UAE-based Arkan Building Materials Company said it had registered a slight decline in its net profit for the first quarter which fell to Dh10.53 million ($2.79 million) from Dh12.21 million ($3.24 million) last year due to lower income recognised from scrap assets sale, from the closed Emirates Cement Factory, than in the previous year.
Announcing its consolidated financial results for the three months to March 31, 2020, Arkan said its net profit before sale of scrap assets for Q1 2020 almost doubled to Dh10.01 million from Dh5.25 million in the same period in 2019 as a result of continued cost saving initiatives, a more efficient mix of raw materials used in the cement business and lower electricity costs, as per the Abu Dhabi government’s ‘Electricity Tariff Incentive Programme’, which supports the industrial sector.
Group revenue too witnessed a decline from Dh234.99 million in Q1 2019 to Dh208.17 million primarily due to persistent intense competition in the cement business, adversely impacting selling prices, it added.
A leading construction and building materials company in the UAE, Arkan's portfolio companies include the Al Ain Cement Factory, Emirates Blocks Factories, Anabeeb and Arkan Dry Mortar.
On the performance, Chairman Engineer Jamal Salem Al Dhaheri said: "The challenging construction market has not been helped by the emergence of Covid-19, towards the end of the first quarter. The increase in operating profit is due to a better performance from our pipes business and the cost control measures the management team has been implementing right across the business."
According to him, GRP Pipes had an especially strong period increasing local market share significantly and PVC Pipes were able to benefit, during the period, from cost cutting initiatives.
Bags too reported good profit growth on increased sales volumes, while blocks and dry mortar saw profits edge up on reduced revenues.
"We continue to supply a number of the largest projects in the emirate and increase our market share where possible," remarked Al Dhaheri.
"We are also committed to supporting the government’s efforts during this period of economic and social uncertainty," he added.-TradeArabia News Service
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