EGX-listed real estate developer Madinet Masr reported EGP 304.4 mn in net income in 1Q 2023, up 153% y-o-y,according to its earnings release (pdf). Revenues climbed 24% y-o-y to EGP 1 bn during the period on the back of higher gross contracted sales.

Sales values were up even as unit volumes fell: Madinet Masr’s gross contracted sales rose 13% y-o-y to hit EGP 1.8 bn during 1Q 2023, marking a record for first-quarter sales. Nearly 70% of sales were at the company’s Taj City project, with the remainder at Sarai. The increase in sales value came even as the number of units sold dropped 41% y-o-y to 333. Deliveries also fell by 24% to number 276 units during the quarter.

Plus: Madinet Masr’s newly-acquired subsidiaries Minka and related special purpose vehicle EgyCan generated another EGP 544 mn in sales that didn’t show up in the company’s consolidated results for 1Q.

What they said: “Our vision for the future is best exemplified through our rebranded identity, which channels a new era of geographic expansion and strategic transformation as we look beyond Nasr City and East Cairo. We have ambitious projects in the pipeline as we continue our mission of transforming urban communities and shaping the real estate landscape,” CEO Abdallah Sallam said. Local media in April reported that the company plans to invest EGP 3 bn on expansions in 2023.

ICYMI- Sallam talked about the company’s expansion mindset during a panel at last week’s Enterprise Exports & FDI Forum.

SOUND SMART- In real estate, sales ≠ revenues. With off-plan sales dominating the industry, most real estate companies book a sale when you sign a contract to buy a home. But they only record (some or all) of the value of the unit it sold you when it (a) delivers the unit to you or (b) hits a percentage completion on a total project. In most cases, then, revenues are composed of sales from past periods, while sales in a given quarter will be recognized as revenues in the future when units are completed or delivered.

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