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1
SINCE1959
DEVELOPING EAST CAIRO
Investor Presentation March 2018
2
DISCLAIMER
This Presentation is intended for information purposes only and does not constitute or form part of an offer for sale or subscription or an invitation or solicitation of an offer
to subscribe for or purchase securities of any kind and neither this document nor anything contained herein shall form the basis of any contract or commitment from any
party whatsoever. Information, including but not limited to financial information, in this presentation should not be considered as a recommendation in relation to holding,
purchasing or selling shares, securities or any other instruments in or, in entities related to, Madinet Nasr for Housing & Development (“MNHD”) or any other company. This
Presentation contains important and privileged information on MNHD which is solely owned by MNHD and may not be relied on or used by any person whosoever for any
purpose, and therefore shall be kept secret and confidential by any receiving party.
This document may contain forward-looking statements which, by their nature, involve a number of risks, uncertainties and assumptions that could cause actual results or
events to differ materially from those expressed or implied by these statements. These risks, uncertainties and assumptions could adversely affect the outcome and financial
effects of the plans and events described within this document. In particular, actual results may be adversely affected by future developments affecting inflation, interest
rates, taxation, social instability or other economic, political or diplomatic or other matters. Forward-looking statements contained in this document that reference past
trends or activities should not be taken as a representation that such trends or activities will continue.
All information contained in this presentation, are compiled from sources known to be reliable and/or publicly available data reasonably assumed to be accurate (the “Data”).
The Data may contain errors and/or inaccuracies; MNHD provides no warranties or guarantees of any kind, expressed or implied, and accepts no responsibility whatsoever,
with regard to the accuracy, completeness or correctness of the Data used in the Presentation.
This disclaimer is to be considered an integral part of the Presentation and MNHD’s liability in respect of this Presentation and is to be governed by Egyptian law under the
jurisdiction of Egyptian courts.
IR CONTACTSalah KatamishInvestor Relations DirectorEmail: [email protected] #: +2 (02) 2400 6207
Madinet Nasr for Housing & Development4 Youssif Abbas Street, District 2Nasr City, Cairo, Egyptwww.mnhd.com
I. MNHD Overview
4
MNHD | COMPANY OVERVIEW
19.9%
7.5%
15.2%
3.7%3.5%3.2%1.7%
45.3%
BIG Investment Group (BPE Managed Vehicle)B Investments (BPE Managed Vehicle)Holding Company for Construction and DevelopmentNational Investment BankOlayan Saudi Investment CompanyBanque MisrSchroder InternationalFree Float
MNHD’s history dates back to 1959 when it was established as a government-owned joint stock company that listed on the EGX in 1996
In 2006, BPE Partners’ managed vehicles acquired a 31.2% stake in MNHD (the single largest shareholder collectively) – currently 27.4%
BPE via its controlling stake has managed MNHD’s successful turnaround, positioning the company as one of the top real estate developers in Egypt
The company historically developed the majority of Nasr City district in East Cairo, covering an area of over 40mn sqm with 3 million inhabitants
