12 May 2008 13:42
This announcement replaces the release entitled '1st Quarter Results' that was issued this morning, May 12 2008, at 08:00 under RNS number '1560U'.
Bullett point two of the 'Highlights' section relates to a '10 month' period and not a '12 month' period as previously stated.
Updated contact details for Mohamed Fahmy are also contained at the end of the statement.
Palm Hills Developments announces first quarter 2008 results. Profit Before Tax reached EGP 199 million (US$ 36,8 million).
Cairo, May 12th 2008 - Palm Hills Developments S.A.E. ("PHD") a leading real estate developer in the Egyptian market that develops primarily high-end residential real estate and resort projects today announced its financial results for the first quarter period ending 31 March 2008. PHD is listed on the London Stock Exchange and the Cairo & Alexandria Stock Exchange.
HIGHLIGHTS
Significant growth driven by increasing number of contracted units with total contracts value of EGP 930 million
Achieved a consolidated net revenue of EGP 326 million (US$60,3 million) compared to L.E 533 million for the 10 month period ending December 31st 2007.
Pre tax profit of EGP 199 million (US$ 36,8 million) versus EGP 231 million for the full year ended December 31st 2007 .
Commenting on the first quarter results of 2008, Yasseen Mansour, Chairman and CEO:
"I am delighted to report that Palm Hills has seen another period of sustained growth which builds on our solid sales and project development track record. PHD continues to be one of the best respected and trusted real estate brands in Egypt and this, together with excellent economic and demographic fundamentals in the Egyptian real estate market, indicate that the prospects for Palm Hills moving forward remain extremely positive. A fact underlined and independently endorsed by the success of our recent IPO in May 2008."
2008 Q1 FINANCIAL RESULTS
The number of contracted units rose by 533 units compared to the total accumulated contracted units as at December 2007 of 871 units. Hacienda Bay project's total contracts value reached EGP 328 million representing 35% of total contracted value in Q1 2008. Kattameya and Golf View projects were also major contributors to growth, together representing 34% of total contracts value.
The company's consolidated performance excludes revenues from the Bamboo Extension Project which recorded a total contracts value of EGP 122.5 Million in Q1 2008
(1) The company changed the financial reporting year end in 2007 from February to December and consequently a like for like quarterly comparison is not applicable for Q1 2008 period.
(2) 2008's consolidated financials exclude the Bamboo Extension Project's figures as the company's acquisition had been implemented during Q2 2008 and will be consolidated by Q2 2008.
The Q1 2008 period has seen excellent growth in operating margins in addition to the strong revenue growth. Gross Profit margin was significantly enhanced as a result of increased sales in projects characterized by low land acquisition cost, namely Hacienda Bay, which constitutes 50% of total consolidated revenues recognized in Q1 2008.
Further margin enhancement was supported by a significant decrease of Selling, General & Administrative expenses as a percentage of Sales reaching 11% in Q1 2008 from 18% in FY 2007, despite the continuous growth of the Company in terms of hiring more employees, and continuing its marketing and advertisement activities through its brand awareness campaign. Consequently, EBITDA and Operating Profit margins jumped from 55.7% and 55.5% in FY 2007 to 69% and 68.7% in Q1 2008 respectively. As a result of the foregoing, profits after tax for the first quarter reached EGP 168 million compared to a total of EGP 204 million in FY 2007.
Income tax expense increased as a result of the increased recognition of sales from taxable projects to record 31 million in Q1 2008 up from 29 million in 2007. Yet, the company's net profit after tax margin jumped to 52% in Q1 2008 up from 38% in FY 2007 due to the strong operating performance as previously mentioned.
Table 1 - Q1 Operating Results
|
| 2007(1) | Q1 2008(1)
|
| Sales, net | 533,425 | 325,877 |
| Cost of sales | (140,512) | (66,851) |
| GROSS PROFIT | 392,912 | 259,026 |
| Margin% | 73.7% | 79.5% |
| Selling, General & Administrative Expenses | (95,978) | (34,220) |
| EBITDA | 296,934 | 224,806 |
| Margin% | 55.7% | 69.0% |
| Depreciation and Amortization | (1,060) | (917) |
| Operating Profit | 295.874 | 223,889 |
| Margin% | 55.7% | 68.7% |
| Other income | 11,126 | 3,337 |
| Interest income - Amortization of discount | - | 6,634 |
| Finance costs | (75,318) | (34,477) |
| PROFIT BEFORE TAX | 231,681 | 199,383 |
| Income tax expense | (29,040) | (31,079) |
| PROFIT FOR THE YEAR | 202,640 | 168,304 |
| Minority interests | 12,97 | (470) |
| Net Profit After Minority | 203,937 | 167,834 |
| Margin% | 38% | 51.5% |
| EARNINGS PER SHARE | 43,2 | 20.98 |
Palm Hills Developments recognizes its villas and town houses revenues, from land upon signature of a contract while revenues from construction are recognized on a percentage completion basis with a minimum threshold of 50%. Revenues of apartments and multi tenant buildings are recognized upon delivery. As a result, total revenues figure on the Income statement during a year does not reflect neither reservations nor construction revenue less than 50% completed or any revenue from apartments.
