Monday, Oct 31, 2011

(This story was originally published Sunday.)

DOHA, Qatar (Zawya Dow Jones)--Barwa Real Estate Co. (BRES.DO), Qatar's largest developer by revenue, saw third-quarter net profit fall 71% to 80.5 million Qatari riyals ($22.1 million), as debt and obligations soared.

Third-quarter net profit was QAR80.5 million compared to QAR277.2 million in the year earlier period, according to Zawya Dow Jones calculations.

The company restructured its debts at the end of 2010 and reduced borrowing costs but said, "obligations under Islamic Finance contracts" and amounts "due to related parties" rose by QAR2.7 billion in the nine months to September, according to an emailed statement late Sunday.

It also blamed the planned sale of its Barwa Financial District to state-run Qatar Petroleum, which it said hadn't been completed yet. "The resulting profit was expected to be partially recorded during the 3rd quarter of 2011," it said, explaining the loss.

Nine month profit was QAR833 million, up from QAR776 million a year earlier, helped by income from sale of properties. Income from the sale of subsidiaries in the nine months rose to QAR419 million, up from QAR93 million a year ago.

Qatar's property market was hit hard by the global economic slowdown in 2008 and 2009, with real-estate prices and rents of freehold property dropping as much as 40% from their peaks in mid-2008, leading to an oversupply situation that continues to weigh on the market.

Barwa Group, 45% owned by Qatar's government, is a conglomerate with over two-dozen subsidiaries ranging from real estate to fund management to banking, and has a large portfolio of properties overseas in countries including France, Egypt and the United Arab Emirates.

Barwa Real Estate is by far the biggest company in the conglomerate. In April, the developer laid off around 12% of its staff.

Shares in the developer finished trading 0.3% higher Sunday at QAR30.90 in a broadly positive overall market. 


 
   -By  Alex Delmar-Morgan,   Dow Jones Newswires; +974 6659 9818; alex.delmar-morgan@dowjones.com

(END) Dow Jones Newswires

31-10-11 0356GMT