Dubai giant behind palm islands posts record profits

 01 Feb 2017 - 19:34

Dubai giant behind palm islands posts record profits
An aerial view of Dubai's Palm Island December 21, 2009. REUTERS/Matthias Seifert

AFP

Dubai: Dubai real estate giant Nakheel, which built the Gulf emirate's iconic palm tree-shaped islands, said Wednesday it made a record profit of $1.35 billion last year and further reduced its debt pile.

The government-owned company said net profits reached 4.96 billion dirhams in 2016, up 13 percent from the previous year, helped by strong performances in retail, hospitality and residential leasing.

Nakheel chairman Ali Rashid Lootah described 2016 as a "momentous year" with the group recording its highest-ever net profit.

The group also repaid 4.3 billion dirhams (more than $1 billion) of debt that had been raised with Islamic sukuk bonds, he said.

Nakheel had piled up a mountain of debt during years of rapid growth in Dubai's property sector before the global financial crisis hit the 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 shore up the group, bolstered by $20 billion in aid from neighbouring oil-rich Abu Dhabi.

As part of Nakheel's restructuring, Dubai injected $9.5 billion into the company in exchange for equity, separating the firm from Dubai World and making it fully government owned.

The economy of Dubai, one of seven emirates that make up the United Arab Emirates, is seen as the most diversified in the Gulf, helped by trade and tourism, and is not dependent on oil revenues.