North Coast projects boost sales
PHDC achieved impressive 3Q21 sales of EGP5.1 billion, up 75.6% y/y and 19.2% q/q. Sales growth in 3Q21 was supported by offerings on the North Coast, including the launch of Hacienda West in July 2021, which brought in EGP1.7 billion in 3Q21 sales, and ongoing sales in Palm Hills New Alamein, bringing total 9M21 sales to EGP12.9 billion, up 75.9% y/y. Commercial sales in 3Q21 stood at EGP470.0 million, driven mainly by the sale of retail space in Palm Hills New Alamein Mall.
Construction spending reached EGP1.9 billion in 9M21, compared to EGP984.0 million in 9M20.
Ready-to-Move inventory stood at EGP3.4 billion at the end of 9M21.
Revenue in 3Q21 reached EGP1.9 billion, up 22.2% y/y and down 7.3% q/q, bringing 9M21 revenue to EGP5.9 billion, up 66.0% y/y as a result of the increase in standalone unit sales and commercial sales, the contribution of Ready-to-Move unit sales, and the rise in unit deliveries. Unit deliveries in Badya started in October 2021, almost one year ahead of contractual delivery dates.
Gross profit in 3Q21 reached EGP670.0 million, up 17.6% y/y and down 3.8% q/q, translating into a GPM of 35.6%, compared to 37.0% in 3Q20 and 34.3% in 2Q21.
Net profit in 3Q21 decreased 26.9% y/y and 32.2% q/q to EGP174.1 million, implying an NPM of 9.2%, compared to 15.4% in 3Q20 and 12.6% in 2Q21.
Receivables increased from EGP23.1 billion at the end of 2Q21 to EGP23.8 billion at the end of 3Q21.
Net debt slightly increased from EGP432.8 million at the end of 2Q21 to EGP442.1 million at the end of 3Q21.
With 9M21 sales of EGP12.9 billion, PHDC is on track to beat our FY21 sales forecast of EGP13.6 billion and is on track to meet, and possibly also beat, its FY21 sales target of EGP15.0 billion, and we maintain our Overweight recommendation.