Nakheel posts $3.6bn H1 loss

Master developer Nakheel said on Wednesday that impairment and termination charges totalled more than AED13bn during the first six months of 2009, as the global economic crisis severely hit the Dubai real estate market.

The impairment charges were primarily related to the write-down in the value of land to current fair market levels plus the write-down of certain properties under construction relating to projects that have been delayed or scaled back, the company said in a statement posted on the Nasdaq Dubai website.

It said total liabilities for the first half of 2009 rose 7.2 percent to AED73.3 billion, as the firm made a loss of AED13.4 billion ($3.64bn).

The developer said revenue for the period fell to AED1.97 billion from AED9 billion in the first half of 2008.

"The Dubai real estate was impacted and as a result Nakheel sales volumes and transaction activity remained low," the statement said, adding that the company's assets decreased to AED147.01bn at the end of June, compared to AED155.52bn in December 2008.

"Nakheel has continued to take steps to reduce its operational and overhead expenditure. The Group's cost base is regularly reviewed to ensure that Nakheel is appropriately sized to meet market opportunities and challenges," the statement added without elaborating on the number of job losses in 2009.

The developer added that its "immediate priority" was to ensure the completion of projects under construction.

"Management remains focused on maximising collections while controlling capital and operating expenditure. Debt maturities occurring in the coming 12 months are being addressed in conjunction with support from Nakheel's parent Dubai World," the company said.

The palm-shaped island builder added that "considerable effort" had been taken to reduce costs by "scaling down or slowing some development activities to beyond 2012".

It said it was "phasing the delivery" of associated infrastructure on projects "in accordance with market demand".