Palm Hills swings to net loss in Q1
Cairo, June 14, 2011
Palm Hills, Egypt's second-biggest listed developer, swung a first-quarter net loss of 36.2 million Egyptian pounds ($1.6 million), the stock exchange said on Tuesday.
Palm Hills, being hit by the political turmoil that swept President Hosni Mubarak from power and a widening graft probe against business executives linked with his administration, reported net profit of 107 million pounds a year earlier.
Three analysts polled by Reuters forecast an average net profit of 92.3 million pounds, but the ranges were very wide, with one expecting profit of 7 million pounds for the first quarter and another of 237 million pounds.
Real estate firms are reeling from a string of legal challenges to their land holdings since a court ruled last year that a state deal with Talaat Moustafa Group (TMG), the country's biggest developer, was illegal.
A court ruled in April that a state land sale to Palm Hills was illegal and scrapped the contract.
Palm Hills' share price has tumbled 61.4 percent this year as investors fret about its struggle with mounting debts and liabilities.
The firm's revenues fell to 193.5 million pounds from a 198 million a year earlier.
Real estate firms in Egypt book sales off-plan, which means revenue can appear on their books years after the initial sale was made.
Talaat Moustafa Group posted a 48 percent drop in first-quarter net profit last month.
Palm Hills has said it expected few if any new reservations or contracts to be signed for the first half of 2011 and that it would cut its construction spending by 50 percent to 1 billion pounds because of the disruptions to the economy. - Reuters