New project cuts full-year loss of Egyptian Resorts

Cairo: Real estate company Egyptian Resorts posted a narrower full-year loss, helped by new revenue from its Sawari project on the Red Sea.

Egyptian Resorts yesterday said it made a 2011 net loss of 7.4 million Egyptian pounds (Dh4 million), compared with a 9.1 million loss in 2010. Revenue nearly doubled to 28.2 million pounds.

The company has not sold any land to developers since the third quarter of 2008 when the global financial crisis reduced appetite for big real estate purchases in Egypt.

Political turmoil

Egyptian Resorts, hit by political turmoil since President Hosni Mubarak was ousted, has been working with Orascom Development Holding to develop land for Sawari, a mixed-use development that will include a marina on a 2.5 million square-metre plot at Sahl Hasheesh on the Red Sea.

Its chief executive told Reuters in October it expected sales of 2.2 billion pounds from Sawari's first phase.

The company said it expected to start construction on the project in the third quarter, but was still waiting for licences from authorities.

Real estate firms in Egypt sell units off-plan or before they are fully constructed and delivered to their clients, meaning Egyptian Resorts reported 10.8 million pounds revenue from Sawari for 2011.

The company, like other developers in the Arab world's most populous nation, is reeling from challenges to state land purchases that started before last year's uprising and which have gathered pace since.

It said the impact of the uprising on the tourism sector, where the number of visiting tourists has slumped 33 per cent, was partly to blame for the net loss.