Edison Investment Research - Palm Hills Developments SAE (PHDC) Strategy paying off

Report

Edison Investment Research

Julian Roberts

Strategy paying off

Palm Hills (PHDC) has capitalised on a period of strong housing demand (which the recent devaluation continues to support) during the economic recovery since the 2011 revolution to accelerate development and grow sales. The balance sheet has been significantly strengthened since and the group is actively pursuing growth of its land bank following a period of optimisation. As operating cash flow improves, the company is investing in recurring revenue streams from commercial properties. Despite these positive developments, the share price has continued to lag the sector and it now trades at one of the lowest price-to-book ratios in the peer group.

28/04/2016 20 EN

Underlying

Palm Hills Developments SAE

Palm Hills Development is a real estate developer in the Egyptian market, developing primarily high-end residential real estate and resort projects. Co. has acquired parcels of land in strategic locations throughout Egypt and maintains a land bank consisting of over 37.7 million square meters of land. Co. has a roster of 32 projects located nationwide and in the region. Co.'s portfolio includes the development of integrated residential communities, commercial projects and tourism destinations. Co.'s projects in residential, commercial and destination tourism are focused on building in 3 directions: Co.'s diversified land bank, creative architecture, high quality delivery and upkeep.

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EGS655L1C012 Egyptian Exchange Egypt

Provider

Edison Investment Research

Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisors and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting.

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Analysts

Julian Roberts

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Tellimer

Palm Hills Developments: 1Q23 | Solid Sales and Revenue; Net Profit Pressured by Finance Cost

Annual rise in sales and revenue * PHDC achieved solid 1Q23 sales of EGP6.8 billion, up 22.3% y/y and down 20.1% q/q, supported by sales in Badya (up 54.0% y/y to EGP2.9 billion) and in Palm Hills Alexandria (up 156.0% y/y to over EGP1.0 billion). Commercial sales contributed EGP466.0 million (down 45.0% y/y due to the company’s decision to put new commercial launches on hold) to 1Q23 sales. * Construction spending amounted to EGP1.2 billion in 1Q23, compared to EGP930.0 million in 1Q22...

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Palm Hills Developments: Concluding an Impressive Year With an Impressive Quarter

Stellar sales performance * PHDC achieved impressive 4Q22 results, with sales rising 92.1% y/y and 23.8% q/q to EGP8.5 billion, bringing FY22 sales to a company record of EGP26.0 billion, up 50.4% y/y, driven by an increase in number of units sold and an increase in selling prices. Sales performance was supported by sales in Badya (up 54.0% y/y to EGP6.1 billion in FY22) and in Palm Hills New Cairo (up 107.0% y/y to EGP4.7 billion in FY22). Commercial sales contributed EGP2.9 billion (up 44....

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Cost inflation being mitigated by selling price increases * 2022 was a record year for PHDC on all fronts, with targets not only met but also exceeded. * 4Q22 witnessed strong sales momentum with much quicker purchase decisions by property buyers. * PHDC has been adjusting selling prices since the beginning of 2022 with monthly increases that mitigated the inflationary effect on costs. * The company did several bulk deals securing various building and finishing materials and i...

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Strategy paying off

Palm Hills Developments: 1Q23 | Solid Sales and Revenue; Net Profit Pressured by Finance Cost

Palm Hills Developments: Concluding an Impressive Year With an Impressive Quarter

PHDC: Management Meeting Key Takeaways

AGBA - A transformational deal

Biodexa Pharmaceuticals - In a period of transition

Norcros - Sale of Johnson Tiles UK agreed

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