Sales and earnings jump
PHDC achieved impressive 2Q21 sales of EGP4.3 billion, up 62.0% y/y and up 26.6% q/q, taking 1H21 sales to EGP7.7 billion, up 76.2% y/y, supported by significant sales growth in Badya. Commercial sales in 2Q21 stood at EGP313.0 million, driven mainly by the sale of retail space in Palm Hills Alamein Mall.
Revenue in 2Q21 increased 132.7% y/y and 2.7% q/q to EGP2.0 billion as a result of the rise in sales and contribution from Ready-to-Move units.
Gross profit in 2Q21 reached EGP696.7 million, up 94.6% y/y and down 3.4% q/q, translating into a GPM of 34.3%, which is lower than its 2Q20 and 1Q21 counterparts, due to a lower-margin delivery mix.
Net profit in 2Q21 increased 31.5% y/y and 25.5% q/q to EGP256.8 million, implying an NPM of 12.6%, which is lower than 2Q20 NPM of 22.4% and higher than 1Q21 NPM of 10.3%.
Receivables increased from EGP22.9 billion at the end of 1Q21 to EGP23.1 billion at the end of 2Q21.
Net debt decreased from EGP1.0 billion at the end of 1Q21 to EGP432.8 million at the end of 2Q21.
The company expects to conclude a sukuk issuance in FY21.
PHDC is on track to beat our FY21 sales forecast of EGP13.6 billion given the company’s 1H21 sales of EGP7.7 billion and its July 2021 launch of Hacienda West. We remind you that PHDC is targeting EGP15.0 billion in sales in FY21. We maintain our Overweight recommendation of PHDC based on our FV of EGP2.58/share.