Solid growth in sales
PHDC achieved solid 2Q22 sales of EGP5.1 billion, up 19.2% y/y and down 7.1% q/q, bringing 1H22 sales to EGP10.7 billion, up 38.3% y/y, driven by an increase in number of units sold and increase in average selling prices across various projects. Sales performance was supported by sales in Badya (up 144.0% y/y to EGP3.1 billion in 1H22) and in Palm Hills New Cairo (up 109.1% y/y to EGP2.3 billion in 1H22). Commercial sales contributed EGP1.9 billion (up 130.0% y/y) to 1H22 sales.
Construction spending amounted to EGP1.7 billion in 1H22, compared to EGP1.4 billion in 1H21.
Ready-to-move inventory stood at EGP4.4 billion at the end of 2Q22.
Revenue in 2Q22 grew 98.7% y/y and 39.0% q/q to EGP4.0 billion, bringing 1H22 revenue to EGP6.9 billion, up 73.1% y/y as a result of the rise in sales, the contribution of ready-to-move unit sales, and the 24.4% y/y increase in 1H22 unit deliveries.
Gross profit in 2Q22 grew 103.2% y/y and 54.2% q/q to EGP1.4 billion, translating into a higher GPM of 35.1%.
Net profit in 2Q22 reached EGP263.5 million, up 2.6% y/y and down 10.7% q/q, giving way to a lower NPM of 6.5% in 2Q22 and bringing 1H22 net profit to EGP558.5 million, up 21.0% y/y.
Receivables increased from EGP24.9 billion at the end of 1Q22 to EGP25.8 billion at the end of 2Q22.
Net debt increased from EGP333.4 million at the end of 1Q22 to EGP1.1 billion at the end of 2Q22.
With 1H22 sales of EGP10.7 billion, PHDC is on track to exceed our FY22 sales forecast of EGP18.2 billion projected in our EGP3.37/share valuation. We remind you that PHDC is targeting FY22 sales of over EGP20.0 billion. We maintain our Overweight recommendation given solid sales momentum.