Dubai Parks & Resorts to weigh in with Dh7b worth of construction projects

Dubai Parks & ResortsImage Credit: Gulf News Archives

Dubai Parks & Resorts will be signing off on project contracts totalling a substantial Dh7.5 billion this year to add to the around Dh5 billion it did in 2014, according to the CEO, Raeed Al Nuaimi. The company confirmed it has reached key project-related milestones in its 2014 financial summary released on Monday.

Nakheel also recently confirmed that its contracts’ outlay for this year would be around Dh7 billion, a pattern in which Dubai Government owned developers will set the dynamics for the construction sector between now and 2020.

“Dubai Parks & Resorts is a fully funded company,” said Al Nuaimi. “While basically anything of a revenue stream before the opening [of the theme park cluster] would be very good — and there are some plans — we are looking to start seeing it generated from the day of opening onwards [in October 2016].

“The aim is to open the destination in one go rather than the individual components.”

The company is 60 per cent owned by Meraas and the rest held by the public following the IPO late last year. The cumulative project expenditure for this year is forecast to be Dh5.9 billion.

The cluster includes four themed elements — Legoland Dubai, Bollywood Parks, Motiongate and Riverland — plus a 503-room hospitality feature under the Lapita branding. The total estimated cost is Dh10.5 billion, with equity making up Dh6.3 billion. As for the rest, the company recently secured a Dh4.2 billion syndicated loan facility agreement.

The company, which does not have an operational revenue flow as yet, recorded a loss of Dh21 million for the final quarter of 2014. It was Dh13 million the year before. But cash and financial assets swelled to Dh4.31 billion as of end 2014. (There were none provided for in the 2013 numbers). Meanwhile, total assets were valued at Dh6.87 billion against Dh340 million in 2013.

Among the key project-specific milestones is that orders for all of the theme park rides have been placed. “The contracts will obviously be paid out linked to specific milestones being attained,” said Sanded Pandhare, Chief Financial and Investment Officer. “Of the total assets of Dh6.9 billion, 3 per cent represents cash and cash equivalents which will meet all the regular payments that need to be made, while 60 per cent represent ‘other financial assets’ such as interest-bearing resources.”

As much as 88 per cent of the design elements are complete, and the missing elements need only be done after the main attractions take shape. Another big plus is that 64 per cent of the resort’s utility and road network are also complete. As of now more than 5,000 workers are on site — on three shifts a day — from the 2,000 odd that were there two months ago. By the end of the year, infrastructure related works would have crossed the 65 per cent mark, which would include the access bridges on Shaikh Zayed Road.

In 2014, advances to contractors and prepayments were up to Dh370 million, related to “funds capitalised over the duration of projects”, according to Pandhare.

 

 

Source:  Manoj Nair, Associate Editor, gulfnews.com

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