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Wed 31 Oct 2007 12:52 PM

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Land, unit sales push Sorouh profit up 40%

UAE's third-largest developer sees Q3 net income rise to $59.1mn as revenues more than double.

Abu Dhabi-based Sorouh Real Estate, the UAE's third-largest real estate firm by market value, said third-quarter profit grew as revenues more than doubled on sales of land and residential units.

Unlike its rival Aldar Properties, Sorouh's quarterly earnings did not include any gains in the value of land holdings, developer of the $25 billion Shams Abu Dhabi project, said in a statement.

"This profit has been derived solely from operating activities with no asset revaluations," Sorouh said in a statement posted on the Abu Dhabi bourse website.

Sorouh began selling freehold titles to developers at Shams Abu Dhabi in the third quarter, the main driver of a 165.2% jump in quarterly revenues to 405.11 million dirhams ($110.3 million), it said.

Sales of land, villas and apartments during the three months reached 1.1 billion dirhams, Sorouh said, without giving a comparative figure.

Sorouh's profit in the three months ended September 30 rose 39.2% to 216.91 million dirhams, or 0.09 dirhams per share, up 39.15% from the year-earlier period, it said.

The quarterly earnings were above an HSBC forecast of 192 million dirhams in a Reuters survey last month.

Sorouh made no gains on the fair value of investment properties in the third quarter, compared with 149.85 million in the year-earlier period, financial statements showed.

Aldar, the second-largest publicly traded UAE property developer, said last week third-quarter profit jumped 74%, spurred by gains in the value of land holdings.

Every quarter, Aldar values a portion of land at market rates and includes that in its income statement, its chief financial officer said in July.

Abu Dhabi, which has more than 90% of the oil reserves of the UAE, is trying to wean its economy off energy exports, including by allowing foreigners to invest in property under 99-year leases.

Shares of Sorouh, which opened up to foreign investment earlier this year, rose almost 4% in early trading. They are up almost 166% this year.

The firm's general and administrative expenses tripled in the quarter to 42.15 million dirhams, compared with 13.52 million dirhams in the year-earlier period.

It made 155.88 million dirhams, or 0.06 dirhams per share, in the third quarter of 2006. - Reuters

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