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SODIC to pay EGP 1.2bn of outstanding land dues in 2019 Company plans to offer second phase of Malaaz North Coast project in July, says managing director
Six of October Development and Investment (SODIC) allocated EGP 1.2bn for the company's projected payments in 2019, the Managing Director and board member of SODIC, Maged Sherif, told Daily News Egypt. The company plans to direct EGP 3.7bn for the construction of the company's projects in 2019, aside of the land costs, Sherif noted during SODIC's annual Iftar (Fast breaking meal in Ramadan) held on Monday. He revealed that SODIC has managed to sell 90% of the Allegria Residence Compound's first phase which has been offered in Cityscape-Egypt exhibition in March. He noted that the company plans to launch a second phase of the project during the second half (H2) of this year. Furthermore, he added that the company plans to offer the second phase of the Malaaz project in the North Coast in July. "The most prominent projects that have joined the company's plan recently are 500-feddan co-developed project with the New Urban Communities Authority in Sheikh Zayed extensions, which is a mixed-use development comprised of 5,000 units with total expected sales worth EGP 43bn, in addition to a new 150-feddan project in Al-Yusr land in the Sheikh Zayed city expansions," he explained. "Moreover, the company has launched one of administrative buildings in EDNC, a dynamic office and retail complex located in New Cairo in the Eastown Residences project." He added that the company's investment plan includes pumping investments worth EGP 3.7bn in the company's projects during the current year and does not include the instalments of the land due this year. Regarding the decrease in net profits in first quarter (Q1) of 2019, compared to Q1 of 2018, Sherif commented that the company has sold a plot of land with amounted to EGP 150m in Q1 of 2018, which causes a high growth margin in that quarter compared to Q1 of 2019, additionally in Q1 of this year, the company delivered units in the Villette project in New Cairo, which its profit margin is lower than the launch. He unveiled that the company is searching for efficient international operators in the field of education in schools and universities and entertainment for the company's project development. Furthermore, he stressed the importance of participating in external exhibitions to market the company's projects whether for Egyptian expatiates or for non-Egyptian customers, where the percentage of Egyptians expatiates sales reaches 8 or 10% of the total company's sales. Therefore, the company is carefully studying and selecting the foreign exhibitions that the company plans to participate in, during the coming period. "We are participating in exhibitions in the Gulf region, such as Dubai, Abu Dhabi, Bahrain, and Saudi Arabia. We are also studying participating in exhibitions in Europe, America, and Canada as part of the expansion of sales to foreign customers, not just Arabs and Egyptians," Sherif said. He pointed out that resolving the problem of high prices of lands in the local market is a strong basis for controlling market prices. The land acquires a large percentage of the total projects' cost, which means high unit costs and sales prices and consequently a lack of access to the target customer whose purchasing power is still stable. Furthermore, he highlighted that Egypt's real estate market is witnessing the launch of a huge package of new cities and national megaprojects which achieve integrated development, but need to cooperate with developers in the implementation of these plans. Moreover, they need to conduct direct dialogue and periodic meetings to discuss ways for developers to participate in the implementation of these development plans, as well as the need to expand the marketing of these investment opportunities abroad. The company is considering and looking for new investment opportunities and once it finds the suitable opportunities, it will immediately seize it. The company has recorded revenues of EGP 941m during Q1of 2019, growing by 84% compared to EGP 512m recorded for the same period last year, the company announced on Sunday. The strong growth in revenues was mainly driven by Villette which contributed to around 50% of the delivered value. Furthermore, gross profits were recorded at EGP 270m, with a gross profit margin of 29%, compared to EGP 266m recorded during the same period last year, reflecting a margin of 52%.
