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Abu Dhabi, UAEWednesday 26 September 2018

Nakheel posts 10.5% fall in first half profit

The company did not give a reason for the lower profit

Nakheel says it should still meet its annual forecast for 2017.
Nakheel says it should still meet its annual forecast for 2017.

Nakheel, the developer behind Palm Jumeirah, posted a 10.5 per cent decline in first half net profit but affirmed its confidence in meeting full-year forecasts.

Net profit for the six months to the end of June fell to Dh2.64 billion from Dh2.95bn in a year-earlier period. The company did not give a reason for the lower profit.

“The company is confident of achieving its forecast 2017 result, which will reflect an overall growth in profits for the year,” Nakheel said.

Nakheel posted last year a 13 per cent increase in full-year net profit to Dh4.96bn in 2016, thanks to improved performance of its retail, hospitality and residential leasing businesses.

Revenue from non-development businesses, which include retail, leasing, hospitality and asset management increased to Dh2.5bn this year from Dh800 million in 2010.

The developer also handed over around 870 units to customers in the first half of this year.

Nakheel awarded more than Dh11bn worth of contracts in the first half of the year.

These include awarding United Engineering Construction a contract worth Dh4.2bn to build the new 10.3 million square feet mall at its Deira Islands master development. The Indian engineering firm Shapoorji Pallonji Group also won a Dh1.5bn construction contract for a residential retail complex on Palm Jumeirah, The Palm Gateway.

Nakheel also released a construction tender for its first hospitality joint venture, the Dh670m RUI resort at Deira Islands and has broken ground on new hotels in Dragon City and Ibn Battuta Mall, with a combined project value of Dh416m.

Dubai’s residential real estate market has yet to bottom out. Sales of apartments fell 0.3 per cent year-on-year in the second quarter as supply continued to outstrip demand, according to the broker JLL.

Any price recovery depends on how many units out of 78,000 scheduled for completion over the next three years are delivered, it said.

Around 25,000 units are scheduled for delivery by the end of this year, but around half are expected to be handed over, according to JLL.

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