Construction firm competed a recapitalisation last year to cut accumulated losses
Arabtec first quarter profit more than triples as company focuses on core business
Arabtec, the UAE's biggest contracting group, said first quarter net profit more than tripled as the company realised benefits of a recapitalisation programme to reduce accumulated losses and construction activity in the region picked up.
The contractor said net profit attributable to the owners of the company for the first three months of the year surged to Dh63.6 million from the year earlier period, according to a regulatory filing with the Dubai Financial Market, where the company’s shares are traded..
The “results reflect the positive impact of our various transformation initiatives,” said Arabtec chief executive Hamish Tyrwhitt. “Strengthening governance still remains our key priority through rigorous project and business performance reporting, with a strong emphasis on cash, collection of receivables and closing-out legacy projects.”
Arabtec "will look to divest or develop non-core assets and investments" this year to further strengthen its balance sheet, Mr Tyrwhitt added.
Revenue for the quarter rose 10.7 per cent to Dh2.4bn year on year and the construction firm said it has a project backlog worth Dh16.2bn. It also said it has a pipeline of “tenders submitted or under preparation” in its primary market, the UAE worth Dh16bn.
Last year, Arabtec completed a recapitalisation programme by raising Dh1.5bn through a rights issue and reduction of capital to cancel nearly Dh5bn of accumulated losses from previous years when construction activity slowed down in the wake of a three year oil slump.
The company won a number of contracts last year that include the UAE’s Expo 2020 Dubai pavilion. In the fourth quarter of 2017, it finalised a Dh950m contract with Emaar Properties and a Dh1.025bn contract with Dubai Properties.
The contract wins helped the construction giant swing to a net profit for the full year 2017, reaching Dh123.1m compared with a net loss of Dh3.4 billion in 2016.
Contracts won in the last quarter include a phase of Damac Properties’ Akoya Oxygen development in Dubai, and a Dh433m Dubai Municipality infrastructure project.