MNHD currently has two main developments;Taj City- 3.5mn sqm mixed use development in East Cairo (in front of Cairo Airport)Sarai- 5.5mn sqm mixed use development in East Cairo (strategically located next to
the new administrative capital)
MNHD IS CURRENTLY POSITIONED AS ONE OF EGYPT’S LEADING REAL ESTATE DEVELOPERS
SHAREHOLDING STRUCTURE
KEY STATISTICS
CONTRACTED SALES (FY 2018) EGP 5.5BN
LAND BANK (sqm) 9MN (C. 7MN UNDEVELOPED)
LAND BANK LIABILITIES MINIMAL
NET PROFIT MARGIN (2018) 44.9%
MARKET CAP (21-FEB-2018) EGP 9.1BN
5
MNHD | TIMELINE
MNHD’S MANAGEMENT LED TURNAROUND PIVOTED THE COMPANY FROM A PURE LANDOWNER TO ONE OF THE LEADING REAL ESTATE DEVELOPERS IN EGYPT
2006/2007 2009 2012 2013 2015 2016 2017
BoD reshuffled and control assumed
New CEO appointed, stronger team brought in (multinational background)
Outstanding Taj City land disputes resolved
Changed the business model to include off plan sales
Launched Tag Sultan in 2012; a 1,700-unit project in Taj City where sales exceeded EGP 2.3 bn
Sarai master plan developed by renowned British master planners and approved via a Ministerial decree
Signed a co-development agreement with PHD to develop
433,000 sqm in Sarai
MNHD was positioned as a top tier real estate developer
Another wave of corporate restructuring that brought in new talent in key positions
Launched Sarai Reached EGP 5bn in
Contracted Sales Approved the new and
improved master plan for Taj City
Resolved Disputes on 9mn sqm of land
Changed management and developed master p lan for land bank
Launched and sold mega projects (aborted raw land sa les model )
Expanded posi t ioning to upper middle income market
1.8
9.1
21-Feb-20192006
c. 5x Growth
205
2,782
20182006
c. 14x Growth
Revenue
(EGP mn)
Market Cap
(EGP mn)
MNHD MANAGED TO ACHIEVE A 5X GROWTH IN MARKET CAP AND 14X GROWTH IN REVENUES
6
Pre-Sales(EGP mn)
Net Revenues (EGP mn)
EBITDA (EGP mn)Margin (%)
1,039 823
3,4255,163 5,495
20172014 2015 2016 2018
744 771
2,0142,428 2,783
201720162014 2015 2018
295 307
1,154 1,2771,559
20172014 2015 2016 2018
203 262
767932 1,085
20162014 20182015 2017
0.21 0.27
0.77 0.84 0.82
2014 2015 2016 2017 2018
C A G R : 5 2 % C A G R : 3 9 % C A G R : 5 2 %
Net Income (EGP mn)Margin (%)
EPS (EGP)
C A G R : 6 6 %
40% 40%
57%52%
27% 34%38% 38%
C A G R : 4 0 %
Net Revenues grew by 15% Y-o-Y, reaching c. EGP 2.8bn compared to EGP 2.4bn in 2017. The increase was attributed to the company delivering a record number of units, reaching 788 units during 2018 and implying a Y-o-Y increase of 46% as well as a 6% increase in the company’s contracted sales
Net Income increased by 16% to reach c. EGP 1.1bn compared to EGP 932mn during 2017. The slight increase in EBITDA & Net Income margin is mainly on the back of land sales, which have significantly higher margins
MNHD | CONSOLIDATED FINANCIAL HIGHLIGHTS
39%
56%
883
381
2,945
752
551
Launched & Sold Launched & UnsoldUnlaunched Residential Unlaunched CommercialCapital Gardens
3,555 5,623
Taj City Sarai
7
MNHD | LAND BANK
MNHD HAS A STRATEGICALLY LOCATED LAND BANK WITH THE MAJORITY OF IT STILL UNLAUNCHED
GROSS LAND AREA (K SQM)
811
423
1,621
700
1,694
804
4,566
1,452
Launched & Sold
Launched & Unsold
Unlaunched Residential
Unlaunched Commecrial
TAJ CITY (K SQM)
SARAI (K SQM)
COMBINED PROJECTS (K SQM)
8
MNHD | A FULL FLEDGED COMMUNITY DEVELOPER
MNHD HAS TRANSFORMED FROM A RAW LAND OWNER INTO A FULL FLEDGED COMMUNITY DEVELOPER- LAUNCHING MULTIPLE MIXED USE PROJECTS
OPEN AIR MALL
AUTO MALL
SCHOOL
SPORTS CLUB
BUSINESS PARK BUSINESS PARK
UNIVERSITY
MEGA MALL
HOSPITAL MEDICAL CITY
RESIDENTIALRESIDENTIAL
HOTELS
HOTELS
LAGOON AND WATER FEATURES
9
MNHD | STOCK PERFORMANCE
5.00
6.00
7.00
8.00
9.00
10.00
11.00
12.00
