Equity Analysis /

Emaar Misr For Development: 1Q19 – Earnings drop on few Uptown Cairo deliveries

    Uptown Cairo deliveries lag

    Following a strong 4Q18, revenue in 1Q19 declined 31.8% y/y and 83.9% q/q to EGP566.6 million due to a virtual lack of deliveries in Uptown Cairo, leaving Mivida and Marassi to be almost equal contributors to the quarter’s delivery mix.

    Margins improved y/y and q/q, with GPM rising to 44.0% and NPM soaring to 73.9% due to notable finance income.

    Net cash slightly expanded from EGP12.3 billion at the end of FY18 to EGP12.5 billion at the end of 1Q19.

    Receivables, including off-balance sheet receivables, slightly declined from EGP15.2 billion at the end of FY18 to EGP14.6 billion at the end of 1Q19.

    Sales figures were not disclosed as is the case during most of the year.

    Maintain Overweight

    We maintain our Overweight recommendation of Emaar Misr for Development (EMFD) based on our FV of EGP6.06/share. EMFD’s net cash currently constitutes 82.2% of market cap.