United Arab Emirates-based building contractor reported a profit attributable to its parent company of $10.83 million in the three months to June
09 August 2017
United Arab Emirates-based building contractor Arabtec on Wednesday reported its second quarterly profit since embarking on its turnaround strategy.
The company reported a profit attributable to its parent company of 39.8 million UAE dirhams ($10.83 million) in the three months to June, compared with a 186.4 million UAE dirham loss in the same period last year.
This was despite a 6 percent year-on-year decline in quarterly revenue, to 2.06 billion UAE dirhams.
The contractor said that for the first six months of the year, revenue increased by 2 percent to 4.25 billion UAE dirhams, while net profit attributable to its parent company stood at 57.4 million UAE dirhams, compared with a loss of 232.8 million UAE dirhams in the same period last year.
In a press statement accompanying its accounts, Arabtec Holding's chief executive Hamish Tyrwhitt said its "key deliverable" during the first half of the year was the successful completion of its recapitalisation exercise, which saw it raise 1.5 billion UAE dirhams through a rights issue and then reduce its share capital by more than 4.6 billion UAE dirhams to wipe out historic liabilities and strengthen its balance sheet.
Accounts show that the company received 1.1 billion UAE dirhams in proceeds from the issue after repaying a 400 million UAE dirham loan from its biggest shareholder, Aabar Investments, which was taken out in June 2016. The company finished the quarter with net equity of 1.28 billion UAE dirhams, compared with a deficit of 250.7 million UAE dirhams at the end of last year.
Arabtec Holding also said it had made progress on introducing more robust risk management systems before taking on new contracts, as well as refocusing on core geographies and markets. Its strategy involves a focus on its three main contracting businesses - Arabtec Construction, Target Engineering and mechanical and mechanical, electrical and plumbing (MEP) contractor Efeco.
Tyrwhitt said: “We continue to align our business with our strategic roadmap which has been reflected in the performance of the group.
He added that the company would "continue to work on turning risks into opportunities through the resolution of legacy claims and collecting receivables”.
© Zawya 2017