13.00
Jan-02-2017 Apr-02-2017 Jul-02-2017 Oct-02-2017 Jan-02-2018 Apr-02-2018 Jul-02-2018 Oct-02-2018 Jan-02-2019
Outstanding Shares 1,200,000,000
Price (21-Feb-19) 7.59
Market Cap (31-Dec-18) 9.1bn
FY2018 Price High/Low 11.96/6.25
FY2018 AVG Volume 2,239,422
FY2018 Volume High 16,682,312
FY2018 Volume Low 200,123
II. Cobalt Business District
11
CBD | OVERVIEW
MNHD IS ABOUT TO LAUNCH THE FIRST PHASE OF COBALT BUSINESS DISTRICT, ITS FIRST COMMERCIAL DEVELOPMENT IN TAJ CITY
Cobalt Business District (CBD) is the first phase of a business hub that MNHD is developing
The business district is comprised of 13 buildings, built on 77,000 sqm of gross land area
The buildings will have a height of G+4 floorsThe project will have a Built Up Area (BUA) of 118,000 sqm
including 28,000 sqm of retail spaceAverage price/sqm will be approx. EGP 55,000Offering payment terms of up to 5 years
12
CBD | MASTER PLAN
III. Developments
14
9mn sqm of Strategically Located Land Bank
DEVELOPMENTS | LAND BANK
New Administrative
Capital
5th Settlement Taj City SARAI
15
DEVELOPMENTS | TAJ CITY OVERVIEW
3.5 MILLION SQM OF PRIME LAND BANK INSIDE CAIRO
GLA: 3.5 million
BUA: 2.9 million
MASTER PLAN SPECIFICATIONS
PROJECT SEGMENTATION One of the largest land plots inside Cairo across from Cairo International Airport Up to 40% foot print Master plan approved in January 2018 with almost 1:1 FAR. Launched first project, Tag Sultan, in October 2012 (sold out and delivered) Launched phase two of Taj City (T ZONE) in 4Q2015 (phase 1 sold in 4Q2015, phase 2 launched
in May 2016) Launched several other developments in Taj City that was currently being sold Infrastructure for Taj City is in final stages
80%
20%
Residential Commercial
16
DEVELOPMENTS | TAJ CITY LAUNCHED PROJECTS
MNHD IS CURRENTLY POSITIONED TO CAPITALIZE ON ITS VAST UNLAUNCHED LAND BANK; HAVING SOLD A MAJORITY OF ITS LAUNCHED PROJECTS
Total BUA (SQM)
Date of Launch
Total # of Units
% Sold
Avg. EGP/SQM
Value of Inventory
304,175
2012
1,764
100%
7,295
EGP 2.4bn
275,920
2015
1,521
90%
18,602
EGP 5.2bn
218,265
2018
1,743
57%
19,452
EGP 4.3bn
Zone T
588,100
-
-
-
50,000
EGP 51bn
Unlaunched Commercial
1,512,735
-
10,356¹
-
19,254²
EGP 54bn
Unlaunched Residential
¹ Assuming an average unit size of 150sqm² Weighted Average of BUA sold in 2018
Total
2,898,275
+
17
DEVELOPMENTS | TAG SULTAN
LAUNCHED IN 2012
1,389 UNITS DELIVERED OUT OF 1,739 UNITS SOLD
304K SQM OF BUA
AREA RANGE 90-405 SQM PER UNIT
AVG. EGP/SQM 7,259 FOR APARTMENTS & 10,000 VILLAS
TOTAL SALES OF EGP 2.4BN (SOLD OUT AND DELIVERED)
18
DEVELOPMENTS | ZONE T
Zone T
LAUNCHED IN 2015
1,521 UNITS
276K SQM OF BUA
TOTAL SALES OF EGP 4.7BN (19% OF TOTAL INVENTORY)
AREA RANGE 80-649 SQM PER UNIT
AVG. EGP/SQM 18,602
19
DEVELOPMENTS | SHALYA
LAUNCHED IN 2017
915 UNITS
150K SQM OF BUA
AREA RANGE 69-300 SQM PER UNIT
AVG. EGP/SQM 18,302
TOTAL SALES OF EGP 1.5BN (53% OF TOTAL INVENTORY)
20
DEVELOPMENTS | LAKE PARK STUDIOS
LAUNCHED IN 2018
828 UNITS
67K SQM OF BUA
TOTAL SALES OF EGP 1.0BN (70% OF TOTAL INVENTORY)
AREA RANGE 58-185 SQM PER UNIT
AVG. EGP/SQM 19,158
21
DEVELOPMENTS | SARAI
5.5 MILLION SQM IN CLOSE PROXIMITY TO THE NEW ADMINISTRATIVE CAPITAL
GLA: 5.5 million
BUA: 5.3 million
MASTER PLAN SPECIFICATIONS
PROJECT SEGMENTATION Master plan approved (designed by Benoy) and Egyptian ministerial decree issued approving the master plan
Up to 30% foot print Infrastructure and utilities are under discussions with New Urban Communities Authority (water
and sewage approved, electricity under discussion with the North Cairo Electricity Company) Hydrogeology studies and investigation finalized to inspect natural water feature Co-Development agreement signed with Palm Hills Development on 433,643 sqm for 36% of
