Abu Dhabi: Developer Sorouh Real Estate said yesterday the evaluation process to look at the legal and business aspects of a potential merger with the emirate’s largest real estate developer Aldar Properties is under way.
“The ultimate outcome of this process will take into account the best interests of shareholders. A further update will be made as and when appropriate,” Sorouh said while announcing its first quarter results.
On March 11, Sorouh and Aldar announced that they were in early discussions to evaluate the possibility of a merger. Sorouh said its first quarter net profit jumped 22 per cent year-on-year to Dh92.8 million while revenue grew a whopping 114 per cent to Dh967.2 million year-on-year. Its stock closed 1.77 per cent higher at Dh1.12 on the Abu Dhabi Securities Exchange yesterday.
Reacting to Sorouh’s performance in the first quarter, Marwan Shurrab, vice president at Dubai-based Gulfmena Investments, told Gulf News: “The first quarter numbers showed strong performance for 2012, indicating the ability to generate liquidity to meet obligations in the short term.”
Shurrab added: “The growth we are seeing in gthe first quarter supports the market performance in the year-to-date, giving indication that future growth will further support the financial performance of the company.”
Higher net profit represents a “continued strengthening of sustainable recurring income from Sorouh’s investment portfolio and revenues from its national housing projects,” Abu Dhabi’s second biggest developer said.
The company also said its revenue from national housing projects increased significantly, generating Dh62 million in gross profit.
“Revenues from investment properties grew 14 per cent year-on-year to almost Dh50 million. The company is on track to reach its target of Dh500 million of recurring income by 2014,” Sorouh said.
Managing director Abu Baqer Seddiq Al Khouri said: “We continue to diversify our revenue streams which will support the quality of our earnings over the medium to long term. The current flight to quality with Abu Dhabi real estate leaves us well positioned to deliver an exciting project pipeline of some 7,000 units between now and the end of 2013.”
By Himendra Mohan Kumar, Staff Reporter