SODIC: a strong start to the year and a growing land bank
SODIC ‘Sixth of October Development & Investment Company’ has released its consolidated financial results for the 3 months ending 31st of March, 2014.
Consolidated Income Statement Figures for the period ending 31-Mar-2014:
· Revenues: EGP301m
· Gross Profit: EGP92m
· Net Profit: EGP40m
Consolidated Balance Sheet Figures as at 31-Mar-2014:
· Accounts Receivable: EGP3,852m
· Work in Process: EGP2,994m
· Cash Balance: EGP507m
SODIC started the year with an operationally outstanding quarter, achieving gross new contracted sales of EGP 758 mln and net contracted sales of EGP 706 mln. Negligible cancellations of EGP 52 mln display a 61% yoy drop in cancellations, a strong indication of a more stable macroeconomic environment and a testament to SODIC’s credibility as a developer. The quarters’ sales results grew 38% qoq compared to 4Q2013 net sales of EGP 513 mln, and 28% yoy compared to 1Q2013 net sales of EGP 551 mln, laying the ground for an even stronger operational year than SODIC’s exceptional 2013.
The strong quarter’s sales figure was mostly driven by Westown Residences’ phase X launch, representing almost 45% of the quarter’s total sales. Since the end of the first quarter, the momentum has continued with last May’s Eastown Residences Phase V launch contributing to year to date sales of over EGP1.4bn. SODIC is planning a number of new project launches in the coming period, starting with the launch of Eastown Residences Phase VI later this month.
From a financial results standpoint, SODIC concluded a solid first 2014 quarter in terms of collections and deliveries, with a healthy set of consolidated profitability metrics.
Timely cash collections of EGP 317 million were on track with the Company’s target to bring in some EGP 1.2 billion over the course of 2014.
Higher than targeted deliveries were achieved, with 114 units worth EGP 292 million delivered in the first quarter, showing a substantial increase of some 140% yoy on the number of units delivered and the associated value. The deliveries came across a well-diversified range of 7 projects with all targets met or surpassed.
Revenues came in at EGP 301 million, displaying an increase of 132% yoy, Gross Profit stood at EGP 92 million showing an increase of 96% yoy, and Net Profit at EGP 40 million showcasing another significant growth of 567% yoy. Gross Margins came in at 31% – a 5% yoy drop attributable to delivering lower profitability units – however Net Margins were significantly boosted to stand at 13% compared to 1Q2013 Net Profit Margins of 5%.
Growing Land Bank
The strong quarter’s results coincide with SODIC’s announcement as highest bidder for a 301 acre plot of land put forward by the New Urban Communities Authority (NUCA) in its latest land auction. The 301 acre plot of land is located in the heart of New Cairo directly off Road 90 and comes as a perfect addition to SODIC’s strategically located land bank.
The new land would successfully replenish SODIC’s land bank, and comes as part of management’s strategy to capitalise on the company’s strong existing platform and realise its growth potential. The company is expecting to receive the official documents awarding the land to the company in the coming weeks.