Arkan Building Materials Co. PJSC (ADX: ARKAN) (“Arkan” or “the Group”), a leading construction and building materials company in the UAE, today announced its financial results for the first half of 2018.
Net revenue for H1 2018 was AED 473.6 million, an increase of 3%, compared with AED 459.6 million for the same period in 2017 as a result of strong sales of Pipes, Blocks, Dry Mortar and Bags, notwithstanding a very competitive market situation.
Arkan’s Pipes division, Anabeeb, increased its market share in the UAE and abroad for its GRP and PVC products. Anabeeb continued to penetrate markets in the Far East and Central Africa and explore new market opportunities for standard and bespoke products and solutions. Arkan’s Blocks division successfully penetrated the Dubai market winning new contracts for Blocks, Pavers and Dry Mortar products. Further, to meet customer demand, Dry Mortar increased its production capacity this year from 165,000 to 222,000 tonnes per annum.
Pipes and concrete product businesses are running at close to full capacity thereby maximizing their efficiency. Additionally, Arkan continues to optimize its cash management resulting in lower financing costs.
As previously communicated this year regarding the uncertainty of the continuation of its own quarry, Al Ain Cement Factory started blending a portion of imported limestone from Oman with its own limestone resulting in an additional cost of AED 11 million for the period. This impacted its profits of the period negatively compared to last year’s. Results were also impacted by additional land lease rental. Overall, net profit for the Company was AED 15.5 million, compared with AED 25.0 million in H1 2017.
Commenting on the results, Eng. Jamal Salem Al Dhaheri, Chairman of Arkan said: “Arkan continues to make operational progress and record improving revenues. Our Pipes, Blocks and Dry Mortar products are generating strong sales and profits, partially offsetting the market challenges we face in our Cement Division. Our strategy to develop a more diversified platform of building material products is creating a more balanced business and will support Arkan through future market cycles.
Looking ahead, we expect a better year end outcome as the construction market improves, supported by more building and infrastructure projects in Abu Dhabi coming on stream. Further, we are confident that an agreement will be reached with the authorities regarding the quarry which will help avoid additional import costs from Oman. Meanwhile we continue to extract the limestone from our existing quarry while being fully compliant with environment, health and safety regulations.”
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For investor relations enquiries, please contact:
Brunswick Group
Phone: +971 (0)2 234 4600 / +971 (0)4 446 6270
Email: arkan@brunswickgroup.com
About Arkan
Arkan Building Materials Co. PJSC (ADX: ARKAN), is a public joint stock company specialising in manufacturing of building and construction products in the UAE. Arkan’s vision is to build a large integrated building products business that serves the local and regional construction industries. Arkan’s portfolio companies include the Al Ain Cement Factory, Emirates Blocks Factories, ANABEEB and Arkan Dry Mortar. For further information, please visit our website: www.arkan.ae.
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