Abu Dhabi-based developer Sorouh Real Estate on Sunday announced a 22 per cent surge in its first quarter profits while revenues more than doubled for the period ended March 31, 2012.
In a media statement, the firm said its net profit rose from Dh76.3m in Q1 last year to Dh92.8m this year, up 22 per cent year-on-year. Sorouh said the rise represented a continued strengthening of sustainable recurring income from Sorouh’s investment portfolio and revenues from its National Housing projects.
The property major also highlighted a “strong start to 2012”, with Q1 revenues more than doubling year-on-year to almost Dh1bn (Dh967.2mn), compared to Dh452m in Q1 2011.
The company said revenues from National Housing projects significantly increased, generating Dh62m in gross profit in Q1, while revenues from investment properties grew 14 per cent year-on-year to almost Dh50m in Q1. “The company is on track to reach its target of Dh500m of recurring income by 2014,” it added on the statement.
“I am pleased to be able to report a strong start to 2012. 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,” said Abubaker Seddiq Al Khouri, Managing Director, Sorouh.
The developer said almost all sold units for Sun Sky Towers have now been handed over, with the handover process generating a gross profit of Dh33m in Q1. The average development margin for the project was 17 per cent, in line with previous guidance, the firm said.
The company reported a robust financial position, with cash collections of approximately Dh450m in Q1, with Dh1.5bn of cash on balance sheet with low gearing of 42 per cent.
Regarding the potential merger with Aldar, the firm said that 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.”
On March 11, 2012, Sorouh and Aldar announced that the two companies were at early stage discussions to evaluate the possibility of a merger between the two companies. “A further update will be made as and when appropriate,” Sorouh said in today’s statement.