The Sixth of October Development & Investment Company (SODIC) has released its consolidated financial results for the first nine months (9M) of 2020.
SODIC said it sold 776 units during the period bringing gross contracted sales to EGP 4.1bn, a year-on-year (y-o-y) increase of 23% from EGP 3.34bn. Residential sales amounted to EGP 3.96bn, up 62% from the EGP 2.45bn recorded during the same period in 2019. The positive momentum was maintained as the company entered the fourth quarter (Q4) of the year, with some EGP 933m of gross contracted sales recorded during October, bringing the company’s total sales to over EGP 5bn in 10M of 2020.
The company’s projects in west Cairo accounted for 60% of total gross contracted sales during the period driven by the strong performance on the next generation projects. VYE contributed 37% of sales, and the Estates contributed 10%. East Cairo made up 39% of the period’s gross contracted sales, with Villette generating 24% and SODIC East contributing 10%.
Cancellations of EGP 799m were recorded during 9M of 2020, representing 20% of the period’s gross contracted sales. The company witnessed exceptional high cancellations in Q1 of 2020 due to the novel coronavirus (COVID-19) outbreak in Egypt, and in September due to the cancellation of a bulk sale transaction. Excluding the effect of the cancellation of the bulk transaction, cancellations for the period would amount to 13% of gross contracted sales. Cancellations continue to trend downwards, recording 7% of gross contracted sales for October 2020.
Net cash collections reached EGP 3.1bn during the period with delinquencies at 9%. This compares to collections of EGP 3.4bn and a delinquency rate of 7% recorded during the same period last year. Delinquencies increased during the first half (H1) of the year as a result of COVID-19, but continued to trend downwards as the situation stabilized and economic activity resumed.
SODIC delivered some 786 units during the period, of which 507 units were in east Cairo projects, namely Eastown Residences and Villette. This compares to 752 units delivered during the same period in 2019.
The company’s capital expenditure on construction during 9M of 2020 amounted to EGP 2.4bn, compared to EGP 2.1bn spent during the same period in 2019.
Revenues of EGP 3.15bn were recorded, 7% lower than the EGP 3.41bn achieved during the same period in 2019. Revenues for the period were mainly driven by east Cairo projects; Eastown Residences and Villette, amounting to 42% and 23% of the period’s delivered value, respectively, while west Cairo projects contributed a further 28%.
Meanwhile, the company’s net profit after tax and minorities increased by 6% y-o-y to EGP 536m. The net profit margins improved 200% compared to the same period last year to record 17% as a result of the y-o-y increase in operating profitability. However, the net profit margins was negatively impacted by a 64% decline in net finance income due to the sharp decline in interest rates following the interest rate cuts by the Central Bank of Egypt during the year.
SODIC continues to maintain a strong liquidity position with total cash and cash equivalents amounting to EGP 3.67bn. Receivables of EGP 13.63bn provide strong cash flow visibility, of which EGP 3.9bn are short term receivables.