rascom Development Egypt (ODE) has announced a strong performance for its financial results in the first quarter (Q1) of 2021, with the company seeing revenues grow by 61.5% year-on-year (y-o-y) to EGP 1.46bn.
The revenues for the quarter compared to the EGP 903.8m reported in Q1 of 2020. Meanwhile, ODE reported net profit grew by 377.1% to EGP 438.5m.
The boost in revenues were the result of an acceleration in its construction activities across all projects, with real estate revenues reaching EGP 1.2bn, an increase of 156.2% y-o-y compared to Q1 of 2020.
Gross profits increased by 152.9% to EGP 574.9m in Q1 of 2021, compared to EGP 227.3m in Q1 of 2020, with a gross margin of 39.4%. Operating EBITDA was up 171.8% to EGP 590.9m in Q1 of 2021, with a 40.5% margin compared to EGP 217.4m in the same quarter of the previous year.
At the same time, EBITDA also increased by 174.6% to EGP 694.0m, compared to EGP 252.7m in Q1 of 2020.
Revenues from real estate surged 156% y-o-y, and decreased 15% quarter-on-quarter (q-o-q) to EGP1.18bn. They were supported by an accelerated pace of construction across all destinations, while revenues from the hospitality segment amounted to EGP 95m.
This reflected a downturn of 64% y-o-y and 21% q-o-q, impacted by the outbreak of the novel coronavirus (COVID-19) pandemic which started in March 2020.
Revenues from the town management segment stood at EGP184m, reflecting a rise of 3% y-o-y, and down 11% q-o-q. As for presales, the company announced that net real estate sales increased 37% y-o-y and 14% q-o-q to EGP 2.1bn, beating the company’s estimate of EGP 1.7bn. The company sold 355 real estate units during the quarter, up 48% y-o-y.
The main contributions for new sales came from: El Gouna, representing 48%; O West representing 37%; and Makadi Heights, representing 15%.
Net debt as of March 2021 dropped to EGP1bn, versus EGP1.5bn in December 2020, boosted by strong operating cash flows of EGP396m during Q1 of 2021. Critically, cancellation rates remained low at 4% of gross sales and delinquencies dropped to 3% versus 4% in 2020.
For the remainder of the year, the company is planning to continue accelerating our real estate construction to meet contractual dates, ultimately increasing the real segment’s revenues.
The company said in a press release, “We will leverage on our town management’s operation and steady growth, and further expanding the number of residents, demonstrating our successes in disciplined deliveries and correct targeting across all destinations.”
It added, “We are also planning on providing attractive offerings for start-ups and entrepreneurs, encouraging them to come set ground in our destinations.”
For the hotels segment, the company said that the 50% capacity remains in place, and lockdowns remain in effect in some of the main European source markets. ODE noted that it is challenging to give short-term guidance on the segment’s performance.
Nonetheless, the company noted that it is optimistic and confident that the acceleration of vaccine rollouts will lead to the return of travel.