Half-year results reflect growth in Dubai's real estate sector, says chairman
Property developer Nakheel on Wednesday declared a record 54 per cent jump in its net profit for the first half of the year on robust growth in the property sector.
Strong revenue from property development together with improving performance in Nakheel's retail, leasing and leisure businesses contributed to the results, the Dubai developer said in a statement.
The developer of Palm Jumeirah and the World, a cluster of islands in the shape of a world map, reported a Dh1.85 billion net profit for the first six months of the year, compared to Dh1.2 billion during the same period last year.
Nakheel did not provide any quarterly figures. However, Khaleej Times calculated a net profit of Dh1.22 billion in the second quarter of 2014 compared to Dh709 million a year earlier. It shows the company's current year's second quarter earnings are equal to total profits from the entire first half of last year.
"These robust financial results reflect the growth witnessed in the real estate sector in Dubai, where Nakheel continues to play a strategic role," Nakheel chairman Ali Rashid Lootah said in the statement.
Since the financial year ending 2010, Nakheel has reported a year-on-year increase in net profit. Now the company is considering an initial public offering, the chairman told reporters at a news conference last month.
Nakheel's half-year results announcement comes two weeks after the company confirmed that it will prepay all of Dh7.9 billion owed in bank debt in August this year — nearly four years ahead of the last installment due in March 2018.
The chairman said: "With the bank debt repaid ahead of time and new cash generating assets coming on stream, Nakheel is well on course to further strengthen its business and financial position going forward."
"Our financial performance reflects the strength of the underlying business, increasing investor trust and confidence in Nakheel and the ongoing support of the Government of Dubai," the chairman said.
During the six months ending June 30, 2014, Nakheel handed over 627 units to customers, while the retail and leasing businesses witnessed almost full occupancy of Nakheel's available units for lease. Nakheel's leisure business also saw an improved performance on previous years.
Nakheel is currently developing a diverse range of new projects in the residential, retail, leasing and hospitality sectors. Among them are Nakheel Mall, on Palm Jumeirah; The Pointe, at the island's tip; Deira Islands Mall; Deira Islands Night Souk; extensions to Dragon Mart and Ibn Battuta; community retail centres at Jumeirah Park, Al Furjan, International City, Discovery Gardens and Badrah; residential and retail leasing units at Warsan Village; and a new community of 1,000 villas for lease. Nakheel is also set to build 10 hotels — from five-star luxury establishments to simpler, budget-style accommodation — over the next five years. Among them are The Palm Tower on Palm Jumeirah, several locations on Deira Islands and hotels at Dragon Mart and Ibn Battuta.
Nakheel's Palma Residences complex on Palm Jumeirah, Dragon Mart phase two, community centres at Discovery Gardens and Jumeirah Park and a three-star hotel at Dragon Mart are due for completion this year.