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22 April 2024

Nakheel profit jumps 57% to Dh2.017b in 2012 on retail, handovers

By Parag Deulgaonkar

Nakheel, Dubai-based master developer, said on Wednesday net profit jumped by 57 per cent to D2.017 billion in 2012 compared to Dh1.28 billion in 2011 on back increasing leasing revenues, land sales and unit handovers.

Revenues rose by 91 per cent to Dh7.8 billion compared to Dh4.1 billion in 2011. Over 2,857 units were handed over in 2012 mostly in Palm Jumeirah, Al Furjan, International City, Jumeirah Village, Jumeirah Park, and Jumeirah Heights residential developments. A total of 4,600 units have been delivered by the company since its restructure until December 2012, while it 2013 it will hand over nearly 3,000 units.

“2012 has been a hugely successful year for us, building on the momentum achieved in 2011. Our financial performance reflects the continuous support and commitment by the government of Dubai and our sustainable, realistic long term business strategy. It is also proof that investor confidence is back, and that Nakheel is firmly moving forward and delivering,” said Nakheel Chairman Ali Rashid Lootah said.

He disclosed that the company plans to invest Dh6.5 billion in new projects, which will be completed over a three year period, expand Ibn Battuta Mall and enhance the existing communities with local facilities such as shopping centres and parks.

“We will be launching new projects this year. We have identified some areas and are waiting for the right time to launch them.”

New launches will focus on the leisure, retail and the upscale residential segment, Lootah disclosed.

In 2012, Nakheel awarded construction contracts worth over Dh1.4 billion for new projects including Dragon Mart Phase 2, Palma Residences, Palm Views, Jumeirah Park Legacy Villas and community/retail centres at Jumeirah Park and Discovery Gardens

Leasing revenues were up year-on-year, with retail revenue rising 23 per cent and residential revenue 17 per cent. Dragon Mart and Ibn Battuta Mall were at almost 100 per cent occupancy, while leases for residential and retail units at International City, Discovery Gardens and Garden View Villas, rose to 92 per cent

The developer completed interest and profit payments of around Dh800 million to lenders in 2012 and made cash payments of around Dh10 billion to various trade creditors and contractors since the start of its restructure.

Long-term customer liabilities reduced significantly by around Dh7.3 billion through consolidation and swap schemes offered to a large number of customers.

“Our total long term liability was Dh9.9 billion and we have reduced it to Dh7.3 billion as we managed to get a majority of our customers to swap/consolidate into our short term projects. We have been offering solutions to our investors and we expect more people will take benefit of it.”

On the issue of accessibility to funds, Lootah emphasized they had full support of the Dubai government, but the company was looking at other alternatives as well.

“The government of Dubai is fully committed to meet our funding requirements through the support fund. We have been doing well financially and have cash of over Dh600 million in banks. Local and international banks have approached us to provide funds to us,” he revealed.

According to information stated in the planned sovereign bond prospectus issued in May 2012, the total amount of funding invested by the Dubai Financial Support Fund (directly or indirectly) in Nakheel pursuant to the developers restructuring was approximately Dh11.15 billion, from a total commitment of Dh26.78 billion.