SODIC held its 2Q16 conference call yesterday. SODIC’s presenters included Magued Sherif (Managing Director) and Omar El-Hamawy (CFO). Below are the key takeaways:
• Comfort reiterated to meeting sales target of EGP4.9bn in 2016 Management has indicated that it is on track to meet its 2016 contracted sales target of EGP4.9bn, with a busy pipeline of launches set for 2H16. The launch of the second phase in Caesar (North Coast) has, so far, been very successful, with strong sales numbers QTD, beating management’s expectations. Management reiterated its bullish view on the market, with real estate being a preferred way to store value and hedge against inflation for Egyptians. Cash outlays were cEGP1bn in 1H16, with another cEGP1bn planned for 2H16.
• Management dismissed high cancellation concerns Management dismissed concerns over the rise in the cancellation rate (7% in Q2), explaining that five units (four in Villette, one in Caesar) made up a big portion of the cancellations. These units were resold, post the quarter’s close, at higher prices,; thus, creating value.
• Management sees no risk on margins from inflationary pressures Management indicated that inflationary pressures were anticipated ahead of time and taken into consideration in its product pricing policy and in its contract agreements with contractors.
• Looking to grow land bank across different locations Management is actively looking to grow its land bank, particularly in East Cairo, the North Coast and the Red Sea. Both, cash and revenue-sharing agreements, are considered. Management confirmed the news that it is in informal talks to acquire 250 acres in Dream Land in Sixth of October City, with no meaningful progress made to date on negotiations.

Mai Attia
Sara Boutros