Egypt's SODIC reports 83% YoY drop in net profits in Q1 2020
Despite the COVID-19 pandemic, SODIC revealed a 25% increase in residential sales aided by its virtual sales platform
Egypt-based real estate developer Sixth of October Development & Investment Company (SODIC) has revealed an 83% year-on-year drop in its net profits after tax and non-controlling interests to $1.73m (EGP28m) in Q1 2020, compared to $9.95m (EGP161m) in Q1 2019.
The firm’s total revenue dropped 54% year-on-year to $26.5m (EGP429m) for the first three months of this year, compared to total revenues of $58.17m (EGP941m) in Q1 2019.
The Cairo-headquartered company, which is listed on the Egyptian stock exchange (EGX) is one of the few non-family-owned companies traded on the EGX, with a strong corporate governance framework.
The business stated that the COVID-19 outbreak has resulted in lower number of deliveries, as lockdowns and mobility restrictions decrease the urgency for customers to come in for handovers, postponing these visits to when the situation improves.
However, despite the adverse effects of the coronavirus pandemic, the effect on sales has been less pronounced in Q1 2020, as residential sales increased by 25% despite the cancellation of major marketing events and the postponement of a number of launches to late-2020.
Commenting on sales, the managing director at SODIC, Magued Sherif, said: “We have maintained our residential sales successfully, aided by the launch of our online virtual sales platform to reach our clients, but despite our efforts our initial sales guidance of $519m (EGP8.4bn) now looks challenging, namely due to uncertainty around the planned launch of our North Coast project Malaaz this year, on the back of further permitting delays.”
Sherif added: “We believe that while the ongoing outbreak presents significant challenges, it also provides an opportunity to standout and distinguish ourselves. The strength and liquidity of our balance sheet strongly support us, but more importantly, we believe that it is our credibility and track record of strong performance in turbulent times as well as our customer-centric approach to the crisis that make us stand out in these times.”
“We are lucky to operate in a sector with very strong local demand fundamentals and we continue to believe in the long-term drivers of growth in our market. We are looking forward to a challenging but rewarding year ahead as we continue to invest in our brand and ensure we distinguish ourselves in this market.”