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Sorouh Real Estate PJSC posts AED130 million Q1 profit

Net profit for the 1^st quarter 2009 was AED 130.4 million representing an increase on 4^th quarter 2008 (AED 45.9M) but a decrease against 1^st quarter 2008 (AED 361.5M). Earnings per share for the period were 5 fils per share (Q1 200814 Fils).

Revenues for the 1^st quarter 2009 were AED 335.6M (Q4 2008aed 532.6 mq1 2008AED 623.7M).

The results reflect the company s strategy to develop its earnings profile by increasing recurring income for long term profitability.

This will be achieved by retaining more property for development and subsequent sale and lease, despite the short term impact on the income statement. The results also reflect the decision to sell less land which is currently not reflective of its intrinsic value.

The company maintains a strong balance sheet with net assets as at the end of the 1^st quarter 2009 of AED 5.7 billion (FY 2008 AED 5.9 billion). Notably the business has seen strong growth of 63in its investment properties to AED 1.4 billion.

The company has low gearing and retains AED 5.9bn of cash on its balance sheet. Cash collection continued to be strong in the period at AED 732 million (1Q 2008 AED 893 million). Total bank borrowings are AED160.5 million, representing a debt to equity ratio of 2.79, this excludes the outstanding amounts of the asset-backed Sukuk certificates issued in the 3^rd quarter 2008 which is a non-recourse facility.

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.

Commenting on the achievement, Abubaker Siddiq al Khouri, Sorouh Managing Director, expressed great delight on his outfit s steady progress in its business. “In the context of difficult market conditions we are pleased to report earnings progression quarter on quarter. This reflects our decision to retain land to develop more property ourselves for future sale and lease, generating sustainable earnings and to not revalue land,’ he said.

‘The business is in good financial health thanks to our cash conservation and cost management initiatives. This, combined with Abu Dhabi s strong market fundamentals, makes us well-placed to capitalise on our position when markets recover, delivering significant long term value to our shareholders,’ he added.