Al-Shams Housing & Development: Earnings Flattened by Factoring Cost
Liquidity exacerbated by delayed project launches
Al-Shams Housing & Development [ELSH]
Egypt / Real Estate / Q1 2021 Results
Fair Value EGP5.1
set on 7 Mar 2021
Investment Rating: Overweight | Risk Rating: High
Bottom line cannibalized by factoring: Al-Shams Housing & Development’s [ELSH] total revenues grew 19% y/y to EGP118mn in Q1 2021, mostly driven by revenues from Gardenia Al-Shams project. However, net profits remained flat at EGP49mn in Q1 2021 due to the booking of EGP37mn (+23% y/y) of interest expense related to factoring of receivables portfolio. Net profit margin (NPM) came in at 42% in Q1 2021 vs. mid-80s before management began factoring ELSH’s receivables.
Kareem Farid
Equity Analyst
T +202 3300 5725