Abu Dhabi's Sorouh Real Estate , which is in merger talks with larger rival Aldar Properties, posted a 30 percent rise in quarterly profits on Sunday, adding to a string of higher earnings from UAE property firms in recent days.
Sorouh, the second largest property developer by market value in Abu Dhabi, reported first-quarter net profit of 83.6 million dirhams ($22.76 million), compared with 64.3 million dirhams in the prior-year period. The results missed four analysts' forecasts for average profit of 87.83 million dirhams, according to a Reuters poll.
Sorouh shares were up 0.88 percent on the Abu Dhabi bourse at 0824 GMT. Quarterly revenue doubled to 967.2 million dirhams, with revenue from national housing projects generating 62 million dirhams in gross profit for the quarter. The developer said it was on track to reach its target of 500 million dirhams of recurring income by 2014.
"We spent 650 million dirhams on work-in-progress in the first quarter and capex for 2012 remains the same," Chief Financial Officer Richard Amos said on a conference call.
"Our cash position is robust, we have no plans to raise finance."
Sorouh has previously said it plans 1.8 billion dirhams in 2012 capital expenditure. The firm's cash balance at the end of the first quarter was 1.5 billion dirhams.
Sorouh, which entered into merger talks with Abu Dhabi's largest developer Aldar last month, said the talks are underway, but did not give any further details.
"The evaluation process to look at the legal and business aspects of a potential merger is now underway and the ultimate outcome of this process will take into account the best interests of shareholders," the company said.
On Saturday, Aldar reported it had more than doubled its first-quarter net profit on land and residential sales to the government. Meanwhile, Dubai-based Emaar Properties said net profit rose 44 pct, beating analysts' forecasts.
Sorouh, whose developments include commercial and residential projects, will deliver around 9,300 units by end 2013, Gurjit Singh, its chief operating officer, said on Sunday. This includes 2,300 units under the national housing programme.
Abu Dhabi-based property firms have relied heavily on government projects to rescue them from a property market slump in the emirate. Property prices in Abu Dhabi are expected to fall another 11 percent from here, a Reuters poll showed in January. Sorouh shares were up 0.9 percent on the Abu Dhabi bourse at 0755 GMT Sunday. They have risen 31 percent year-to-date.
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