(MENAFN- Khaleej Times) Development revenue props up earnings growth
Dubai- Nakheel announced on Wednesday a 115 per cent surge in first quarter net profit to Dh1.35 billion from Dh629 million in the same 2014 quarter on the back of brisk performance by its development business and said it is aiming for Dh7.5 billion per year in recurrent income in the coming years.
The developer said its ongoing handovers of properties also spurred profit growth. “Nakheel’s retail leasing and leisure businesses also continue to improve and contribute to the overall financial results for 2015 first quarter” the company said in a statement.
Nakheel chairman Ali Rashid Lootah said he expects to build upon the first quarter results throughout 2015 and would continue to remain focused on 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. We thank our investors for their increasing trust and confidence in Nakheel and the Government of Dubai for their ongoing support” said Lootah.
He said development projects are in progress across various Nakheel communities and the company expects to continue generating development revenue when these projects are completed.
Nakheel 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 cash revenue for Nakheel and further strengthen the company’s overall financial position.
In 2014 Nakheel reduced its financial debt from Dh12.3 billion to Dh4.4 billion by repaying Dh7.9 billion of bank debt four years ahead of time. Nakheel’s trade creditor sukuk of Dh4.4 billion is due to be paid in August 2016.
Nakheel’s master developments in Dubai include Palm Jumeirah The World Deira Islands Jumeirah Islands Jumeirah Village Jumeirah Park Jumeirah Heights The Gardens Discovery Gardens Al Furjan Warsan Village Dragon City International City and Villas at Nad Al Sheba. Nakheel’s existing and pipeline retail projects cover more than 13 million square feet of leasable space. Nakheel is also developing hotels in Dubai including Palm Jumeirah Deira Islands Ibn Battuta Mall and Dragon City. Over the next three years Nakheelplans to implement nearly $4 billion worth of projects in Dubai. The project includes Deira Mall which will accommodate 3000 shops and will be surrounded by 16 residential towers offices four residential complexes including 2500 apartments and sports walkway hotels and upscale resorts recreational and tourist facilities and other features such as restaurants cafes and a children’s garden.
The Ibn Battuta expansion project includes a covered indoor garden equivalent to four football pitches and a lobby for restaurant courts along with a five-star hotel cinema and 4000 additional vehicle parking spaces.
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