the Mediterranean north coast that had contributed to 16 per cent of the nine months 2016 sales.  A total of 788 units were sold during the nine month period versus 833 units during the same period last year a decline of 5 per cent. Cancellations declined to 3 per cent, compared to 6 per cent in 2016 reflecting the continuation of healthy demand.

Collections during the nine month period grew by 29 per cent to EGP2.7 billion up from EGP2.1 billion for the comparable period last year. Delinquencies came in at a low rate of 3 per cent.

Magued Sherif, Sodic managing director said: “Sodic continues to deliver strong growth and healthy profitability. With gross margins for the quarter hitting the 40 per cent mark in such an inflationary backdrop we are once again demonstrating our ability to generate superior profitability on our developments.”

“Our sales performance was very much in line with our expectations, given the limited inventory on the Mediterranean north coast and we remain on track to meet our 2017 financial and operational goals. The fourth quarter will mark the launch of Sodic East, our 655 acre co-development in East Cairo. The project is expected to contribute significantly to our sales in the last quarter of 2017,” he added. – TradeArabia News Service