Dubai-based construction major Arabtec Holding is expected to win contracts worth Dh7.4 billion this year against Dh4.9bn last year, according to a projection by investment bank Shuaa Capital.
Arabtec won contracts worth Dh4.3bn this year but adjusted cancellation of deals worth Dh1.1bn to record the net year-to-date contracts at Dh3.2bn, said a study released yesterday.
Abu Dhabi was the largest source of year-to-date awards, followed by Qatar, Dubai and the Levant. The company's 72 per cent or Dh3.1bn of contracts are outside Dubai.
"If new work keeps coming as fast as the first five months of this year, the company will most likely exceed estimates by a considerable margin - suggesting increased future earnings potential," said the report.
The Shuaa study claimed that Arabtec's backlog stands at an estimated value of Dh 3.9bn; Russia being the largest backlog contributor. With no major news coming on the Russian front, Shuaa remained cautious on the Dh10bn project and continue excluding it from projections and valuations.
Consequently, the effective backlog amounts to Dh13.9bn. Around 60 per cent of this backlog comes from Abu Dhabi, Qatar and Saudi Arabia.
Shuaa said Meydan, Nakheel, Zabeel Investments, Dubai Silicon Oasis and Dubai Properties are among the largest of Arabtec's debtors.
Shuaa reduced Arabtec's revenue projections by 27.7 per cent from Dh9.74bn to Dh7.04bn this year. The revenues are expected to increase to Dh8.465bn next year and Dh8.75 in 2012.
By Waheed Abbas
© Emirates Business 24/7 2010