revenues. MNHD launched S1 in November 2016 with phase 1 selling out in 24hours (EGP 1.0bn) MNHD launched S2 in February 2017 with phase 2 selling out within 1 week (EGP 1.7bn)
77%
13%
10%
Residential Commercial Capital Gardens
22
DEVELOPMENTS | SARAI
MNHD IS CURRENTLY POSITIONED TO CAPITALIZE ON ITS VAST UNLAUNCHED LAND BANK; HAVING SOLD A MAJORITY OF ITS LAUNCHED PROJECTS
Total BUA (SQM)
Date of Launch
Total # of Units
% Sold
Avg. EGP/SQM
Value of Inventory
478,842
2017
2,536
71%From Launched
12,926
EGP 7.0bn
+S2
226,347
2016
1,229
69%
10,070
EGP 3.6bn
3,061,904
-
20,347¹
-
14,430
EGP 163.4bn
Unlaunched Residential
20,747
2018
80
55%From Launched
30,728
EGP 0.6bn
1,028,700
-
-
-
30,000
EGP 68bn
Unlaunched Commercial
¹ Assuming an average unit size of 150sqm
484,100
2016
-
-
-
-
Total
5,361,165
23
DEVELOPMENTS | TAVAL - S1
LAUNCHED IN 2016
1,229 UNITS
226K SQM OF BUA
TOTAL SALES OF EGP 2.5BN (69% OF TOTAL INVENTORY)
AREA RANGE 87-343 SQM PER UNIT
AVG. EGP/SQM 10,070
24
DEVELOPMENTS | S2
S2LAUNCHED IN 2017
C. 4,000 UNITS
614K SQM OF BUA
TOTAL SALES OF EGP 3.6BN (55% OF TOTAL INVENTORY)
AREA RANGE 100-295 SQM PER UNIT
AVG. EGP/SQM 12,926
25
DEVELOPMENTS | CROONS CONDOS – S2
LAUNCHED IN 2018
344 UNITS
33K SQM OF BUA
TOTAL SALES OF EGP 238MN (49% OF TOTAL INVENTORY)
AREA RANGE 56-181 SQM PER UNIT
AVG. EGP/SQM 14,672
26
DEVELOPMENTS | CAVANA LAKES – S3
LAUNCHED IN 2018
265 UNITS
78K SQM OF BUA
TOTAL SALES OF EGP 430MN (17% OF TOTAL INVENTORY)
AREA RANGE 5240-440 SQM PER UNIT
AVG. EGP/SQM 30,728
27
DEVELOPMENTS | SARAI S-VILLA
MNHD INTRODUCED THE S-VILLA IN SARAI; A NEW INNOVATIVE PRODUCT THAT OFFERS ITS CLIENTS THE LUXURY OF A VILLA AT THE PRICE OF A TOWNHOUSE
The S-Villa is a new product offered to clients in Sarai The S-Villa is engineered to host 2 villas on one plot of land, aligning luxury with
affordability Each villa has its own garden and view and the top villa also has a penthouse The S-Villa gives clients the convenience and privacy of owning a villa but at the
price of a town house
IV. Tag Sultan Case Study
29
TAG SULTAN CASE STUDY | USE OF PROCEEDS
Tag Sultan is MNHD’s first completed project as a full fledged real estate developer
MNHD sold 1,739 units and delivered 1,389 units successfully and on time The project spans across an area of 300k sqm of BUA The project generated revenues of EGP 2.3bn Starting selling price was EGP 4.5k/sqm given it was MNHD’s first residential
development
USE OF PROCEEDS
Tag Sultan – Performa Financials
Revenues 2,361,502,310
Net Income Before Tax 663,872.486
Account
Tag Sultan Net Profit 664
CIB Loan Balance 203
Total 867
Cash Balance 30
PDC 450
Taxes 150
Profit Share 60
Protocol Payment 90
External Infrastructure 66
2017 Cash Dividends 21
Total 867
EGP mn Tag Sultan has generated EGP 867mn in proceeds MNHD used proceeds from Tag Sultan to raise the value of the land for future
developments by starting infrastructure work and finalizing the new and improved maser plan (protocol payment)
MNHD was also able for the first time in 10 years to pay a cash dividend
V. Financials
31
FINANCIALS | CONSOLIDATED INCOME STATEMENT
EGP 000’ 2013 2014 2015 2016 2017 2018
Net Revenues 718,540 743,850 771,466 2,014,425 2,428,257 2,782,728
Growth 45% 4% 4% 161% 21% 15%
COGS (391,316) (355,242) (365,416) (658,584) (840,476) (992,283)
Gross Profit 327,224 388,608 406,050 1,355,841 1,587,781 1,790,445
Gross Profit Margin 46% 52% 53% 67% 65% 68%
Selling and Marketing Expenses (37,275) (34,822) (47,158) (133,937) (252,667) (204,421)
