Abu Dhabi developer Sorouh Q1 profit down 42 pct

Abu Dhabi developer Sorouh Q1 profit down 42 pct

Q1 net profit 76.3 million dirhams, vs 132 million; Revenues 452 million dirhams, vs 431 million; Shares down 3.4 percent

April 28, 2011 3:51 by p.deleon

Sorouh Real Estate reported a 42 percent drop in first-quarter profit, after Abu Dhabi’s second-largest developer had no land sales in the first quarter and made less money on property handovers.

Sorouh reported a net profit of 76.3 million dirhams ($21 million) on Thursday. Two analysts polled by Reuters had forecast a profit of 54 million dirhams and 94 million respectively.

Its shares were down 2.7 percent at 0710 GMT.

“This quarter is very different to the first quarter of 2010 which was largely a land sales quarter. This quarter was a delivery quarter,” chief financial officer Richard Amos told reporters.

Revenue rose 5 percent to 452 million dirhams as it began the handover of commercial properties at its Sun and Sky Towers project in Abu Dhabi in March. Sorouh said it saw a pick-up in sales and leasing interest in the project and will begin handover of residential homes in May.

Sorouh’s results followed the UAE’s biggest developer Emaar Properties, which reported a 45 percent drop in quarterly profit after revenue dipped.

Amos had said earlier this month the company expected to complete projects worth 13 billion dirhams with delivery of 7,000 units by 2014.

Most Abu Dhabi developers have been focusing on completion and delivery of existing projects after suffering big losses during the global financial crisis, which put an end to a six-year construction boom.

By Stanley Carvalho

(Writing by Jason Benham; Editing by Dan Lalor)