Cost management drives 55% rise in Arkan's H1 2019 net profits
Net profits for the construction firm during the first half of 2019 amounted to $9.2m (AED33.8m)
UAE construction and building materials firm Arkan has reported a 55% growth in net profits thanks to “disciplined” cost management, the award of a major insurance claim, and proceeds from the sale of old assets at the Emirates Cement Factory, as revealed in its financial results for H1 2019.
The results showed that net profit for the period was $9.2m (AED33.8m), a year-on year increase of 55%, while overall group revenue for H1 2019 was $124.9m (AED458.9m), compared to $137.1m (AED503.8m) in the same period last year.
Arkan said the decline in overall revenue was due to further “market price pressure” after export markets witnessed a slowdown, mainly when it came to cement profits.
However, as a result of its major insurance claim and the sale of old assets at the Emirates Cement Factory, cement profits rose due to the company's cost optimisation programme.
Other areas noted in its financial results for the first half of 2019 was the rise in its blocks and dry mortar revenues as a result of “strong sales volumes” and the expansion of the manufacturing unit’s product range.
However, profits were affected from its blocks and dry mortar by an increased land lease tariff and new accounting standards for leased assets, which increased costs.
Commenting on the results, Arkan’s chairman Eng. Jamal Salem Al Dhaheri said the firm’s results demonstrated the resilience of the business.
“We could achieve high levels of efficiency in most of our businesses resulting in considerable savings on energy coupled with an increased use of industrial waste,” said Al Dhaeri.
“This confirms our continuous progress toward being a sustainable company while our innovative products continue to break ground in new local and international markets.”