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Nakheel Nine-Month Profit Surges 83% on Dubai Property

Oct. 21 (Bloomberg) -- Nakheel PJSC, the builder of artificial islands off Dubai’s coast, said nine-month profit surged 83 percent as demand for its properties climbed and almost all of its retail space was leased.

Net income for the period ended Sept. 30 rose to 1.1 billion dirhams ($299 million) from 600 million dirhams a year earlier, the company said in a statement today. Revenue more than doubled to 4.5 billion dirhams from 2 billion dirhams.

Nakheel, which almost drove Dubai’s government into bankruptcy after the 2008 credit crunch slashed property values by more than 65 percent, is completing delayed projects and trying to increase revenue from shopping-mall and hotel operations. Earnings were bolstered by “near 100 percent occupancy” of retail and other leased assets, Dubai-based Nakheel said today.

The developer wrote down the value of its real estate by 78.6 billion dirhams from late 2008 through mid-2010, and it received a bailout from Dubai’s government in 2009. The company also shelved several large projects, labeling them long-term, including two palm-tree-shaped islands along the emirate’s Persian Gulf coast.

The company, which restructured $16 billion of debt, said today that cash payments to trade creditors have reached 9.4 billion dirhams. Nakheel has also reduced long-term liabilities to its customers by 7.2 billion dirhams through consolidation and swap transactions, it said.

The government-controlled developer has provided buyers with the keys to 4,000 homes since the restructuring, Nakheel said. Most properties now under construction are expected to be handed over to customers in the last quarter of 2012 and in 2013.

To contact the reporter on this story: Zainab Fattah in Dubai at zfattah@bloomberg.net

To contact the editor responsible for this story: Andrew Blackman at ablackman@bloomberg.net

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