Thursday 1 October 2020

Arkan H1 revenue falls to $105m over Covid curbs

ABU DHABI, August 11, 2020

UAE-based Arkan Building Materials Company said its group revenue for the first six months fell to AED387.4 million ($105 million) from AED459 million ($125 million), primarily due to limitations resulting from the measures taken to counter the spread of Covid-19.
The decrease in revenue was offset by rigorous cost saving programmes to cover vital processes such as; raw material prices negotiation, reduced outsourced services, reduced manpower cost, higher efficiencies in energy utilisation coupled with lower electricity cost as a result of the Abu Dhabi Government’s ‘Electricity Tariff Incentive Programme’, which supports the industrial sector. 
In parallel, the company focused on maintaining its market share by securing supply to all active projects.
Announcing its consolidated H1 results, Arkan said it remained profitable with a net profit of AED2.1 million for the first six months despite the pandemic and its negative impact on the building material sector.
This was compared to AED8.5 million last year, before one-off gains of AED25.3 million from the sale of scrap assets at the Emirates Cement Factory and proceeds from an insurance claim in the Cement Division.
While the company’s cement, dry mortar and blocks businesses were negatively affected by the pandemic with a marked slowdown in sales despite solid order pipeline; revenues from Arkan’s GRP Pipes segment doubled to AED 43.3 million, versus H1 2019, due to significant market share gains. This has again shown the value of a broader diversified business.
On the results, Chairman Engineer Jamal Salem Al Dhaheri said: "Arkan has proven its ability to manage through even the toughest market environment and still remain profitable.  This was due to the strong and decisive measures taken by management to implement over AED30 million of cost improvement initiatives across the business, as well as the team’s ability to continue the reliable and uninterrupted supply of product to customers."
Arkan continues to be recognised as one of the largest and most respected building material suppliers in the UAE, with a diversified portfolio of high-quality products and services and a strong order book.  We will manage the business prudently through the remainder of the year and believe we are well positioned to emerge stronger as the pandemic passes, and markets recover,” he added-TradeArabia News Service


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