Talaat Moustafa Group (TMG), Egypt's biggest listed developer that is mired in a legal row over its flagship project posted a 48 per cent drop in first-quarter net profit on Wednesday. But the profits, even though they're trimmed, are a sign that the firm is holding up despite the slowdown of the whole sector in the aftermath of the revolution. Net income fell to LE 169.4m (US$28.5m) from LE324.1m in the same period a year earlier, it said in a statement posted on the stock exchange's website.Revenues in the first quarter are slightly down from Q12010 -- LE1.4bn, against LE1.6bn. The company's statement doesn't show major sources of revenue. But real estate new sales dropped 51 per cent to LE 567 mn ($95.4m) in the first quarter, compared to Q12010.This sum was made up by delivery of already sold units. ”I think that the delivery of units brought some cash to the company in the last three months”, says Harshjit Oza a real estate analyst at Beltone Financial. He adds that the details of financial statement will be disclosed by next week. “Five per cent of profits come from hotels revenues,” Oaza explained, saying that the crisis in Egyptian tourism had shrunk this sector. CI Capital investment bank on 27 April predicted TMG net profits for Q12011 would reach LE190m, implying a net profit margin of 18 per cent TMG's $3 billion Madinaty project, which makes up the bulk of its land bank, has been caught in a dispute since September, when a court upheld a ruling that scrapped a sale of state land to TMG because it was not auctioned. TMG's original contract with the government for Madinaty was scrapped last year but the cabinet returned the land to the company under a new deal on the same terms based on its right to act in the national interest. But since the ousting of Mubarak and his cabinet -- which signed the deal -- the fate of that contract remains unclear. It is being contested in courts, with a hearing later this month. Illicit gains investigations have confirmed that Mubarak's sons have shares in this company via a private equity fund, Horus III.
