Abdullah Al-Khodari net rises on stronger year

Contractor sees gains seven months after listing after contract flurry

Al-Khodari has snapped up a number of contracts in the last two quarters.
Al-Khodari has snapped up a number of contracts in the last two quarters.

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Abdullah A. M. Al-Khodari Sons Company, the Saudi contractor that listed last year, said profits from 2010 remained steady against the previous year as the company continues its regional expansion.

The Eastern-Province based contractor, whose specialisms include civil engineering as well as infrastructure projects, said net profits rose 0.4% to SAR 217.9 million, up from 217 million. Operating profits fell 2.5% to SAR 230 million, down from SAR 236 million.

The family-based company has secured a number of contracts since its shares went live last October on the Tadawul, Saudi Arabia’s stock exchange and the biggest Arab bourse.

These include a package of contracts worth a combined SR430 million to build roads around the country, and a SR86.3 million deal with the interior ministry to build an airport in Umm Mulh. In December 2010 it was awarded a contract worth more than SAR 90.87 million to build storage buildings for the Saudi Arabian Mining Company, also known as Ma'aden

“The main reason for increase in net income in 2010 compared to the previous year 2009 is due to increase in contracting revenue sector by 2.6%, equal to SAR 24 million, and the increase in trading revenue sector by 1.5%, equal to SAR 2 million,” the company told investors in a statement.

The company is looking to expand across the region, and last month announced that its office in Abu Dhabi would be entirely independent for the first time, rather than working with a local partner.

Jim Pollitt, business development manager, said that the company was seeking a “greater openness” to the potential opportunities and clients in the region, particularly when seeking involvement in some of the big infrastructure projects, such as the Union Railways network. “We want to foster an openness that the market can see,” he told CW last month.

Meanwhile, Al Jouf Cement Company, the manufacturer that listed at the same time, posted a net profit of SAR 14.75 million for 2010, a strong reversal from losses of more than SAR 31 million the previous year.

The cement provider saw its gross takings reach SAR 45.6 million, though the company has no comparative figures for 2009. Operating profit reached SAR 13 million for the twelve months, up from a loss of SAR 31.1 million in 2009.

Al Jouf Cement joined eight other cement suppliers on the Tadawul stock exchange in July. The company is expected to have raised $174 million from the sale 65 million shares, of half its total equity.

The company’s stock price has remained steady overall, peaking at SAR 13.6 on 6th September from its launch price of SAR 10, with a low of SAR 11.25 at the end of January.

Al Jouf Cement produces ordinary and sulphur-resistant Portland cement and is a wholesale and retail trader of products and building materials. It also provides industrial service and owns land. The company said that the full scale of production of sales only began at the start of 2010, which accounted for the higher earnings.

Abdullah Al-Khodari shares closed down 2.59%% to SAR 56.5 in afternoon trading on Wednesday.

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