Earnings Report /
Egypt

MNHD: 1Q22 review – Revenues rise on higher sales and deliveries

  • 1Q22 sales increased 110.6% y/y to EGP1.6 billion.

  • Net cash collections grew 4.5% y/y to EGP836.3 million in 1Q22.

  • Net profit in 1Q22 increased 5.1% y/y and 266.9% q/q to EGP120.3 million.

1Q22 highlights:

  • 1Q22 sales increased 110.6% y/y to EGP1.6 billion of which Sarai constituted 54.3% and Taj City constituted 45.7%.

  • Net cash collections grew 4.5% y/y to EGP836.3 million in 1Q22.

  • Cumulative delinquency rate reached 4.7% by the end of 1Q22, down from 8.9% at the end of 4Q21, reflecting MNHD’s efforts to rid its receivables portfolio of nonperforming contracts as indicated by the 49.1% cancellation rate in 1Q22, compared to 21.2% in 1Q21. MNHD expects its sales cancellation rate to normalize toward 10.0%-15.0% as it clears its receivables portfolio of nonperforming contracts during FY22.

  • Ready-to-move inventory amounted to EGP2.2 billion at the end of 1Q22.

  • Construction and infrastructure spending amounted to EGP381.1 million in 1Q22, down 45.2% y/y.

  • Revenue in 1Q22 increased 70.7% y/y to EGP841.6 million as a result of the increase in unit deliveries and increase in sales.

  • Gross profit in 1Q22 increased 13.7% y/y and 124.2% q/q to EGP276.3 million, leading to a GPM of 32.8%, lower y/y due to 1Q22 taking into account the costs of the higher y/y deliveries.

  • Net profit in 1Q22 increased 5.1% y/y and 266.9% q/q to EGP120.3 million, translating into an NPM of 14.3%, lower annually and higher sequentially.

Maintain Overweight

As communicated by MNHD management during our webinar series earlier this year, MNHD plans to focus less on land sales and more on development, recurring revenue generation, and co-development of nonresidential projects. The company is exploring the establishment of a commercial leasing business. MNHD is also planning to double unit deliveries in FY22. We maintain our Overweight recommendation based on our FV of EGP3.26/share given the company’s attractively-located land bank.