The Egyptian developer Palm Hills said property sales increased by 61 per cent last year to 6.3 billion Egyptian pounds (Dh2.95bn), surpassing a previous record of 5.5bn pounds set back in 2010.
The company said that the growth in sales was a result of strong demand for new schemes launched during the year in east Cairo and along Egypt’s north coast.
Revenue for the year increased by 69 per cent to 3.6bn pounds and net profit was up by 192 per cent to 1bn pounds, which it said was almost double its historical profit record of 545 million pounds – also posted in 2010.
Profit for the fourth quarter of the year increased to 203.5m pounds – up by 128 per cent on the 89.2m pounds achieved in the final quarter of 2014. This was boosted by a one-off gain of 75.7m pounds, which is understood to have come from the settlement of land liability claims by the Egyptian government’s New Urban Communities Authority (Nuca).
Palm Hills also said that the number of units delivered during the year increased by 60 per cent year-on-year to 1,573 – up from 981 in 2014 as a result of a 1.9bn pound accelerated construction works programme.
The company’s chairman, Yasseen Mansour, said that growth in the number of pre-sold homes “was fuelled by the demand for primary housing as Egyptians continue to migrate from Cairo heading west and east, as well as demand for secondary homes in the north coast”.
He said that the company had achieved a record quarter of pre-sales in east Cairo, where it booked 889m pounds – 628m pounds of which came at its Capital Gardens project.
Palm Hills also pointed to a much stronger balance sheet, which is partly thanks to last year’s 1.62bn pound rights issue, but also the 4.4bn pounds worth of contracted sales achieved during the year. It announced a cash dividend of 0.15 pounds per share and the issue of one bonus share for every 20 owned.
Harshjit Oza, an analyst with Egypt’s Naeem Brokerage, described the dividend as “a good surprise”.
“This is something they intend to do every year – distribute roughly 30 per cent of the free cash flow as dividends,” he said.
In the second half of 2015, Palm Hills signed a deal with NUCA to jointly develop a 2.1 million square metre plot of land in east Cairo under a revenue-sharing deal. It appointed SWA Group as the architect to develop a master plan for the site last month.
Mr Mansour said that it is planning to launch sales at this site in the third quarter of 2016 and that it expects to reach a another deal with Nuca for a project in west Cairo in the first half of the year. This 42 million sq metre site is expected to be the site of a major, mixed-use scheme.
Palm Hills is targeting gross sales of 5.6bn pounds and construction spending of 2bn pounds as it attempts to hand over a further 1,600 units by the end of this year.
“They are doing quite well,” said Mr Oza. “They’ve signed a few deals with the government and private developers to boost their land bank and they’re being quite aggressive. They have been aggressive before the revolution also but at that time the balance sheet was highly leveraged. Now the balance sheet is improved it gives them more flexibility and more power to grow.”
mfahy@thenational.ae
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