Real estate: Sorouh net profit rises 21.6%

Abu Dhabi: Sorouh Real Estate, Abu Dhabi’s second-largest real estate company by market capitalisation, yesterday said its first quarter profit rose 21.6 per cent to Dh83.6 million while revenue fell 35 per cent to Dh632.2 million.

“Profit attributable to shareholders was up... due to the change in revenue mix, release of contingencies on completed projects, and reduction in fair-value losses on the Investment Portfolio. Profits were driven principally by National Housing projects and investment property income. Earnings per share increased as a result by 21.6 per cent year-on-year to reach 3.9 fils per share,” Sorouh said in a statement.

“Revenues were down year-on-year due to handovers at Sun and Sky last year and due to Phases 1 and 2 of Watani, the National Housing project, approaching construction completion. Sorouh grew its recurring revenues from investment properties by over 50 per cent year-on-year to Dh74 million in [the first quarter],” the statement added.

Sorouh’s stock on the Abu Dhabi Securities Exchange yesterday ended 1.6 per cent lower at Dh1.85. Commenting on its projects, the company said the The Gate Towers are 97 per cent complete and Alghadeer is 95 per cent complete. “Building completion certificates for Watani have been obtained for Phases One and Two.”

Sorouh said its “financial position is robust, with cash collections of approximately Dh1.4 billion in the first quarter, and Dh1.8 billion of cash on the balance sheet.”

Commenting on the first quarter financial results, Abu Bakr Seddiqi Al Khouri, managing director of Sorouh, said: “This is a very solid start to the year. Substantial progress is being made on our large portfolio of developments as we move closer to delivering around 7,000 units between now and the end of 2014.”

Reacting to Sorouh’s first quarter financial performance, Mohammad Ali Yasin, managing director at NBAD Securities. told Gulf News: “The slowdown in Sorouh’s revenue is similar to that of Aldar. They have not announced any new projects, while the local housing projects are low margin. For the second quarter, it will probably be more of the same. People are now looking at the formation of the new entity AldarSorouh Properties.”

Sorouh said it is anticipated that its merger with Aldar Properties will become effective in June 2013.