Sorouh reports 22% increase in profit

Dubai: Sorouh Real Estate PJSC, an Abu Dhabi-based developer, reported a 22 per cent increase in its consolidated net profits to Dh92.8 million during the first quarter of  2012, up from Dh76.3 million recorded in the corresponing period last year.

The company recorded a 114 per cent jump in revenues to Dh967.2 million, up from Dh452 million recorded during the first quarter of 2011. Earnings per share grew 30 per cent to 3.2 fils, up from 2.4 fils.

"Revenues from National Housing projects significantly increased, generating Dh62 million in gross profit in the first quarter," the company said in a statement.

"Revenues from investment properties grew 14 per cent year-on-year to almost Dh50 million in Q1. The company is on track to reach its target of Dh500 million of recurring income by 2014."

Almost all sold units of the company's Sun & Sky Towers have now been handed over. Handed over units generated a gross profit of Dh33 million in Q1. The average development margin for the project was 17 per cent, in line with previous guidance.

"Robust financial position, with cash collections of approximately Dh450 million in the first quarter, Dh1.503 billion of cash on balance sheet with low gearing of 42 per cent," it said.

Abubaker Seddiq Al Khouri, Managing Director, Sorouh, commented: "These results reflect the strength and maturity of our business. We continue to diversify our revenue streams which will support the quality of our earnings over the medium to long term. The current flight to quality with Abu Dhabi real estate leaves us well positioned to deliver an exciting project pipeline of some 7,000 units between now and the end of 2013."

In March, Sorouh and Aldar announced that the two companies were at early stage discussions to evaluate the possibility of a merger between the two companies.

"The evaluation process to look at the legal and business aspects of a potential merger is now underway and the ultimate outcome of this process will take into account the best interests of shareholders. A further update will be made as and when appropriate," the statement said.