Nakheel posts Dh526 million profit for first half

Nakheel today reported a net profit of Dh526 million for the first half of the financial year ending December 31, driven mostly by handover of units and its leasing and retail operations.

The news follows after the company successfully completion of its Dh59 billion restructuring programme and restarting work on a number of its stalled project.

The government-owned developer also said it reduced overheads by Dh131 million compared to corresponding period last year. No comparison figures were given.

“The improved financial performance is reflective of the commitment made by the board of directors of Nakheel to implement a sustainable business strategy for the medium to long term and largely due to better cost and cash management,” it said in an emailed statement.

“The financial results are also indicative of a relatively more stable real estate market in Dubai where Nakheel is a dominant player and will continue to strengthen its position with the passage of time,” the company added.

In September, chairman Ali Rashid Lootah said the company made a profit of Dh860 million in 2010 and sees a rise in revenue this year. The company reported a profit of Dh58.3 million in the six month period ended June 30, 2010, according to the prospectus for its Dh3.8 billion sukuk issue.

The master developer reported a loss of Dh 76.6 billion for the year ended December 31, 2009 and a profit of Dh505.3 million for the year ended December 31, 2008. The change was primarily due to these impairment losses and contract termination costs, the document said.

Lootah had told an Arabic newspaper that the company had experienced a rise in revenue based on a 10 to 15 per cent increase in the management and leasing of fully-owned assets as well as a rise in residential unit occupancy, which is at currently at 70 per cent of the 20,000 units it owns.

"Nakheel anticipates that as it completes and delivers projects, its role as developer will gradually be reduced, resulting in its development business becoming more centered on land sales in its role as master developer, and managing its master planned communities," the prospectus said.

The developer is planning to spend Dh7.4 billion on its projects this year and Dh1.4 billion next year.

In August, the developer said it will commence extension of Dragon Mart Mall and begin development of community retail centres in Jumeirah Park and Discovery Gardens from next year. It also expects to deliver 7,714 units across various projects by end of 2012 and launched a new project on Palm Jumeirah, comprising102 beach-front townhouses.

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