Palm Hills’ Sales Inch Up to EGP 2.2 bn in Q1

Palm Hills’ Sales Inch Up to EGP 2.2 bn in Q1

Egypt’s Palm Hills Developments (PHD) posted EGP 2.2 bn sales (residential and commercial) in Q1 2019, marking a 5% surge YoY, with 374 units sold in total, arising 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, as opposed to a strong demand in Palm Hills New Cairo and some other key developments during the same period last year, the company confirmed in a statement published on June 11. The developer 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, “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,” read the statement, underlining, “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.” Speaking of real estate projects, the company spent EGP 309 mn 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 developer 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 it continued to deliver those at Palm Valley ahead of schedule. The firm also handed over some homes 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,” the company’s Chairman and CEO Yasseen Mansour 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 press release. On May 22, Arkan Palm and Gensler, a global design and architecture firm, inked a contract to develop a detailed masterplan and designs of the aforementioned 205-acre project within 20 weeks. Afterward, the former company will apply for obtaining the project’s ministerial approval and necessary licenses to begin construction immediately