10th Aug 2009 07:00
Palm Hills Developments Reports Strong Financial Results for Second Quarter 2009
Cairo, August 6, 2009 - Palm Hills Developments S.A.E. (PHD), a leading Egyptian real-estate developer, announced its financial results for the six-month period ending 30 June 2009. PHD is listed on Cairo & Alexandria Stock Exchanges (CASE) and on the London Stock Exchange (LSE).
HIGHLIGHTS
Strong performance despite the slowdown affecting the global economy; Net Sales in Q2 2009 recorded a strong growth of 86% to EGP 242 million (US $43 million) over Q1 2009 of EGP 130 million (US $23 million).
Gross contracts signed in Q2 2009 surged 54% in value to EGP 807 million (US $144 million) compared with EGP 523 million (US $93 million) in Q1 2009.
Operating profit for Q2 2009 witnessed a significant increase of 36% reaching EGP 106 million (US $19 million) over EGP 78 million (US $14 million) in Q1 2009. The growth in our operating profits enabled us to maintain healthy gross profit margins; and is a testament on our ability to control operating expenses.
Gross profit reached EGP 247 million (USD $ 44 million) in 1H 2009, 56% of which was achieved in Q2 2009.
SG&A reduced 31% in absolute terms, down from EGP 86 million (US $15 million) in H1 2008 to EGP 59 million (US $11 million) in H1 2009.
EBITDA value for Q2 2009 witnessed an increase of 33% over Q1 2009 to reach EGP 108 million (US $19 million), while EBITDA margin remained at a healthy level of 51% in H1 2009.
Net Profit for Q2 2009 recorded a significant growth of 57% over Q1 2009 to reach EGP 96 million (US $17 million). As for 1H 2009 it reached EGP 157 million (US $28 million).
Total land bank remained at 48.8 million sqm.
Bank Debt: Equity1: dropped from 23% at 30/6/2008 to 22% at 30/6/2009.
1 Based on EGP/US$5.6
2 (Bank Overdrafts + Term Loans) / Total Equity
Operational Performance
PHD demonstrated healthy operational performance in Q2 2009, despite the slowdown affecting the global economy that started in Q4 2008. Gross value of contracted units amounted to EGP 807 million (US $144 million), compared with EGP 523 million (US $93 million) in Q1 2009 representing an increase of 54% in value accompanied by a 36% increase in the total volume of contracted units during the period.
Cumulative reservations remained over EGP 8 billion (approximately US $1.4 billion) at June 30, 2009. Half year net sales reached EGP 372 million (US $ 66 million), with half year operating profits reaching EGP 184 million (US $32 million).
Reservation rates have surpassed that of the cancellation in Q2 2009, as the local economy stabilized and rebounded. This reversed the trend that started in Q4 08 with the ratio of cancelations to reservations reaching approximately 1:1 and continued into Q1 09 where the cancellation rates grew and exceeded the number of reservations. (Table 1)
Table 1
|
Q2 2009 |
Reservation |
> |
Cancelation |
|
(348 units) |
( 246 units) |
||
|
Q1 2009 |
Reservation |
< |
Cancelation |
|
(333 units) |
(413 units) |
||
|
Q4 2008 |
Reservation |
= |
Cancelation |
|
(203 units) |
( 208 units) |
There was an increase in gross reservations of 5% from 333 units in Q1 2009 to 348 units in Q2 2009 and gross sales cancellation rates decreased by 40% in Q2 2009 compared to Q1 2009; highlighting the confidence of PHD's customers in the company's reputation and brand name synonymous with its reliability and ability to deliver quality products on the agreed upon delivery schedule.
The sales level increase achieved on PHD's newly launched projects; despite the current economical challenges, demonstrates the company's ability on identifying existing opportunities as well as the continuing customer interest in the company's wide range of products.
Financial Performance
The Second quarter of 2009 proved to be in line with our expectations, as we continue to develop and grow the business. PHD is continuing to witness strong revenue growth across the board, as well as significant increase in net profit figures over Q1 2009 primarily due to higher sales and better cost management.
The increase in Net sales is mainly attributed to the materialization of 28% from the earlier reserved units in the Golf Extension project to actual contracts amounting to EGP 226 million (US $40 million), with recognized land sales revenue reaching EGP 138 million (US $25 million). In addition to a 15% increase in the number of units sold under the Golf View Project from Q1 2009 amounting to EGP 151 million (US $27 million).
EBITDA value increased in absolute terms by 33% in Q2 2009 to reach EGP 108 million (US $19 million) from EGP 81 million (US $14 million) in Q1 2009 PHD, accompanied by a slight tightening of EBITDA margins resulting from the high land acquisition cost of Golf Extension project.
Despite the decrease in EBITDA margins, PHD was able to partially offset the decrease through the containment of SG&A expenses, whereby SG&A as a percentage of net sales decreased by 10 percent points from Q1 2009. This reflects on PHD's managements' efficiency in implementing the company's cost saving initiatives and continued effort on aggressively managing cost and cash while driving performance.
Additionally, PHD's organizational structure allowed it to become more customer-focused, as well as increased its flexibility and ability to take advantage of more specialized-market opportunities. As a result, Net Profit for Q2 2009 recorded significant growth of 57% over Q1 2009 with Net Profit for 1H 2009 reaching EGP 157 million (US $28 million).
