30th of July 2012
Nakheel is pleased to announce the financial results of its operations for the first half year ended 30 June 2012 generating a net profit of AED 767m, an increase of 36.5% compared to a net profit of AED 562m in 1H11. Revenues of AED 3,108m were mainly contributed by the handover of properties in a number of Nakheel projects, up by 112% against revenues of AED 1,464m in 1H11. Retail and Leasing also contributed positively to the results. Nakheel gained favourably from the various operating income segments that continue to be the core area of focus. Effective cost control measures implemented by Nakheel resulted in overheads sustaining at the reduced levels of 2011.
The financial performance is reflective of the continuous support and commitment made by the Government of Dubai and the Board of Directors of Nakheel to implement a sustainable business strategy for the medium to long term and largely due to better cost and cash management. The positive results of 1H12 following from the robust financial results achieved in the year 2011 are reflective of the strong growth in the real estate market in Dubai where Nakheel is a dominant player and will continue to strengthen its position with the passage of time.
Approximately 3,500 units have been delivered to customers since the beginning of the restructuring in several developments, mainly Palm Jumeirah, Jumeirah Village, International City, Al Furjan and Jumeirah Heights.
Nakheel successfully concluded it’s restructuring in August 2011 with the issuance of a Sukuk of AED3.8bn to the eligible trade creditors and did a subsequent tap issuance of AED 227m in April 2012 as part of its overall Sukuk program. Interest and profit payments amounting to c. AED 500m have been released to the lenders since the completion of the restructuring.
Vendor commitments are being settled on a timely basis thus complementing the delivery of the projects resulting in a reduction in vendor liabilities. Nakheel has made cash payments of c. AED 8.6b to its trade creditors since the commencement of the restructuring.
The consolidation of the existing customer liabilities has progressed well with Nakheel managing to amicably reduce longer term customer liabilities by c. AED 7.2b out of a total customer liabilities of c. AED 9.9bn through various consolidation and swap schemes offered to its customers.
The robust financial performance of Nakheel are reflective of it’s focus on contributing to the recovery of the Dubai real estate market. Nakheel successfully recommenced all its near term projects and started delivering properties as scheduled during FY11. Most of the properties currently under construction are expected to be handed over to customer in the intervening period to Q1 2013.
Nakheel is proactively evaluating and assessing various development projects that are expected to be implemented in the subsequent periods in the Company’s quest to deliver sustainable communities. The recently launched Palma Residences and Palm Views projects in Palm Jumeirah have been well received in the market.
The currently available leasing portfolio is almost fully leased and the two retail malls, Ibn Battuta (IBM) and Dragon Mart (DM) are running at 100% occupancy. Nakheel has recently launched an extension to the DM, comprising of an extension of the retail mall, a hotel and a extensive parking facility, the initial construction work for which is estimated to be completed by 2013. The strong performance of the retail and hospitality sector is reflective of the growth in the economy of Dubai and the investor’s trust and confidence in Dubai. Additional projects in the pipeline in this sector include The Palm Mall and the Pointe on the iconic Palm Jumeirah development, the extension of the Ibn Battuta Mall and the construction of the community centres at Jumeirah Park and the Discovery Gardens, popular residential communities by Nakheel.