Cairo, Egypt, 28 July 2024, Sixth of October Development & Investment Company “SODIC” has released its consolidated financial results for the six months ended 30th of June 2024.

Operational & Financial Highlights

    • Gross contracted sales EGP 10.93 billion, up 34% YoY
    • Cancellations 2% of gross contracted sales, down from 10% in H1 2023
    • Net Cash collections EGP 6 billion
    • Timely delivery of 478 units
    • Revenues EGP 3.94 billion, up 35% YoY
    • Gross profit: EGP 1.41 billion, up 26% YoY, reflecting a gross profit margin of 36%
    • Operating profit: EGP 714 million, up 77% YoY, implying an operating profit margin of 18%
    • Net profit after tax and non-controlling interests EGP 626 million, up 87% YoY

Key Corporate Highlights

  • April 24th: SODIC and Nobu, the renowned luxury lifestyle brand, announce the signing of Nobu Hotel and Restaurant East Cairo. The signing marks Nobu and SODIC’s third venture in Egypt, following the announcement of Nobu Hotel, Restaurant, and Residences in both West Cairo and North Coast Egypt last summer.
  • June 11th: SODIC signed an agreement with Marriott International, Inc. to bring the Tribute Portfolio brand to two of the leading developer’s hotels in West Cairo and the North Coast.
  • June 24th: SODIC announced the upcoming grand opening of its newest retail destination, Eastown District New Cairo “EDNC”, in September 2024.

Operational Review

SODIC sold 361 units during the first six months, generating gross contracted sales of EGP 10.93 billion, an increase of 34% over EGP 8.17 billion of gross contracted sales recorded during H1 2023.

Gross contracted sales during the period were diversified between SODIC’s main markets, with West Cairo accounting for 58% of sales supported by the strong demand for the 464 acres project and the Estates which contributed to c. EGP 5.3 bn in contracted sales, 49% of SODIC’s contracted sales in H1 2024. North Coast projects contributed 36% of the company’s gross contracted sales on the back of robust sales in June, which contributed 22% of sales. East Cairo accounted for 6% of contracted sales during the first half of 2024.

Cancellations of EGP 253 million were recorded during the period, representing 2% of the year’s gross contracted sales. This compares to a cancellation rate of 10% during H1 2023.

Net cash collections reached EGP 6 billion for the period, with delinquencies at 6%. This compares to collections of EGP 4 billion and a delinquency rate of 5% recorded during H1 2023.

SODIC delivered some 478 units during this first six months of the year, of which 324 were in East Cairo projects, while West Cairo accounted for 154 of the delivered units. This compares to 402 units delivered during the previous year’s first half year.

CAPEX spent on construction amounted to EGP 3 billion, compared to EGP 2 billion spent during the first half of 2023.

Financial Review

Income Statement

Revenues of EGP 3.94 billion were recorded during the period, representing a 35% increase compared to EGP 2.92 billion of revenues recorded during the same period last year. Revenues were driven by deliveries in West Cairo projects which accounted for 51% of SODIC’s deliveries by value. West Cairo’s projects The Estates and SODIC West accounted for 24% and 23% of the value delivered during this half year respectively, together representing 47% of the total value of deliveries. East Cairo contributed 49% of the delivered value.

Gross profit came in at EGP 1.41 billion, implying a gross profit margin of 36%, gross profits recorded a 26% growth YoY.

Operating profit of EGP 714 million was recorded during H1, reflecting an operating profit margin of 18% growing 77% YoY.

Net profit after tax and non-controlling interests came in at EGP 626 million and implying a net profit margin of 16% and EPS of EGP 1.76. 

Balance Sheet

SODIC continues to maintain a strong liquidity position with total cash and cash equivalents amounting to EGP 2.64 billion.

Bank leverage remains low, with bank debt to equity standing at 0.32x. Bank debt outstanding amounted to EGP 2.98 billion as of 30 June 2024. Debt to equity amounted to 0.37x at year-end 2023, with EGP 3.22 billion of outstanding debt.

Total receivables stood at EGP 49.9 billion, of which EGP 11 billion are short term receivables providing strong cash flow visibility for the company. A total of EGP 7.3 billion receivables are reported on the balance sheet, reflecting only the receivables related to delivered units already recognized as revenue. On the other hand, some EGP 42.6 billion receivables related to undelivered units are disclosed in the footnotes.

SODIC’s total backlog of unrecognized revenue stood at EGP 54.39 billion as of 30 June 2024, providing strong revenue visibility for the company.

Commenting on the results Ayman Amer SODIC’s General Manager said “We are happy to report a strong set of results for the first half of 2024, marked by substantial growth in revenues and profits. Sales have grown by 34% despite the limited launches in the first quarter as we remain committed to delivering profitable sales and sustainable growth. We are proud to have taken further strides in our hospitality offering, having expanded our relationship with Nobu, the renowned luxury lifestyle brand, and partnered with Marriott International to bring two Tribute Portfolio Hotels in West Cairo and the North Coast. The robust demand for our projects reflected in the demand for our launches and the significant drop in cancellations underscores the strength of our brand and the resilience of the Egyptian market”.

About SODIC

SODIC is one of the region’s leading real estate development companies, currently developing a number of diversified projects in Egypt. SODIC’s developments in East and West Cairo and Egypt’s North Coast range from residential, retail, and commercial projects to large-scale mixed-use developments. SODIC is listed on the Egypt’s Stock Exchange (Ticker OCDI). For more information, please visit www.sodic.com.