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Sorouh’s Q2 profits soar 33%

Sorouh Real Estate on Tuesday said its consolidated net profit surged 33 per cent in the second quarter to Dh166.6 million on sustainable incomes.

Abu Dhabi’s second biggest property developer linked the higher profitability to continued strengthening of sustainable recurring income streams from Sorouh’s investment portfolio, as well as revenues from its national housing projects, subsidiaries and the release of contingencies and provisions.

The real estate developer said its consolidated first-half net profit surged 29 per cent to Dh259.4 million from Dh201.6 million in the same period last year.

“Revenues from National Housing projects increased significantly, generating nearly Dh1.2 billion of revenue for the half year, representing an annual increase of 247 per cent,” the company said. Abubaker Seddiq Al Khouri, managing director of Sorouh, said the developer has about 7,000 units in the pipeline. He was confident about the company’s outlook as business continues on its path to maturity.

“The quality of earnings continues to improve through the diversification and strengthening of revenue streams,” Al Khouri said.

He described the national housing project as “an important contributor to the quarterly revenue mix along with the increased amount of leasing income.”

“At the same time, we are continuing to invest across our development portfolio to ensure that we meet the demand for high quality product with a pipeline of some 7,000 units,” he added.

The property developer raised Dh28 million revenues from selling 250 parking spaces in Sun & Sky Towers; another Dh82 million was racked up from other income derived from the release of contingencies and provisions that are no longer required on completed projects. The company reported an exceptional performance for leasing activity during the quarter with the signing of 91 new leases in Sun & Sky Towers and 56 in Al Murjan development. About 800 units were signed in second quarter for bulk corporate leasing in Al Rayyana.

“Strong overall leasing demand has led to a rise in revenues from investment properties of 22 per cent quarter-on-quarter to almost Dh50 million in second quarter, and reaching Dh100 million for the half year, an increase of 18 per cent,” the company said, adding that it is well on track to reach its target of Dh500 million of annualised recurring income by 2014.

Sorouh has a robust financial position, with cash collections of approximately Dh1 billion in first half. It also has Dh1.1 billion of cash on balance sheet with low gearing of 41 per cent. Net asset value increased from Dh2.37 per share to Dh2.47 per share.

— haseeb@khaleejtimes.com