Arkan Building Mat profits fall for 2011 periods

Arkan has a broad range of material lines.

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Abu Dhabi’s Arkan Building Materials saw revenue for the last quarter and nine month periods rise 64% and 19.5%, though higher costs and adjustments on the value of investments sank net profits.

The company made AED 84.7m ($23.05m) in the third quarter, up from AED 51.4m ($14m) last year following top-line gains from subsidiary Emirates Cement Factory and the company’s pipe manufacture. But despite gaining from a government grant of AED 12.6m ($3.43m), higher costs produced a profit of AED 2.7m ($735,000), down from AED 15.9m ($4.32m).

Nine month revenue rose to AED 213.5m ($58.12m) against AED 178m ($48.45m) last year, with an added boost from other income. After expenses and tax, profit fell to AED 23.5m (6.39m) from AED 37.7m ($10.26m).

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The company is one of the UAE’s broadest firms for building materials, with business stakes in companies producing cement, concrete blocks, pipe manufacturing and limestone production. As with many rivals in the country, it has seen profits erode over the last two years as a sharp downturn in the building market has shrunk demand for supplies.

Last year the company reported profits that had been bolstered by its investment in shares and other assets rather than materials, though its financial statement posted today states that the company’s “shares portfolio has been liquidated” apart from a few highly priced stocks, to reduce the loss on investments to AED 4.63m from AED 7.35m. The share of profits from associates at the end of the third quarter fell to AED 13m from AED 15.69m.

Arkan shares rose 3.3% to AED 1.25 in the UAE capital yesterday.