Sorouh announces third quarter results for the period ended 30 September 2009

Results Highlights

Revenues for the quarter were Dhs1,351m (Q3 2008: Dhs1,497m / Q2 2009: Dhs978m). Revenues in the quarter were principally driven by the handover of villas at Golf Gardens and the recurring rental income of Sas Al Nakhl, Khalidiya Village and Al Oyoun. Revenues in the comparable period last year were predominantly land sales which have not been repeated in the current quarter.

Revenues for the first nine months were Dhs2,664m (9M 2008: Dhs3,190m). Net profit for the quarter, excluding minorities, was Dhs187m up 26% on Q2 (Q2 2009: Dhs148m / Q3 2008: Dhs765m). Net profit for the nine months period was Dhs461m (9M 2008: Dhs1,813m).

Earnings per share for the three month period were 7 fils (3M Q2 2009: 6 fils / 3M Q3 2008: 18 fils). EPS for the nine months were 31 fils (9M 2008: 73 fils).

These results are in line with the previous guidance and reflect the Company's strategy to focus on delivery of existing projects, cash conservation and prudent management of operating costs.

The Company maintains a strong balance sheet with net assets as at the end of the third quarter 2009 of Dhs6.1bn (Q2 2009: Dhs5.9bn).

The Company retains Dhs3.9bn of cash on its balance sheet. Total bank borrowings are Dhs126m, representing a debt to equity ratio of 2%, (this excludes the outstanding amounts of the asset-backed Sukuk Certificates issued in the third quarter 2008 which is a non-recourse facility).

Developments Update

All of Sorouh's Abu Dhabi developments remain on track with the core focus being on maintaining delivery schedules:

- Golf Gardens is the first development being recognised to revenue and is making a substantial contribution to the quarter's earnings.

- The investment portfolio of Sas Al Nakhl, Khalidiya Village and Al Oyoun Village is now substantially leased and generating steady recurring income.

- SHAMS Abu Dhabi infrastructure works are well underway. Earthworks are now finished, bridges substantially complete and essential infrastructure such as water and drainage are nearing completion. In addition, a number of sub-developers have started work and the amount of development activity has increased substantially across the site.
o Sun Tower and Sky Tower, at the entrance to SHAMS Abu Dhabi on Al Reem Island, remain on track for delivery in mid 2010. Over fifty percent of the retail podium is now pre-leased.
o The Gate Towers' construction is on schedule and works are progressing above ground.

- alghadeer's customer optimisation plan is broadly complete with significant take up of the revised project and payment plans. The project is now progressing into the construction phase following the completion of the enabling works.

Management Appointments

During the period, Mr. Mounir Haidar resigned from his position as Chief Executive Officer to pursue other business opportunities. Mr. Abubaker Al Khouri will continue to lead the Company as Managing Director and Mr. Gurjit Singh has been promoted to Chief Operating Officer. Separately, Mr. Richard Amos joined as Chief Financial Officer. Mr. Amos has over 25 years experience in banking and finance and recently headed up the finance function at TDIC.


Abubaker Al Khouri, Managing Director of Sorouh, commented:

"We are pleased to continue to report results in-line with previous guidance of quarter on quarter earnings improvement. This quarter, the handover of Golf Gardens and the increased recurring income from the rental developments of Sas Al Nakhl, Khalidiya Village and Al Oyoun Village have all contributed to earnings. In addition, we are making good progress with all our major developments; in particular, the award winning Gate District on SHAMS Abu Dhabi is moving ahead on schedule, with the Sun & Sky Towers due for handover mid next year and the three Gate Towers now rising above ground."

"Whilst the real-estate market is likely to remain challenging in the near future we remain cautiously optimistic over signs that the market is stabilising, as the number of sales enquiries increase, especially in the secondary market. Sorouh is well placed to capitalise on the future success of Abu Dhabi. The scarcity of quality completed units coming on stream, means demand is likely to exceed supply for some years to come," he added.