Abu Dhabi's Sorouh Real Estate said on Wednesday its first quarter net profits had fallen by more than half compared to the same period of last year because of a decline in land sales.
The developer said it expected earnings to improve through the year as sales and rentals on projects grow after a six month slowdown in the property sector. "The results also reflect the decision to sell less land which is currently not reflective of its intrinsic value," the developer said in a statement.
"Over the course of the year Sorouh expects to see gradual quarter-on-quarter improvement as the company starts to realise unit sales on the handover of Golf Gardens 1 and an increase in recurring income from the rental developments of Sas Al Nakhl, Khalidiya Village and Al Oyoun Village."
Sorouh earned a net profit attributable to equity holders to the parent of AED125.46m ($34.14m) in the first quarter, down 65.3 percent from AED361.47m in the year-earlier period.
Net profit for the period was AED130.45m, it said.
Revenues for the first quarter of 2009 were 335.6 million dirhams, down from AED623.7m in the same period last year, it said.
"The reduction in revenue from the corresponding period in 2008 is due to a decrease in the number of plots recognised," it said.
Developers in the UAE have been hit hard as the global financial crisis ended a six-year construction boom.
Hundreds of billions of dollars worth of projects have been cancelled in recent months while valuations and sales have fallen.
Earnings per share in the three months to March 31 were AED0.05 per share, down from AED0.14 last year.
EFG-Hermes estimated a first-quarter net profit of 287 million dirhams in a Reuters survey in April.For all the latest business news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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