Sorouh Real Estate reports full year growth despite toughening market conditions

The net profit represented earnings per share of 74 fils (50 fils per share) and was generated from operating activities, with no asset revaluations.

The company reported a growth in total assets of 135% to Dhs17bn at 31 December 2008 (Dhs7.2bn), with net asset value up 33.5% to Dhs5,958m (Dhs4,463m). Liquid funds increased from Dhs1.4bn to Dhs6.8bn, as a result of cash collection from sales and rental income, and funds raised through the issue of an award-winning asset-backed Sukuk during the third quarter of 2008.

The company said that it remained positive about the long term outlook of the Abu Dhabi real estate market and the company's strong balance sheet.

Abubaker Seddiq Al Khouri, Managing Director of Sorouh, said:

"We were pleased to meet full-year expectations, despite the challenging global picture in the last quarter of 2008. We remain confident that we are positioned as positively as we can be for 2009. Sorouh strengthened its cash position in 2008 to ensure we have the necessary liquidity in place for the coming year and beyond. We are taking a prudent approach to the deployment of those reserves in 2009."

Mounir Haidar, Sorouh's Chief Executive Officer, said: "During 2009, we will focus on the on-time construction of Sorouh's projects, which saw significant progress in 2008. We accept that 2009 will be slower than 2008, given the global financial situation, but we remain confident of the long-term outlook for Abu Dhabi and for Sorouh."

Cost of revenue, which were related to cost of land plots, attributable cost of infrastructure work and lease expenses, increased to Dhs1,426m (Dhs1,001m), while general and administrative expenses rose from Dhs165m to Dhs340m, due to the company's expansion, consultancy work and including expenses related to subsidiaries.

Sales and marketing expenses also rose, from Dhs100m to Dhs311m, due to the rise in sponsorships, communication expenses and sales commission on newly-launched projects.

Bank borrowings decreased from Dhs233m as at 31 December 2007, to Dhs220m as at 31 December 2008.