Abu Dhabi's Sorouh Q2 profits surges; misses estimates

Abu Dhabi’s Sorouh Q2 profits surges; misses estimates

Co says Q2 net profit 125 mln dirhams vs 31 mln dirhams yr-ago; Q2 revenue 1.22 billion dirhams; Provision drops to 6 mln dirhams from 41 mln dirhams in Q2 2010

July 28, 2011 9:19 by Reuters

Sorouh Real Estate reported a four-fold surge in second-quarter net profit as Abu Dhabi’s second largest property developer handed over more units and saw a sharp drop in bad debt provisions, but the results missed analysts’ forecasts.

Sorouh made a net profit of 125 million dirhams ($34 million)compared with 31 million dirhams in the same period last year, it said in a statement on Thursday.

Analysts in a Reuters poll in July estimated Sorouh would make an average 157.17 million dirhams for the second quarter.

Profits for the first half were 202 million dirhams, up 33 percent from the prior year period.

Revenues for the quarter was 1.22 billion dirhams, most of which was derived from ongoing handover of units in Sun and Sky Towers, revenues from housing projects awarded by the government and income from rental portfolio. Sorouh’s year-ago revenue stood at 189.8 million dirhams.

Provisions for doubtful debt dropped to 6.2 million dirhams for the quarter, down from 41 million dirhams during the same period last year.

The developer said in June it will continue to focus on the delivery of existing projects in its home market in 2011 and has no plans to expand abroad just yet.

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. ($1 = 3.673 UAE Dirhams) (Reporting by Jason Benham, writing by Praveen Menon, Ediitng by Dinesh Nair)