Press releases

Cairo, August 14th, 2008 - Sixth of October for Development and Investment Company ("SODIC") announced its 1H 2008 results:

• Net sales of EGP 41.34 million
  
• Gross profit of EGP 32.79 million
  
• Net profit of EGP 15.06 million
  
• Receivables of EGP 1,769.8 million
  
• Works in process of EGP 532.6 million
  
• Total Assets EGP 3,677 million

Statement from SODIC's Managing Director - Maher Maksoud

Operational Progress

The first half of 2008 witnessed significant progress in the implementation of our value creation strategy to our shareholders, by converting SODIC's entire land bank (approx. 4.8 million sqm) into a diversified set of highly profitable projects which will be developed over the next 8-10 years.

• Allegria (1,042 units over 2.38 million sqm of land)
  
  • Sale of more than 800 units with a value of EGP 2.513 billion.
  • Winner of multiple international awards such as the award of merit from the American Society of Landscape Architects & CNBC Arabia's property awards.
  • Golf course under construction, to be completed by the end of 2008 and playable by Q2 2009.
  • Infrastructure contract awarded to The National Company (subsidiary of M.A.Kharafi group). Construction commenced with a 19 month target completion period.
  • Construction works scheduled to begin during the third quarter of 2008.
• Kattameya Plaza (696 apartments over 116,000 sqm of land)
  
  • Sales launched in July with property worth EGP 51 million reserved during the first few weeks of sales.
  • Construction of 40 apartments completed.
  • Infrastructure and construction works on the rest of the project to start in early 2009.
• Eastown (0.858 million sqm land area) & Westown (1.2 million sqm land area)
  
  • Master Plans for both projects are in final review by the relevant authorities.
  • Submitted master plans have a combined built up area of 3.98 million sqm.
  • First phases of both projects currently being designed by 24 leading international award winning architects including Machado-Silvetti, Allies & Morrison and Jerde Associates.
  • Sales launch of both projects before the end of the year.
  • Solidere International (SI) exercised its option to acquire 250,000 sqm of land in Westown ahead of schedule, with plans to immediately develop the entire area.
  • Designs underway for a joint SODIC-SI development of a large mall, an office park and a residential compound.

Corporate Development

We continue to implement our strategy of strengthening our management capabilities, execution and development capacity:

• Recruited an outstanding team in charge of managing the Eastown and Westown projects.
  
• Established, in partnership with a leading local landscape architect, a company that will provide its services to SODIC's projects as well other projects.
  
• Formed a company that will provide interior finishing services, and is headed by a leading specialist in the field.
  
• Establishing a property management company to manage SODIC's projects and will also provide similar services to other projects.
  
• Negotiating with several contractors to establish a strategic partnership to secure the timely and high quality execution of our projects.
  
• Set up an investments division to evaluate and monitor our different investments.

Financial Performance:

The significant operational progress is not yet reflected in our income statement mainly due to our revenue recognition policy. We base our policy on International Accounting Standards which stipulates that revenues and profits are only recognized upon full completion of projects, resulting in a lag between achievement of sales and the actual recognition of those sales and their accompanying returns in the income statement.

A more suitable gauge of the company's performance is through analyzing our balance sheet which has grown significantly year on year:

• Total Assets (reflecting over all growth): 1H 2008 EGP 3,677 million Vs 1H 2007 EGP 1,757.7 million (109% y-o-y growth).
  
• Receivables (reflecting sales progress): 1H 2008 EGP 1,769.8 million Vs 1H 2007 EGP 396.3 million (346% y-o-y growth)
  
• Works in process (reflecting project development): 1H 2008 EGP 532.6 million Vs 1H 2007 EGP 233.6 million (128% y-o-y growth).

Outlook:

We continue to drive further progress in implementing SODIC's growth and expansion plans. We just acquired an additional plot of 1.36 million sqm of land (bringing total SODIC land bank to 6.1 million sqm), which we plan to develop as an apartments complex project catering to upper middle income that we plan to launch in 2009. We are launching in the next few weeks a car and accessories strip mall on the Dahshur road which will comprise some 30,000 sqm of retail space.

Looking forward, we will continue to implement our strategy of leveraging our management team and value adding partners to unlock the value of our strategic land bank and diversifying our portfolio of projects to cater to the different income segments and to generate recurrent lease income for SODIC. Our company has developed a reputation as the provider of the best quality product and service in the market. An achievement that we plan to strengthen further, by continuously introducing new and creative services and developing superior quality projects at competitive prices.

Income Statement: