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Abu Dhabi developer Sorouh swings to Q4 profit
Abu Dhabi developer Sorouh Properties, the emirate's second largest developer by market value, swung to a profit in the fourth quarter, lifted by a rise in home and land sales.
February 15, 2012 2:01 by Reuters
The company also reported a jump in full year profit on Wednesday, partly on lower impairments.
Sorouh made a net profit of 92.6 million dirhams ($25.2 million) in the fourth quarter, against a net loss of 212.5 million dirhams in the prior-year quarter, Chief Financial Officer Richard Amos told reporters in a conference call.
“The profit was driven by handover of 188 units at Sun and Sky towers, also national housing sales and a land sale in the fourth quarter,” Amos said.
Two analysts had forecast profit of 72 million dirhams and 108 million dirhams, according to a Reuters poll last month.
Sorouh earned a 2011 net profit of 334.7 million dirhams ($91.12 million), compared to 7.4 million dirhams in 2010, according to its financial statements.
The developer took lower goodwill impairments of 117 million dirhams last year, down 28 percent over the previous year.
Sorouh delivered 918 units in 2011 and expects to deliver close to 5000 units during 2012-13. It expects to spend 1.8 billion dirhams on its projects this year, down from the 2.8 billion dirhams of capital expenditure in 2011, Amos said.
The firm is unlikely to seek financing until the end of the year and forecasts further revenue growth this year, Amos said.
Sorouh made a gain of 20.7 million dirhams on sale of investment property, it said. Revenues in the fourth quarter totalled 1.2 billion dirhams, driven by sale and rental income.
Abu Dhabi’s property market fared better than neighbouring emirate Dubai, which saw a collapse and the restructuring of its flagship firm Dubai World.
However, Abu Dhabi too is now facing challenges as a huge supply of high-end homes are expected to enter the market. Property prices in the emirate are expected to fall another 11 percent from here, a Reuters poll showed. ($1 = 3.6730 UAE dirhams) (Reporting by Stanley Carvalho; Editing by Rachna Uppal)