Sorouh Real Estate said on Thursday its fiscal fourth quarter net profit rose 21 per cent on the year to Dh118.9 million while net income for full year 2012 rose to Dh507.5 million, up 32 per cent from 2011.
“2012 revenue of Dh3 billion was mainly driven by national housing projects. Leasing income increased by 25 per cent year on year to Dh217 million reflecting successful lease-up of units in new developments such as Sun and Sky Towers, Al Murjan and the BOUTIK retail outlets, as well as continued high occupancy in established properties,” Sorouh said in a statement, adding the company is confident of reaching its stated goal of Dh600 million of annualised recurring revenues by the end of 2015.
“2012 continued to see strong investment in properties under development, which bodes well for delivery in 2013. These deliveries will drive cash flow and profit from handovers as well as continue to boost recurring revenues,” it added. Sorouh said its financial position remains robust and the balance sheet is strong. “Cash collections in 2012 amounted to Dh3.2 billion and the company had Dh1.3 billion of cash on its balance sheet as of 31 December 2012. The company has started to amortise its club loan making repayments of almost Dh400 million to date. The loan will be fully repaid by June 2014,” said the property developer.
Sorouh’s stock on the Abu Dhabi Securities Exchange on Thursday fell 1.13 per cent to close at Dh1.75 on profit-booking by investors.
Commenting on Sorouh’s financial performance, Abu Bakr Seddiq Al Khouri, the company’s managing director said: “Sorouh’s delivery pipeline for 2013 is very strong, with over 7,000 units coming to market. These deliveries will strengthen cash flow and improve profitability. Meanwhile, the proposed merger with Aldar will enhance shareholder value by bringing together two complementary businesses that will have a more diversified and balanced portfolio along with significant future growth opportunities.”
However, Sorouh’s financial results disappointed some analysts.
“Sorouh’s earnings came below expectations. The primary considerations now are merger synergies and valuation assumption underpinning the merger ratio,” Anastasios Dalgiannakis, Head of Trading at Dubai-based Mubasher Financial Services told Gulf News.
Earlier this month, the boards of Aldar Properties and Sorouh Real Estate recommended a merger of two of the Abu Dhabi’s largest property developers that would lead to the creation of a new company having total assets of more than Dh47 billion and enabling the entity to become one of the largest listed real estate companies in the region. Shareholders are scheduled to vote on the merger at their respective extraordinary general meetings (EGMs) on February 21.
The move paved the way for the second-biggest corporate merger in UAE’s history after Emirates Bank International and National Bank of Dubai merged a few years ago.