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Arabtec's Q1 2016 revenue up 8% as backlog grows

In a bourse filing, Arabtec Holding said its backlog has grown to $6.5bn in Q1 2016 from December's $5.25bn, adding it is close to completing work on Louvre Abu Dhabi

Arabtec said works on Louvre Abu Dhabi are nearing completion.
Arabtec said works on Louvre Abu Dhabi are nearing completion.

Arabtec Holding reported an increase in revenue from $490.1m (AED1.8bn) in Q1 2015 to $517.2m (AED1.9bn) in Q1 2016, an 8% hike worth $40.2m (AED148m). 

The company said its operational improvements led to direct costs decreasing by 2%, from $525.5m (AED1.93bn) in Q1 2015 to $514.6m (AED1.89bn) in Q1 2016. 

Arabtec reported a $12.6m (AED46.4m) loss for the first three months of 2016, which is an 83% reduction on the $76.1m (AED279.8m) loss the company declared in Q1 2015. 

The firm also said it is "proposing to utilise its statutory reserve balance to reduce its accumulated losses in order to improve its balance sheet".

In a filing to Dubai Financial Market, the company said it completed and handed over more than 2,000 residential villas in Dubai's Mira and Palma projects in Q1 2016. 

The group also completed homes in Reem Island's Najmat Abu Dhabi Tower. 

Arabtec Construction is also in the final stages of completing Saraya Towers in Abu Dhabi and is close to completing the landmark Louvre Museum, Abu Dhabi.

In Q1 2016, the contractor secured project wins worth $2.3bn (AED8.35bn), of which Arabtec's share is $1.8bn (AED6.5bn). 

This includes the Bahrain International Airport Modernisation Programme, the West Yas villa development, the construction of 1,100 homes for UAE nationals, and a twin tower development in central Dubai. 

Works commenced on the Bahrain Airport, West Yas villas, and twin towers in the first quarter. 

The firm's backlog increased to $6.5bn (AED24bn) in Q1 2016 from $5.25bn (AED19.3bn) in December 2015. 

Arabtec's board "is looking at ways to enhance its capital structure," the filing added.

"For this purpose, Arabtec is currently engaged in discussions with Aabar, its largest shareholder, in respect of potential options for cooperation and continues to remain in dialogue with its major lending banks." 

The group said"challenging market conditions" continue to impacting government spending in the GCC. 

"In light of these conditions, Arabtec continues to implement its reorganisation and cost reduction programme," the filing continued. 

"The company is seeking to reduce its cost base even further in 2016 in addition to the cost savings plans previously announced." 

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