UAE capital's second biggest developer posts profit of US$40.35m compared to year ago
Abu Dhabi's Sorouh Real Estate, which is in merger talks with larger rival Aldar Properties, reported a 34 percent rise in second-quarter net profit on Tuesday, beating analyst estimates.
The second largest developer by market value in Abu Dhabi made a net profit of AED148.2m (US$40.35m), compared to AED110.4m in the prior-year period, the company said in a statement on the Dubai bourse.
The estimates beat two analysts' forecasts which had estimated net profit between AED57.5m and AED132m.
Revenues for the quarter reduced to AED681.3m from AED1.2m in the prior-year period. The company said earnings were helped by revenue from government housing projects.
"We are continuing to invest across our development portfolio to ensure that we meet the demand for high quality product with a pipeline of some 7,000 units," said Abubaker Seddiq Al Khouri, managing director of Sorouh.
The developer announced earlier this year that it may merge with Aldar in a state-backed tie-up that could create a company worth about US$15bn in assets.
Sorouh said the due diligence process for the merger is "well underway".
Abu Dhabi's property market is facing challenges as a huge supply of high-end homes are expected to enter the market this year. Property prices in the emirate are expected to fall another 5 percent in 2012, a Reuters poll showed.