Sorouh Q1 earnings surge 21.6%

01/05/2013 11:07 AST

Sorouh Real Estate's profit climbed 21.6 per cent in the first-quarter of 2013 compared to the same period last year.

The rise in earnings was a consequence of change in revenue mix, release of contingencies on completed projects, and a reduction in fair value losses on the investment portfolio. Profits were driven principally by National Housing projects and investment property income.

Revenues were down year-on-year due to handovers at Sun and Sky last year and due to Phases 1 and 2 of Watani, the National Housing project, approaching construction completion.

Sorouh grew its recurring revenues from investment properties by over 50 per cent year-on-year to Dh74 million in the first quarter of the year. In addition, Sorouh's financial position is robust, with cash collections of approximately Dh1.4 billion in the quarter, Dh1.8 billion of cash on the balance sheet and gearing reduced to 32 per cent.

Shareholder approval was obtained in March 2013 for the merger with Aldar Properties. It is anticipated that the merger will become effective in June 2013.

Abubaker Seddiq Al Khouri, managing director, Sorouh, termed it as "a very solid start to the year."

The managing director said: "In line with our strategy, the business is generating a significant amount of recurring revenues from its investment portfolio. Integration work in preparation for our merger with Aldar is also progressing well and we expect the merger to complete in June this year. Substantial progress is being made on our large portfolio of developments as we move closer to delivering around 7,000 units between now and the end of 2014."

Khaleej Times