DUBAI: Shares in Abu Dhabi’s Aldar Properties and Sorouh Real Estate fell after they reported mixed first-quarter earnings, weighing on the emirate’s main stock index.
Aldar dropped 3.3 percent after its quarterly profit and revenue slumped by more than half.
Shares in Sorouh, which will delist from the Abu Dhabi bourse in June and merge with Aldar, dipped 1.6 percent. Sorouh’s profit rose 21.6 percent, but revenue fell 35 percent.
“There’s a big difference between what you see in the (property) market and what companies report in their earnings because they only record revenue from property sales when the property is delivered, not when it is sold,” said a regional property analyst.
Despite Tuesday’s earnings statements, “the sector seems to be picking up selectively and occupancy rates are improving.”
Aldar shares are still up 13.3 percent in 2013 and Sorouh is up 48 percent.
Aldar’s results were short of forecasts as gross profit margins fell to about 25 percent from 50 percent in previous quarters due to a change in its revenue mix, the analyst said.
“Maybe that is why we’re seeing more selling pressure on Aldar’s shares — people were possibly hoping for more details on the merger, such as a specific timeline for when the process will be completed,” the analyst added.

Abu Dhabi’s index slipped 0.2 percent, down for a second day in three since Thursday’s 4-1/2 year peak.
Other Gulf markets were broadly positive, extending gains as an upbeat economic outlook buoyed investor sentiment.
“We continue to operate against a very supportive backdrop — the underlying drivers of the economy are strong, there is high government spending, valuations are attractive and stocks offer very tempting yields in a low interest rate environment,” said Rami Sidani, Schroders Middle East head of investment.
“The only risk for the rest of the year would be a significant deterioration on the global scene.”
The Kuwait, Abu Dhabi and Dubai benchmarks have all gained more than 20 percent this year, while the economies of the six Gulf countries are forecast to grow by at least 3 percent in 2013, according to this week’s Reuters poll of analysts.
Renewed buying in blue chip stocks lifted Dubai’s index to a new 3-1/2 year high, although it is still down 66 percent from its 2008 peak.
“Fundamentals have improved substantially, yet UAE markets have lagged emerging markets since the global financial crisis,” added Schrodersí Sidani.
“There is more to go given valuations remain attractive — we’re still way off peak levels, especially in blue chip stocks.”
HSBC Bank Oman, which was formed last year by a merger of HSBC’s Oman unit and Oman International Bank, rose 1.0 percent as investors give a lukewarm response to the lender’s quarterly profit jump.
“We’re not happy with the quality of the bank’s earnings — it’s still not able to secure decent non-interest business,” said Adel Nasr, United Securities’ brokerage manager.
“The costs of the merger are still high and to see the synergies from the merger will take longer than we thought.”