Palm Hills Developments’ (PHD) revenues remained flat at EGP 6.9 bn in 1H 2023, according to the real estate developer’s earnings release (pdf ). Net income after tax and minority interest increased 9% y-o-y to EGP 608 mn. Revenues remained unchanged “as the majority of sales in 1H 2023 were apartments that will be recognized as revenue once delivered,” PHD writes.

Record sales: The company’s decision to hike prices saw new sales hit an all-time high of EGP 12.9 bn in 2Q 2023, an increase of 150% y-o-y, despite lower volumes, according to the release. West Cairo projects dominated new sales. “We have increased our selling prices 60-70% over the past year to price-in the increases in the prices of construction materials and the rise in interest rates,” PHD co-CEO Hazem Badran told CNBC Arabia (watch, runtime: 11:42). New sales for the first half of the year increased 84% y-o-y to EGP 19.6 bn even as the number of units sold slipped 10% to 1,688.

Rising expenses: Higher interest rates helped the company’s financing costs doubleto EGP 627.7 mn while construction spending rose 123% to EGP 3.8 bn — more than it spent on construction in all of 2022 — after it struck several bulk agreements to secure inputs highly exposed to the USD, the company said.

What’s next: “We expect 3Q 2023 to maintain strong sales momentum, evidence seen after several successful launches in the North Coast and steady sales pace across the rest of our projects since the beginning of the quarter,” said Executive Chairman Yasseen Mansour. “We remain confident in the ability of our company to accommodate the current uncertainties.”

Tags: