Egyptian Resorts loses $2.5m in Q4

Real estate company Egyptian Resorts tumbled to a loss in the fourth quarter of 2009 after a full year without land sales, its main source of income.

Reuters calculated its made a fourth-quarter loss of 13.6m Egyptian pounds ($2.5m) after the company said it made an annual loss of 3.9 million pounds, having reported a profit of 9.7m pounds in the first nine months.

The loss did not surprise analysts, who did not expect the firm to sell land in 2009 after the global economic downturn curbed investor appetite for pricey Egyptian property.

"The name of the game here is, do they have enough cash to survive for two years? It looks like they have. I think that's what matters," said Naeem Holding analyst Hisham Halaldeen.

"If they can survive to the end of 2011 and have everything ready for the up market ... then I think they should do well," he added.

Naeem had forecast a loss of 5.8m for the fourth quarter, while EFG-Hermes had forecast net profit of 4m pounds.

Shares in Egyptian Resorts rose 3.9 per cent to 2.11 pounds on Wednesday, outpacing the main index, which gained 1.3 per cent.

Egyptian Resorts has 41 million square metres of land on the Red Sea at Sahl Hasheesh, which it sells in phases to high-end developers.

In January Egyptian Resorts said it had sold a plot for $13.3m to a Saudi investor planning to build a luxury hotel, marking its first sale since the third quarter of 2008.

The investor paid $300 per square metre, more than double the firm's average selling price in 2008, it said.

In the fourth quarter of 2008, the firm's net profit after minority interests was 41.8m pounds.