* Sorouh Q3 consolidated profit 129 mln dirhams
* Aldar Q3 net profit 206 mln dirhams, vs 144 mln
* Merger talks at advanced stage
* Due diligence almost complete - Sorouh CFO
(Adds Aldar earnings, Sorouh conference call)
By Praveen Menon
DUBAI, Nov 7Abu Dhabi's top two developers -
Aldar Properties and Sorouh Real Estate -
said their government-backed talks were at an advanced stage.
The two companies also both reported higher quarterly profit
on Wednesday, albeit with impairments and asset writedowns as
valuations fell, highlighting glum conditions.
Their merger talks were started against the backdrop of
continuing oversupply and declining house prices. Prices in Abu
Dhabi were expected to fall 5 percent this year, a Reuters poll
"The due diligence is pretty much complete. It is only a
matter of a little more patience before a final announcement,"
Sorouh Real Estate chief financial officer Richard Amos said.
"These things take quite a lot of time," he said. The two
companies, which started talks in March, had previously said a
decision on whether to merge would be reached by June.
Aldar - the larger company and which built the Yas Marina
Formula One Circuit, home to the Abu Dhabi Grand Prix - said a
valuation review ahead had prompted it to write down 737 million
dirhams ($201 million), mainly related to hotel assets.
Aldar took provisions for impairments and write-offs of 932
million dirhams, compared with 2.5 million a year ago.
Sorouh took a fair value loss of 126.5 million dirhams on
Abu Dhabi has spent over $10 billion on Aldar, equivalent to
the amount it needed to rescue Dubai from a bond default in
2009. In return, land on Al Raha beach, the Ferrari World Theme
Park, and other key assets, were sold to the government.
Aldar posted a 43 percent rise in third-quarter net profit
to 206 million dirhams, on revenue that nearly halved to 1.6
billion. Profit grew as the company wrote back 431.5 million
dirhams of excess accruals and recoverable costs written off
Meanwhile, Sorouh reported a net consolidated profit of 129
million dirhams, up 55 percent. Income got a boost after Sorouh
reversed 40 million dirhams in contingency provisions for its
Sun and Sky towers, which have been completed. Quarterly revenue
fell 9.8 percent to 803 million dirhams.
The developer said its results were buoyed by revenue from
national housing projects - government-awarded schemes to build
homes for UAE citizens - which rose to 607 million dirhams from
Shares in Aldar and Sorouh were both down 2.2 percent at
($1 = 3.6730 UAE dirhams)
(Editing by Dan Lalor and Amran Abocar)