Earnings Report /

MNHD: Sales expectedly decline compared to land-backed 1Q20

  • 1Q21 sales reached EGP1.5 billion, down 42.1% y/y, due to 1Q20 having included the EGP1.1 billion land sale.

  • Sales drop overshadowed deliveries jump and resulted in the 46.1% y/y drop in revenue to EGP493.1 million.

  • Net profit decreased 69.7% y/y and 69.1% q/q to EGP114.5 million.

Numbers down on unfavorable base effect

  • MNHD recorded 1Q21 sales of EGP1.5 billion, down 42.1% y/y. The decline in sales is the result of 1Q20 having included the EGP1.1 billion land sale. Excluding this land sale from 1Q20 sales would yield 1Q20 sales of EGP1.4 billion and would translate into a 5.7% y/y increase in 1Q21 sales.

  • The sales drop overshadowed the significant jump in unit deliveries and resulted in the 46.1% y/y drop in revenue in 1Q21 to EGP493.1 million, down 63.1% q/q. Revenue in 1Q20 was also buoyed by the aforementioned land sale.

  • Gross profit in 1Q21 decreased 58.8% y/y and 57.8% q/q to EGP243.0 million, leading to a GPM of 49.3%, lower than 1Q20 GPM of 64.4% and higher than 4Q20 GPM of 43.1%.

  • Net profit in 1Q21 followed suit with a 69.7% y/y and 69.1% q/q decrease to EGP114.5 million, spelling out an NPM of 23.2%, lower than 1Q20 NPM of 41.3% and 4Q20 NPM of 27.7%.

  • The company’s Board of Directors approved an EGP1.8 billion loan offer and an EGP500.0 million receivables securitization.

Maintain Overweight

For MNHD to achieve its targeted 10.0%-15.0% growth in sales in FY21, we expect the company to sell more land plots in FY21 to, at least, keep a level playing field. We maintain our Overweight recommendation of MNHD based on our FV of EGP5.35/share, which is mainly supported by the residual land in Taj City and SARAI.