Egypt’s Palm Hills Developments (PHD) posted EGP 2.2 bn sales (residential and commercial) in Q1 2019, with 374 units sold in total, marking a 5% surge YoY that arisen notably from continued uptake of launched properties in Palm Hills Alexandria, Invest-Gate reports.

There were also limited launches in several of PHD’s west and east Cairo projects in Q1 2019, as opposed to strong demand in Palm Hills New Cairo and a few other key developments during the same period last year, PHD confirmed in a press release on June 11. It noted that despite the drop in the top line, profitability margins remained stable YoY, with a gross profit of 37% and an EBITDA margin of 23%.

However, consolidated net profits dipped to EGP 141.2 mn in Q1 2019, ending on March 31, from EGP 224.2 mn in the year-ago period, recording a 37% drop with a net profit margin of 15%. Revenues also declined 35% YoY to hit EGP 958.1 mn during the three-month period versus EGP 1.465 bn in Q1 2018.

According to the statement, this was “largely driven by lower handed-over residential units, despite that PHD had 440 units released from construction during Q1 2019, yet in non-livable zones … Furthermore, top line seen limited contribution from sales of standalone units, as Palm Hills Alexandria’s impact is yet to be reflected during coming quarters.”

A total of EGP 309 mn was spent on construction activities during Q1 2019, namely on Palm Hills New Cairo and Capital Gardens, east Cairo, in addition to west Cairo’s Palm Valley and Woodville. During the same period, the company delivered 215 units and is on track to achieve its full-year target of 1,350 properties in FY 2019. The majority of these houses were in Palm Parks, Golf Views, Golf Extension, and Woodville, west Cairo – where PHD continued to deliver those at Palm Valley ahead of schedule. Also, some homes were handed over in Hacienda Bay and Hacienda White 2 at the North Coast.

“We are planning several launches which will take place during the coming quarters, especially the summer season, allowing us to sustain our leading position,” Yasseen Mansour, the company’s chairman and CEO, was quoted as saying.

Mansour revealed that the real estate company is set “to complete a number of projects during the year, including Palm Valley, Golf Extension, and Woodville in west Cairo, as well as, Palm Hills Katameya Extension 2 in east Cairo. Notably, we commenced site mobilization, earthworks, and construction activities of Badya’s phase 1A during Q2 2019.”

One key highlight of the three-month period is that PHD’s subsidiary, Arkan Palm for Real Estate Investment Company, has signed a co-development deal with the New Urban Communities Authority (NUCA) to develop a mixed-use innovative urban project in Sheikh Zayed, west Cairo, on a revenue-sharing basis, according to a previous statement.