* 2008 net profit triples, sales double
* Land bank up 29 percent
* Shares up 11 percent at 0956 GMT (Adds details from results statement)
By Cynthia Johnston
CAIRO, March 16 (Reuters) - Egyptian real estate developer Palm Hills trebled its net profit for 2008 to 658 million Egyptian pounds ($116.7 million) as it penetrated the middle income market, the firm said on Monday. It said that net sales more than doubled to 1.234 billion pounds and that the Palm Hills land bank continued to grow, reaching 48.8 million square metres in 2008, an increase of 29 percent from a year earlier.
"PHD's remarkable growth in sales had been triggered by an all-encompassing strategic corporate focus on diversifying the customer base and penetrating the middle income market segment," the firm said.
"PHD is the only existing developer today that offers a highly diversified product mix that is spread over an equally diversified land bank, thereby addressing different market segments with varied purchasing powers," it added.
Total contract values surged to 3.032 billion pounds in 2008, while reservations grew 23 percent to 3.702 billion pounds. Earnings before interest and tax (EBIT) reached 730 million pounds while the EBIT margin hit 59 percent, from 53 percent in 2007.
Palm Hills said it would launch three new housing projects in and around Cairo where 80 percent of the units would be valued at less than 1.5 million pounds. It also planned to start construction on the Village Mall project in New Cairo, the firm's first commercial project of this kind.
"While the uncertainty in the global economy has clearly impacted investor sentiment in the Egyptian marketplace, the underlying, long term fundamentals of the real estate market remain intact," the firm's statement said.
Palm Hills would focus on controlling costs and was targeting a drop of over 25 percent in overall group overheads, and was hoping to benefit from a decline in building material prices.
It added that it expected to benefit from what it described as the "highly fragmented" real estate industry in Egypt where only a handful of developers command a modest market share.
It said that after adding 11 million square metres to its land bank in 2008, both regionally and in Egypt, an independent revaluation put the market value of Palm Hills properties at nearly $6 billion before adjusting for liabilities.
"Given the current market conditions, the less organized and smaller developers will be at a more significant disadvantage, allowing PHD and other more established developers to expand their share in the market," the firm said.
Shares in the firm were trading 10.98 percent higher at 7.58 pounds by 0956 GMT, well above a low of 0.34 pounds hit in August. ($1 = 5.6380 Egyptian pounds) (Writing by Cynthia Johnston; Editing by Jon Loades-Carter and Rupert Winchester)