Egypt: SODIC achieves $970mln in gross contracted sales, up by 42% YoY

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Egypt - Sixth of October Development and Investment Company (SODIC) achieved revenues of EGP 10.33bn in 2023, representing a 32% increase compared to EGP 7.81bn in 2022.

Revenues were mainly driven by deliveries in East Cairo projects, which accounted for 56% of SODIC’s deliveries by value during the year.

East Cairo projects V Residence, SODIC East, and EDNC accounted for 20%, 15%, and 12% of the value delivered during the year, respectively, together representing 47% of the total value of deliveries. West Cairo and North Coast projects contributed 43% and 1% of the delivered value, respectively, in 2023.

Gross profit reached EGP 3.57bn, implying a gross profit margin of 35%. Gross profits recorded a 32% growth over 2022, compared to a gross profit margin of 28% in 2022, expanding 650 bps YoY.

Operating profit of EGP 1.86bn was recorded in 2023, reflecting an operating profit margin of 18%, growing 187% YoY.

Net profit after tax and non-controlling interests came in at EGP 1.37bn, implying a net profit margin of 13% and EPS of EGP 3.85.

Balance Sheet

SODIC maintained a strong liquidity position with total cash and cash equivalents amounting to EGP 2.66bn.

Bank leverage remained low, with bank debt to equity standing at 0.37x. Bank debt outstanding amounted to EGP 3.22bn as of 31 December 2023. Debt to equity amounted to 0.43x at year-end 2022, with EGP 3.16bn of outstanding debt.

Total receivables stood at EGP 48.1bn, of which EGP 10.29bn were short-term receivables, providing strong cash flow visibility for the company. A total of EGP 6.7bn of receivables were reported on the balance sheet, reflecting only the receivables related to delivered units already recognized as revenue. On the other hand, EGP 41.4bn of receivables related to undelivered units were disclosed in the footnotes.

SODIC’s total backlog of unrecognized revenue stood at EGP 51.4bn as of 31 December 2023, providing strong revenue visibility for the company.

Commenting on the results, Ayman Amer, SODIC’s General Manager, said: “We are very happy to report a strong set of results with growth across all operational and financial metrics. The focus this year was on achieving growth while ensuring healthy and profitable sales. We also expanded our land bank by adding two new plots on the north coast, complementing our portfolio of successful projects in this key market. The signing of the partnership with the world-renowned Nobu Hospitality in the summer is something we are exceptionally proud of, as we continue to bring our clients world-class experiences. We look forward to another year of strong results as we push forward with our diligent management approach that continues to set SODIC apart. The robust demand for SODIC’s projects continues to be a testament to the strength of our brand as well as the underlying fundamentals driving the real estate market.”