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- Dubai 04:53 06:06 12:12 15:35 18:12 19:26
Sorouh, Abu Dhabi's second largest developer will deliver around 1,100 residential units this year and expects the property market in the emirate to stabilise this year, the company's chief operating officer said yesterday.
"We'll deliver units in our Sun and Sky Towers at the end of the second quarter and start of third quarter," Gurjit Singh told Reuters on the sidelines of a property conference.
"The handover of these units will show in our third-quarter results." Singh said he expects in excess of 4,000 units to come online this year in Abu Dhabi, which will help stabilise the market.
The developer also plans to increase its rental income to around 12 per cent of total income by the end of the year. "We're growing our rental income," he said.
Earlier, Sorouh reported profit by 39 per cent in the fourth-quarter 2009. Profit for the period fell to Dh8.1 million from Dh44.8m a year earlier. Full-year profit slumped 72 per cent to Dh495m, or 19 fils a share, from Dh1.8bn, or 74 fils a share. "We've comprehensively reviewed our projects and receivables for next year and we'll keep a very clear control on our costs moving forward," said Chief Financial Officer Richard Amos.
Credit Suisse analysts said the fourth quarter effort missed most expectations due to provisions and associate losses but "operationally the results look very good and beat our estimate", eported Zawya Dow Jones.
Sorouh doesn't expect to take more provisions in 2010, after boosting provisions in the fourth quarter to Dh242 million, said Amos. Provisions in the quarter were taken on non-core businesses expenses and some delays in payments from customers.
Amos said he was "cautiously optimistic" that land sales would improve in 2010, and that he expects profit growth from its rental portfolio to increase over the next few years, to 20 per cent from about 12 per cent at present.
Sorouh said it has Dh3bn of cash on its balance sheet and "almost no borrowings". Sorouh's next three-year business plan focuses on its core Abu Dhabi projects, and the developer may sell its investment in an associate that incurred a loss in the fourth quarter.
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