A blooming palm: Dubai's Nakheel profits more than double

Dubai-based developer Nakheel said its net profit more than doubled to Dh1.35 billion ($357 million) in the first quarter from Dh629 million ($171.2 million) for the same period last year.

Announcing the financial results for the first three months, Nakheel said the 115 per cent net profit jump was the result of 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, it addded.

Development projects are in progress across various Nakheel communities and the company expects to continue generating development revenue when these projects are completed and units are handed over.

Nakheel said it has also launched a number of projects in the retail, hospitality and residential leasing sectors, including a vast new community at Deira Islands and huge extensions to Dragon Mart and Ibn Battuta Mall, announced earlier this month.

When operational, these projects will generate good cash revenue and further strengthen the company’s overall financial position, it said.

The top Dubai developer is aiming for a Dh7.5 billion ($2.04 billion) per year in recurrent income in the subsequent years.

In 2014, Nakheel had reduced its financial debt from Dh12.3 billion to Dh4.4 billion ($3.34 billion to $1.19 billion) by repaying all Dh7.9 billion ($2.15 billion) of bank debt four years ahead of time.

The company's trade creditor sukuk of Dh4.4 billion ($1.19 billion) is due to be paid in August 2016.

Commenting on the performance, chairman Ali Rashid Lootah said: "We expect to build upon these impressive first quarter results throughout 2015, and will continue to remain focussed in contributing to the real estate sector in Dubai in a positive and effective manner in line with the Government’s 2021 vision."

"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," he added