Palm Hills Developments’ (PHD) revenues grew 22% y-o-y to EGP 3.5 bn in 1Q 2023 thanks to a rise in residential sales, according to the real estate developer’s earningsrelease (pdf). Net income after tax and minority interest dropped 14% y-o-y to EGP 252.7 mn as higher financing costs — which more than doubled y-o-y — ate into the company’s margins.

West Cairo drives new sales: New sales grew 22% y-o-y to EGP 6.8 bn, driven by sales in PHD’s West Cairo locations including residential developments Badya and the Crown. Some 69% of new sales in 1Q were in West Cairo, where sales grew 65% y-o-y to EGP 4.7 bn. Sales in Badya alone grew 54% y-o-y to reach EGP 2.9 bn, accounting for 43% of total new sales. Commercial sales dropped 45% y-o-y to EGP 466 mn after the company paused all new commercial launches.

Rising rates hit profit margin: PHD’s borrowing costs surged 145% y-o-y to EGP 368.4 mn during the quarter on the back of sharply higher interest rates. This caused the company’s profit margin to fall to 7% from 10% in 1Q 2022.

Construction spending was up 23% to EGP 1.2 bn as PHD “continues to expand [its] focus on Badya and Palm Hills New Cairo, the company’s largest integrated developments,” said Executive Chairman Yasseen Mansour. “Looking ahead, we are well positioned with high quality assets and product offering complemented by a strong balance sheet and an attractive development pipeline.”

ELSEWEDY ELECTRIC PROFITS SURGE-

Elsewedy Electric’s net income after minority interest rose nearly fourfold to EGP 2.9 bn in 1Q 2023, according to its earnings release(pdf). Revenues climbed 80% y-o-y to EGP 33.3 bn. The strong bottomline growth came on the back of “higher profitability across all business segments, coupled with higher FX gains that partially offset rising financing costs and [operating] expenses,” the release read.

Revenues from the company’s key wires and cables segment nearly doubled to record EGP 17.9 bn during the quarter, accounting for 54% of total revenues. Turnkey project revenues were up 53% y-o-y to EGP 11.6 bn, accounting for 35% of the company’s top line.

What they said: “Our top-line has maintained solid growth as a result of strategic planning and an export driven focus, as we continue to leverage our expansive geographic footprint,” CEO Ahmed El Sewedy said. “This growth, coupled with efficiency measures, has resulted in improved profitability this quarter, as our agile business model allows us to capitalize on the double effect of exports and efficiencies.”

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