Dubai developer Nakheel grows profit over third quarter

Nakheel recorded a rise in third-quarter profit as it handed over homes and grew its retail business.

Net profits at the company rose to Dh780 million in the three months to the end of September, up from Dh750m for the same period a year earlier, calculations show.

The developer said that the increase was “mainly due to continued strong performance by Nakheel’s development business, with ongoing handovers of properties to customers”.

Nakheel said yesterday that it had made a net profit of Dh3.61 billion for the first nine months of 2015 – up 39 per cent on a year earlier.

Most of this profit appears to have been made in the first part of the year.

Nakheel did not provide figures for its turnover during the period or any detailed breakdown of how its profit was achieved.

The company, which is behind some of Dubai’s most ambitious projects including the Palm Jumeirah and Ibn Battuta Mall, amassed debts of Dh7.9bn during the global financial downturn, forcing it to cancel major projects.

Last year Nakheel reported that it had reduced its debts to Dh4.4bn from Dh12.3bn by repaying Dh7.9bn of bank debt four years ahead of time. Nakheel’s trade creditor sukuk of Dh4.4bn is due to be paid in August 2016.

The company has awarded a flurry of contracts over the past three weeks worth more than Dh3.1bn.

The latest of these was a Dh353.7m contract to build the Circle Mall between Sheikh Mohammed bin Zayed Road, Al Khail Road and Hessa Street in Jumeirah Village Circle.

“We will continue to build on these results during the last quarter of the year,” said the Nakheel chairman Ali Rashid Lootah.

Dubai property developers are facing tough trading conditions as a strong dollar and weakening sentiment hit sales. JLL this month reported that average house prices in Dubai had fallen 10 per cent in the 12 months to August 2015, while average housing rents in the city were down 1 per cent.

JLL said that it expected prices to continue softening over the remainder of the year and into 2016.

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