Sixth of October Development & Investment Company (SODIC) has revealed its financial results achieved in the year’s first half (H1), which ended on June 30, 2023, Invest-Gate reports.

Operational Review

SODIC reported selling 674 units during H1 2023, generating gross contracted sales of EGP 8.17 bn, an increase of 22% over EGP 6.67 bn of gross contracted sales recorded during the same period in 2022.

The company’s achieved gross contracted sales showed strong performance despite the company slowing down sales during the first quarter to review selling prices amid increasing construction costs. Sales were driven by strong demand for new launches of off-plan units and ready-for-delivery inventory across the SODIC’s projects in the year’s second quarter despite a significant increase in selling prices due to inflation.

West Cairo projects accounted for 52% of gross contracted sales, because of the strong demand for SODIC’s relaunched 464-acre project. On the other hand, East Cairo projects accounted for 34% of SODIC’s H1 2023 sales, on the back of strong uptake of newly released inventory on Villette. Finally, North Coast June accounted for 15% of gross contracted sales.

For his part, Ayman Amer, SODIC’s General Manager, commented, “Despite the limited launches in the first quarter and the significant price increases to offset the effect of inflation, we have achieved record H1 sales.”

“It has been a very strong quarter for SODIC with the addition of 620 acres to our land bank on the North Coast, one of our key markets. We look forward to a strong second half of the year,” Amer added.

SODIC recorded cancellations of EGP 816 mn, representing 10% of the period’s gross contracted sales, which comes in line with the cancellation rate of 10% recorded in the same period in 2022.

Net cash collections reached EGP 4.06 bn during this period, with delinquencies at 4.5%, compared to EGP 2.93 bn and a delinquency rate of 8.2% recorded during the same period in 2022.

SODIC delivered some 402 units during H1, of which 212 were in East Cairo projects, while West Cairo and North Coast projects accounted for 189 and 1 of the delivered units, respectively. This compares to 463 units delivered during the same period last year.

CAPEX spent on construction during the period amounted to EGP 1.79 bn, compared to EGP 1.3 bn spent during H1 2022.

Financial Review

SODIC’s revenues hit EGP 2.92 bn during H1 2023, representing a 7% increase compared to EGP 2.73 bn of revenues recorded during the same period last year.

Gross profit increased 22% YoY to record EGP 1.12 bn, implying a gross profit margin of 38%. Operating profit for the H1 period amounted to EGP 404 mn, reflecting an operating profit margin of 14%. Meanwhile, net profit after tax and non-controlling interests came in at EGP 335 mn, up by 15% from the EGP 292 mn recorded during H1 2022.

Additionally, SODIC maintains a strong liquidity position, with total cash and cash equivalents amounting to EGP 2.93 bn, while bank leverage remains low, with bank debt to equity standing at 0.41x.

Lastly, Total receivables stood at EGP 33.74 bn, with EGP 7.50 bn in short-term receivables. SODIC’s total backlog of unrecognized revenue stood at EGP 38.56 bn as of 30 June 2023.