Impressive 1Q sales
OCDI achieved strong 1Q22 sales of EGP3.7 billion, up 102.2% y/y and down 37.4% q/q from 4Q that is generally a strong quarter in real estate, reaching a record 1Q high in OCDI’s history. West Cairo projects accounted for 36% of 1Q22 sales, supported by the launch of The Estates Residences project, and East Cairo projects and the North Coast respectively contributed 34% and 30% to 1Q22 sales.
Sales cancellation rate reached 10% of sales in 1Q22, compared to 8% in 1Q21. The increase in sales cancellation rate is the result of the 500 feddan project’s temporary suspension. Excluding this effect would yield a sales cancellation rate of 2%.
Construction spending in 1Q22 amounted to EGP634.0 million, compared to EGP776.0 million in 1Q21 and EGP1.1 billion in 4Q21.
Revenue performance mirrored delivery performance in 1Q22, with revenue reaching EGP1.2 billion, up 39.8% y/y and down 67.1% q/q, mainly supported by deliveries in commercial project EDNC and Villette’s Sky Condos. 1Q22 also witnessed the commencement of unit deliveries in SODIC East.
Gross profit in 1Q22 reached EGP503.0 million, up 78.4% y/y and down 60.9% q/q, leading to a higher GPM of 42.4% due to a better delivery mix supported by the high-margin commercial project EDNC.
Net profit in 1Q22 reached EGP226.0 million, up 126.0% y/y and down 56.4% q/q, translating into a higher NPM of 19.0%.
Net debt decreased from EGP636.8 million at the end of 4Q21 to EGP526.0 million at the end of 1Q22.
Receivables, including off-balance sheet receivables, increased from EGP19.5 billion at the end of 4Q21 to EGP21.2 billion at the end of 1Q22.
With sales kicking off with a strong 1Q22, OCDI is on track to reach our FY22 sales forecast of EGP11.5 billion. We maintain our Overweight recommendation based on our FV of EGP20.02/share.