ABU DHABI: Abu Dhabi's Sorouh Real Estate, one of the Middle East's biggest developers, said on Tuesday a lack of land sales in the second quarter explained a sharper-than-expected drop in net profit and revenues, both of which fell about 80 percent. "There were no land sales this quarter, so revenues and profits were lower. We are seeing the revenues diversify from land sales to rental, lease and sale of units," Richard Amos, chief financial officer said on a conference call. The company's projects include development of Abu Dhabi's Al Reem Island with homes and offices planned for 45,000 residents. Net profit attributable to shareholders for the three months to June 30 fell to AED31 million ($8.44 million) from 148 million. That missed an average forecast of AED43.6 million from a Reuters poll of analysts. Revenues fell to AED189.81 million from 978.23 million. Its shares were off 1.66 percent at AED1.78 as of 0754 GMT. Developers across the United Arab Emirates have suffered from the global financial crisis which put an end to a six-year boom. While Dubai has suffered the most, Abu Dhabi, home to most of the country's oil, has fared better. Sorouh's half-year performance, which saw profit fall 41 percent, was buoyed by first-quarter land sales and a rise in lease income. The developer will hand over some 1725 units by the second half of next year as deliveries are on track, Chief Operating Officer Gurjit Singh said on the conference call. Some 6000 to 12,000 units are likely to be delivered this year by developers in Abu Dhabi this year, he added. Sorouh's funding plans are in place having secured bank loans of AED2.35 billion recently. It is in talks with banks for project finance for one or two projects, Amos said, declining to provide details. "It's a perfectly doable deal with interest from two banks and we are comfortable for at least a year," he said. Sorouh booked AED50 million in provisions in the second quarter and may book further provisions in coming quarters, he said.
