Strong sales performance
PHDC achieved impressive 3Q22 results, with sales rising 33.0% y/y and 33.0% q/q to EGP6.8 billion, bringing 9M22 sales to a company record of EGP17.5 billion, up 36.2% y/y, driven by an increase in number of units sold and an increase in selling prices. Sales performance was supported by sales in Badya (up 109.0% y/y to EGP4.2 billion in 9M22) and in Palm Hills New Cairo (up 99.0% y/y to EGP3.3 billion in 9M22). Commercial sales contributed EGP2.4 billion (up 83.0% y/y) to 9M22 sales.
Construction spending amounted to EGP2.5 billion in 9M22, compared to EGP1.9 billion in 9M21.
Ready-to-move inventory stood at EGP3.5 billion at the end of 3Q22.
Revenue in 3Q22 reached EGP2.6 billion, up 38.9% y/y and down 35.2% q/q, bringing 9M22 revenue to EGP9.6 billion, up 62.2% y/y, driven by the increase in sales and contribution from ready-to-move inventory sales.
Gross profit in 3Q22 reached EGP874.7 million, up 30.5% y/y and down 38.2% q/q, translating into a lower GPM of 33.4%.
Net profit in 3Q22 rose 102.4% y/y and 33.7% q/q to EGP352.4 million, leading to a higher 3Q22 NPM of 13.5% and bringing 9M22 net profit to a company record of EGP910.9 million, up 43.3% y/y.
Receivables increased from EGP25.8 billion at the end of 2Q22 to EGP28.2 billion at the end of 3Q22.
Net debt increased from EGP1.1 billion at the end of 2Q22 to EGP1.4 billion at the end of 3Q22.
Maintain Overweight
With 9M22 sales of EGP17.5 billion, PHDC is on track to reach its FY22 sales target of over EGP20.0 billion and is comfortably on its way to exceed our FY22 sales forecast of EGP18.2 billion projected in our EGP3.37/share valuation. We maintain our Overweight recommendation given strong sales performance.