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Egypt's SODIC hits 5-year high, doubles profits in H1/2014

Stellar first half of 2014 for Egyptian real estate developer, as share prices reach LE44 and net profits are doubled from same period last year

Ahram Online, Thursday 14 Aug 2014

Egypt's Six of October Development and Investment (SODIC), the country's third-largest real estate developer, saw a five-year high in its share price on Thursday, reaching LE44 after seeing significant net profits in the first half (H1) of 2014.

According to a statement released by the company on Thursday, SODIC's net profit in H1/2014 (LE91 million) has almost doubled from the same period of last year as the property developer has witnessed strong and healthy operations during the first six months of the year.

"The share price has gone up as investors are tending to buy since their sentiment is boosted by SODIC's plan to increase its capital by LE1 billion," Eissa Fathy, vice head of the securities division at Cairo Chamber of Commerce, told Ahram Online.

The company said in May that "the capital increase will be divided over 250 million shares at a value of LE4 per share. Existing shareholders will have the right to either subscribe to the capital increase or sell their subscription right in the market via tradable rights."

SODIC's flourishing operations were led by the delivery of 223 housing units worth LE644 million in H1/2014, compared to 212 units in H1/2013 that brought LE426 million.

Egypt's real estate industry was thrown into turmoil after a popular uprising ousted president Hosni Mubarak in 2011, causing demand for high-end property to fall.

SODIC has been spared much of the legal uncertainty over land-bank ownership that has damaged investor confidence in the sector since 2011.

In April, SODIC agreed to pay the Egyptian government LE900 million over seven years following a revaluation of its Eastown scheme in Cairo, adding it would develop the project over five years.

In May, US private equity firm Ripplewood acquired a 10 percent stake in Egypt's SODIC for LE217.17 million.

The deal is Ripplewood's second investment in Egypt, after the company acquired a 2.3 percent stake in Palm Hills, the country's second-largest listed property developer, and said it hoped to increase its stake over time.

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