SODIC gross contracted sales grow 87% YoY to reach a record EGP 21 billion driven by successful relaunch of New Zayed project and strong sales in East Cairo and North Coast
Cairo, Egypt, 9 February 2023,SODIC sold 2,873 units during 2022, generating gross contracted sales of EGP 21.29 billion, an increase of 87% over EGP 11.36 billion of gross contracted sales recorded during 2021.
Gross contracted sales during the period were diversified between SODIC’s main markets, with West Cairo accounting for 37% of sales supported by the strong demand following the relaunch of the 464 acres project in Q4 2022, with the project generating c. EGP 3.72 billion in contracted sales, 15% of SODIC’s contracted sales in 2022. East Cairo contributed 35% of the company’s gross contracted sales on the back of robust sales on both Villette and SODIC East, which contributed 15% and 13% of the year’s sales, respectively. While continued strong performance of June led to the North Coast accounting for 29% of contracted sales during 2022.
Sixth of October Development & Investment Company “SODIC” has released its consolidated operational and financial results for the year ended 31st of December 2022
Cancellations of EGP 1.25 billion were recorded during 2022, representing 6% of the year’s gross contracted sales. This compares to a cancellation rate of 17% during 2021.
Net cash collections reached EGP 7.02 billion for the period, with delinquencies at 5.1%. This compares to collections of EGP 4.95 billion and a delinquency rate of 5.95% recorded during 2021.
Gross contracted sales: EGP 21.29 billion, up 87% YoY
SODIC delivered some 1,279 units during the year, of which 1,001 were in East Cairo projects, while West Cairo and North Coast projects accounted for 258 and 20 of the delivered units respectively. This compares to 1,163 units delivered during the previous year.
Deliveries on the 655-acre flagship East Cairo project SODIC East started during the year, with the company delivering 439 units as of 31st of December 2022.
Cancellations: 6% of gross contracted sales
CAPEX spent on construction during the 2022 amounted to EGP 3.21 billion, compared to EGP 3.27 billion spent last year.
Revenues of EGP 7.81 billion were recorded during 2022, representing a 13% increase compared to EGP 6.92 billion of revenues recorded during 2021. Revenues were mainly driven by deliveries in East Cairo projects which accounted for 75% of SODIC’s 2022 unit deliveries by value. SODIC East Cairo projects Sky Condos and SODIC East, led the year in terms of delivered value respectively accounting for 26% and 24% of the value delivered during the year. Furthermore, West Cairo and North Coast projects contributed 21% and 4% of the delivered value during 2022 respectively.
Cash collections: EGP 7.0 billion
Gross profit came in at EGP 2.19 billion, implying a gross profit margin of 28%, impacted by EGP 542 million of provisions for the potential future impact of the recent currency devaluation, that has impacted development costs across the industry, on the company’s future revenue backlog.
This provision brings forward the potential impact of the inflationary headwinds on units that will be delivered in the coming two to three years and comes as part of SODIC’s prudent management approach and in line with the company’s commitment to transparency to its shareholders and delivery to its customers. SODIC will continue working towards mitigating this impact over the remaining period to completion of the homes, while delivering on the quality and experience that SODIC prides itself on.
Timely delivery of 1,279 units
Excluding the effect of these provisions, Gross profits would register a 17% growth over 2021 levels to EGP 2.73 billion, which would reflect a gross profit margin of 35%, expanding 120 bps YoY.
Operating profit of EGP 650 million was recorded during 2022, reflecting an operating profit margin of 8%, adversely affected by the provisions. Excluding the effect of the provisions would imply an operating profit of EGP 1.19 billion growing 2% YoY.
Revenues: EGP 7.81 billion, up 13% YoY
Net profit after tax and non-controlling interests came in at EGP 520 million and implying a net profit margin of 7%. Normalised net profit amounted to EGP 941 million, reflecting a net profit margin of 12% and EPS of EGP 2.63.
SODIC continues to maintain a strong liquidity position with total cash and cash equivalents amounting to EGP 2.90 billion.
Net profit after tax and non-controlling interests: EGP 520 million, down 60% YoY, delivering a net profit margin of 7%
Bank leverage remains low, with bank debt to equity standing at 0.43x. Bank debt outstanding amounted to EGP 3.16 billion as of 31 December 2022. SODIC has been gradually increasing leverage mainly to enhance returns. Debt to equity amounted to 0.38x at year-end 2021, with EGP 2.55 billion of outstanding debt; and to 0.37x at year-end 2020, with EGP 2.3 billion of outstanding debt.
Total receivables stood at EGP 31.1 billion, of which EGP 6.8 billion are short-term receivables, providing strong cash flow visibility for the company. A total of EGP 4.05 billion of receivables are reported on the balance sheet, reflecting only the receivables relating to delivered units already recognized as revenue. On the other hand, some EGP 27.1 billion of receivables related to undelivered units are disclosed in the footnotes.
Normalized net profit after tax and non-controlling interests: EGP 941 million, a YoY growth of 9%, reflecting a net profit margin of 12%
SODIC’s total backlog of unrecognized revenue stood at EGP 34.2 billion as of 31 December 2022, providing strong revenue visibility for the company.
Commenting on the results, Magued Sherif SODIC’s Managing Director said, “We are proud to deliver an excellent set of results for the year 2022, having almost doubled our sales and grown SODIC’s market share in East Cairo and the North Coast. Our strong results, despite global headwinds and challenging local operating conditions, are a testament to the strength of our brand and the confidence of our customers in our ability to consistently deliver on our promises. We remain firm believers in the depth of our sector, driven by the strong fundamental demand of a young population and the deeply rooted home owning culture among Egyptians. We look forward to another year of strong performance as we continue to leverage the strength of our platform and disciplined management approach which has consistently set up apart in challenging times.