Land Bank
PHD's strategy is to focus primarily on the execution of its existing projects and developing its sizable land bank. Nonetheless, PHD will remain diligent regarding the pursuit of unparalleled land acquisition opportunities that complement its existing developments.
Outlook
The Egyptian real estate market has held up very well this quarter given the current economic climate, relative to previous quarters where the economy witnessed significant slow-downs.
PHD's strong performance in Q2 2009 reflects the company's ability to successfully weather the global economic downturn and the Group is well placed to emerge the other side in a stronger position.
Yasseen Mansour, Chairman and Chief Executive Officer of PHD, said:
"We are strategically positioned in high growth markets and key geographies which creates a solid platform for us to sustain and increase our development; leveraging our network and unique local knowledge."
"Our strategy of diversified but complementary businesses as well as our robust funding platform in the real estate sector has enabled us to generate healthy results for our shareholders during this global recession, as we have increased our operating profit by 36% over the previous quarter. It has also provided us with a degree of resilience against the risks of the wider economic downturn. More importantly, it has strategically positioned us to play an even bigger role in the market once this period of uncertainty has passed.
"Today we have an unparalleled footprint in the Egyptian market with an unequaled sales and distribution capacity and our excellent cash position, healthy debt profile and diversified product mix, gives us the utmost confidence in PHD's future success."
Table 1 - 1H 2009 Vs. 1H 2008 Operating Results (EGP '000)2
|
6 Months Ended |
|||
|
|
30/6/2009 |
30/6/2008 |
|
|
SALES (NET) |
372,009 |
765,877 |
|
|
Cost of Sales |
(124,678) |
(197,964) |
|
|
GROSS PROFIT |
247,332 |
567,913 |
|
|
Margin% |
66.49% |
74.15% |
|
|
Selling, General & Administrative Expenses |
(58,767) |
(85,548) |
|
|
EBITDA |
188,565 |
482,365 |
|
|
Margin% |
50.69% |
62.98% |
|
|
Depreciation and Amortization |
(4,832) |
(1,814) |
|
|
OPERATING PROFIT (EBIT) |
183,733 |
480,551 |
|
|
Margin% |
49.39% |
62.75% |
|
|
Other Income |
16,443 |
21,992 |
|
|
Interest Income - Amortization of Discount |
64,867 |
19,571 |
|
|
Finance Costs |
(41,265) |
(41,085) |
|
|
Interest Exp. - Amortization of Discount |
(17,322) |
(52,517) |
|
|
PROFIT BEFORE TAX |
223,777 |
428,512 |
|
|
Income Tax Expense |
(27,578) |
(70,043) |
|
|
PROFIT FOR THE YEAR |
196,199 |
358,469 |
|
|
Minority Interest |
(38,828) |
3,224 |
|
|
NET PROFIT AFTER MINORITY |
157,371 |
361,692 |
|
|
Margin% |
42.30% |
47.23% |
|
N.B
Palm Hills Developments recognizes its villas and town houses revenues from land upon signature of a contract while revenues from construction are recognized on a percentage of completion basis with a minimum threshold of 50%. Revenues from apartments and multi tenant buildings are recognized upon delivery. As a result, total revenues figure on the Income Statement during a period does not reflect neither reservations nor construction revenues from villas and town houses less than 50% completed or any revenues from apartments.
2 Figures presented are prepared according to IFRS
|
Table 1 - Q2 2009 Vs. Q1 2009 Operating Results (EGP '000)3 |
|||
|
3 Months Ended |
|||
|
|
30/6/2009 |
31/3/2009 |
|
|
SALES (NET) |
241,713 |
130,296 |
|
|
Cost of Sales |
(103,591) |
(21,087) |
|
|
GROSS PROFIT |
138,123 |
109,209 |
|
|
Margin% |
57.14% |
83.82% |
|
|
Selling, General & Administrative Expenses |
(30,097) |
(28,670) |
|
|
EBITDA |
108,025 |
80,539 |
|
|
Margin% |
44.69% |
61.81% |
|
|
Depreciation and Amortization |
(2,137) |
(2,695) |
|
|
OPERATING PROFIT (EBIT) |
105,888 |
77,844 |
|
|
Margin% |
43.81% |
59.74% |
|
|
Other Income |
4,528 |
11,915 |
|
|
Interest Income - Amortization of Discount |
32,433 |
32,434 |
|
|
Finance Costs |
(8,767) |
(15,177) |
|
|
Interest Exp. - Amortization of Discount |
(8,661) |
(8,661) |
|
|
PROFIT BEFORE TAX |
125,423 |
98,354 |
|
|
Income Tax Expense |
(18,037) |
(9,541) |
|
|
PROFIT FOR THE YEAR |
107,385 |
88,814 |
|
|
Minority Interest |
(11,160) |
(27,668) |
|
|
NET PROFIT AFTER MINORITY |
96,225 |
61,146 |
|
|
Margin% |
39.81% |
46.93% |
|
N.B
Palm Hills Developments recognizes its villas and town houses revenues from land upon signature of a contract while revenues from construction are recognized on a percentage of completion basis with a minimum threshold of 50%. Revenues from apartments and multi tenant buildings are recognized upon delivery. As a result, total revenues figure on the Income Statement during a period does not reflect neither reservations nor construction revenues from villas and town houses less than 50% completed or any revenues from apartments.
3 Figures presented are prepared according to IFRS
PALM HILLS DEVELOPMENT CO.
