Nakheel’s Net Profit Rises 115% In Q1 2015

Dubai-based developer Nakheel reported a net profit of Dhs1.35 billion during the first quarter of 2015, up 115 per cent from the Dhs629 million it earned in Q1 2014.

The company attributed the growth in profits to a strong performance by the development business, with ongoing handovers of properties to customers.

Nakheel’s retail, leasing and leisure businesses also continued to improve and contributed to the overall financial results for Q1 2015, it said in a statement.

The developer also launched a number of new retail projects including a new community centre in Deira Islands and huge extensions to Dragon Mart and Ibn Battuta Mall, all of which are expected to generate cash revenues when operational.

The firm is aiming for Dhs7.5 billion per year in recurrent income in the subsequent years, the statement said.

Nakheel, which was badly hit during Dubai’s real estate bust, also said that it reduced its financial debt from Dhs12.3 billion to Dhs4.4 billion.

The company’s trade creditor sukuk of Dhs4.4 billion is due to be paid in August 2016.

“With our significantly reduced level of debt, we are well positioned to pursue our strategy of creating more cash generating assets and strengthening Nakheel’s asset base to further boost our business and financial results in the coming years,” said Ali Rashid Lootah, chairman, Nakheel.

In an interview with Gulf Business in April, Lootah said that the developer expected to continue posting a steady annual profit growth of 40 per cent in 2015 and 2016.

In line with its profit forecasts, the company is looking to expand its residential leasing portfolio from 17,000 units in 2014 to 30,000 units by 2017, while its leasable retail space area during the same period is estimated to grow from 2.5 million sqft to 10 million sqft.

Nakheel also forayed into hospitality in 2014 and plans to open 10 hotels and resorts across its master developments such as Palm Jumeirah, Ibn Battuta Mall and International City in Dubai by 2020.