The Egyptian real estate market leader, Nasr City Housing & Development, released this week its first quarter results for the fiscal year 2001/2002 ending September 30, 2001, in which net profits totaled 23.09 million Egyptian pounds ($5.04 million), up a slight 2.1 percent from the EP22.63 million recorded in the same period last year, according to the Cairo and Alexandria Stock Exchanges (CASE) Disclosure Department.
Despite the issuance of the new mortgage law earlier this year, Nasr City Housing has been suffering from a stagnant real estate market. The company’s projects under construction fell by 74 percent, from EP2.1 million in 1998/99 to EP574,000 in 1999/2000. Nonetheless, EFG-Hermes forecasted that as soon as the market starts to revitalize, the company's strong asset base and solid financial structure should qualify it to be one of the first to regain strength and dominance within the sector.
According to the company’s latest financial statement, sales reached EP22.5 million between July and September 2001, recording a 70 percent hike over the corresponding quarter the previous year, while COGS (Cost of Goods or Services Sold) rose 10 percent during that period, reaching EP10.11 million. Gross profit thus tripled to EP12.4 million.
These upward trends were offset by a 25 percent fall in interest income that reached EP7.44 million, a 32 percent drop in investment income that reached EP5.64 million and an 81 percent drop in other income that reached EP0.59 million. Provisions registered a 30 percent drop to EP1.62 million, while extraordinary income fell a 62 percent to reach EP0.4 million. General and administrative expenses increased 20 percent to reach EP2.07 million.
Nasr City Housing was established in 1959 as a public sector land development company, with the chief responsibility of developing Cairo’s Nasr City district for the Egyptian government, by providing housing at a reasonable price to low-to-middle income groups. The company’s main activity is real estate development, including land acquisition, construction of residential, commercial and administrative housing units, including the installing of utilities, and the sale and lease of these units.
As part of Egypt’s privatization program, Nasr City Housing became a joint stock company in 1996, when the Holding Company for Building and Construction (HCBC) decided to sell 75 percent of the company’s equity, in what became Egypt’s first majority privatization completed through the stock exchange. Nasr City’s model of ownership is now a de-concentrated one, where the government remained the largest single shareholder, with 25 percent of the shares.
Following the privatization, the company began to engage in more profitable activities. Less than one third of the housing units that Nasr City currently develops are for the low-income market, and the company now deals mainly with high revenue projects, including luxury housing and diplomatic communities. — (menareport.com)
© 2001 Mena Report (www.menareport.com)