S.A.E AND ITS SUBSIDIARIES
UNAUDITED INTERIM CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
30 June 2009
REPORT ON REVIEW OF INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS TO THE BOARD OF DIRECTORS OF PALM HILLS DEVELOPMENT CO. S.A.E AND ITS SUBSIDIARIES
Introduction
We have reviewed the accompanying interim condensed consolidated balance sheet of Palm Hills Development Company S.A.E and its Subsidiaries ('the Group') as at 30 June 2009, comprising of the interim consolidated statement of financial position as at 30 June 2009 and the related interim consolidated statements of comprehensive income, changes in equity and cash flows for the six-month period then ended and explanatory notes. Management is responsible for the preparation and presentation of these interim condensed consolidated financial statements in accordance with International Financial Reporting Standard IAS 34 Interim Financial Reporting ('IAS 34'). Our responsibility is to express a conclusion on these interim condensed consolidated financial statements based on our review.
Scope of review
We conducted our review in accordance with International Standard on Review Engagements 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity". A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing. Consequently, it does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim condensed consolidated financial statements are not prepared, in all material respects, in accordance with IAS 34.
|
Nabil Istanbouli |
|
Partner |
|
Date: 14 July 2009 |
|
Egypt |
Palm Hills Developments Company S.A.E and its Subsidiaries
INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the six months ended 30 June 2009
|
For the six months ended 30 June 2009 |
|||
|
2009 |
2008 |
||
|
Unaudited |
|||
|
EGP |
EGP |
||
|
Sales, net |
372,009,156 |
765,877,480 |
|
|
Cost of sales |
(124,677,629) |
(197,964,207) |
|
|
GROSS PROFIT |
247,331,527 |
567,913,273 |
|
|
Selling and administrative expenses |
(63,599,382) |
(87,362,342) |
|
|
Interest income |
71,563,344 |
34,671,532 |
|
|
Finance costs |
(41,265,408) |
(93,601,544) |
|
|
Other income |
9,746,457 |
6,890,963 |
|
|
PROFIT BEFORE TAX |
223,776,538 |
428,511,882 |
|
|
Income tax expense |
(27,577,644) |
(70,043,000) |
|
|
PROFIT FOR THE PERIOD |
196,198,894 |
358,468,882 |
|
|
OTHER COMPREHENSIVE INCOME FOR THE PERIOD, NET OF TAX |
- |
- |
|
|
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD |
196,198,894 |
358,468,882 |
|
|
Attributable to: |
|||
|
Equity holders of the parent |
157,371,111 |
361,692,443 |
|
|
Minority interests |
38,827,783 |
(3,223,561) |
|
|
196,198,894 |
358,468,882 |
||
|
Basic earnings per share attributable to the ordinary equity holders of the parent (expressed in EGP per share) |
0.33 |
0.84 |
|
Palm Hills Developments Company S.A.E and its Subsidiaries
INTERIM CONSOLIDATED STATEMENT OF FINANCIAL POSITION
At 30 June 2009
|
30 June 2009 Unaudited |
31 December 2008 Audited |
||
|
EGP |
EGP |
||
|
ASSETS |
|||
|
Non-current assets |
|||
|
Property and equipment |
555,947,427 |
543,044,803 |
|
|
Advance payments for investments acquisition |
487,024,328 |
470,675,012 |
|
|
Investment in an associate |
245,000 |
245,000 |
|
|
Intangible assets |
45,050,000 |
47,700,000 |
|
|
Notes receivable |
2,016,242,196 |
1,658,430,196 |
|
|
3,104,508,951 |
2,720,095,011 |
||
|
Current assets |
|||
|
Notes receivable |
785,838,792 |
683,086,670 |
|
|
Accounts receivable and prepayments |
1,112,681,212 |
318,745,683 |
|
|
Bank balances and cash |
282,441,452 |
279,712,833 |
|
|
Financial assets at fair value through profit or loss - Held for trading |
- |
203,433,368 |
|
|
Development properties |
4,879,308,459 |
4,940,216,448 |
|
|
7,060,269,915 |
6,425,195,002 |
||
|
TOTAL ASSETS |
10,164,778,866 |
9,145,290,013 |
|
|
EQUITY AND LIABILITIES |
|||
|
Attributable to equity holders of the parent |
|||
|
Share capital |
1,397,760,000 |
931,840,000 |
|
|
Share premium |
- |
890,538,204 |
|
|
Statutory reserve |
471,435,177 |
13,635,814 |
|
|
Retained earnings |
975,565,915 |
851,375,963 |
|
|
2,844,761,092 |
2,687,389,981 |
||
|
Minority interests |
208,964,416 |
144,810,439 |
|
|
Total equity |
3,053,725,508 |
2,832,200,420 |
|
|
Non-current liabilities |
|||
|
Term loans |
425,339,041 |
379,591,680 |
|
|
Land purchase liabilities |
831,588,546 |
1,652,579,957 |
|
|
Notes payable |
1,970,235,817 |
1,172,180,388 |
|
|
Other non-current liabilities |
350,940,442 |
164,874,504 |
|
|
Deferred tax liability |
2,124,436 |
2,124,436 |
|
|
Total non-current liabilities |
3,580,228,282 |
3,371,350,965 |
|
|
Current liabilities |
|||
|
Bank overdrafts |
98,853,790 |
111,249,739 |
|
|
Current portion of term loans |
145,519,670 |
136,405,712 |
|
|
Current portion of land purchase liabilities |
531,441,129 |
298,545,082 |
|
|
Accounts payable and accruals |
483,520,674 |
266,384,061 |
|
|
