Abu Dhabi-based Sorouh Real Estate, a leading property developer, has earned Dh130.4 million ($35.4 million) in the first quarter, down 64 per cent from the same period in 2008 (Dh361.5 million).

Revenues for the first quarter 2009 were Dh335.6 million, as against Dh532.6 million in the fourth quarter of 2008 and Dh623.7 million in the first quarter of 2008.

Earnings per share for the period were 5 fils per share, as against 14 fils in the first quarter of 2008.

The results reflect the Company’s strategy to develop its earnings profile by increasing recurring income for long term profitability, said a report.

This will be achieved by retaining more property for development and subsequent sale and lease, despite the short term impact on the income statement. The results also reflect the decision to sell less land which is currently not reflective of its intrinsic value.

Over the course of the year Sorouh expects to see gradual quarter on quarter improvement as the Company starts to realise unit sales on the handover of Golf Gardens 1 and an increase in recurring income from the rental developments of Sas Al Nakhl, Khalidiya Village and Al Oyoun Village.

“In the context of difficult market conditions we are pleased to report earnings progression quarter on quarter,” said Abubaker Siddiq Al Khouri, managing director, Sorouh.

“This reflects our decision to retain land to develop more property ourselves for future sale and lease, generating sustainable earnings and to not revalue land,” he added.

“The business is in good financial health thanks to our cash conservation and cost management initiatives. This, combined with Abu Dhabi’s strong market fundamentals, makes us well-placed to capitalise on our position when markets recover, delivering significant long term value to our shareholders.” – TradeArabia News Service