Abu Dhabi’s Sorouh sees fourth quarter loss as provisions rise

Developer booked a net loss of AED199m in Q4, provision for debts rose to AED370m for the year
Abu Dhabi’s Sorouh sees fourth quarter loss as provisions rise
Sorouh Real Estate booked a net loss of AED199m ($54m) in the fourth quarter after provisions
By Joanne Bladd
Mon 14 Feb 2011 10:50 AM

Sorouh Real Estate booked a net loss of AED199m ($54m) in the fourth quarter after setting aside money to cover impairments and provisions, the company said Monday.

Abu Dhabi’s second largest developer by market value said the loss compared to a profit of AED28.1m during the same period in 2009.

Sorouh took AED370m of provisions and impairments last year, adding to AED363m set aside in the previous year.

Full-year revenue dropped 61 percent to AED1.2bn, while revenue for the three months to December 31 fell 51 percent to AED214m, the developer said in a statement to Abu Dhabi bourse.

 “In the short-term, 2011 and 2012 will be years of delivery for us,” Sorouh’s managing director Abubaker Seddiq Al Khouri said in the statement.

Sorouh said it would deliver 1,500 new homes by the end of 2011 and focus on profit growth from its existing real estate portfolio.

“This means significant cash generation for het business and profits for shareholders,” he said.

Sorouh raised AED2.35bn in loans to repay Islamic bonds and finance projects in Abu Dhabi, the company said on July 1. The company has AED2.35bn of outstanding debt due in 2014, according to data compiled by Bloomberg.

Sorouh said it has a cash balance of AED1.3bn at the end of 2010 compared with AED2.8bn dirhams a year ago.

Abu Dhabi, the capital of the UAE, suffered more than a 45 percent decline in property values from its 2008 peak following the financial crisis.

Sorouh's earnings comes after Abu Dhabi's struggling developer Aldar Properties reported a full-year loss of AED12.7bn, as it booked massive writedowns on its assets.

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