Notes payable |
175,337,021 |
261,212,904 |
|
|
Advances from customers |
374,148,689 |
573,596,662 |
|
|
Billings in excess of costs |
1,694,394,187 |
1,236,749,032 |
|
|
Income tax payable |
27,609,916 |
57,595,436 |
|
|
3,530,825,076 |
2,941,738,628 |
||
|
Total liabilities |
7,111,053,358 |
6,313,089,593 |
|
|
TOTAL EQUITY AND LIABILITIES |
10,164,778,866 |
9,145,290,013 |
|
Yasseen Mansour |
|
(Chairman) |
Palm Hills Developments Company S.A.E and its Subsidiaries
INTERIM CONSOLIDATED CASH FLOW STATEMENT
For the six months ended 30 June 2009
|
For the six months ended 30 June 2009 |
|||
|
2009 |
2008 |
||
|
Unaudited |
|||
|
EGP |
EGP |
||
|
OPERATING ACTIVITIES |
|||
|
Profit before tax |
223,776,538 |
428,511,882 |
|
|
Adjustments to reconcile profit before tax to net cash flows: |
|||
|
Non cash: |
|||
|
Depreciation |
4,832,013 |
1,814,096 |
|
|
Amortization of intangible asset |
2,650,000 |
- |
|
|
Interest income |
(71,563,344) |
(34,671,532) |
|
|
Finance cost |
41,265,408 |
93,601,544 |
|
|
Working capital adjustments: |
|||
|
(Increase) in notes receivable |
(395,696,838) |
(1,065,098,928) |
|
|
Decrease in financial assets at fair value through profit or loss - held for trading |
203,433,368 |
- |
|
|
(Increase) in accounts receivable and prepayments |
(793,935,529) |
(118,644, 891) |
|
|
(Increase) in development properties |
(544,508,876) |
(169,639,908) |
|
|
Increase in notes payable |
712,179,546 |
- |
|
|
Increase / (decrease) in accounts payable and accruals |
217,136,613 |
(143,144,503) |
|
|
(Decrease) in advances from customers |
(199,447,973) |
(12,182,533) |
|
|
Increase in billings in excess of costs |
457,645,155 |
685,065,247 |
|
|
Increase in other non-current liabilities |
186,065,938 |
- |
|
|
Interest paid |
(23,943,907) |
(41,084,833) |
|
|
Tax paid |
(57,563,164) |
- |
|
|
Net cash flows (used in) operating activities |
(37,675,052) |
(375,474,359) |
|
|
CASH FLOWS FROM INVESTING ACTIVITIES |
|||
|
Purchase of properties and equipment |
(17,734,637) |
(34,320,679) |
|
|
Advance payments for investments acquisition |
(16,349,316) |
(11,749,910) |
|
|
Interest received |
6,696,060 |
15,100,753 |
|
|
Net cash flows (used in) investing activities |
(27,387,893) |
(30,969,836) |
|
|
CASH FLOWS FROM FINANCING ACTIVITIES |
|||
|
Proceeds from shares issued |
- |
99,840,000 |
|
|
Proceeds from term loan |
54,861,319 |
329,676,996 |
|
|
Proceeds from share premium |
- |
985,920,000 |
|
|
Minority share in the capital of subsidiaries |
25,326,194 |
22,408,896 |
|
|
Net cash flows from financing activities |
80,187,513 |
1,437,845,892 |
|
|
NET INCREASE IN CASH AND CASH EQUIVALENTS |
15,124,568 |
1,031,401,697 |
|
|
Cash and cash equivalents at 1 January |
168,463,094 |
(99,969,750) |
|
|
CASH AND CASH EQUIVALENTS AT 30 JUNE |
183,587,662 |
931,431,947 |
|
Palm Hills Developments Company S.A.E and its Subsidiaries
INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six months ended 30 June 2009
|
Attributable to equity holders of the parent |
|||||||||||||||
|
Share Capital |
Share Premium |
Statutory Reserve |
Special Reserve |
Retained Earnings |
Total |
Minority Interests |
Total |
||||||||
|
EGP |
EGP |
EGP |
EGP |
EGP |
EGP |
EGP |
EGP |
||||||||
|
As at 1 January 2009 |
931,840,000 |
890,538,204 |
13,635,814 |
- |
851,375,963 |
2,687,389,981 |
144,810,439 |
2,832,200,420 |
|||||||
|
Profit for the period |
- |
- |
- |
- |
157,371,111 |
157,371,111 |
38,827,783 |
196,198,894 |
|||||||
|
Other comprehensive income |
- |
- |
- |
- |
- |
- |
- |
- |
|||||||
|
Total comprehensive income |
- |
- |
- |
- |
157,371,111 |
157,371,111 |
38,827,783 |
196,198,894 |
|||||||
|
Transfer to statutory reserve |
- |
(890,538,204) |
457,799,363 |
430,293,851 |
2,444,990 |
- |
- |
- |
|||||||
|
Share Dividends |
465,920,000 |
- |
- |
(430,293,851) |
(35,626,149) |
- |
- |
- |
|||||||
|
Minority share in capital of subsidiaries |
- |
- |
- |
- |
- |
- |
25,326,194 |
25,326,194 |
|||||||
|
At 30 June 2009 (Unaudited) |
1,397,760,000 |
- |
471,435,177 |
- |
975,565,915 |
2,844,761,092 |
208,964,416 |
3,053,725,508 |
|||||||
|
As at 1 January 2008 |
800,000,000 |
- |
13,635,814 |
- |
218,173,380 |
1,031,809,194 |
98,642,068 |
1,130,451,262 |
|||||||
|
Profit for the period |
- |
- |
- |
- |
361,692,443 |
361,692,443 |
(3,223,561) |
358,468,882 |
|||||||
|
Other comprehensive income |
- |
- |
- |
- |
- |
- |
- |
- |
|||||||
|
Total comprehensive income |
- |
- |
- |
- |
361,692,443 |
361,692,443 |
(3,223,561) |
358,468,882 |
|||||||
|
Proceeds from shares issued |
99,840,000 |
985,920,000 |
- |
- |
- |
1,085,760,000 |
- |
1,085,760,000 |
|||||||
|
Share Dividends |
32,000,000 |
- |
- |
- |
(32,000,000) |
- |
- |
- |
|||||||
|
Minority share in capital of subsidiaries |
- |
- |
- |
- |
- |
- |
22,408,896 |
22,408,896 |
|||||||
|
At 30 June 2008 (Unaudited) |
931,840,000 |
985,920,000 |
13,635,814 |
