Dubai: Arabtec Holding said in a statement on Thursday its net profit in the first half of 2013 increased 114 per cent. The UAE-based construction firm said operations in Saudi Arabia and the UAE led the company to announce a Dh155 million first half profit.
“Our businesses have delivered a strong performance in the first half of 2013, particularly in the UAE and in Saudi Arabia, and our results are a clear indicator of the health of the industry and the potential for sustained growth in the medium term,” Hassan Abdullah Ismaik, Managing Director and CEO of Arabtec Holding, said in a statement.
Arabtec said its growth was a reflection of in the regional construction industry and its recovery from the global financial crisis.
The company also attributed “continued realignment of its businesses” to its performance.
Across the first half of 2013 Earnings before Interest, Taxes, Depreciation, and Amortisation (Ebitda) rose 48 per cent to Dh363 million and Selling, General and Administrative Expenses (SG&A) declined by 15 per cent to Dh239 million “due to cost savings and reallocation of overheads to the delivery organisation”, the statement said.
Ismaik stated the company had “realigned our businesses to ensure that we are properly organised for further growth in accordance with our five-year strategy”.
Geographic expansion and a growing backlog of new contracts now amounting to Dh24.4 billion had underpinned strengthened performance, the statement said,
A significant increase in cash flow improved company operations, the statement said, seeing the company draw Dh98 million in the first quarter compared to negative Dh2 million in the same period last year.
“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,” Ismaik stated.
The company said it would now shift its focus to refining their project management and execution platform in order to deliver “more value and stronger results”.
Ismaik stated that the aim was to turn Arabtec into one of the most sought after shares in the region.
Arabtec has maintained double digit gross margins with 12 per cent in the first half of 2013 and 11 per cent in the second half. The UAE is the major market for Arabtec accounting for roughly 60 per cent of all revenue.
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