By Eman Hamed
Palm Hills Developments S.A.E. (“PHD” or “the Company”), a leading real estate developer in Egypt, announced its consolidated financial and operating results for the financial period ending June 30, 2023.
Financial Highlights
- Revenue stood at EGP6.9 billion in 1H2023, stable YoY, on sales mix during the period, as the majority of new sales were apartments.
- Gross Profit stood at EGP2.3 billion in 1H2023, flat YoY, translating into a gross profit margin of 34%. EBITDA increased 2% YoY to record EGP1.4 billion, implying a margin of 20%.
- Net Profit After Tax & Minority Interest amounted to EGP608 million in 1H2023, an increase of 9% YoY, with a Net Profit margin of 9%.
- Net Debt increased to EGP3.1 billion by the end of 1H2023, reflecting the progress in construction activities spending in 1H2023 to record EGP3.8 billion, exceeding total construction spending in FY2022 of EGP3.7 billion, as the company concluded early on several bulk deals to secure highly exposed USD components and alleviate inflation cost impact. Also, contractors’ payments were expedited, and down payments percentage was increased to ensure accelerated infrastructure works.
- During 1H2023, the company concluded EGP 472.5 million securitized bond as part of the EGP5 billion issuance program.
Operational Highlights
- New sales grew 84% YoY to record EGP19.6 billion in 1H2023, mainly driven by higher new sales in Badya, Palm Hills New Cairo, Palm Hills Alexandria, Hacienda West, and The Crown.
- New sales for 2Q2023 recorded EGP12.9 billion, the highest quarter in the company’s history,
- showing an increase of 150% YoY.
- Badya continues to witness record new sales, surpassing EGP10 billion mark in 1H2023, a growth of 229% YoY, boosted by strong demand in 2Q2023 to record EGP7.1 billion compared to EGP1.1 billion in 2Q2022.
- PHNC’s new sales amounted to EGP2.2 billion during 1H2023, a growth of 15% YoY, driven by strong sales momentum in 2Q2023.
- During 1H2023, construction spending grew 115% YoY to reach EGP3.8 billion, which reflects the acceleration of construction pace across all projects.The Company delivered 538 units during 1H2023, a decline of 16.3% YoY. Released from construction by end of 1H2023 reached 873 units compared to 600 units in 1H2022, while Ready to Move Inventory stood at c.EGP 3 billion, representing 140 units.
Yasseen Mansour, Executive Chairman Comments:
I am pleased with the announcement of our results for the period ended June 30, 2023, where we delivered a healthy set of financial and operational results despite the challenging dynamics.
The Company achieved another record new sales in 1H2023 of EGP19.6 billion, a growth of 84% YoY. Badya, The Crown, Palm Hills New Cairo, Palm Hills Alexandria, and Hacienda West accounted for 86% of total new sales in 1H2023. Performance of the second quarter came in strong amidst the current macro circumstances, booking EGP12.9 billion new sales in 2Q2023, the highest quarter in the company’s history, driven by our resilient projects’ portfolio and strategic measures taken since the beginning of FY2022 to introduce unparalleled offerings across all of our projects, while maintaining growth momentum and profitability margins.
Badya continues to grow in terms of sales, construction, and deliveries momentum, as new sales in Badya increased remarkably by 229% YoY crossing the EGP10 billion mark by the end of 1H2023.
In July 2023, the Company successfully concluded the second securitization transaction during the year of EGP472 million via the issuance of securitized Bonds as part of our EGP5 billion issuance program to diversify our funding sources.
On the development side, we are accelerating construction and execution pace in our major projects, as we spent EGP3.8 billion in 1H2023 on construction, surpassing what we have done in terms of construction spending in FY2022, to conclude, early on, bulk deals to secure highly exposed USD components namely building and finishing materials, also higher down payments were granted to contractors to accelerate infrastructure works. As a result of construction spending progress, a total of 873 units were released from construction in 1H2023 and 2,350 units planned to be released from construction by year end, complemented by Ready to Move inventory balance of 140 units worth EGP3 billion.
We expect 3Q2023 to maintain strong sales momentum, evidence seen after several successful launches in the North Coast and steady sales pace across the rest of our projects since the beginning of the quarter, and we remain confident in the ability of our company to accommodate the current uncertainties.