Palm Hills of Egypt Says Revolution Poses Challenge for Survival
Palm Hills Developments SAE (PHDC), the second-biggest publicly traded real-estate developer in Egypt, said 2011 will “pose challenges” to its survival in the wake of a revolution in the country last month.
“Our message today is mixed: 2010 was the best year for sales in PHD’s history, and was marked by a number of impressive achievements,” Chairman and Chief Executive Officer Yasseen Mansour said in an e-mailed statement today. “That said, this coming year is going to pose challenges for our continuing survival.”
Palm Hills warned that it would make “low to no new reservations” in the first half of the year as the economy remains disrupted after the revolution that toppled President Hosni Mubarak in February. Spending on construction will be reduced by 50 percent to 1 billion Egyptian pounds ($168.7 million) in 2011, the Cairo-based company said in the statement.
The company is also facing a case for an allegedly illegal land sale. A panel of Egyptian judges recommended this month the annulment of a 966,000 square-meter land sale to Palm Hills by the government because the plot wasn’t sold at an auction. Disputed land sales represent less than 7.5 percent of its total land bank, Palm Hills said in today’s statement.
Fourth-quarter net income declined to 181.2 million pounds, from 185.1 million pounds a year earlier. The value of new reservations almost doubled to 1.12 billion pounds in the fourth quarter, it said.
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