Abu Dhabi real estate firm reports 54.5 percent rise; no decision on Aldar merger yet
Abu Dhabi's Sorouh Real Estate reported a 54.5 percent rise in third-quarter net profit on Wednesday and said no decision has been taken so far about its proposed merger with rival Aldar Properties.
The second largest developer by market value in Abu Dhabi said it had net consolidated profit of AED129.2m (US$35.2m), up from AED83.6m in the prior-year period, it said in a statement on Abu Dhabi's bourse.
Income was boosted after Sorouh reversed AED40m in contingency provisions for its Sun and Sky towers, which have been completed.
Revenue for the quarter dropped to AED803.4m from AED890.4m, down 9.8 percent.
The developer said its results were buoyed by revenue from national housing projects - government-awarded schemes to build homes for UAE citizens - which rose to AED607m from AED68m.
Sorouh said merger talks with rival Aldar, which were first announced in March, are at an advanced stage.
"A decision will be taken by the Company's board of directors as to whether or not to recommend the merger to the company's shareholders in due course," the statement said.
The two firms had earlier said a decision would be reached by last June.
Discussions between the two firms come as Abu Dhabi's property market continues to face challenges as a huge supply of high-end homes comes on the market this year. Property prices in the emirate are expected to fall another 5 percent in 2012, a Reuters poll in May showed.
Cash-rich Abu Dhabi, which is conducting a strategic review of its state-linked entities, has spent more than US$10bn on Aldar itself in the last two years as the emirate's property market was hit by oversupply and falling prices, compounded by a similar collapse in neighbouring Dubai.
Shares of Sorouh have climbed 57.7 percent this year buoyed by the merger discussions with Aldar.