DUBAI: Abu Dhabi developer Sorouh Real Estate said on Monday project handovers and its rental portfolio would boost business in 2011 after its third quarter profit was hit by one-off expenses.
The emirate’s second largest developer by market value reported a 68 percent fall in profit to 59.3 million dirhams ($16.15 million), compared with 187.3 million dirhams in the year-ago period.
Sorouh’s shares were 2.2 percent lower at 0747 GMT underperforming Abu Dhabi’s bourse which eased 0.1 percent.
"Profits were impacted by one-off expenses of 42 million dirhams," Richard Amos the firm’s chief financial officer told reporters in a conference call. He said the expenses included the early redemption of a sukuk.
"Sukuk was paid early on beginning of the third quarter and as a result there were some upfront costs."
Amos said Sorouh is "confident" about 2011 and 2012 with several projects nearing completion. "The majority of Sun and Sky towers will be delivered in 2011 and that will generate good cash flow for us. Also Watani project will develop well in 2011," he said.
Sorouh’s third-quarter profit was driven by the sale of one plot on Shams Abu Dhabi, rental income from the investment portfolio and construction contracts, it said in a statement earlier on Monday.
Analysts polled in a Reuters’ survey in October forecast an average profit of 48.5 million dirhams for the third-quarter.
Sorouh said it added a further 38 million dirhams of provisions in the quarter. Revenues for the quarter fell to 371 million dirhams from 1.4 billion dirhams in the same period last year.
Finance costs amounted to 72.3 million dirhams, up from 26.8 million dirhams, it said.
Abu Dhabi Property
Abu Dhabi’s property market would be boosted by the relaunch of lending by Dubai Islamic mortgage lender Tamweel.
Tamweel said on Monday it will offer up to 80 percent financing of the current value of residential properties in Dubai and Abu Dhabi, resuming lending after a two-year freeze.
Developers across the United Arab Emirates have suffered the impact of the global financial crisis which put an end to a six-year construction boom. While Dubai has suffered the most, Abu Dhabi, home to most of the country’s oil, has fared better.