Nakheel made $234m profit in 2010 says chief

Dubai, September 25, 2011

Dubai's Nakheel made a 2010 profit of Dh860 million ($234.1 million) and sees a rise in revenue this year as the property developer revamps its operations post its $16 billion debt restructuring, its chairman told a local newspaper.

The rise in profit, which provided a strong boost for the company after the 2009 real estate crash left it financially crippled, was due to an increase in the company's activities, said chairman Ali Rashid Lootah in Arabic language daily al-Khaleej on Sunday, without elaborating.

'Nakheel's announcement of its profits is an important step ... towards fulfilling our promises to our clients and strategic partners,' he said.

Lootah also said that the company has experienced a rise in revenue so far in 2011, based on a 10-to-15 per cent increase in the management and leasing of fully-owned assets as well as a rise in residential unit occupancy, currently at 70 per cent of the 20,000 units Nakheel owns.

As part of Nakheel's restructuring deal, it offered repayment to trade creditors through 40 per cent cash and 60 per cent via an Islamic bond, or sukuk.

Sources told Reuters that much of the land backing the $1.03 billion sukuk is unreclaimed seabed, leaving trade creditors holding the paper with scant recourse to tangible assets in the event of a default.

In a separate published statement in al-Khaleej last week, Lootah hit back at the report, saying 'such news leaks will only hurt the investors as they are not based on facts and real investment value.'

Dubai's property sector has been hit hard in recent years with billions of dollars worth of projects put on hold or cancelled, while property prices slumped as much as 60 per cent. – Reuters

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