Tuesday, Apr 17, 2012

(This story was originally published Monday.)

--Net profit surges 33% in 2011 on property handovers, no impairments

--Sees third tranche of AED4.8 billion sukuk issued to trade creditors by June

--Liabilities decrease to AED41 billion in 2011 from AED61 billion, assets increase

By Tahani Karrar-Lewsley

Of ZAWYA DOW JONES

DUBAI (Zawya Dow Jones)--Dubai-based real-estate developer Nakheel posted a 33% rise in 2011 net profit, as it handed over properties and avoided any impairment charges, and said it expects to issue the third tranche of its 4.8 billion U.A.E. dirhams ($1.31 billion) sukuk to trade creditors by June.

Net profit last year came to about AED1.3 billion, up from around AED1 billion in 2010, Nakheel said in a statement.

"The increase in profit in full year 2011 is primarily due to the fact that as against impairment loss of AED2.7 billion recorded in full year 2010, there was no impairment loss in full year 2011," it added.

Revenue in the 12 months to Dec. 31 was broadly flat at AED4.1 billion as it handed over of properties at its Palm Jumeirah, Jumeirah Village, International City, The World and Al Furjan projects.

Nakheel's improved performance comes amid growing signs that Dubai's embattled real estate market might have found a floor. Just last week, Nakheel said it had sold 30% of a new luxury residential project on the Palm Jumeirah, while property consultants Jones Lang LaSalle said earlier Monday that the residential rental market in Dubai looks to have bottomed out, with prices currently at rates similar to early 2008 levels.

Nakheel said Monday that total liabilities decreased to AED41 billion in 2011, from AED61 billion in 2010, as it company paid trade creditors and realised payments on its sukuk, while net assets tripled to AED24 billion in 2011, from AED8 billion in the year before.

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 such as Dubai's palm tree-shaped artificial islands.

Nakheel said its retail and residential leasing operations continued to perform well with full year 2011 witnessing almost 100% occupancy at its Ibn Battuta Mall and Dragon Mart, reflecting a buoyant local retail market. The company is one of a number of developers in the emirate that have identified an opportunity in retail space-a relatively underdeveloped sector that has performed well despite the economic crisis.

On a separate issue, Nakheel Chairman Ali Rashid Lootah told reporters Monday the company may issue the third tranche of its AED4.8 billion sukuk to trade creditors by June.

"We are issuing AED240 million and in a couple of months we will issue another depending on our negotiations with the contractors," he said.

Lootah said last week that the second tranche of its sukuk was likely to be issued to trade creditors by the end of April. Nakheel issued the first tranche of the sukuk, worth AED3.8 billion, in August 2011. The asset-backed Islamic bond carries a coupon of 10%.

-By Tahani Karrar-Lewsley, Dow Jones Newswires; +9714 446-1692; Tahani.Karrar@dowjones.com

Copyright (c) 2012 Dow Jones & Co.

(END) Dow Jones Newswires

17-04-12 0337GMT