Tuesday, Jul 31, 2012

DUBAI(Zawya Dow Jones)--Abu Dhabi-based developer Sorouh Real Estate (SOROUH.AD) that is currently studying a possible merger with Aldar Properties, Tuesday posted a 33% year-on-year rise in second-quarter net profit to 166.6 U.A.E. million dirhams ($45.4 million) as it further strengthened its investment portfolio and added to revenue streams.

Second-quarter net profit exceeds Securities & Investment Co (SICO) expectations of AED57.5 million in quarterly net profit.

Sorouh said earnings per share for the second quarter was AED5.6 versus AED4.2 in the year ago period.

"The quality of earnings continues to improve through the diversification and strengthening of revenue streams," Abubaker Seddiq Al Khouri, Sorouh's managing director said in an emailed statement.

Sorouh is currently undergoing a due diligence for a possible state-backed merger with Aldar Properties after first announcing it would study the merger in March.

Like Dubai, Abu Dhabi's real estate sector has suffered from an oversupply and CBRE anticipates significant new office and residential supply will enter the market in 2012 causing vacancy rates to rise further and sale and rental prices to fall.

Sorouh shares are trading +1.9% at AED1.05 Tuesday extending its 2% rise Monday.

-By Tahani Karrar-Lewsley, Dow Jones Newswires; +971-4-446-1686; tahani.karrar@dowjones.com; Twitter: @ZDJnews

Copyright (c) 2012 Dow Jones & Co.

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(END) Dow Jones Newswires

31-07-12 0613GMT