Nakheel semi-annual report as of June 30, 2009

I put together a couple of interesting quotes from the Nakheel financial statements, which are available from NASDAQ Dubai. See the full financial statement for additional details. The numbers included are from various financial statements presented in the semi-annual report.

“In light of the challenging market environment Nakheel has reviewed the carrying value of all its assets to ensure that they are reflected in the financial statements at a prudent estimate of their future recoverable amount. This resulted in impairment and termination charges of AED 13.21 billion in the period. The impairment charge primarily relates to the write-down in the value of land to current fair market levels and the write-down of certain properties under construction relating to projects that have been delayed or scaled back”

“Total liabilities increased by AED4.90 billion in the six months to June 2009 mainly due to increases in accounts payable and accruals which include funds received from a related party”

“Debt maturities occurring in the coming 12 months are being addressed in conjunction with support from Nakhweel’s parent Dubai World”.

Ernst & Young noted that “As discussed in note 2 to the financial statements under “Impact of the Global Crisis on Funding”, the ultimate parent of the Group intends to enter into discussions with its providers of financing on restructuring of the Group’s debt facilities. The outcome of any such discussions cannot be determined at this stage”

Assets include “Loans to a related party” of AED9.769bn as of 6/30/09 compared to AED9.286bn on 12/31/08.

Loans to a related party were AED482.7m in six months to 6/30/09 compared to AED5.93bn in six months to 6/30/08. The balance was AED2.485 billion on 1/1/08, AED 9.286bn on 12/31/08 and AED 9.769bn on 6/30/09 and bore interest at an effective rate of 3% in 2008 and 2.38% in 2009.

Funding received from a related party was AED3.014bn in six months to 6/30/09 compared to AED0 in six months to 6/30/08. The funding received was from Dubai World.

“The Group has received significant funds from Dubai World in the current period and subsequent to the period-end. Furthermore, on 25 November 2009, the Government of Dubai issued a statement that the ultimate parent of the Group [Dubai World] intends to request all providers of financing to the Group for a ‘standstill’ and extension of the maturities of such facilities until at least 30 May 2010. Whilst the management and shareholders remain optimistic, the outcome of such a request cannot currently be determined”