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Sodic slips to 2009 loss, H2 seen better

Cairo, April 1, 2010

Sodic, a high-end Egyptian real estate firm, slipped to a net loss in 2009, as expected, but analysts said they see a big upswing in profit toward the end of the year after the company recognises revenue from home sales.

The developer, also known as Sixth of October Development and Investment Company, reported a loss of EGP112.5 million ($20.4 million) in 2009, down from a net profit of EGP26.8 million in 2008.

Sodic does not fully recognise revenue from a unit until it is delivered. Because many homebuyers in Egypt purchase houses 'off-plan,' or before delivery, that can take as much as five years after a sale is made.

'We expect to see a real change in their income statement in the second half of 2010,' Beltone analyst Khalid Khalil said, adding he sees revenues of EGP500 million for the company in the second half of 2010, and 1 billion pounds in 2011.

While analysts had expected a loss, brokers said Sodic shares slipped in low volumes after some retail investors sold on the headline loss.

The stock shed 0.7 per cent by 1140 GMT, while the main index  rose 0.9 per cent.

Sodic has said it plans to start delivering homes in its flagship Allegria project west of Cairo near the end of this year, and will deliver some 300 units over 2010.

That is fewer homes than Sodic predicted last year it would deliver in 2010, but the firm said it was still ahead of an earlier schedule by one to two years in some cases.

The firm aims for commercial property leasing to bring in EGP400 million a year by 2014. – Reuters




Tags: real estate | Cairo | Sodic | loss | H2 |

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