Madinet Masr Housing and Development, the Egyptian real estate firm led by Abdallah Sallam, posted a lower net profit of $13.11 million in the first quarter of 2026, compared with $15.25 million in the same period last year. The 14.1% decline reflects a higher contribution from unit deliveries, which typically carry lower margins than new sales.

The Cairo-based developer posted revenue of EGP 2.8 billion ($53.72 million), up 7.4% year-on-year, as net profit declined by 14.1% to EGP 682.5 million ($13.11 million) in Q1 2026, compared to EGP 794.9 million ($15.25 million) in Q1 2025, reflecting softer sales and evolving market conditions. Despite revenue mix normalization driven by market conditions and geopolitical headwinds, the net profit margin stood at 24.8% in Q1 2026, compared to 31% in Q1 2025.

Sales slow as deliveries accelerate

New sales fell 7% to EGP 11.7 billion ($224.58 million) in the first quarter of 2026, down from EGP 12.6 billion ($241.86 million) a year earlier, as Egypt’s property market cooled following two years of strong demand growth, partly influenced by regional geopolitical tensions.

However, the company significantly accelerated project execution, delivering 831 units during the quarter, more than triple the 233 units handed over in the same period last year.

This surge in deliveries drove a 138.5% increase in revenue from unit handovers, helping offset weaker primary sales and supporting overall revenue growth.

Margins adjust on revenue mix shift

Madinet Masr maintained strong profitability metrics, reporting a gross profit margin of 50.3% and a net profit margin of 24.8%.

Still, both margins declined from the previous year, as a higher contribution from unit deliveries, typically lower-margin compared to new sales, reshaped the company’s revenue structure. EBITDA came in at EGP 857.2 million ($16.45 million), with a margin of 31.2%, also reflecting the normalization in earnings quality.

Strong cash flows and improving balance sheet

Cash collections rose sharply, increasing 33.2% year-on-year to EGP 4.5 billion ($86.38 million), supported by improved collection efficiency and a decline in delinquency rates to 1% from 1.6%.

The company also strengthened its balance sheet, moving into a net cash position of EGP 380.1 million ($7.30 million), compared to a net debt position at the end of 2025. Its unrecognized revenue backlog climbed to EGP 98.2 billion ($1.89 billion), providing strong visibility on future earnings and cash flows.

Dividends and investor confidence

Founded in 1959, Madinet Masr has grown into one of Egypt’s most prominent developers under Sallam’s leadership. He also founded Minka Development, which broadened the group’s portfolio. Total assets climbed 4.41% from EGP43.3 billion ($831.95 million) to EGP45.21 billion ($868.62 million), while retained earnings rose 56.35% from EGP5.72 billion ($109.99 million) to EGP8.95 billion ($171.98 million).

In a first for the company, Madinet Masr distributed a 4.17% stock dividend in March 2026, followed by a cash dividend of EGP 0.15 ($0.0029) per share. The combined payout of approximately EGP 0.376 ($0.0072) per share represents a dividend yield of about 9%, based on its closing share price at the end of 2025. Investor confidence remained strong, with the company’s share price rising roughly 22% during the quarter.