UPDATE 2-Abu Dhabi's Sorouh plans $381 mln spend in H2

Thu Jul 28, 2011 3:44am EDT

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By Stanley Carvalho and Jason Benham

ABU DHABI/DUBAI, July 28 (Reuters) - Sorouh Real Estate , which reported a fourfold surge in second-quarter profit on Thursday, plans to invest 1.4 billion dirhams ($381 million) in completing and delivering its existing projects until year-end.

Abu Dhabi's second-largest developer by market value made a net profit of 125 million dirhams compared with 31 million in the same period last year as it delivered more units and reduced bad debt provisions.

Analysts had forecast, on average, profit of 157.17 million dirhams in a Reuters poll.

"We plan to invest another 1.4 billion dirhams (in the second half). Our focus is on project delivery and we are expecting good results for the year-end," Richard Amos, chief financial officer, said in a conference call on Thursday.

Sorouh invested 1.4 billion dirhams in its projects in the first six months and plans to deliver some 1,000 homes by the year-end, he added.

Profit for the first half rose 33 percent to 202 million dirhams, Sorouh said in an earlier statement.

Revenue for the second quarter reached 1.22 billion dirhams, most of which was derived from the ongoing handover of units in Sun and Sky Towers, revenue from housing projects awarded by the government and income from rental portfolio.

Sorouh's year-ago revenue stood at 189.8 million dirhams.

Provisions for doubtful debts fell sharply to 6.2 million dirhams for the quarter, down from 41 million during the same period last year.

Sorouh trimmed staff by 17 percent over the last year as part of cost cuts and more jobs could happen as projects are completed, Amos said.

The company has no immediate borrowing plans due to its strong cash position, he added.

Sorouh's shares dipped 1.6 percent to 1.2 dirhams, underperforming Abu Dhabi's bourse which edged 0.1 percent higher.

The developer said in June it would continue to focus on the delivery of existing projects in its home market in 2011 and has no plans to expand abroad yet.

Most Abu Dhabi developers have been focusing on completion and delivery of existing projects after suffering big losses during the global financial crisis, which put an end to a six-year construction boom.

($1 = 3.673 UAE Dirhams)

(Editing by David Hulmes) (Reporting by Stanley Carvalho & Jason Benham; Editing by David Hulmes)

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