- |
547,865,822 |
2,479,261,636 |
117,827,403 |
2,597,089,040 |
|||||||
1 ACTIVITIES
Palm Hills for Development Company (S.A.E) was established according to the Investment Incentives and Guarantees Law No. (8) of 1997 and the Companies Law No.159 of 1981 and their executive regulations, taking into consideration the statutes of the Capital Market Law No. 95 of 1992 and its executive regulations. The company's headquarter is located in 6th of October City in Giza Governorate, where the main branch is located in Smart Village.
The company is registered in the Commercial Register under No. (6801) on 10 January 2005, and was listed in the unofficial schedule no. (2) Of the Cairo and Alexandria Stock Exchanges on 27 December 2006. The company got listed in the official schedule no. (1) Of the Cairo and Alexandria Stock Exchange on April 2008 and in London stock exchange on 8 May 2008.
The company was established to invest in real estate in the New Cities and New Urban Communities including building, constructing, possessing and managing residential compounds, resorts, villas and tourist villages, sale or lease as well as all the services, facilities, leasing and construction of integrated projects and managing the entertainment activities associated with the company's in activities. All such activities are subject to the approval of appropriate authorities.
All the company operations are located in Egypt; it has only one identifiable business segment which real estate development.
The company participated in the capital of eleven subsidiary companies as follows:
New Cairo for Real Estate Developments S.A.E
New Cairo for Real Estate Development S.A.E. is registered in Egypt under commercial registration number 12613 under the provisions of the Investment Guarantees and Incentives law No. 8 of 1997 and the Companies' Law No 159 of 1981 and the statutes of Capital Market Law No 95 of 1992. The company is located in plot 36 South investors' area in new Cairo. The company is engaged in construction, management, and the sale of hotels, motels, buildings and residential compounds and the purchase, development, dividing and sale of land.
The company's fiscal year ended 31 December of each year.
Royal Gardens for Real Estate Investment Company S.A.E
Royal Gardens for Real Estate Investment Company S.A.E. is registered in Cairo under commercial registration number 21574 under the provisions of under the provisions of the Investment Guarantees and Incentives law No. 8 of 1997 and the Companies' Law No 159 of 1981 and the statutes of Capital Market Law No 95 of 1992. The company is located in 11 El-Nakhil Street - Dokki-Giza. The company is engaged in real estate investment in cities and new urban communities and the set up, execution, acquisition, and management of urban communities, resorts, villas and tourist villages through sale or lease. The company is also involved in all other types of related services such as finance leasing and construction.
The company's fiscal year ended 31 December of each year.
Palm Hills Middle East Company for Real Estate Investment S.A.E and Its Subsidiary
Palm Hills Middle East Company for Real Estate Investment S.A.E and its subsidiary, Middle East Company for Real Estate and Touristic Investment S.A.E are engaged in real estate investment in new cities and urban communities, and also the construction, ownership and management of residential compounds, resorts, and villas. The company and its subsidiary are also involved in the sale and lease and other related services for managing integrated projects and entertainment activities.
1 ACTIVITIES - continued
The company is registered in Egypt under commercial registration number 21091. The company's subsidiary is registered in Egypt under commercial registration number 25016. Both companies are registered under the provisions of under the provisions of the Investment Guarantees and Incentives law No. 8 of 1997 and the Companies' Law No 159 of 1981 and the statutes of Capital Market Law No 95 of 1992.
The companies' fiscal year ended 31 December of each year.
Middle East for Development and Investment Touristic S.A.E
Middle East for Development and Investment Touristic S.A.E. is registered in Egypt under commercial registration number 25015 under the provisions of the Investment Guarantees and Incentives law No. 8 of 1997 and the Companies' Law No 159 of 1981 and the statutes of Capital Market Law No 95 of 1992. The company is located in 40 Lebanon Street - Mohandessin- Giza.
The company is engaged in real estate investment in cities and new urban communities and the set up, execution, acquisition, and management of urban communities, resorts, villas and tourist villages through sale or lease. The company is also involved in all other types or relevant services such as finance lease and construction of the company's projects or others'.
