Sorouh's Q3 net profit slumps 75%

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PROFIT DROP: Q3 profits for Abu Dhabi's Sorouh Real Estate fell 75 percent, compared to the previous quarter.

Abu Dhabi developer Sorouh Real Estate on Thursday posted a third-quarter net profit of AED187.3 million ($50.99 million), a drop of 75 percent from the same period in 2008, but up 26 percent from the previous quarter.

Its managing director, Abubaker Al Khouri, said he expected the real estate market to "remain challenging" but said the company was "cautiously optimistic" over signs the sector was stabilising.

The emirate's second-largest developer by market capitalisation made a net profit attributable to shareholders of AED765.2 million in the third quarter of 2008 and a nine-month net profit of AED461 million, according to a statement posted on the bourse website.

Revenues for the third quarter were AED1,351m, up from AED978m in Q2, principally driven by the handover of villas at Golf Gardens and the recurring rental income of Sas Al Nakhl, Khalidiya Village and Al Oyoun.

Net profit for the third quarter, excluding minorities, was AED187m, up 26 percent on Q2. Net profit for the nine months period was AED461m, down from AED1,813m in 2008.

The company said it maintained a strong balance sheet with net assets as at the end of the third quarter 2009 of AED6.1bn.

Sorouh's statement added that it retained AED3.9bn of cash on its balance sheet.

Abubaker Al Khouri, managing director of Sorouh, said: “We are pleased to continue to report results in-line with previous guidance of quarter on quarter earnings improvement.

“Whilst the real estate market is likely to remain challenging in the near future we remain cautiously optimistic over signs that the market is stabilising, as the number of sales enquiries increase, especially in the secondary market.

"Sorouh is well placed to capitalise on the future success of Abu Dhabi. The scarcity of quality completed units coming on stream, means demand is likely to exceed supply for some years to come.”

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