While the Abu Dhabi-based real estate developer reported a 22% increase in first-quarter profit on Wednesday, a senior executive stated that the company would postpone further investments in Egypt until the situation stabilized.
Aldar and the Abu Dhabi fund ADQ bought about 85.5% of The Sixth of October for Development and Investment shares in 2021 for 6.1 billion Egyptian pounds ($198 million), or around $387 million at today’s currency rates.
The SODIC initiative was intended to serve as a springboard for the firm’s Egyptian property holdings.
SODIC reported in its first-quarter results report, issued on Tuesday, that it had canceled 21% of its gross contractual sales, resulting in a 17% decline in net profit compared to the first quarter of 2022.
In a media call, Aldar’s acting chief finance and sustainability officer, Faisal Falaknaz, stated, “We are taking a very cautious approach to launch projects.”
Although the company sees long-term potential in Egypt, “we are not putting any more money into the business until things stabilize further,” he said.
Later that day, Aldar issued a bourse statement in which it underlined its desire to continue investing in Egypt for the foreseeable future.
Because of Egypt’s vast consumer market, Gulf corporations have been considering it as a possible expansion target. In April, ADQ invested more than $1.85 billion in Egyptian enterprises.
However, due to ongoing economic and financial pressures, some investors are delaying their plans to invest in Egypt.
While the majority of Aldar’s projects and assets are in Abu Dhabi, Falaknaz has stated that the company is also looking to expand in Riyadh and Jeddah, as well as across all asset classes in Saudi Arabia.
He said that the company has a good liquidity position, with 6.1 billion dirhams in free cash and 4.4 billion dirhams in undrawn facilities, and that it would only utilize debt markets on an “opportunistic” basis.
Revenue climbed 14% year on year to 3.1 billion dirhams, while net profit increased 22% to 836 million dirhams ($228 million).
Sales of 4.5 billion dirhams established a new quarterly record in the third quarter of 2018, owing to increased interest from both foreign and local ex-pat buyers.
