Dubai developer reports record $1.35bn profit in 2016, a 13% rise on the previous year
The Dubai developer Nakheel says it plans to award construction contracts worth AED 10 billion ($2.72 billion) this year, more than three times the value it signed in 2016.
Nakheel Chairman Ali Rashid Lootah said that the company plans to make the awards amid a “promising” outlook for the future, after the company reported record annual profits for 2016.
“Under our ongoing commitment to maintaining the momentum in the local economy, Nakheel awarded construction contracts worth around AED3 billion in 2016, and is set to award AED10 billion worth this year,” Lootah said in an emailed statement.
“The future is promising and we are confident that our strategy of having a diversified business will significantly benefit Nakheel and reinforce its position as one of the world’s leading real estate developers.
“We are currently working towards completing our healthy pipeline of projects and making them operational in the next few years, starting with The Pointe at Palm Jumeirah, one of our key hospitality and retail destinations, which is due to open this year.”
Nakheel on Wednesday announced record annual net profits, reporting that it made AED4.96 billion ($1.35bn) in 2016, a 13% increase on the the previous year.
Nakheel reported a net profit of AED955 million for the last quarter of 2016 – up 22% on the AED781 million posted for the same period in 2015.
The results “indicate a stabilising, mature real estate sector in Dubai”, the developer of Dubai’s manmade island, the Palm Jumeirah, said in a statement.
The 2016 results also “follow improved year-on-year performances by Nakheel’s retail, hospitality and residential leasing businesses,” it said.
Nakheel said it handed over 1,426 land plots and built units in 2016, primarily in Palm Jumeirah, Jumeirah Park, Al Furjan and International City.
Revenue from its retail operations grew by more than 70 per cent in 2016 compared to 2015, Nakheel said. Its hospitality business “jumped by 50 per cent in 2016 compared to 2015”.
Lootah said: “2016 was a momentous year in which we met and completed all of our restructuring obligations by repaying all AED4.3 billion of the trade creditors sukuk from our own resources – and recorded our highest ever net profit since Nakheel’s inception.
“A month into 2017, we have already begun handovers to customers on some of our completed projects, signed agreements with new hospitality partners, released the first of many construction tenders and announced an investment of AED150 million in cycle tracks across our communities, while later this year we will launch sales of our new project on Palm Jumeirah, PALM 360.”