Abu Dhabi's Sorouh Q2 profit surges to $34m
Sorouh Real Estate , which reported a fourfold surge in second-quarter profit on Thursday, plans to invest Dh1.4 billion ($381 million) in completing and delivering its existing projects until year-end.
Abu Dhabi's second-largest developer by market value made a net profit of Dh125m compared with Dh31m in the same period last year as it delivered more units and reduced bad debt provisions.
Analysts had forecast, on average, profit of Dh157.17m in a Reuters poll.
"We plan to invest another Dh1.4bn (in the second half). Our focus is on project delivery and we are expecting good results for the year-end," Richard Amos, chief financial officer, said in a conference call on Thursday.
Sorouh invested Dh1.4bn in its projects in the first six months and plans to deliver some 1,000 homes by the year-end, he added.
Profit for the first half rose 33 per cent to Dh202m, Sorouh said in an earlier statement.
Revenue for the second quarter reached Dh1.22bn, most of which was derived from the ongoing handover of units in Sun and Sky Towers, revenue from housing projects awarded by the government and income from rental portfolio.Sorouh's year-ago revenue stood at Dh189.8m.
Provisions for doubtful debts fell sharply to Dh6.2m for the quarter, down from Dh41m during the same period last year.
Sorouh trimmed staff by 17 per cent over the last year as part of cost cuts and more jobs could happen as projects are completed, Amos said.
The company has no immediate borrowing plans due to its strong cash position, he added.
Sorouh's shares dipped 1.6 per cent to Dh1.2, underperforming Abu Dhabi's bourse which edged 0.1 per cent higher.
The developer said in June it would continue to focus on the delivery of existing projects in its home market in 2011 and has no plans to expand abroad yet
Most Abu Dhabi developers have been focusing on completion and delivery of existing projects after suffering big losses during the global financial crisis, which put an end to a six-year construction boom.