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Egypt's TMG full-year net falls 39 pct

Egypt's largest listed developer sees its bottom-line fall to $95.7 million

Reuters, Wednesday 7 Mar 2012
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Egypt's Talaat Moustafa Group said its full-year net profit fell 39 per cent last year when the real estate industry was thrown into turmoil by a popular uprising and disputes over land ownership.

The decline was narrower than a 44 per cent drop in first-half earnings. TMG reported full-year profit of LE577.5 million ($95.7 million), down from LE940 million in 2010.

Total sales for projects were around LE3 billion, down from LE4 billion a year earlier. Revenue - including money received once clients take ownership of properties - slipped to 5.1 billion from 5.34 billion, the company said in a statement.

TMG shares were down 2 per cent at LE4.96 by 0955 GMT on Wednesday, the biggest decliners on Egypt's main index.

Both revenue and net income were below the forecasts of some Cairo-based analysts, but they said they would wait for more detailed results before taking a considered view.

"Still I think the results look positive," said Monsef Morsy of Pharos, who has a "buy" rating on TMG and was impressed with the revenue number given the company's challenges last year.

"It implies TMG was working quite well still in 2011... As for the bottom line, it's not clear what led to the decline. The number was below our estimate of LE720 million."

A cloud hanging over TMG lifted in November when an administrative court ended a drawn-out dispute over the legality of the company's purchase of state land for its flagship Madinaty project.

It also suffered from the economic turmoil sparked by the uprising that ousted Egypt's president in February last year.

Investors are now waiting for a state authority to issue a re-assessed value of unused Madinaty land, but are hoping it will have little major impact on TMG results and have already been piling into the stock, sending it up 71 per cent this year.

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