Net profits of Dubai property giant increase 19% in 2015

Friday 29/01/2016
Development remains core business activity

DUBAI - Dubai's Nakheel said Wednesday its net profit increased 19 percent last year to $1.19 billion, as the real estate giant widens its revenue base.

The government-owned firm, which built Dubai's iconic islands in the shape of a palm tree and a world map, said net profits jumped in 2015 to 4.38 billion dirhams ($1.19 billion) from 3.68 billion dirhams in 2014.

"While development remains Nakheel's core business activity, the plan to increase cash-generating assets of the business is also paying dividend," Nakheel said in a statement.

Combined revenues from retail and residential leasing increased in 2015 compared to 2014, it said, without specifying by how much.

"Our strategy to have a more diversified business is taking shape," Nakheel chairman Ali Rashid Lootah said.

The company has opened its new Dragon Mart 2 shopping centre in Dubai along with the attached ibis Styles hotel, Nakheel's first hospitality asset.

Nakheel had piled up a mountain of debt during five years of rapid growth in Dubai's property sector before the global financial crisis hit the Gulf emirate in 2009.

The company was part of the government-linked Dubai World group, which shook global markets in 2009 when it signalled it was facing difficulties paying off debts totalling about $24.9 billion.

The government intervened to prop up the group, including with $20 billion in aid from the neighbouring oil-rich emirate of Abu Dhabi.

As part of Nakheel's restructuring, Dubai injected $9.5 billion into the company in exchange for equity, separating the firm from Dubai World and making it fully government-owned.

Economic growth in Dubai has been steady thanks to the trade, transport and tourism sectors, after contracting 2.9 percent in 2009.