CAIRO: Real estate firm Egyptian Resorts’ net profit plunged by more than 90 percent in the first six months of 2010, the bourse said on Sunday, after the company failed to sell any land.
But analysts said the company’s profit could recover as soon as next year thanks to new management and a partnership to develop land with property developer Orascom Development Holding (ODH).
"They make money from selling land, for the last eight quarters they haven’t sold any," Naeem Holding analyst Hisham Halaldeen said. "We expect the company to go through a sales famine until the end of 2010."
The firm, which has sold land for as much as $200 per square meter, posted a profit of LE 622,606 ($109,200) for the first half of the year, down from LE 11.1 million a year earlier.
In April, Orascom Development said it bought a 4.5 percent stake in Egyptian Resorts and would develop 2.5 million square meters (618 acres) of Egyptian Resorts property in its existing Sahl Hasheesh resort.
"The launch of the Marina project in partnership with ODH will be the game changer starting the first quarter of 2011," Halaldeen said.
Mohamed Kamel, the company’s new chief executive, told Reuters in April the company had enough cash and receivables to weather three to four years without selling land.
Shares in Egyptian Resorts closed down 1.5 percent before the results were issued, while the main index, EGX30, shed 0.5 percent.