Hard year looms for developers in Egypt

Egypt's two largest developers both reported full year results this month that pointed to a year of hardship following former president Hosni Mubarak's abdication in February last year.

Egypt's two largest developers both reported full-year results this month that pointed to a year of hardship after the removal from power of Hosni Mubarak more than a year ago.

Talaat Moustafa Group, the country's biggest publicly traded property developer, said its full-year net income fell 38.5 per cent last year to 577.5 million Egyptian pounds (Dh351.4m) from a year earlier.

Revenue, including money received after clients took possession of properties, fell to 5.09 billion pounds from 5.33bn pounds in 2010, and total project sales stood at 3bn pounds, down from 4bn in 2010.

Meanwhile, Palm Hills Developments, the second-biggest traded developer, said it had swung to a net loss of 331.3m pounds at the end of last year, compared with a profit of 526.8m pounds a year earlier as revenue slipped to 560.1m pounds at the end of last year versus 1.73bn pounds in 2010.

The bellwether property companies' results show the aftermath of a fiscally and politically difficult year that will be hard for them to overcome quickly.

Sales in Cairo were down by 60 per cent last year, while collection from property developments fell 55 per cent, said Ahmed Sabbour, the managing director of Al Ahly Real Estate Development.