The Sixth of October Development and Investment Company (SODIC) has reported a strong sales performance in July, bringing the seven-month gross sales value to 2019 levels. The real estate development company maintained the strong sales despite the negative economic impacts of the novel coronavirus (COVID-19) pandemic, which has left consumer confidence shaky.
SODIC sold 383 units during the six month period ending on 30 June 2020. The latest figures bring the company’s gross contracted sales to EGP 1.89bn, down 26% from the EGP 2.54bn reported in the same period last year.
Gross contracted sales of residential units stood at EGP 1.83bn in the first half (HI) of 2020, almost flat compared to the EGP 1.86bn reported in the same period last year. Commercial sales contributed only 3.2% to the gross contracted sales during H1 of 2020, versus 27% of gross contracted sales during the same period in 2019.
This falls in line with the company’s strategy to largely retain prime non-residential assets, to contribute to its recurring income in the future.
SODIC’s East Cairo developments represented 40% of the period’s gross contracted sales, mainly from Villette, which contributed 29%.
The company’s West Cairo developments represented 60%, driven by its newest projects, The Estates and VYE, which contributed a combined 43% to SODIC’s gross contracted sales during the period. Allegria Residences contributed a further 10%. Cancellations of EGP 320mn were recorded during the period.
Revenues of EGP 1.07bn were recorded during the first seven months of 2020, compared to EGP 2.02bn recorded during the same period in 2019.
Revenues for the period were negatively affected by lower year-on-year (y-o-y) deliveries. They were mainly driven by SODIC’s East Cairo projects, Eastown Residences and Villette, which amounted to 49% and 19% of the delivered value, respectively.
Net profit after tax and non-controlling interests amounted to EGP 68m for the period, reflecting a margin of 6%. This compares to the EGP 336m reported, at a net profit margin of 17%, during the same period in 2019. Net profit was affected by a higher effective tax rate on a consolidated level, due to net losses in some legal entities in the group.
Meanwhile, gross contracted sales for the second quarter (Q2) of 2020 stood at EGP 1.02bn, off the sale of 178 units sold. This reflected a 33% downturn on the EGP 1.53bn, representing 262 units sold for the same period last year.
Gross sales were negatively affected by the coronavirus lockdown measures, but have since improved as government-imposed precautionary measures were lifted. As a result, gross contracted sales reached EGP 756m in July 2020.