Sorouh net jumps by impressive 42%

Dubai: Sorouh Real Estate PJSC enjoyed net profits of Dh1.7 billion in 2008, an impressive 42 per cent increase on Dh1.2 billion in 2007.

In the fourth quarter alone, the company made a net profit of Dh46 million.

Although many companies, especially those in real estate, are now feeling the squeeze from the global financial world, profits and revenues have been robust.

Analysts say this is mainly because 2008 was a year of exceptional growth and repercussions of the downturn only became clear in the last month of 2008.

Barmak Besharaty, managing director of Al Mas Capital, told Gulf News earlier that he wouldn't be surprised if most companies experienced growth in 2008, as business was only threatened in the final quarter.

Sorouh also reported revenues of Dh3.7 billion, up a massive 60 per cent on 2007's Dh2.3 billion.

The net profit represented earnings per share of 74 fils. Earnings per share in 2007 were Dh0.50, a 48 per cent increase and was generated from operating activities, with no asset revaluations.

The company reported a growth of Dh17 billion in total assets last year, a 135 per cent increase from Dh7.2 billion in 2007.

Net asset value was up 33.5 per cent, reaching Dh5.9 billion, from Dh4.5 billion in 2007.

Liquid funds increased from Dh1.4 billion to Dh6.8 billion, as a result of cash collection from sales and rental income, and funds raised through the issue of asset-backed Sukuk during the third quarter of 2008.

The company said that it remained positive about the long term outlook of the Abu Dhabi real estate market and the company's strong balance sheet.

"We remain confident that we are positioned as positively as we can be for 2009. Sorouh strengthened its cash position in 2008 to ensure we have the necessary liquidity in place for the coming year and beyond. We are taking a prudent approach to the deployment of those reserves in 2009," Abubaker Seddiq Al Khouri, managing director of Sorouh said.

While 2009 is set to be a challenging year for companies whose business revolves around real estate, Sorouh are confident of success in Abu Dhabi.

"During 2009, we will focus on the on-time construction of Sorouh's projects, which saw significant progress in 2008. We accept that 2009 will be slower than 2008, given the global financial situation, but we remain confident of the long-term outlook for Abu Dhabi and for Sorouh," said Mounir Haidar, chief executive of Sorouh.

Sorouh projects include Shams Abu Dhabi, Golf Gardens and Tala Tower.

Total expenditure was Dh2 billion in 2008, up from Dh.2 billion in 2007. Land costs, infrastructure work and lease expenses hit Dh1.4 million.

General and administrative expenses reached Dh340 million and sales and marketing expenses was Dh311 million.

Bank borrowings decreased from Dh223 million at the end of 2007, to Dh220 million at the end of last year.