(Updates with shares in fifth paragraph.)
Feb. 15 (Bloomberg) -- Sorouh Real Estate PJSC, Abu Dhabi’s second-biggest developer by market value, said 2011 profit surged as income from rentals and housing projects rose.
Net income climbed to 334.7 million dirhams ($91 million) from 7.44 million dirhams, the company said in a statement to the Abu Dhabi bourse today. The average estimate of six analysts was for a profit of 363 million dirhams, according to data compiled by Bloomberg. Revenue more than tripled to 3.79 billion dirhams, while provisions for doubtful debts dropped 81 percent to 19.3 million dirhams and impairment of goodwill fell 28 percent to 117 million dirhams.
The “mix of revenue contributors has helped strengthen the earnings profile of Sorouh, building a more sustainable business for the future,” Managing Director Abubaker Seddiq Al Khouri said in the statement.
Abu Dhabi’s construction boom was hurt by the financial crisis at a much earlier stage than that of neighboring Dubai, which by mid-2008 had completed more projects and attracted more buyers. Aldar Properties PJSC, the Abu Dhabi-based developer that was bailed out twice by the government last year, reported yesterday full-year profit that beat analyst estimates after the company sold more land and properties to the state.
Sorouh declined 2 percent to 99 fils at 10:44 a.m. in Abu Dhabi. The shares dropped 48 percent in 2011, while Abu Dhabi’s benchmark stock index lost 12 percent.
Fourth-quarter profit after provisions, impairments and non-recurring income was 98.1 million dirhams after a loss of 198.6 million dirhams a year earlier, the Abu Dhabi-based company said. Fourth-quarter revenue rose to 1.2 billion dirhams from 197 million dirhams a year earlier.
Developers in the United Arab Emirates, whose capital is Abu Dhabi, are generally paid in installments as construction progresses and receive a final sum when the property is delivered to its buyer. Sorouh expects to hand over the keys to 7,000 homes in the next four years, excluding government housing, Chief Financial Officer Richard Amos said in April.
--Editors: Claudia Maedler, Shaji Mathew
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