Sixth of October Development & Investment Company (Sodic), a leading Egyptian developer, said it has begun 2018 on a solid note with exceptionally strong profitability and land bank developments shaping the first three months of the year.

Announcing the results for the quarter ended March 31, 2018, Sodic posted a net profit of E£212 million ($11.84 million), up 41 per cent over the same period last year, however its revenues fell to E£512 million from E£703 million recorded during the same period last year.

Revenues during 2017 were exceptionally front loaded towards the first quarter in which Sodic delivered circa 35 per cent of the units for the year.

Gross profit increased by 26 per cent to reach E£266 million, delivering a solid gross profit margin of 52 per cent. Sodic’s projects recorded exceptionally high profitability during the quarter with almost all projects achieving a gross margin of over 40 per cent, said a statement from the company.

Gross profit was augmented by a sub-development deal in Sodic West. Excluding the effect of this deal gross profit margin from developments was a solid 43 per cent, it stated.

Operating profits came in at E£193 million reflecting a healthy operating margin of 38 per cent, representing a marked improvement of 712 bps over same period last year.

Sodic’s bottom line continues to be positively impacted by the high interest rate environment. Excluding the impact of net interest income net profit margin comes in at a solid 28 per cent.

The Egyptian developer said its total cash and cash equivalents amounted to E£3.9 billion at the end of the quarter, reflecting the strength of the company’s balance sheet, supporting the company’s aggressive land bank expansion plans and timely projects execution.

The company's net contracted sales surged nine per cent to E£1.2 billion on the same period last year. With limited release of residential inventory, sales for the quarter were mainly driven by non-residential developments which represented 78 per cent of the net contracted sales for the period, it added.-TradeArabia News Service