Arabtec swings to Q2 profit of $25 million
Dubai, August 15, 2013
Dubai's largest contractor Arabtec swung to a profit in the second-quarter of Dh92.4 million ($25.16 million), compared with a loss of Dh11.6 million in the corresponding period in 2012, it said in a bourse statement on Thursday.
Arabtec, part-owned by Abu Dhabi state fund Aabar Investments, beat analysts' forecasts on the back of business growth in Saudi Arabia and the United Arab Emirates.
The earnings beat average estimate of five analysts polled by Reuters who expected a quarterly profit of 51.5 million dirhams.
Revenue for the second-quarter was 1.6 billion dirhams against 1.3 billion dirhams in the prior-year period.
Arabtec, which raised $650 million through a rights issue in July to support its expansion plans, has won a series of contracts this year especially in oil-rich Abu Dhabi where its top shareholder and state investment firm Aabar is based.
The company said that its agreed joint venture with Korea's Samsung Engineering that was announced in April is still in the process of being finalised.
“We have realigned our businesses to ensure that we are properly organised for further growth in accordance with our five-year strategy,” said Hasan Abdullah Ismaik, managing director and CEO of Arabtec Holding.
“In doing so, we have already achieved measurable efficiencies and cost-savings. Our financial position is very strong indeed, with healthy cash flow generation and the successful conclusion of our Dh2.4 billion Rights Issue which was 30 per cent oversubscribed by our shareholders. All of this is supported by our geographic expansion and growing backlog, which now stands at Dh24.4 billion, giving us visibility over our earnings for the coming years.
"All these positive developments are precursors to a strong performance in 2013 and beyond, which will start to show enhanced returns from 2014 onward since profits are tied to progress of work. We expect that this substantial backlog will have significant positive impact on the Company's financial position and profitability during the next five-year period as well as in the long term,” he added.– Reuters & TradeArabia News Service
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