Arabtec Holding, the largest construction firm in the Emirates by market value, has recorded a net profit of Dh256 million (US$69.7m) in the third quarter, up 51 per cent from the same period a year earlier. The company's order book continues to grow, with the total backlog estimated at Dh49bn, which is more than six times the company's estimated revenues for this year, according to figures from the investment bank Al Mal Capital.
In the third quarter alone, the company secured several new contracts, with the biggest being the Dh2.4bn deal to build the Atrium, a residential project being developed by The Sunland Group at Nakheel's Waterfront development. Earlier this month, the company also won a Dh550m contract from Dubai Properties to construct 12 five-storey buildings at the Mudon development. Arabtec is also expected to win a Dh1.5bn deal from Abu Dhabi's Tourism Development Investment Company for the construction of a hotel resort at Saadiyat Island.
Of the company's order backlog, 62 per cent is in Dubai, nine per cent is in Abu Dhabi, 21 per cent is in Russia and the remaining eight per cent is in the rest of the Gulf. The third quarter, however, was also a time for Arabtec to reflect on its business strategy in light of the global economic slowdown. At the end of the second quarter the company's chairman, Riad Kamal, said its profits had been driven largely by its expansion strategy.
But while the company has bought several construction supply companies since November last year, it recently decided to defer plans to buy a piling contractor until market conditions became clearer. Mr Kamal told The National earlier this month: "We didn't think it would be a good idea to go ahead and fling money at something like this right now." Arabtec also pulled out of a deal worth an estimated Dh2.9bn to build the 500-metre-high Burj Al Alam on behalf of the developer Fortune Group.
The company was involved in the pre-construction phase of the project, and tipped to be awarded the deal. However, the developer later said disagreements over pricing led to a breakdown in talks. Mr Kamal also recently said that Arabtec was eyeing more opportunities beyond the UAE in expectations of a slowdown in the company's home market. It expects to win three contracts in Saudi Arabia early next year, which together are worth Dh2.9bn.
agiuffrida@thenational.ae
