Emaar Misr posted a 47 per cent increase in first-quarter net profit as Emaar’s Egyptian arm benefited from a housing market boom.
Net profit for the three months to March 31 surged to 254.5 million Egyptian pounds (Dh105.2m) from 172.7m pounds in a year earlier, the company said in a bourse filing.
Emaar Misr, which is majority owned by Dubai’s largest developer, Emaar, reported that the increase in profits came on the back of a 25.7 per cent fall in revenues. Emaar Misr floated on the Cairo bourse last year.
“These results reflect the strong Egyptian property market and that demand in Egypt is still growing,” said Harshjit Oza, the assistant director for research at Egypt’s Naeem Brokerage. “The fall in revenue is a function of the timings of property completions so it is telling that Emaar Misr has been able to make more of a profit despite fewer completions.”
Despite Egypt’s stalling economy that has been hit by the country’s recent revolutions, the housing market has flourished in the past few years as property developers struggle to build enough homes to supply its rapidly growing population and as middle-class Egyptians seek to put their cash into an asset class they view as a safe investment.
Emaar Misr is developing three prime housing estates: Marassi, a 624.8-hectare project on Egypt’s Mediterranean coast, Uptown Cairo and Mivida, a green community in New Cairo.
According to the property broker JLL, prices for flats in the New Cairo district increased by 10 per cent between the end of 2014 and the end of last year, while flats in the Sixth of October district increased by 14 per cent over the same period.
The property boom has prompted Egyptian developers to build more houses to keep up with demand. Last year, Emaar Misr launched 2,147 units, compared with 1,540 the previous year.
“The volatility of the Egyptian pound, together with historically high inflation rates, has attracted residents to the property investment market in order to secure their money,” said the property broker Colliers in its recently published 2016 Cairo Market Overview.
Emaar Misr shares rose by 2 per cent in trading to close at 2.55 pounds.
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