Dubai’s Nakheel posts 43% surge in 2014 profits

by / Saturday, 07 February 2015 / Published in Uncategorized

Dubai real estate giant Nakheel, hit badly during the global debt crisis, said Wednesday its profits surged 43 percent on year in 2014 to $1.0 billion.

The government-owned company, which built Dubai islands in the shape of a palm tree and world map, said net profits reached 3.68 billion dirhams ($1.0 billion), compared with 2.57 billion dirhams for 2013.

It said the strong performance was driven mostly by the continued delivery of residential units and plot sales, adding a total 1,117 units were sold in the 12-month period.

“2014 was our biggest year yet in terms of financial performance and achievements,” said Nakheel chairman Ali Rashid Lootah, underscoring the company’s success in repaying debt of 7.9 billion dirhams ahead of schedule.

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 buoy the group, bolstered by $20 billion in aid from neighbouring oil-rich Abu Dhabi.

As part of the restructuring of Nakheel, the government injected $9.5 billion converted into equity, separating the company 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. The property sector has also made a strong comeback after nosediving during the crisis.

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