Thursday, Feb 16, 2012
(This story was originally published Wednesday)
--FY net profit soars to AED335 million versus AED7.4 million year earlier
--Sees further growth in recurring revenues in 2012
--4Q net profit of AED93 million misses EFG Hermes estimate
By Tahani Karrar-Lewsley
OF ZAWYA DOW JONES
DUBAI (Zawya Dow Jones)--Abu Dhabi's Sorouh Real Estate Co. (SOROUH.AD) said Wednesday it plans to hand over more units in 2012 and boost its recurring income portfolio as it posted a fourth quarter net profit of 93 million U.A.E. dirhams ($25.2 million) versus a net loss of AED212.5 million a year ago.
Sorouh said in a statement on the Abu Dhabi Securities Exchange its full year net profit for 2011 was AED335 million versus AED7.4 million a year ago as the hand over of units at the Sun & Sky Towers, recurring rental income, construction income from national housing projects and revenues from subsidiary companies yielded a revenue of AED2.2 billion.
Full-year revenue for 2011 soared to AED3.8 billion, from AED1.20 billion a year ago, the company said in a statement on the Abu Dhabi Securities Exchange website. Revenues for the fourth quarter were AED1.2 billion versus AED197 million a year ago.
Investment bank EFG Hermes said the results were stronger than expected due to the stronger-than-expected deliveries of units in Sun and Sky towers, even though the 4Q net profit of AED93 million came below its estimate of AED115 million. "While some negative surprises below the operating profit line make us believe that the results were mixed," EFG said in a note.
"[The strong performance] reflects the strength of the business and our ability to deliver over 1,700 high quality units to market while diversifying our earnings through construction income from our prestigious national housing developments, revenue from subsidiary companies, a significant land transaction and rental income from investment properties," said Abubaker Seddiq Al Khouri, Managing Director at Sorouh.
He added this mix of revenue contributors has helped strengthen the earnings profile of Sorouh, building a more sustainable business for the future.
In addition, a swap deal over a plot of land in Shams Abu Dhabi had "a net positive revenue impact of AED211 million," Sorouh said. It, however, noted a AED78 million loss in fair value on investment properties in 2011.
The developer's board has recommended a full year cash dividend of 5 fils per share, subject to shareholder approval.
Sorouh's Chief Operating Officer Gurjit Singh said the company expects to see further growth in recurring revenues in 2012 as it adds Alrayyana and Boutik Al Ain Mall to its leasing portfolio. Singh added that there would also be AED250 million in fee income from its Al Ain Ghuraiba and Al Sila'a Western Region national housing projects as well as revenues from the handover of Tala Tower.
Sorouh's Chief Financial Officer Richard Amos said the company has no need to raise funding at present. "We will be pretty self-sufficient this year, we are in a pretty strong cash position," Amos said. As of end-2011, Sorouh had a cash balance of AED1.8 billion, the statement showed.
Sorouh shares are trading 3% down at AED0.98 Wednesday after gaining 7.5% Tuesday.
-By Tahani Karrar-Lewsley, Dow Jones Newswires; +9714 446-1692; Tahani.Karrar@dowjones.com
Copyright (c) 2012 Dow Jones & Co.
(END) Dow Jones Newswires
16-02-12 0351GMT
