Casablanca – Addoha is the largest real estate developer in Morocco operating in all of social, intermediate and high-end housing. Consolidated revenue decreased from MAD 9.3 billion in 2012 to MAD 7.0 billion in 2014 as a result of lower units delivered in all segments where the developer is operating.
Henceforth, the group re-engineered its corporate strategy by launching the triennial cash generation plan (CGP) in 2015.
The CGP reengineered many facets of the real estate giant’s strategy and focuses on the following pillars: 1/ Generating cash from the company’s current assets by selling the stocks of unsold finished products and by reducing clients receivable; 2/ Reducing both of production and investments in land acquisition over the coming years; 3/ Launching the marketing of tranches only if previous tranches have been entirely commercialized; 4/ Launching the production of tranches only if the pre-sale ratio is above 70%.
The ambition of the CGP is for the company to enter a cycle of strong operating cash flow generation (a total of MAD 8b targeted for the 2015-2017Eperiod), in order to reduce the indebtedness (targeted gearing of 33% at the end of the period vs. 80% as of 2014), as well as in order to significantly increase the amount of dividends distributed to their shareholders.
Today, the group reported exceptional CGP achievement rates (higher than 100%) at all levels (commercial, operational, financial). Management enjoys now a very decent track-record of outperforming the CGP targets amid a market where confidence in Management yields real market premia.
During these past two years, the group has been able to achieve 70% of its deleveraging objective. The net reduction in debt stood at MAD 3.1 billion which corresponds to 116% of the amount targeted by the end of 2016.
As a result of this debt reduction along with an improvement of cost of debt, financial expenses plunged by 22% to MAD 454 million. Henceforth, NIGS soared by 18% to MAD 1.0 billion, while net margin improved by 120 basis points to 15.8%. Also, gearing stood at 50% at the end of 2016 to be compared to 80% at the beginning of the CGP and to a target of 33%.
Deliveries stood at 15,587 units almost stable YoY while revenue also barely increased by 0.2% to MAD 7.1 billion. 89.9% of the deliveries were social and intermediate housing dwellings. Margins resumed their upward trajectory with social and intermediate housing’s gross margin jumping by 4 percentage points to 28%, while high-end housing margin soared by 8 percentage points to 34%.
Furthermore, the group pre-sold 10,744 units which corresponds to 92% of the target set in the CGP.
For the Shareholders’ Meeting, the Board of Directors will propose the distribution of a dividend of MAD 2.40 per share (up 7% YoY).
