Sorouh Real Estate Company said yesterday its net profit for 2011 after provisions and impairments was Dh383.3 million, compared with Dh16.2 million for 2010.
The company's revenues for the full year were Dh3.8 billion, compared with Dh1.2 billion a year earlier, driven by the handover of its Sun and Sky towers, which generated Dh2.2 billion, construction income from national housing projects, revenue from subsidiary companies, a significant land transaction and rental income from investment properties.
Sorouh's stock surged on the news in morning trade, though it ended 0.99 per cent lower on the Abu Dhabi Securities Exchange at Dh0.99 yesterday.
Profit in fourth quarter
For the financial quarter ended December, the company's net profit was Dh98.1 million compared to a net loss of Dh198.6 million for the same quarter a year earlier.
Speaking to Gulf News shortly after Sorouh announced its financial results, the company's chief financial officer Richard Amos said that 2011 was "a very good year" for the company in which it completed 1,700 units, leased 340 units, handed over 918 units and sold 37 new units.
Amos said that Sorouh's capital expenditure in ongoing projects was Dh2.8 billion last year. For the current financial year, he said the company's capital expenditure would be Dh1.8 billion.
"The lower capex is because we are coming to the end of the development cycle in many of our projects," Amos explained.
During the current financial year up to December 2012, Dh1 billion will be spent on the completion of the Gate Tower and Dh300 million on the Al Rayyana project, he said.
Another Dh150 million will be deployed towards the completion of Sorouh's Tala Tower and Dh200 million will go towards completion of infrastructure on Shams.
The remaining Dh150 million will be spent on "different things", Amos added. Amos said the company had no immediate market borrowing plans.
"We are pretty well funded at the moment. There's Dh1.8 billion in cash available to us and this will be sufficient for our capital expenditure this year," he said.
Focus on unit delivery
Gurjit Singh, Sorouh's chief operating officer, told Gulf News that in 2012, the company's main focus would be on deliveries.
He said Tala Tower and Al Rayyana would be delivered in the late second quarter, and the Gate Tower will be delivered in the late fourth quarter.
"In all, there will be deliveries of 5,000 units in 2012 and 2013," Singh said.
Rents, prices to stabilise
He said the UAE in general would see a lot more supply of residential units coming into the market this year, which would result in moderation of rents and capital values.
Sorouh's board of directors has recommended a full year cash dividend of 5 fils per share, which is subject to shareholder approval at the company's annual general meeting.
Sorouh held net assets of Dh6.6 billion at the end of 2011.