The figures presented are prepared according to Egyptian Accounting Standards.
EPS for 2008 is calculated before the stock split & for 2007 based on average number of shares outstanding during the years.
Table 2 - Q1 Performance by Project (in EGP thousand, unless otherwise stated)
| Name of Project | Sales Launch | Revenues | Total Contract Value | ||||
| 2007 | Q1 08 | 2007 (Accumulated ) | Q1 08 | ||||
| No. of units | Value | No. of units | Value | ||||
| Cascade (6) | Mar-05 | 20,801 | 0 | 43 | 37,801 |
| 0 |
| Bamboo (7) |
| 0 | 0 | 132 | 78,507 |
| 0 |
| Golden Palm (8) | Jun-05 | 255 | 4,837 | 91 | 168,394 | 6 | 13,558 |
| Golf Views | Jun-05 | 50,232 | 87,704 | 16 | 79,912 | 43 | 153,683 |
| Golf Extension | Jan-08 | 0 | 0 |
| 0 |
| 0 |
| Kattameya | Jul-06 | 295,861 | 94,396 | 251 | 552,856 | 54 | 166,635 |
| Bamboo Extension | May-07 | 0 | 0 |
| 0 | 55 | 122,522 |
| Hacienda Bay | Jul-07 | 194,541 | 188,623 | 89 | 288,489 | 161 | 327,565 |
| Casa | Jun-07 | 0 | 0 |
| 0 | 117 | 86,669 |
| The Village | Nov-06 | 0 | 0 | 249 | 109,129 | 97 | 59,828 |
| Palm Parks | Dec-07 | 0 | 0 |
| 0 |
| 0 |
| Ain Sokhna | Feb-08 | 0 | 0 |
| 0 |
| 0 |
| Grand Total (*) |
| 561,691 | 375,560 | 871 | 1,315,088 | 533 | 930,461 |
(*) Revenues Recognized for FY 2007 and Q1 2008 are pre Net Present Value discount
For further information:
Mohamed Fahmy
Palm Hills Developments
Chief Financial Officer and Investor Relations Director
11 Nakheel street, Mohandeseen
Tel: +202 3338 2302/3
Fax: +202 3335 1204
Email: mohamed.fahmy@palmhillsegypt.com
NOTES TO EDITORS
About Palm Hills Developments
www.palmhillsdevelopments.com
PHD is a leading real estate developer in the Egyptian market, developing primarily high-end residential real estate and resort projects. The market value of PHD's properties as at 1 March 2008 has been independently valued by CB Richard Ellis (CBRE) at LE 19.5 billion (US$3.5 billion). Palm Hills Developments is listed on Cairo & Alexandria Stock Exchange ("CASE") under the symbol PHDC.CA and on London Stock Exchange ("LSE") under the symbol of PHDC.
The Company has acquired large parcels of land in strategic locations throughout Egypt and has one of the largest land banks held by any developer operating in the Egyptian market consisting of over 38,8 million square metres of land. Of the Company's 22 projects, five are under construction and a further 12 have already been master planned. Development land locations include: Cairo's West axis in 6th of October City; Cairo's East axis in New Cairo City; the North Coast on the Mediterranean Sea; the City of Alexandria; and the Red Sea Coast in different locations.
PHD is currently constructing or designing seven residential projects, covering approximately 12.0 million square metres. These projects feature a variety of residential units and have been designed to meet demand in the Egyptian market for high-quality, prestigious housing of varying sizes and styles. These projects are designed as "gated communities" that include the requisite supporting infrastructure, landscaping, common areas and security services.
A further five residential resort projects, covering approximately 9.3 million square metres, are currently being constructed or designed by PHD. These projects are designed to respond to increasing demand, both from Egyptians and from abroad, for high-quality second homes and resort accommodation. Amongst these projects, Hacienda Bay comprises over 2.3 million square metres of land located on Egypt's North Coast and, upon completion, is expected to feature a variety of residential units, five-star hotels, a health spa and a private 18-hole golf course, as well as numerous dining and entertainment facilities. These projects also include properties on the Egyptian coast of the Red Sea that Palm Hills intends to develop as residential resort projects.
The Company is also constructing or designing five mixed-use projects covering approximately 0.9 million square metres. These projects will include a mixture of residential and commercial properties. For example, "The Village", which is situated near to the American University campus in New Cairo, is designed to include quality apartments suitable for students, young professionals and young families, as well as a large retail mall designed to attract residents of the development, students from the nearby campus and others in the same age group.