Arabtec Q3 profit soars 140% on project wins
Dubai-based construction giant Arabtec reported Q3 net profit of $49 million (AED181m), up 140 percent on the same quarter last year.
Revenue for the quarter was $1.9 billion, up 12.7% on last year’s $1.7bn.
The increased profit was partly attributed to new contract wins in the quarter, which included a $871m (AED3.2bn) award by ADNOC LNG to the Target Engineering Consortium with Tecnicas Reunidas and a $42m (AED155m) contract awarded by Dubai Municipality to Arabtec Engineering Services for sewerage and drainage infrastructure works.
Arabtec’s backlog now stands at $4.4bn (AED16.4bn), with a $12.4bn (AED45.8bn) pipeline of identified opportunities within Arabtec’s addressable market.
The company, which last year embarked on a three-phase roadmap to stabilise and prepare the business for growth, also hired New York-based investment bank Moelis & Co to advise on a new restructuring plan.
Arabtec said it will look to reduce costs with the removal of duplicated functions and activities through shared services and outsourcing. The company will also continue to review non-core assets which are not considered key to the business for divestment or development.
“Debtors days are continuing to decrease through our efforts to close out completed projects and shorten the payment cycle for current projects,” said Group CEO Hamish Tyrwhitt.
“This has contributed to a further improvement in cash from operations and an AED 146 million ($39m) reduction in net debt. Strengthening the balance sheet remains a strategic priority going into 2019.”