Palm Hills Developments’ (PHD) posted a 53 percent jump in third quarter sales, driven partly by luxury home developments on Egypt’s north coast, the property company said on Monday.
Sales of LE 1.78 billion ($312 million) marked the firm’s second consecutive quarter of strong growth. The company also said it booked contracts worth LE 1 billion.
"As anticipated, strong sales at Palm Hills’ North Coast developments underpinned our record sales in the third quarter," Chairman and Chief Executive Officer Yasseen Mansour said in a statement.
The net profit of Egypt’s second biggest property developer climbed 13 percent to LE 153.7 million in the third quarter of 2010, beating analyst expectations. Revenue rose 49 percent to LE 451.3 million.
The firm sold 120 units under a partnership with Burooj Properties, an arm of Abu Dhabi Islamic Bank. Burooj has agreed to sell a total 425 units to middle-income Egyptian expatriates working in Gulf Arab countries.
Analysts said the solid sales figure had helped reassure investors after a series of legal challenges against the way the government had sold a number of tracts of land to real estate firms.
These were prompted by a ruling that the government broke the law when it sold land to developer Talaat Moustafa Group without a public auction.
The latest suits include one involving a 960,000 square metre plot sold to Palm Hills. The plot in a Cairo suburb represents only a small portion of its total land bank.
"Palm Hills’ case is totally different from Talaat Moustafa’s. That is what investors should realize, both cases are not identical," said Naeem analyst Mohamed Ashour.
The firm said it expected sales to continue to grow in 2011, when it will launch at least one new project and finalize the legal procedures for two others. The firm is finalizing tender documents for the construction of a Ritz Carlton Hotel at one of its developments.
