Palm Hills Development aims to launch the first phase of Waha Compound in the first half (H1) of 2018, after signing the joint development agreement with the New Urban Communities Authority (NUCA) on an area of 12.6m sqm in western Cairo.
The company said that the agreement is important, being a quantum leap in the company’s activity from the development of integrated communities to the development of small cities.
Palm Hills has seen its Q3 sales up by 44% on annual basis, reaching EGP 8.1bn. The company had realised its record revenues in the first nine months of the current year of EGP 4.8bn, leading to profits of EGP 467m.
Palm Hills Chairperson Yassin Mansour said that the financial results confirm the success of their strategy to achieve the target in 2017 and strengthen their leading position in the Egyptian real estate market. “Despite the high number of projects implemented by Palm Hills and their huge size, we are committed to maintain the rates of implementation of all projects according to schedules and the same quality of excellence that Palm Hills is best known for,” he added.
The first nine months of this year witnessed a total increase in the land portfolio of Palm Hills to 41m sqm and new sales to go up to 1,709 units worth EGP 8.1bn, up 44% from the same period last year. This includes EGP 7.6bn of residential units and EGP 519m from commercial units. The company also has achieved a big boom in its projects in the North Coast, with total bookings for the project Hacienda West reaching EGP 979m since it was launched in June through to the end of Q3 2017.
During Q2 and Q3 of 2017, Palm Hills was successful in delivering 455 units, mostly in Hacienda Bay, Hacienda White 2, Village Gate, Golf Extension, and Palm Parks. Moreover, revenues in the same period were up by 3% on annual basis with a profit margin of 35%, despite the hike in general and administrative expenses on an annualised basis in terms of absolute value due to the increase in sales and commission incentives resulting from strong sales performance, as well as the costs associated with preparations for the launch of the Waha project.
Pharos Holding believes that the growth in the first nine months on annual basis by 43.6% is due to the rise in prices by 60% for built units, 36% for apartments, and 40% for land plots.
Quarterly net profit fell by 50% to EGP 118m, versus EGP 235m in the same period in 2016.
Pharos attributed the fall in profits to the cost of funding and the company bearing the cost of the securitisation, next to the reduction in the number of units delivered by 27.4% annually to 455 units.
The managing director of the company, Tarek Abdul Rahman, told Daily News Egypt in previous remarks that the company aims to fund the partnership projects worth EGP 150bn, based on the proceeds of revenues and the growth in delivery rates in the coming period, next to securitising part of the customers’ portfolios to issue bonds.
He explained that it is intended to issue another tranche of bonds during the coming period, without disclosing its size or specifying the date. He added that the company had put together a programme to securitise its portfolio, which reached EGP 13.6bn at the end of September 2017.