The company's fiscal year ended 31 December of each year.
Gamsha for Tourist Development S.A.E
Gamsha for Tourist Development S.A.E. is registered in Egypt under commercial registration number 23889 under the provisions of the Companies' Law No 159 of 1981. The company is located in 11 El Nakhil Street-Dokki-Giza. The company is engaged in real estate investments in new cities, urban communities, remote areas and regions outside the old valley.
The company's fiscal year ended 31 December of each year.
Nile Palm Al-Naeem for Real Estate Development S.A.E
Nile Palm Al-Naeem for Real estate Development S.A.E. is registered in Egypt under commercial registration number 27613 under the provisions of the Investment Guarantees and Incentives law No. 8 of 1997 and the Companies' Law No 159 of 1981 and the statutes of Capital Market Law No 95 of 1992. The company is located in 40 Lebanon Street - Mohandessin- Giza. The company is engaged in real estate investment in new cities and urban communities, and also in the construction, ownership and management of residential compounds, resorts, and villas.
The company's fiscal year ended 31 December of each year.
Saudi Urban Development Company S.A.E
Saudi Urban Development (Company) S.A.E. is registered in Egypt under commercial registration number 1971 under the provisions of the Companies' Law No 159 of 1981. The company is located in 72 Gamet El-Dewal El Arabia Street-Mohandeseen-Cairo. The company is engaged in the construction of advanced residential projects.
The company's fiscal year ended 31 December of each year.
Rakeen Egypt for Real Estate Investment S.A.E
Rakeem Egypt for Real Estate Investment S.A.E. is registered in Egypt under commercial registration number 22996 under the provisions of the Investment Guarantees and Incentives law No. 8 of 1997 and the Companies' Law No 159 of 1981 and the statutes of Capital Market Law No 95 of 1992. The company is located in 6th of October City. The company is engaged in leasing, construction and operation of hotels, motels, resorts and residential compounds, construction, generation of electricity, desalination of water, land acquisition, dividing and constructing villas, residential units and offices malls and the marketing thereof..
The company's fiscal year ended 31 December of each year.
1 ACTIVITIES - continued
Al Naeem for Hotels and Touristic Villages S.A.E
Al Naeem for Hotels and Touristic Villages S.A.E. is registered in Egypt under commercial registration number 32915 under the provisions of the Investment Guarantees and Incentives law No. 8 of 1997 and the Companies' Law No 159 of 1981 and the statutes of Capital Market Law No 95 of 1992. The company is located in 6th of October City. The company is engaged in construction and operation of hotels in Hamata.
The company's fiscal year ended 31 December of each year.
Gawda for Trade Services S.A.E
Gawda for Trade Services S.A.E. is registered in Egypt under commercial registration number 10242 under the provisions of the Companies' Law No 159 of 1981. The company is located in 66 Gamet El-Dewal El Arabia Street-Mohandeseen-Cairo. The company is engaged in real estate investments in new cities, urban communities, remote areas and regions.
The company's fiscal year ended 31 December of each year.
2 BASIS OF PREPARATION AND ACCOUNTING POLICIES
Basis of preparation
The interim condensed consolidated financial statements for the six months ended 30 June 2009 have been prepared in accordance with IAS 34 Interim Financial Reporting.
The interim condensed consolidated financial statements do not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the Group's annual financial statements as at 31 December 2008.
Significant accounting policies
The accounting policies adopted in the preparation of the interim condensed consolidated financial statements are consistent with those followed in the preparation of the Group's annual financial statements for the year ended 31 December 2008, except for the adoption of new Standards and Interpretations as at 1 January 2009, noted below:
- IAS 23 (Amendment), 'Borrowing costs' (effective from 1 January 2009). The amendment requires an entity to capitalise borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset (one that takes a substantial period of time to get ready for use or sale) as part of the cost of that asset. The option of immediately expensing those borrowing costs will be removed. The group is applying IAS 23 (Amendment) retrospectively from 1 January 2009.
- IAS 1 (Revised), 'Presentation of financial statements' (effective from 1 January 2009). The revised standard will prohibit the presentation of items of income and expenses (that is, 'non-owner changes in equity') in the statement of changes in equity, requiring 'non-owner changes in equity' to be presented separately from owner changes in equity. All non-owner changes in equity will be required to be shown in a performance statement, but entities can choose whether to present one performance statement (the statement of comprehensive income) or two statements (the income statement and statement of comprehensive income). Where entities restate or reclassify comparative information, they will be required to present a restated balance sheet as at the beginning comparative period in addition to the current requirement to present balance sheets at the end of the current period and comparative period. The group is applying IAS 1 (Revised) from 1 January 2009.
2 BASIS OF PREPARATION AND ACCOUNTING POLICIES - continued
- IAS 27 (Revised), 'Consolidated and separate financial statements', (effective from 1 July 2009). The revised standard requires the effects of all transactions with non controlling interests to be recorded in equity if there is no change in control and these transactions will no longer result in goodwill or gains and losses. The standard also specifies the accounting when control is lost. Any remaining interest in the entity is re-measured to fair value, and a gain or loss is recognised in profit or loss. The group will apply IAS 27 (Revised) prospectively to transactions with non-controlling interests from 1 January 2010.
