x Abu Dhabi, UAEWednesday 17 January 2018

Atkins rides railway contracts to better profits in Middle East

It won a £75 million design contract for Riyadh Metro in October, and in March it won a contract for the Doha metro as part of a consortium.

The British design and engineering consultancy Atkins improved its Middle East performance last year after major railway contract wins in the region.

Besides design contract wins for the Riyadh metro, a boom in the UAE property sector “[offset] restructuring costs and delays to project mobilisation during the first half of the financial year”, the company said in a filing to the London Stock Exchange.

The division’s operating profits rose 22 per cent to £14.4 million (Dh89.02m) in the financial year ending March 31, the company reported yesterday. It also led to a 3.8 per cent rise in revenues to £168.4m for the division.

In the first half of last year, restructuring costs and project delays in Bahrain and Kuwait cut the division’s operating profits.

“We had some strong performance in Middle East and most of that came through from the second half last year by winning large projects like Riyadh metro and strong growth in the UAE and Dubai, with the property market coming back. A number of projects were restarted, besides new projects,” said Simon Moon, Atkins’ chief executive for the Middle East.

“Our real focus of growth is in rail, infrastructure and property sectors [in the region], and in the UAE, Qatar and Saudi Arabia.”

The profit margin in the region was about 8 per cent, which was a 22 per cent increase over the previous year, it said. Staff numbers rose by 4.6 per cent to reach 2,071 people. Of these, 71 employees came to the region after the British company’s acquisition of the Singapore-based project management business Confluence. Atkins has 1,000 people in the UAE and 500 in Qatar.

It won a £75m design contract for Riyadh Metro in October.

Atkins won the designing contract for Habtoor Residences in Dubai in November. It is also working on Emaar’s opera house in Downtown Dubai. In Abu Dhabi, it is developing four new schools in the capital and Al Ain, and a Hilton project in Ras Al Khaimah.

In Saudi Arabia, it is bidding for the metro projects in Mecca, Madinah, Damman and Jeddah. It is also bidding for the Abu Dhabi light rail system.

Atkins expects to bid for the extension of the Dubai Metro system to the Expo2020 site this year, along with the expansion of Dubai Metro’s existing routes, Mr Moon said.

Its order book stands at 62.7 per cent of next year’s budgeted revenue, down from 80.2 per cent of the last financial year.

“It is not that we have less work but that we have several large projects under negotiations,” he said.

The company’s global pre-tax underlying profits grew 7.3 per cent to £106.4m and revenues increased 2.6 per cent to £1.75 billion with improved performance in North America and Britain, Atkins said. It has net funds of £188.3m.


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