Leading Egyptian property developer Sodic has announced solid results for FY 2021 with the group's gross contracted sales for the year surging 54% year-on-year to hit E£11.36 billion ($720 million) generated by the sale of 1,745 units across all projects.

 

Announcing its consolidated financial results for the full year ended December 31, Sodic said the group's net profit after tax and non-controlling interests stood at E£860 million, up 5% YoY, delivering a net profit margin of 12%.

 

Operating profit grew 14% YoY to amount to E£1.16 billion for the year, reflecting an operating profit margin of 17%, compared to  E£1.02 billion of operating profit and an operating profit margin of 18% recorded in 2020, with the slight decrease in operating profit margin attributable to one-off recognition of sunk costs on Malaaz in the amount of  E£17 million before relaunching the project as June, as well as sunk costs related to the 500 acres project in the amount of EGP 68 million due to the adjustment of the land plot location, in addition to one-off professional advisory fees of EGP 95 million. 

 

Excluding these one-off events, normalized operating profit for 2021 would be EGP 1.47 billion, an increase of 45% on a YoY basis and would reflect an operating profit margin of 21%.

 

Net profit after tax and non-controlling interests came in at EGP 860 million, growing 5% YoY and delivering a net profit margin of 12%, which compares to EGP 820 million and a net profit margin of 15% recorded during 2020, with the decline in the net profit margin as a result of lower operating profitability due to the recognition of one off costs in addition to a sharp decline in net finance income due to lower interest rates. 

 

Excluding one-off events, normalized net profit after tax and minority interest would come in at EGP 1.1 billion a 33% YoY growth, and would imply a normalized net profit margin of 16%.

 

Gross contracted sales set a new record for annual gross contracted sales in terms of both number and value of units sold despite challenges posed by the temporary suspension of sales on West Cairo 500 acres project in New Zayed.

 

Despite the limited launches, West Cairo projects accounted for 30% of gross contracted sales during the year, supported by the continued strong demand for the signature project The Estates. 

 

East Cairo projects accounted for a further 33% of gross contracted sales during 2021, driven by the strong performance of SODIC East, which contributed 17% to the year’s gross contracted sales.

 

Finally, the North Coast made up 37% of gross contracted sales during 2021, on the back of the successful launch of North Coast project “June” during the fourth quarter of the year, which recorded some E£4.14 billion in gross contracted sales.

 

Cancellations of E£1.97 billion were recorded during 2021, representing 17% of the year’s gross contracted sales. This compares to a cancellation rate of 14% recorded during 2020. 

 

The increase comes as a result of the amplified cancellations on the 500 acre project due to its temporary suspension, with the project accounting for E£1.12 billion of cancellations during the year. Excluding cancellations on the 500 acre project, cancellations during 2021 would stand at 7% of gross contracted sales, in line with the historical average.

 

Net cash collections reached E£4.95 billion for the year, with delinquencies at 6%. This compares to collections of E£4.28 billion and a delinquency rate of 8% recorded during 2020. 

 

Sodic delivered some 1,163 units during the year, of which 345 were in West Cairo projects, while East Cairo and North Coast projects accounted for 800 and 18 of the delivered units, respectively. Sodic also delivered 1,163 units during the previous year.

 

Throughout the year, the company started delivery on several projects, notably residential project Six West and commercial project Polygon X in the flagship destination SODIC West, as well as Sky Condos, the first multi-family offering in East Cairo project Villette, and EDNC, the commercial component of East Cairo project Eastown and the company’s flagship commercial project in East Cairo. 

 

Sodic said it continues to invest in its assets portfolio in line with the company’s strategy to build a sizeable portfolio of prime leasable assets. Investment Property & Investment Property under Development balance amounted to some  E£3.52 billion on 31 December 2021.

 

Total receivables stood at  E£19.5 billion, of which  E£ 5 billion are short term receivables providing strong cash flow visibility for the company. The new presentation of receivables reports a total of EGP 2.5 billion of on-balance sheet receivables, reflecting only those relating to delivered units already recognized as revenue. On the other hand, some  E£17 billion of receivables related to undelivered units are disclosed in the footnotes.

 

Total backlog of unrecognized revenue stood at  E£22.76 billion as of December 31, 2021, providing strong revenue visibility for the company.