Property

Dubai’s Nakheel sees 22% drop in Q2 profit

Developer confident of hitting forecasts for 2017

Nakheel, the Dubai-based developer, has announced a net profit of $718.7 million for the first six months of 2017, compared to a profit of $803.1 million for the same period in 2016.

During the second quarter, the developer saw a 22% decline in net profit, to 1.16 billion dirhams ($315.8 million) compared to 1.48 billion dirhams a year ago, Reuters calculations showed. Nakheel did not provide a quarterly breakdown.

The developer said it was confident of achieving its forecast of an overall growth in profits for 2017 as a whole.

In a statement, the company said that revenue from non-development business – including retail, leasing, hospitality and asset management services – registered a significant increase, in line with company strategy.

Annual revenues from these segments have more than trebled from $217.8 million in 2010 to $680.6 million in 2017. The surge in non-development revenues has also resulted in a significant increase in the asset values of the company, it added.

Nakheel said that it would be continuing its strategy of developing cash-generating assets, having announced construction contracts worth more than $2.99 billion in the first six months of 2017. These include a $1.14 billion contract for Deira Mall at Deira Islands, and a contract for $408.3 million for the Palm Gateway on the Palm Jumeirah.

Nakheel earlier this year released a construction tender for its first hospitality joint venture – the $182.4 million, 800-room RUI resort at Deira Islands. The company has also broken ground on new hotels at Dragon City and Ibn Battuta Mall which have a combined project value of $113.25 million.

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