Addoha, Morocco’s biggest property developer by market value, posted a 2.1 percent rise in first-half net profit on Friday, as rising sales helped to offset a government-driven squeeze on margins.
The company said it made a net profit of 608 million dirhams ($70 million) on an 11 percent rise in consolidated sales revenues to 3.36 billion dirhams.
It sold 9,641 units in the first six months of the year, up from 8,636 in the same period of last year, with 74 percent of its sales revenues coming from low-income housing units encouraged by the government.
Morocco has been striving to build low-income housing developments in an attempt to stop the spread of slums mainly in the city of Casablanca.
But the kingdom is also under pressure from its international lenders to reduce its public deficit and with economic growth forecast to slow this year, the government has been putting pressure on housebuilders’ margins.
Addoha is aiming to offset this by expanding rapidly in Sub-Saharan Africa, where it is signing agreements with governments to build social housing. The company has operations in countries including Senegal, Ivory Coast, Chad and Guinea Conakry.
Addoha expects its Sub-Saharan business to boost its results in 2016.
The company’s debt shrank 0.2 percent to 9.3 billion dirhams in the first half of the year.
Its shares were down 3.3 percent to 50.22 dirhams on the Casablanca stock exchange after the results.
($1 = 8.7034 Moroccan dirhams) (Reporting by Aziz El Yaakoubi; Editing by Jason Neely and Mark Potter)
