The Dubai property and construction market showed more signs of improving health yesterday as two major building materials firms reported positive results.
The Abu Dhabi cement producer Arkan Building Materials said profits grew 76 per cent during the year to the end of September to Dh41.5 million (US$11.2m).
Fellow building materials firm Sharjah Cement & Industrial Development also issued a positive third-quarter set of results at the Abu Dhabi Securities Exchange yesterday.
Arkan's improvement was mostly brought about by a 38 per cent increase in sales, which rose to Dh295.1m in the year, from Dh213.5m a year ago.
Arkan operates through its wholly owned subsidiaries Emirates Cement Factory in Al Ain and Emirates Block Factory in Al Mafraq.
Arkan's subsidiaries are capable of producing 850,000 tonnes of clinker and 1.2 million tonnes of cement and concrete blocks annually.
Revenue at the company's Emirates Cement Factory rose from Dh129.6m last year to Dh141.8m and profits at the factory rose from Dh36.8m to Dh41m - a rise that the company attributed to an increase in the price of cement.
However, at the company's Emirates Block Factory, revenue fell from Dh56.4m to Dh42.5m and profits slumped from Dh10.9m to just Dh713,000.
The company blamed the decrease on lower selling prices and higher raw material prices "particularly for cement".
Arkan, which is majority owned by Senaat, previously called General Holding Corporation, secured a Dh1.4 billion credit agreement with its banks in June which it used to pay off $260m of existing debt and to fund new projects in the UAE.
"The first nine months of 2012 have seen an increase in the pricing of cement," Suhil Mubarak Al Ameri, Arkan's chairman, said in a statement to the Abu Dhabi bourse yesterday.
"Arkan has continued to strengthen its operations during this period, leading to positive results."
Sharjah Cement, meanwhile, moved back into the black in its results for the nine months to the end of September.
It announced it had made profits of Dh14.3m for the period, up from a loss of Dh17.8m for the same period the previous year.
"In Dubai we are seeing a number of new projects coming on stream and other schemes which were previously on hold being dusted off and relaunched, all of this has had a positive effect on the construction industry in the UAE," said Craig Plumb, the head of research for Jones Lang LaSalle's Dubai office.
"And this is filtering down into the entire industry including the firms which manufacture building materials," he added.