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Abu Dhabi: Sorouh Real Estate said on Tuesday its net profit rose 29 per cent in the financial year ended December 2007 led by a strong performance in land sales in Shams Abu Dhabi and Saraya projects and rental income from its three residential villages.
The company's net profit rose to Dh1.26 billion from Dh975 million in 2006, a 28 per cent return on equity.
"The increase in profits from Shams Abu Dhabi is attributable to Sorouh's purchase of the freehold title to Shams Abu Dhabi, previously held under a lease arrangement," Sorouh told the Abu Dhabi Securities Market, where it's listed.
"Rental income from residential village Sas Al Nakhl, Khalidiya village and Al Oyoun village in Al Ain has boosted 2007 income and net profit."
The company's strong showing, however, did little to lift its shares on the ADSM. Sorouh's stock ended yesterday at Dh8.16, marginally lower than its closing share price on Monday, despite more than 44 million shares being traded.
Sorouh's earnings per share increased 28 per cent during 2007 to Dh0.50 from Dh0.39 a year earlier, while the net asset value per share rose 29 per cent on year to Dh1.79. The company's total assets as of December 31 were valued at Dh7.2 billion, up 66 per cent from Dh4.3 billion as of December 31, 2006.
Sorouh's market capitalisation as of December stood at Dh21 billion, more than three times higher than what it was at the end of 2006. Sorouh said sales of land, villas and apartments will set the tone for the company's profit growth in the years ahead, as was the case in 2007 when it reported a 28 per cent sales growth in the segment, year on year.
In 2007, Sorouh said its bank borrowings grew to Dh234 million from Dh12 million in 2006.
"Going forward, Sorouh intends to take advantage of its strong balance sheet to take on additional borrowings with the intention of improving further its return on equity and ensuring the availability of sufficient funding for the delivery of its existing and future projects," the property developer said.
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