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UPDATE 1-Egyptian Resorts profit rises 18 pct on services

Published 03/29/2011, 09:52 AM
Updated 03/29/2011, 09:56 AM

* Egyptian Resorts sees tourism rebounding after elections

* Unconsolidated year net profit 10.6 million Egyptian pounds

* Shares up 8.4 percent, outperform market

(Adds detail, background)

CAIRO, March 29 (Reuters) - Real estate company Egyptian Resorts reported an 18 percent rise in unconsolidated 2010 net profit and said it expected tourism to recover after taking a hit from the country's political turmoil.

The company has previously made most of its money selling land in a large plot on Egypt's Red Sea coast to tourism-focused developers. But it has not sold any land since the third quarter of 2008, when the global financial crisis hurt the real state market.

Instead, revenue from its services operations, such as its water and waste management services, has boosted profit, Egyptian Resorts said. The firm reported a 57 percent increase in the number of hotel units and apartments that it operates from a year earlier.

Analysts also say forex gains and revenues from interest income were also likely to be behind the gain in net profit.

While Egypt's economy and its vital tourism sector have slowed since the mass protests that ousted President Hosni Mubarak erupted on Jan. 25, Egyptian Resorts was confident tourism would boom as soon as European travel bans were lifted and "as political reforms are made and stability returns".

This would likely happen after presidential elections, it said. Egypt's interim military rulers have said parliamentary elections will be held in September and presidential elections soon after.

Egyptian Resorts said in August its board of directors agreed to take back a plot the company had sold for about $11 million after the buyer failed to meet sale requirements.

Its unconsolidated net profit rose to 10.6 million Egyptian pounds ($1.8 million) in 2010, while unconsolidated net revenue nearly halved to 16.9 million pounds.

Egyptian Resorts, which reported a consolidated net loss of 3.9 million pounds in 2009, has not yet released a consolidated profit figure for 2010.

Its shares closed up 8.4 percent, with the benchmark index up 3 percent. (Reporting by Dina Zayed; Editing by Erica Billingham)

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