Sodic Q1/012 consolidated profits hit LE 36 m

Cairo - Sixth of October Development & Investment Company (SODIC) - (OCDI) has released its consolidated financial results for Q1 2012 period. SODIC reported a net consolidated Profit of EGP 36 million on consolidated revenues of EGP 312 million for Q1 2012.

SODIC had an operationally outstanding start to the year with record new contracted YTD 2012 Gross Sales of EGP 982 mln. The strong figures are mostly due to SODIC’s new product line of City Villa’s and Duplexes in its Westown Residences Development. Cancellations have been negligible at EGP 63 mln, leading to Net Sales figure of EGP 918 mln.

During Q1 2012, the Company achieved EGP 753 mln of gross sales, with minor cancellations of EGP 37 mln, taking net contracted sales to EGP 715 mln. The Company also accomplished on schedule unit delivery of 83 units worth EGP 268 mln and cash collection of EGP 156 mln with a minimal 11.8% delinquency rate.

On the legal front, SODIC is currently still enrolled in the CRC (Conflict Resolution Committee); a committee designed to fast track investor issues, and is pending a decision after NUCA sent a revocation letter for the Eastown plot (0.86 mln Sqm).

SODIC is planning a number of new projects launches in the coming period. Westown Residences phase 5 is a continuation of the successful launches and will target the upper middle income segment with unit values ranging from EGP 1.2 mln through EGP 2.0 mln. SODIC is also launching a retail destination in SODIC West, Westown Entertainment Hub, which will generate lease revenues of some EGP 30 mln by 2015.

SODIC delivered 83 units in Q1 worth EGP 268 million. This brings total Allegria deliveries at end of Q1 2012 to 449 units (35% of Project units) worth EGP 1.1 bln. SODIC expects to deliver some 350 unit for FY2012.

Q1 2012 contracted Gross Sales reached EGP 753 million with cancellations at a minimal EGP 37 million. Q1 2012 reached a net sales position of EGP 715 million.

SODIC’s cash collection process led to collecting more than 88.2% of Q1 2012 project receivables. The tightly managed cash collection process secured EGP 156 million of total Company receivables for the quarter.

SODIC’s commitment to clean up delinquent contracts in 2011 has given the company improved visibility on its operations. Management believes that the bulk of cancellations have been realized and that the company is experiencing stronger sales, improved cash collection and on schedule delivery.

SODIC’s main priority in 2012 remains to maintain its strong balance sheet with clear guidelines on unit delivery, construction, cash collection, new sales and debt management.

Management Assessment on Q1 2012 Results:

Revenues are booked upon final delivery to clients. SODIC revenues came to EGP 312 million mainly due

delivering 83 units. Other revenue lines include construction contracts from subsidiaries and Beverly Hills

Gross Profit of EGP 87 million were achieved during the quarter due to higher margin deliveries in Allegria.

Net Income of EGP 36 million mainly due to on schedule Allegria delivery and non-existent cancellations that

would impact above the line. The profits were impacted by an additional EGP 10 mln, due to a change in

accounting policy of provisioning for the YE bonus which in previous years was fully expensed in the 4th quarter.

Receivables at end of Q1 have increased by 20% reaching EGP 2 billion due to the new launches and strong

sales achieved. Additional off balance sheet receivables related mostly to delivery checks that have not been

received from client’s amount to some EGP 400 million.

Works in Process are at EGP 2.8 billion showcasing the continued execution works on the ground undertaken

by the Company to deliver its various projects.

Cash levels have decreased by to EGP 373 million due to normal construction outflows.

Operational Performance Highlights for the Q1 2012:

I. New Contracted Sales of EGP 753 million and Cancellations of EGP 37 million

II. Project Cash Collection of EGP 156 million with a delinquency of 11.8% for Q1 2012 (total revolving