A string of major project wins in the UAE, strategic expansions into new markets and timely acquisitions enabled construction major Arabtec to record a triple-digit growth rate (149 per cent over 2012) in net income for 2013.
The final total came to Dh468 million (Dh188 million in 2012) on revenues that were up 30 per cent to Dh7.4 billion (Dh5.66 billion in 2012).
The company’s board has given the go-ahead for a 40 per cent dividend. (This will be distributed as bonus share dividends at 30 per cent of share capital at par value, being 1 bonus share for each 3.3 shares held; in addition to cash dividends of Dh0.1 per share, or 10 per cent cash dividends.) The Arabtec scrip was particularly active in recent days. The share closed 2.52 per cent higher to Dh5.28.
The full-year income attributable to the “parent company” will be Dh377.77 million, from Dh129 million in 2012.
If 2013 proved a strong year, indications for this year verge on the spectacular — the company confirmed the year-to-date order book has gone past Dh200 billion, bolstered by the recently awarded $40 billion (Dh146.9 billion) contract in Egypt. There was another of over Dh20 billion in the UAE.
For 2013, Arabtec confirmed that its gross margins actually firmed up to 12 per cent from 10 per cent. “At this stage, Arabtec is well-poised to take on a larger number of new projects, as it continues to upgrade its systems, processes and project execution platform, and has an expanding senior management team with world-class expertise,” said Hassan Ismaik, managing director and CEO of Arabtec Holding, in a statement.
“Since the start of 2014, our company’s subsidiaries have been selected to execute a series of new projects, with a total value of Dh180 billion, which gives us visibility on our earnings growth for many years to come.
“The strong foundations that we have built over the past year have allowed Arabtec to continue driving its growth strategy by further expanding reach into new sectors through new subsidiaries, joint ventures and office locations.”
According to Krishna Murthy, general manager at Dubai International Securities,
“The backlog of orders provides revenue visibility for more than three years; the execution of recent order wins is likely to peak during 2015 to 2017.
“Also, Phase II of the Dh4.8 billion rights issue having been called off appears positive for stock’s valuation and makes equity servicing easier.
“The cash collection cycle has improved to below 190 days from 250 days in 2012, which helps the balance sheet with 30 per cent year-to-date higher operating cash flow.”
For this year, “Arabtec started with an aim to capitalise on identified opportunities across the region … To do so, Arabtec launched five new subsidiaries, to expand reach into new sectors, and in line with the Company’s strategy,” the company announced in a statement
“Two of the subsidiaries will focus on infrastructure projects inside and outside the UAE, one will focus on water and energy projects and one will concentrate on the Egyptian market.”
© Al Nisr Publishing LLC 2022. All rights reserved.