General and Administrative Expenses (45,554) (55,815) (60,699) (68,133) (98,355) (97,108)
Depreciation (3,656) (3,897) (4,482) (2,762) (3,795) (10,195)
BOD Expenses (4,280) (4,829) (8,731) (5,197) (10,212) (8,584)
Provisions (4,827) 1,057 13,446 (117,423) (31,321) (32,729)
Operating Profits 231,632 290,302 298,426 1,028,389 1,191,431 1,437,408
Finance Costs (7,177) (9,050) (10,319) (11,076) (28,372) (112,879)
Capital Gain - - 2 175 - -
Investment Income (Loss) - 7,317 17,118 12,651 846 528
Other Costs (6,030) (5,440) (4,645) (29,265) (38,669) (16,628)
Interest Income 8,976 13,581 11,378 7,799 31,254 45,428
Other Income 19,719 4,011 17,285 23,010 46,226 74,405
Net Profit Before Tax 247,120 300,721 329,245 1,031,683 1,202,716 1,428,262
Income Tax (60,019) (88,066) (68,980) (264,668) (272,442) (314,055)
Deferred Tax (220) 511 (1,571) 1,887 2,778 (3,831)
Net Profit After Tax 186,881 213,166 258,694 768,902 933,052 1,110,376
Minority Interest (10,904) (10,409) (5,988) (2,325) (1,432) (25,785)
Net Profit After Minority 175,977 202,757 252,706 766,577 931,620 1,084,591
32
FINANCIALS | CONSOLIDATED BALANCE SHEET
EGP 000’ 2013 2014 2015 2016 2017 2018
Cash 122,250 212,283 104,444 152,563 268,983 485,592
Investments and Marketable Securities 83,699 100,536 243,725 264,451 217,872 445,395
Inventory 427,063 553,330 839,926 1,073,748 1,412,190 1,588,525
Receivables 942,454 910,689 1,201,343 1,576,872 2,296,377 3,014,500
Letter of Guarantee Coverage 12,927 14,905 9,962 10,865 10,330 10,291
Debtors and other Debit Balances 31,994 138,808 248,693 283,645 400,299 500,344
Total Current Assets 1,620,387 1,930,551 2,648,093 3,362,144 4,606,051 6,044,647
Work in Progress 16,384 17,224 18,255 15,746 12,927 18,122
Long-Term Receivables and Debit Balances 1,738 920,431 2,972,920 5,144,995 6,149,282
Deferred Tax 8,354 8,866 7,295 9,182 11,960 8,129
Total Long-term Investments 15,287 15,286 12,157 14,871 15,722 18,365
Net Fixed Assets 29,790 31,446 45,741 49,716 54,661 54,445
Total Long-Term Assets 71,553 72,822 1,003,879 3,062,435 5,240,265 6,248,343
Total Assets 1,691,940 2,003,373 3,651,972 6,424,579 9,846,316 12,292,990
Banks - Credit Facilities & Short Debt 6,472 22,636 35,533 44,593 187,680 177,963
Current Portion of Long Term Loans 4,239 4,258 4,278 4,298 177,893 137,768
Provision for Claims 67,165 60,999 46,741 131,893 128,641 124,043
Completion Liabilities 50,024 83,973 132,011 169,429 170,827 116,553
Deferred Profits & Interests 355,074 366,988 350,065 304,950 226,811 -
Dividends Payable 4,289 3,839 4,320 3,706 6,962 12,196
Creditors & Other Credit Balances 381,915 371,798 1,455,542 87,177 79,188 39,067
Tax Authority - - 74,133 278,113 296,710 320,079
Liabilities For Project Maintenance - - 47,422 111,407 192,402 319,155
ST Notes Payable 33,164 84,885 88,752 55,502 150,411 110,376
Accounts Payable 110,176 145,365 311,616 339,151 447,911 493,390
Total Current Liabilities 1,012,518 1,144,741 2,550,413 1,530,219 2,065,436 1,850,590
Long Term Notes Payable 26,235 - - 2,942,735 5,119,127 6,734,179
Long Term Debt 16,460 37,269 68,969 259,283 207,153 238,780
Long Term Liabilities 42,695 37,269 68,969 3,202,018 5,326,280 6,972,959
Paid-in-capital 135,000 199,285 250,000 500,000 997,100 1,200,000
Treasury Shares - - - (74,633) - -
Reserves 57,398 65,387 74,725 86,375 123,314 170,479
Net Profit of the year 175,977 202,758 262,099 766,575 931,621 1,084,592
Retained earnings 211,728 288,747 377,463 344,351 332,036 918,234
Minority Interest 56,627 65,186 68,301 69,672 70,527 96,136
Shareholders' Equity 636,730 821,363 1,032,588 1,692,340 2,454,598 3,469,441
Total Liabilities and Equity 1,691,943 2,003,373 3,651,970 6,424,577 9,846,314 12,292,990