MNHD Reports Results for H1 2022

MNHD maintains operational momentum into the second quarter to drive rapid top-line growth

Madinet Nasr for Housing & Development (“MNHD” or “the Company”), one of Egypt’s premier urban community developers, announced on 8 August 2022 its standalone financial results for the six-month period ended 30 June 2022 (H1 2022), reporting a net profit of EGP 236.9 million on total revenues of EGP 1,790.7 million. The Company reported a net profit of EGP 116.7 million for the quarter ended 30 June 2022 (Q2 2022), booking a top line of EGP 972.3 million.

Key Highlights

MNHD recorded gross contracted sales of EGP 3,342.3 million for H1 2022, up by 117.3% y-o-y. On a quarterly basis, the Company booked gross contracted sales of EGP 1,780.3 million for Q2 2022, an increase of 122.8% y-o-y marking a company record for gross contracted sales in the second quarter.

The Company delivered a total of 832 units during H1 2022, an increase of 136.4% y-o-y versus the 352 units delivered for H1 2021. On a quarterly basis, MNHD delivered a total of 471 units for Q2 2022, up by 207.8% y-o-y.

Revenues came in at EGP 1,790.7 million for H1 2022, up by 101.1% y-o-y, driven by an increase in deliveries and secondarily by strong growth in gross contracted sales. MNHD booked revenues of EGP 972.3 million in Q2 2022, an increase of 120.3% y-o-y.

Gross profit recorded EGP 547.3 million in H1 2022, climbing 6.8% y-o-y. MNHD’s gross profit margin registered 30.6% in H1 2022 against 57.5% for H1 2021, with the decline reflecting the dominance of unit delivery revenues in MNHD’s total revenue mix for H1 2022. Gross profit came in at EGP 275.8 million for Q2 2022, up by 1.9% and yielding a gross profit margin of 28.4% against the 61.4% booked in Q2 2021.

MHHD booked an EBITDA of EGP 404.0 million for H1 2022, a rise of 10.5% y-o-y. The EBITDA margin came in at 22.6% for the period, down from the margin of 41.1% recorded one year previously. On a quarterly basis, EBITDA recorded EGP 193.0 million for Q2 2022, up by 3.9% and yielding a margin of 19.9% against the 42.1% booked for Q2 2021.

The Company posted a net profit of EGP 236.9 million for H1 2022, up by 1.4% y-o-y and yielding a net profit margin of 13.2% against the 26.2% booked for H1 2021. Net profit came in at EGP 116.7 million for Q2 2022, down by 0.9% and yielding a net profit margin of 12.0% against the 26.7% recorded one year previously.

Net debt stood at EGP 1,721.3 million at the close of H1 2022, marking a decrease of 34.6% in the year-to-date (YTD). The net debt/EBITDA ratio booked 2.1x for the period, down from 3.6x at year-end FY2021.  

Total notes receivable recorded EGP 3,310.9 million as at 30 June 2022, up by 15.5% YTD and yielding a receivables/net debt ratio of 1.9x for H1 2022, up from 1.1x at the close of FY2021.

Net cash collections booked EGP 1,634.0 million in H1 2022, up by 8.8% y-o-y. On a quarterly basis, the Company made net cash collections of EGP 797.7 million in Q2 2022, an increase of 13.8% y-o-y.

MNHD deployed EGP 798.9 million in construction and infrastructure CAPEX during the six-month period, down from the outlay of EGP 1,182.1 million booked for H1 2021 following the completion and delivery of several construction projects. The Company made CAPEX outlays of EGP 417.8 million in Q2 2022, down by 14.1% y-o-y from the EGP 486.3 million deployed in Q2 2021.

Management Comment Halfway through 2022, MNHD is more confident than ever of its ability to build and deliver sustainable communities. Our teams have worked hard to maintain the positive momentum gathered during the first quarter to deliver strong operational and financial results. Our performance during the second quarter was very strong and has only cemented our confidence in MNHD's new growth strategy following an already-impressive first quarter. 

In April 2022, we launched Taj Ville, a premium villas compound located at our Taj City development. Taj Ville’s focus on villas reflects our efforts to leverage our customers’ aspirations for standalone units. Within just a few weeks, we had sold out all standalone villas at the project. Besides being a testament to the great potential of our undeveloped land bank at Taj City and Sarai, our success at Taj Ville speaks to homeowners’ trust in MNHD and their confidence in our value proposition. Remarkably, we drove this strong performance at Taj Ville despite launching the project at the tail-end of the holy month of Ramadan, traditionally a period of subdued activity in the real estate market.

Coupled with sales of ready-to-move inventory, the launch of Taj Ville helped us more than double our gross contracted sales for H1 2022 to EGP 3,342.3 million. On a quarterly basis, Q2 2022 saw us deliver an all-time company record for gross contracted sales in the second quarter. Deliveries were also up by more than double during the period, reaching 832 units, driven particularly by handovers at Sarai. Reflecting this operational strength, the Company’s top line was up by 101.1% y-o-y to EGP 1,790.7 million, yielding a net profit of EGP 236.9 million and a margin of 13.2%. Despite global macroeconomic instability and the prevailing inflationary pressures, the Egyptian real estate market has once again demonstrated its defensive nature, to MNHD’s benefit. 

Demand remains strong despite the headwinds, and we have been able to take full advantage of this strength through our stock of ready-to-move inventory, which further offers us a margin of flexibility in the face of an uncertain macro environment. We have also taken a strategic stance towards cancellations, designing our policy to relieve delinquent customers, enhance our collection, and release in-demand inventory. To date, we have implemented only limited price increases, consolidating buyers’ confidence in our offering, a confidence which has been further deepened by the start of construction at the Shalya compound in Taj City. 

Moving forward, we expect the Company to continue delivering positive operational and financial results, and to give our customers even more reason for confidence and satisfaction. As we prepare a number of new launches and seek new growth opportunities over the coming period, we are optimistic and motivated for what the coming quarters will bring. We are confident that MNHD will continue to outperform even the strong results that we have already achieved, and that the Company will successfully generate growth across its project portfolio in a manner that is sustainable and efficient.