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Arabtec revenue up 15% on Saudi, Kuwait operations
(Staff Report) / 28 February 2013
DUBAI — Arabtec Holding on Wednesday reported a 15 per cent increase in 2012 revenue, but net profit fell to Dh139.2 million compared to Dh221.1 million in 2011.
The company also announced that Hasan Ismaik to replace Riad Kamal as chief executive officer and said it plans to raise Dh6.4 billion through a rights issue and a convertible bond. he proceeds will be used to finance Arabtec’s growth strategy, to be implemented through organic growth, acquisitions, and international joint ventures.
The Dubai-based company, which specialising in complex construction projects, said revenues jumped to Dh5.66 billion, largely driven by growth in its Saudi Arabia and Kuwait operations.
“2012 was a solid year for Arabtec, with revenue growth, stable margins and strong new project awards. The construction industry has moved back into growth, and Arabtec is well placed to benefit,” Arabtec Holding managing director Hasan Ismaik said in a statement.
The company, which built the world’s tallest building, the Burj Khalifa, experienced a strong year for new contract awards, resulting in an increase of 27 per cent in its backlog to Dh17.9 billion as of December 31, 2012. The backlog has since risen to Dh21.4 billion, following awards in 2013 of the contracts to build the Louvre Abu Dhabi and the Fairmont Hotel in Abu Dhabi.
“Arabtec now has the right platform to take the business to the next level of its development, by applying our core competencies and skills to other growth sectors and markets. The company’s future capital raising reflects the Board’s ambitious yet realistic expansion strategy, the strong brand, and our institutional strength to grasp growth opportunities,” Ismaik said.
The company derived 62 per cent of its revenues from operations in the UAE in 2012. Meanwhile, its Saudi Arabia operations — principally residential construction projects — gained in importance, generating Dh1.34 billion of revenue in 2012, more than double comparable revenue in 2011. The company’s gross margin remained robust at 10 per cent in 2012, compared to 11 per cent in 2011.
The full year 2011 earnings have been restated by an amount of Dh76.8 million in revenues and net income mainly to correct the application of accounting policy, primarily related to revenue recognition from four projects. The restatement will not impact the total value of the four projects to Arabtec.
Arabtec is currently working on Midfield Terminal development at Abu Dhabi International Airport and a regeneration project in Doha.
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