02/02/2013 16:39 AST

Abu Dhabi's Sorouh Real Estate , which has agreed to merge with Aldar Properties, has reported an 21.2-per cent rise in fourth-quarter net profit, driven by income from government projects and higher leasing revenue.

Abu Dhabi's second largest property developer by market value, posted a quarterly consolidated net profit of Dh118.9 million ($32.37 million), compared with Dh98.1 million dirhams in the prior-year period, it said in a bourse statement on Thursday.

The earnings missed forecasts of brokerages Sico Bahrain and Arqaam Capital that had estimated net profits of Dh119.6 million and Dh168 million respectively.

Revenue from Abu Dhabi's national housing projects totalled Dh443 million in the fourth quarter, up 41 per cent year-on-year, said the firm. The leasing portfolio generated Dh67 million of revenue in quarter, up 43 per cent compared to the same period in 2011.

The profit for 2012 was Dh442.6 million compared with Dh334.7 million for 2011.

Revenue for the year was Dh3 billion, down 20 per cent. The company booked fair value loss on investment of Dh108.9 million and impairment of goodwill of Dh35.8 million.

Shareholders of Sorouh and Aldar will vote on the proposed merger on February 21.

Under the merger proposal, Sorouh shareholders will get 1.288 Aldar shares for every share they own. Sorouh will be dissolved and delisted from the local bourse after the merger.

Sorouh's managing director Abubaker Seddiq Al Khouri, who is proposed to be the chairman of the merged entity, said the company would deliver over 7,000 units this year.

"These deliveries will strengthen cash flow and improve profitability," said al-Khouri.

Another 15,000 units are expected to enter Abu Dhabi's already oversupplied real estate market this year, property consultancy CBRE has said. The merger was a step by the government to revive the emirate's battered property sector.


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