Tuesday, Apr 17, 2012
Gulf News
Dubai: Nakheel believes Dubais real estate sector is showing signs of recovery after reporting a 33 per cent increase in full-year net profit.
The state-owned property developer said yesterday it made a full-year net profit of Dh1.3 billion in 2011, up from Dh1 billion the previous year. Revenues hit Dh4.1 billion, slightly down from Dh4.2 billion in 2010, on the handover of properties across several of the groups developments, including the Palm Jumeirah, The World and International City.
Nakheel launched a new luxury project on the Palm Jumeirah last week, its first major residential development since completing a massive restructuring process. However, the company still faces a difficult multi-year process of paying down debt.
We have been doing fantastic across the board and there has been an increase in demand for most of our properties, Rashid Ali Lootah, Nakheels chairman, said. We are handing over between 40 and 50 units every day; most of our projects will be handed over this year, he added.
The net assets of Nakheel group tripled to Dh24 billion from Dh8 billion in the year-before period, which the company attributed to a successful restructuring and improving market conditions. Liabilities decreased to Dh41 billion from Dh61 billion in the year-before period.
Our assets have tripled as a result of money we received from the government, the delivery of properties and cost-cutting. Furthermore, early figures suggest this year will be much better than 2011, Lootah said, adding the Dh41 billion in liabilities comprised payments to contractors and delivery of units to investors.
Lootah also told reporters the companys retail and residential leasing units continued to perform well with 2011 seeing almost 100 per cent occupancy at Ibn Battuta Mall and Dragon Mart. Nakheel handed over 820 units, including land parcels, to customers during the financial year.
Most of our trade creditors have been paid; we have achieved a huge mitigation of our long-time payment liabilities. The delivery of units to investors is an ongoing challenge but we see a good recovery, he said.
Nakheels $1 billion, five-year sukuk is currently bid at a yield of about 14.4 per cent, down from levels above 21 per cent when the Islamic bond was issued to trade creditors last August as part of restructuring the companys $16 billion debt.
Trade creditor claims
Lootah said that Dh5.3 billion of claims from trade creditors is still under negotiation. Earlier this month, the chairman said a second, $65 million tranche of Nakheels sukuk will probably be issued to trade creditors by the end of April. The tranche will be about a quarter of the size previously expected after the firm persuaded creditors to accept a big discount on their claims.
By Kevin Scott, Staff Reporter
Gulf News 2012. All rights reserved.