- IFRS 3 (Revised), 'Business combinations' (effective from 1 July 2009). The revised standard continues to apply the acquisition method to business combinations, with some significant changes. For example, all payments to purchase a business are to be recorded at fair value at the acquisition date, with contingent payments classified as debt subsequently re-measured through the income statement. There is a choice on an acquisition-by-acquisition basis to measure the non-controlling interest in the acquiree either at fair vale or at the non-controlling interest's proportionate share of the acquiree's net assets. All acquisition-related costs should be expensed. The group will apply IFRS 3 (Revised) prospectively to all business combinations from 1 January 2010.
- IAS 23 (Amendment), 'Borrowing costs' (effective from 1 January 2009). The amendment is part of the IASB's annual improvements project published in May 2008. The definition of borrowing costs has been amended so that interest expense is calculated using the effective interest method defined in IAS 39 'Financial instruments: Recognition and measurement'. This eliminates the inconsistency of terms between IAS 39 and IAS 23. The group is applying the IAS 23 (Amendment) prospectively to the capitalisation of borrowing costs on qualifying assets from 1 January 2009.
- IAS 28 (Amendment), 'Investments in associates' (and consequential amendments to IAS 32, 'Financial Instruments: Presentation', and IFRS 7, 'Financial instruments: Disclosures') (effective from 1 January 2009). The amendment is part of the IASB's annual improvements project published in May 2008. An investment in associate is treated as a single asset for the purposes of impairment testing. Any impairment loss is not allocated to specific assets included within the investment, for example, goodwill. Reversals of impairment are recorded as an adjustment to the investment balance to the extent that the recoverable amount of the associate increases. The group is applying the IAS 28 (Amendment) to impairment tests related to investments in subsidiaries and any related impairment losses from 1 January 2009.
- IAS 36 (Amendment), 'Impairment of assets' (effective from 1 January 2009). The amendment is part of the IASB's annual improvements project published in May 2008. Where fair value less costs to sell is calculated on the basis of discounted cash flows, disclosures equivalent to those for value-in-use calculation should be made. The group is applying the IAS 28 (Amendment) and provide the required disclosure where applicable for impairment tests from 1 January 2009.
- IAS 1 (Amendment), 'Presentation of financial statements' (effective from 1 January 2009). The amendment is part of the IASB's annual improvements project published in May 2008. The amendment clarifies that some rather than all financial assets and liabilities classified as held for trading in accordance with IAS 39, 'Financial instruments: Recognition and measurement' are examples of current assets and liabilities respectively. The group is applying the IAS 39 (Amendment) from 1 January 2009. It is not expected to have an impact on the group's financial statements.
- There are a number of minor amendments to IFRS 7, 'Financial instruments: Disclosures', IAS 8, 'Accounting policies, changes in accounting estimates and errors', IAS 10, 'Events after the reporting period', IAS 18, 'Revenue' and IAS 34, 'Interim financial reporting', which are part of the IASB's annual improvements project published in May 2008 (not addressed above). These amendments are unlikely to have an impact on the group's accounts and have therefore not been analysed in detail.
2 BASIS OF PREPARATION AND ACCOUNTING POLICIES - continued
Interpretations and amendments to existing standards that are effective and not relevant for the group's operations
The following interpretations and amendments to existing standards have been published and are mandatory for the group's accounting periods beginning on or after 1 January 2009 or later periods but are not relevant for the group's operations:
- IAS 16 (Amendment), 'Property, plant and equipment' (and consequential amendment to IAS 7, 'Statement of cash flows') (effective from 1 January 2009). The amendment will not have an impact on the group's operations because none of the group's companies ordinary activities comprise renting and subsequently selling assets.
- IAS 27 (Amendment), 'Consolidated and separate financial statements' (effective from 1 January 2009). The amendment will not have an impact on the group's operations because it is the group's policy for an investment in subsidiary to be recorded at cost in the standalone accounts of each entity.
- IAS 28 (Amendment), 'Investments in associates' (and consequential amendments to IAS 32, 'Financial Instruments: Presentation' and IFRS 7, 'Financial instruments: Disclosures') (effective from 1 January 2009). The amendment will not have an impact on the group's operations because it is the group's policy for an investment in an associate to be equity accounted in the group's consolidated accounts.
- IAS 29 (Amendment), 'Financial reporting in hyperinflationary economies' (effective from 1 January 2009). The amendment will not have an impact on the group's operations, as none of the group's subsidiaries or associates operate in hyperinflationary economies.
- IAS 31 (Amendment), 'Interests in joint ventures' (and consequential amendments to IAS 32 and IFRS 7) (effective from 1 January 2009). The amendment will not have an impact on the group's operations as there are no interests held in joint ventures.
- IAS 38 (Amendment), 'Intangible assets' (effective from 1 January 2009). The amendment will not have an impact on the group's operations, as all intangible assets are amortised using the straight-line method.
- IAS 40 (Amendment), 'Investment property' (and consequential amendments to IAS 16) (effective from 1 January 2009). The amendment will not have an impact on the group's operations, as there are no investment properties are held by the group.
- IAS 41 (Amendment), 'Agriculture' (effective from 1 January 2009). The amendment will not have an impact on the group's operations as no agricultural activities are undertaken.
- IAS 20 (Amendment), 'Accounting for government grants and disclosure of government assistance' (effective from 1 January 2009). The amendment will not have an impact on the group's operations as there are no loans received or other grants from the government.
