Dubai's Nakheel posts 27% 2013 profit gain

Dubai's Nakheel reported a 27.2 percent rise in full-year profit on Sunday as the property developer benefitted from the emirate's resurgent real estate market.

The government-owned developer, which agreed a $16 billion debt restructuring in 2011, made a net profit of 2.57 billion dirhams ($700 million) in 2013, up from 2.02 billion dirhams in 2012, chairman Ali Rashid Lootah announced at a news conference.

Revenues also boomed in 2013, growing 20.5 percent to 9.4 billion dirhams.

Nakheel plans to launch new projects worth between 6 billion and 8 billion dirhams in 2014, Lootah said.

Dubai house prices plunged about 60 percent from a 2008 peak as a property boom turned to bust, with Nakheel among the most high-profile corporate casualties. That led the company to stall or scrap some of its more grandiose plans, such as building a one-kilometre high tower.

But Dubai's property sector is now recovering, helped by an influx of money from Arab and other countries, with residential property prices rising 22 percent in 2013, according to consultants Jones Lang LaSalle.

In a report on Sunday, Jones Lang LaSalle predicted the rebound would continue this year, though it added that increases in prices and rents were likely to slow as supply of new properties increased and Dubai government steps to avert excessive market speculation had an impact.

About 80 percent of property buyers in Nakheel's stalled projects have now settled with the developer, with 20 percent of buyers still in dispute, said Lootah. These can get their cash back five years from the date of Nakheel signing its restructuring deal, he said.

The company has made interest and profit payments of around 1.8 billion dirhams to lenders, issued a trade creditor sukuk of around 4.4 billion dirhams, and made cash payments of about 12.3 billion dirhams to various trade creditors and contractors since the start of its debt restructuring, a company statement said.

Lootah said Nakheel would consider an initial public offer of shares after the company settled its debts.
The firm handed over 3,150 units in 2013, although this is poised to drop to 1,600 units this year. Last year, it sold 3,500 properties.

Earlier this month, Nakheel said it would repay this year up to 4 billion dirhams of bank debt due in 2015.