Naeem Brokerage has said that Talaat Moustafa Group’s (TMG) net profits in the first quarter of 2023 exceeded the company’s estimates. The Group’s net profits amounted to EGP 747m in the first three months of 2023, outperforming Naeem’s estimates of EGP 651m.
Talaat Moustafa Group’s profit margins improved to 35.2%, up 3.4%, exceeding estimates for the value by 34%. The group also recorded total revenues of EGP 4.4bn, up 46.7% annually, in line with estimates.
This highlighted the large growth rate in the sales of Talaat Moustafa Group during the first quarter of 2023, amounting to 127%, bringing sales to EGP 12.2bn, and Madinaty still has the top selling projects in the group therefore in Egypt.
The report recommended buying the shares of Talaat Moustafa Holding Group on the Egyptian Stock Exchange, setting EGP 15 as a fair value for the stock listed on the money market, against a market price exceeding EGP 9.35, according to Monday’s trading session.
Naeem referred to Talaat Moustafa’s model in developing the group’s remaining built-up land portfolio, on an area of 24.5 million square meters for residential uses and 4.5 million square meters for commercial uses. Apartments make up 83% of the remaining residential land area, while the rest of the area is dedicated to villas. The sales period of 25 years has also been set for apartments and commercial lands, in addition to a sales range of up to 10 years for villas.
The company added that a 15-year installment plan was applied to residential units, apartments and villas, and a five-year payment schedule was put forward for units with commercial purposes. The company’s free cash flow was also discounted using a weighted average cost of capital of 25.2% for 2023, expected to settle in the end at 17.2% in 2029.
Talaat Moustafa Group achieved EGP 20.2bn in total sales during the first quarter of the year, ending on 31 March 2023 (1Q2023), including core sales and resales realized for third parties; records a net profit of EGP 747bn, up by a substantial 32% y-o-y, driven by strong hospitality results and timely real estate deliveries.
TMG achieved total revenues of EGP 4.4bn, up 47% y-o-y, of which 35% or EGP 1.6bn was generated from hospitality and other recurring income lines. It recorded gross profit of EGP 1.6bn, up 44% y-o-y, of which 47.8% or EGP 740m was generated by recurring income lines.
