Palm Hills generated a EGP300mln surplus from interest cuts, chairman

Palm Hills, one of Egypt’s leading developers,generateda EGP300mln surplus per year from latest interest rate cuts introduced by the Central bank of Egypt, according to chairman Yaseen Mansour.

Palm Hills, the builder of 29 developments over the past 20 years, recorded EGP300mln annual surplus owing to cuts in interest payments and borrowing costs, Mansour told Osoula Misr Maganze.

Any interest rate cuts drive down borrowing costs, as the latter was curtailed to EGP127.8mln in late September 2019 down from EGP207.7mln in the same period of 2018, according to the company’s financial statements.

Back in October 2019, Palm Hills tapped Tharwa Capital to finance the construction of 582 housing units. Egypt’s real estate mogul signed off the 4th issuance of long-term securities worth EGP776mln, he elaborated.

With the latest issuance included, securities issued by Tharwa Capital for Palm Hills topped EGP4.2bn, the biggest portfolio in the Middle East.

“ More bonds worth EGP5.1bn, are set to be issued throughout 2020… On top of that, negotiations are in the works with local and foreign lenders over a long-term facility ranging from EGP1bn and 2.5bn for Badya Project in the 6th of October City.”

Palm Hills netted consolidated earnings worth EGP906.2mln in 2019 down from EGp906.7mln in the previous year.

Mansour said that the company has kicked-off late last year the second phase of Palm Hills Alexandria at investments of EGP5.1bn.

“ The project, away from Alexandria by 4km, is made up of housing units, commercial complexes, international school, a garden and a sporting club, as units of its first phase are poised to be delivered in December 2023, and those of the second phase in 2024.”

Regarding the company’s projects in Sheikh Zayed City, Mansour said that it injected up to EGP800mln in Badya.

Badya, due to be built over 3,000 feddans, consists of 5,000 villas at investments totaling EGP320bn.

“ Out of Badya, the company eyes aggregate sales ranging from EGP470bn and EGP480bn. Also, EGP2.7bn investments, of which banking financing constitutes EGP1.5bn to EGP2bn, are to be pumped in the first phase of the project.”