Thursday, May 31, 2012

--Reports net profit of AED362 million in the first quarter compared to AED36 million loss last year

--Profit boosted by handovers, overhead costs cut by AED22 million

--Net assets now stand at AED24.5 billion.

(Adds more details, background throughout.)

By Tahani Karrar-Lewsley and Leila Hatoum

Of ZAWYA DOW JONES

DUBAI (Zawya Dow Jones)--Dubai-based real-estate developer Nakheel PJSC said it swung to profit in the first quarter of the year, as the company responsible for constructing the city's palm tree-shaped artificial islands handed over more properties and cut costs.

Net profit in the three months ended March 31 amounted to 362 million U.A.E. dirhams ($98 million), it said in an emailed statement Thursday. The firm made a loss of AED36 million in the year ago quarter.

"The positive results of 1Q, following from the robust financial results achieved in the year 2011 continue to indicate a relatively more stable real estate market," Nakheel said in an emailed statement.

Revenues in the first quarter almost tripled to AED1.35 billion--driven mainly by the handover of development properties in Nakheel projects and a strong performance by the company's retail and leasing operations.

Furthermore, the company said reduced cost overheads by AED22 million, compared with the corresponding period in 2011. Nakheel's net assets stood at AED24.5 billion at the end of March, a AED1 billion increase on the year ago date.

In May, Nakheel launched a new mixed-residential development on Palm Jumeirah though the company has yet to issue a tender for the project. The two-building project named Palm Views will include a total 192 studio units all priced at AED1 million with retail space for restaurants and selected shops on the ground floor. It will be developed over the next 18 months with handover expected in the first quarter of 2014.

The developer got into financial trouble in late 2009 after being hit hard by the fallout from the global financial crisis, which saw housing prices in Dubai slump and a property bubble burst. Nakheel ramped up billions of dollars worth of debt during years of spending on some of the world's most extravagant real-estate projects.

-By Tahani Karrar-Lewsley and Leila Hatoum, Dow Jones Newswires; +971-4-446-1686; tahani.karrar@dowjones.com; Twitter: @ZDJnews

Copyright (c) 2012 Dow Jones & Co.

(END) Dow Jones Newswires

31-05-12 0849GMT