The minor amendments to IAS 20 'Accounting for government grants and disclosure of government assistance', and IAS 29, 'Financial reporting in hyperinflationary economies', IAS 40, 'Investment property', and IAS 41, 'Agriculture', which are part of the IASB's annual improvements project published in May 2008 (not addressed above). These amendments will not have an impact on the group's operations as described above.
- IFRS 2 (Amendment), 'Share-based payment' (effective from 1 January 2009). The amendment will not have an impact on the group's operations as there are no share-based-payments made by the group.
- IAS 32 (Amendment), 'Financial instruments: Presentation', and IAS 1 (Amendment), 'Presentation of financial statements' - 'Puttable financial instruments and obligations arising on liquidation' (effective from 1 January 2009). These amendments will not have an impact on the group's operations.
2 BASIS OF PREPARATION AND ACCOUNTING POLICIES - continued
- IFRS 1 (Amendment) 'First time adoption of IFRS', and IAS 27 'Consolidated and separate financial statements'(effective from 1 January 2009). These amendments will not have an impact on the group's operations.
- IFRS 5 (Amendment), 'Non-current assets held-for-sale and discontinued operations' (and consequential amendment to IFRS 1, 'First-time adoption') (effective from 1 July 2009). These amendments will not have an impact on the group's operations.
- IAS 38 (Amendment), 'Intangible assets'(effective from 1 January 2009). The amendment will not have an impact on the group's operations.
- IAS 19 (Amendment), 'Employee benefits' (effective from 1 January 2009). The amendment will not have an impact on the group's operations.
- IAS 39 (Amendment), 'Financial instruments: Recognition and measurement' (effective from 1 January 2009). The amendment will not have an impact on the group's operations.
- IFRS 8, 'Operating segments', IFRS 8 replaces IAS 14, 'Segment reporting', The amendment will not have an impact on the group's operations as the group does not have identifiable business or geographical segments.
3 SHARE CAPITAL
|
Date |
Authorised |
No. of shares |
Par value |
Issued and fully paid |
|
Establishment date |
350,000,000 |
1,215,000 |
100 |
121,500,000 |
|
20 December 2006 |
350,000,000 |
3,070,000 |
100 |
307,000,000 |
|
13 May 2007 |
1,500,000,000 |
4,000,000 |
100 |
400,000,000 |
|
15 May 2007 |
1,500,000,000 |
6,000,000 |
100 |
600,000,000 |
|
6 November 2007 |
1,500,000,000 |
8,000,000 |
100 |
800,000,000 |
|
27 March 2008 |
3,500,000,000 |
416,000,000 |
2 |
832,000,000 |
|
8 May 2008 |
3,500,000,000 |
465,920,000 |
2 |
931,840,000 |
|
18 June 2009* |
3,500,000,000 |
698,880,000 |
2 |
1,397,760,000 |
\* The Share Capital was increased from EGP 931,840,000 to EGP 1,397,760,000 based on the Company's General Assembly Meeting approval dated 31 March 2009. The company distributed 232,960,000 share dividends (one share for each two shares). The new shares were listed in Cairo Stock exchange on 18 June 2009.
4 EARNINGS PER SHARE
Basic earnings per share amounts are calculated by dividing net profit for the period attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the period.
|
For the six months ended 30 June 2009 |
|||
|
2009 |
2008 |
||
|
EGP |
EGP |
||
|
Net profit attributable to ordinary equity holders of the parent |
157,371,111 |
361,692,443 |
|
|
Weighted average number of ordinary shares outstanding during the period |
481,450,667 |
432,960,000 |
|
|
0.33 |
0.84 |
||
- No figure for dilutive earnings per share has been given as the company has not issued any instruments that might be potentially diluted.
5 GROUP ENTITIES
|
2009 |
2008 |
2007 |
|
|
% |
% |
% |
|
|
Subsidiaries |
|||
|
New Cairo for Real Estate Developments S.A.E |
99.87% |
99.87% |
74.9% |
|
Royal Gardens for Real Estate Investment Company S.A.E |
51% |
51% |
51% |
|
Palm Hills Middle East Company for Real Estate Investment S.A.E and its |
99.95% |
99.95% |
99.95% |
|
subsidiary, Middle East Company for Real Estate and Touristic Investment S.A.E |
87.5% |
87.5% |
87.5% |
|
Middle East for Development and Investment Touristic S.A.E |
58.75% |
58.75% |
58.75% |
|
Gamsha for Tourist Development S.A.E |
59% |
59% |
59% |
|
Nile Palm Al-Naeem for Real Estate Development S.A.E |
51% |
51% |
50% |
|
Saudi Urban Development Company S.A.E |
51% |
51% |
51% |
|
Rakeen Egypt for Real Estate Investment S.A.E |
97% |
97% |
97% |
|
Al Naeem for the hotels and touristic Villages SAE |
60% |
60% |
- |
|
Gawda for trade services SAE |
99.98% |
99.98% |
- |
|
An associate |
|||
|
Coldwell Banker - Palm Hills for Real Estate Investments - S.A.E |
49% |
49% |
- |
|
Under incorporation |
|||
|
New East Cairo for Real Estate Development. SAE |
89% |
89% |
- |
|
Saultan Company - Saudi SAE |
51% |
51% |
- |
|
Villamora for Real Estate Development Company SAE |
65% |
65% |
- |
|
Citi for real estate development SAE |
51% |
51% |
- |
|
United group for real estate development SAE |
49% |
49% |
- |
Related Shares:
PHDC.L