Porto Marina, one of Amer Group's projects in the north coast
Egypt’s Amer Group, one of the largest real estate developers in Egypt, announced preliminary net profit figures in the first three quarters of 2011, which came below expectations. The nine month net income stood at LE233 million ($38.8 million), a drop of 45 per cent below the same period last year.
Beltone Financial, a Cairo based investment bank, said that Amer’s results came in 23 per cent below their expectations of LE303 million.
Amer’s Slower deliveries of finished units caused revenues to drop a quarter below last year to reach LE903 million. Quarter three 2011 standalone profits stood at LE31 million, a whopping 83 per cent fall below third quarter 2010 and a 53 per cent plunge below second quarter 2010.
Real estate firms realize their revenues on delivery of units, which means that revenues of units sold 3 or 4 years ago appear on this year's financials.Land value of these units, however, is recorded right away. Such revenues have diminished in 2011 due to lower sales volumes
Last June the allocation of 2.8 million square meters of land in Fayoum governorate to Amer Group for building a luxury resort was disputed in court.
He also adds that while revenues of units sold are realized on delivery.
Earlier in May, Amer Group returned 588 feddans (2.6 million square metres) to the governorate of Matrouh following the termination of a buying agreement.
The company, however, says it returned the land to reduce the size of its land bank and cope with a foreseen decline in demand.
Detailed financial results haven’t been released yet.
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