Arabtec's revenues in the third quarter of 2018 increased to Dh2.3 billion, up 11.5 per cent year-on-year. Image Credit: Virendra Saklani / Gulf News

Highlights

  • Dubai-listed contractor recorded Dh67.5 million in net profit attributable to owners in the quarter, up from Dh17.8 million in the third quarter of 2017.
  • Net profit in the first nine months of 2018 up to Dh180.5 million, more than double from the Dh75 million recorded in the same period last year.
  • Revenues in the third quarter of 2018 increased to Dh2.3 billion, up 11.5 % year-on-year
  • Revenues in the first nine months of this year up 12.7 per cent, at Dh7.15 billion.

Dubai: Arabtec, the Dubai-listed contractor, reported on Wednesday a jump in its net profit for the third quarter of 2018, more than tripling as revenues rose and profit margins widened.

The company recorded Dh67.5 million in net profit attributable to owners in the quarter, up from Dh17.8 million in the third quarter of 2017. This brings net profit in the first nine months of 2018 to Dh180.5 million, more than doubling from the Dh75 million recorded in the same period last year.

Meanwhile, revenues in the third quarter of 2018 increased to Dh2.3 billion, up 11.5 per cent year-on-year. Revenues in the first nine months of this year were also higher, by 12.7 per cent, at Dh7.15 billion.

“Debtors days are continuing to decrease through our efforts to close out completed projects and shorten the payment cycle for current projects,” said Hamish Tyrwhitt, Arabtec’s chief executive officer. “This has contributed to a further improvement in cash from operations and a Dh146 million reduction in net debt.”

He added that Arabtec is making progress in building a stronger presence in the infrastructure and industrials sectors, both of which “offer a strong pipeline of addressable opportunities, which we are well-positioned to pursue.”

Debtors days are continuing to decrease through our efforts to close out completed projects and shorten the payment cycle for current projects.

- Hamish Tyrwhitt, Arabtec chief executive officer

At the end of September 2018, Arabtec’s backlog of projects was at Dh16.4 billion, it said, supported by a pipeline of identified opportunities worth Dh45.8 billion.

Its profit margins also improved to 2.6 per cent in the first nine months of 2018 from 0.8 per cent in the same period in 2017.

Dh180.5m

Arabtec's profit for first 9 months of 2018

The jump in earnings in the third quarter comes as the company undergoes restructuring, a programme that began in 2017. Arabtec said it is currently in the second phase, which aims to ensure consistently securing a strong annual backlog of projects, ensuring on-time and on-budget project deliveries, and risk management, among other targets.

In a press statement on financial results, Arabtec said it is continuing to simplify the business, moving towards 2019

“Arabtec continues to review non-core assets [that] are not considered key to the business for divestment or development,” the statement said, without elaborating on when it may sell any assets.

The construction company has already appointed Moelis & Co, it confirmed earlier this week, to advise and assist it with debt financial modelling, structuring options, and engagement with finance providers.

It also said it is on track to achieve its priorities for this year that include strengthening its regional footprint in the UAE, Saudi Arabia, Egypt, and Bahrain, as well as building presence in the infrastructure space.

As for market outlook, Arabtec said it expects to see growth in the UAE’s construction market, which it said it estimated at Dh155 billion in 2018. The market is expected to reach Dh216 billion in value in 2023, Arabtec said as per forecasts, driven by rising oil prices, the Expo 2020, and government-supported infrastructure spending.