Palm Hills Developments has announced EGP 2.7bn worth sales in the second quarter (Q2) of 2020, reflecting 55% quarter-on-quarter (q-o-q) growth, according to the company’s Chairperson and Group CEO Yasseen Mansour.
The latest quarterly figures compare to the EGP 1.7bn the company recorded in Q1 of 2020, with April reporting particularly slow sales.
The growth in sales during Q2 of 2020 was supported by the gradual improvements in home buying transactions. This followed the easing of restrictions and precautionary measures imposed due to the novel coronavirus (COVID-19) pandemic.
In July 2020, Palm Hills developments achieved new sales of EGP 1.2bn, a growth of 204% year-on-year (y-o-y), compared with EGP 410m in July 2019.
Mansour said that the company’s performance has been swiftly improving, mostly since the beginning of June, and is showing further recovery year to date (YTD). This follows the easing of restrictions and precautionary measure previously imposed in relation to the global pandemic.
“Although April 2020 was a slow month, with only EGP 194m in new sales because of COVID-19, we ended Q2 of 2020 with EGP 2.7bn in new sales, the highest new sales in Egypt during the period,” Mansour said. “During the first half (H1) of 2020, we sold 662 units for EGP 4.4bn, representing a growth of 10% y-o-y, should we remove Palm Hills Alexandria’s Expression of Interest of EGP 2.1bn from H1 of 2019 New Sales.”
Mansour added, “We see liquidity gradually returning to the market, evidenced by our record new sales of EGP 1.2bn in July 2020, which translates to a growth of 204% y-o-y.”
He added that the upcoming securitisation transactions for a gross receivables portfolio with bring in about EGP 1.5bn during Q4 of 2020.
“Our balance sheet remains strong and flexible, and at the end of H1 of 2020, the company’s cash and cash equivalents amounted to EGP 2.0bn, while net debt amounted to EGP 2.0bn,” Mansour said, “Our receivables recorded EGP 21.4bn, covering net debt 10.6 times in H1 of 2020.”
Mansour expects the property market to remain uneven, with key and large developers to out-perform and gain market share. He added that the company is working on reducing its net debt from the current EGP 2.0bn level to EGP1.5bn by year end.
Revenue reached EGP 2.0bn during H1 of 2020, with gross profit amounting to EGP 751m in H1 of 2020, a gross margin of 37%, compared to 40% in H1 of 2019. The company’s net profit after Tax and Minority Interest amounted to EGP277m, implying a net profit margin of 14%.
