Sorouh posts profits

Depending on how you look at them, the profit figures for Abu Dhabi based Sorouh can be good or bad.

The only real conclusion that one can draw from the posted profits by Abu Dhabi developer Sorouh is that one can look at it from an individual point of view.

The bad news would be that the profits posted in the fourth quarter of 2007 by the property developer were approximately 2.5 per cent lower than the profits the developer posted in the same three months in 2006. The hard numbers work out to approximately AED 483.5 in the fourth quarter of 2007 and approximately AED 496 million in the fourth quarter of 2006.

This is bad in the sense that a strong real estate developer posting a lower profit in 2007 might be a commentary on the state of the real estate market in Abu Dhabi and that in turn should make investors very leery about investing more money into the real estate market.

However, this is less than half the story, as the lower fourth quarter on the whole was still enough to give Sorouh a whopping 28 per cent increase in profits over the whole year from the previous year. Hard numbers on the full year comparison would be AED 1.26 billion for 2007 and AED 975 million in 2006.

Converse to that, some analysts breathed a sigh of relief due to the AED 483.5 million profit that Sorouh made in the fourth quarter of 2007 thereby completely destroying all projections prior to that. One projection by Prime Group had Sorouh making less than half that amount in profit during that period of time, so while the number was lower than the figure for the same time in 2006, it was also a figure that exceeded expectations in most case.

Although the analytical viewpoints are mixed depending on how the figures are spun, most analysts are not going be losing sleep over a 2.5 per cent comparative decline in the face of the good news that can come out of the same measurements.

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