Abu Dhabi developer sees third quarter profit fall $16.2m as finance costs almost triple
Abu Dhabi developer Sorouh Real Estate on Monday said its third-quarter profit declined 68 percent as revenues fell and finance costs almost tripled, but the results beat analysts' forecasts.
Profit in the three months to September 30 fell to AED59.3m ($16.15m), compared with AED187.3m in the year-ago period, the emirate's second largest developer said in a statement.
The profit was "mainly attributable to a plot sale, rental income from the investment portfolio and construction contracts," the company said in the statement.
Analysts polled in a Reuters survey in October forecast an average profit of AED48.5m for the third-quarter.
Sorouh said it added a further AED38m of provisions in the quarter. Revenues for the quarter fell to AED371m from AED1.4bn in the same period last year.
Finance costs amounted to AED72.3m, up from AED26.8m, it said.
Developers across the United Arab Emirates have suffered the impact of the global financial crisis which put an end to a six-year construction boom. While Dubai has suffered the most, Abu Dhabi, home to most of the country's oil, has fared better.
Abu Dhabi's property market is set for another year of consolidation in 2011 and the supply of some 8,000 higher end homes over the next 15 months will do little to address a shortage in mid-income housing, the firm's chief operating officer told Reuters in October.