Maged Sherif, managing director of Sixth of October Development and Investment Company (SODIC), said that the flotation of the pound doubled the company’s revenues as it increased the demand for real estate.
He added on Tuesday that the company surpassed its target, as it delivered 1,060 units compared to the targeted 935 units.
He added that the company increased its prices by 20-30% over the last year, and the proceeds amounted to EGP 3.1bn, which reflects the company’s success.
Sherif revealed that SODIC will propose two phases in the first quarter of the year, after the postponement of four recent proposals worth 1.2bn, which were scheduled to be implemented in the fourth quarter of last year.
He noted that the company furthermore managed to sell many units in existing projects.
Sherif continued that this year will witness many challenges in terms of the price hikes to maintain profit margins of the company, in light of the high cost and the difficulty of calculating it amid the several changes experienced in the market.
He further continued that the increase of land prices is the most prominent challenge in the current year, noting that the company welcomes partnership projects, especially as it looks forward to increase its portfolio of lands. But it also takes into account that the land should be problem-free, which is not easy, especially in the lands affiliated to the New Urban Communities Authority (NUCA).
The total revenues of SODIC reached EGP 2.1bn, according to the income statement of the company in the fiscal year that ended on 31 December 2016, according to a statement issued by the company on Tuesday.
The statement added that the company’s net profit was EGP 429m, with a net profit margin of 21%.
The statement added that the company’s revenues increased by 40% compared with 2015, while the after-tax profits reached EGP 429m, marking a growth of 38%. The company’s net sales reached its highest value in its history, reaching EGP 5.6bn, a growth of 28%.
Sodic’s sales in eastern Cairo contributed to 60% of total sales in 2016, while western Cairo’s projects contributed to about 28% of sales. Furthermore, SODIC’s Caesar, the company’s first project in the North Coast, achieved the rest of the sales during the last year.
In the fourth quarter of 2016, following the Central Bank of Egypt’s (CBE) decision to float the pound exchange rate, and the inflation resulting from this decision, SODIC has increased the sale price of its units by 20-30% and postponed the projects planned to be launched in 2016 to be implemented in 2017.
The last quarter of the year also witnessed a high demand for the existing units, achieving sales of 92% of the residential units implemented in 2016. The company’s net sales have surpassed the total sales target by 17%.
Moreover, Sherif stated that the company allocated EGP 600m for purchasing lands in 2017 in different areas.