Arabtec more than triples net profits for Q1
UAE?s largest construction firm considering buying steel subsidiary
Arabtec Holding, the UAE's largest construction firm by market value, more than tripled its first-quarter net profits, exceeding analysts' forecasts, Reuters News Agency reports.
The company, which built Dubai Sports Stadium and is currently building Dubai’s Infinity Tower, also announced it was considering buying out its steel subsidiary.
The company, in which Abu Dhabi state-owned fund Aabar has a 10.5% stake made a net profit of $22.9m (AED 84.1m) in the quarter, compared with $7.2m (AED 26.6m) in the corresponding period last year.
Revenue for the quarter rose slightly to $354m (AED 1.3bn) from $327m (AED 1.2bn) in the previous year, Arabtec said in a bourse statement.
Arabtec's quarterly profit easily beat estimates of four analysts polled by Reuters, who on average expected it to earn $10.9m (AED 40m) in the quarter.
The company also said it was considering buying out the remaining 45% stake held by three separate partners in its subsidiary, Gulf Steel Industries (GSI).
“The board provisionally authorised the CEO of the company, Riad Kamal, to negotiate the best possible price for acquiring a further 45% in GSI so long as it did not exceed the valuation originally obtained on the said subsidiary,” Arabtec said in a separate statement.
It also named Aabar’s Khadem Al Qubaisi, chairman of Aabar, as chairman of the Arabtec board.
Arabtec nominated four executives from Aabar to its board in April, a sign of the state fund’s growing influence in the company after it doubled its stake to over 10%. The company has also won a $60m (AED 220.4) contract from Aabar after the stake hike.
Arabtec, along with a consortium of Turkey’s TAV Insaat and Athens-based Consolidated Contractors Company (CCC), were also identified as the preferred bidders for an estimated $3bn (AED 11bn) contract to expand Abu Dhabi’s international airport.
Shares in Arabtec have more than doubled on the Dubai bourse so far in 2012 on the back of new contract wins and expectations of further stake increases by Aabar.