Sorouh Q2 profit up 34%

Posts Dh148.2m profit; merger talks with Aldar well underway

Abu Dhabi's Sorouh Real Estate, which is in merger talks with larger rival Aldar Properties, reported a 34 per cent rise in second-quarter net profit on Tuesday, beating analyst estimates.

The second largest developer by market value in Abu Dhabi made a net profit of Dh148.2 million ($40.35 million), compared to Dh110.4 million in the prior-year period, the company said in a statement on the Dubai bourse.

The estimates beat two analysts' forecasts which had estimated net profit between Dh57.5 million and Dh132 million.

Revenues for the quarter reduced to Dh681.3 million from Dh1.2 billion in the prior-year period. The company said earnings were helped by revenue from government housing projects.

"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," said Abubaker Seddiq Al Khouri, managing director of Sorouh.

The developer announced earlier this year that it may merge with Aldar in a state-backed tie-up that could create a company worth about $15 billion in assets.

Sorouh said the due diligence process for the merger is "well underway".

Abu Dhabi's property market is facing challenges as a huge supply of high-end homes are expected to enter the market this year. Property prices in the emirate are expected to fall another 5 per cent in 2012, a Reuters poll showed.

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