Arabtec records profit for first time since 2014
Arabtec Holding has recorded its first quarterly profit since 2014 after achieving a net profit of $4.9m in Q1 2017
Arabtec Holding has recorded its first quarterly profit since 2014.
The UAE-headquartered construction giant posted a net profit of $4.9m (AED18m) in Q1 2017, a $17.4m (AED64m) increase compared to the net loss of $12.5m (AED46m) recorded during the corresponding period of last year.
The company recorded revenue of $600m (AED2.2bn) in Q1 2017, up 11% from the $540m (AED2bn) recorded in Q1 2016.
The firm’s gross profit increased by $14.2m (AED52m) to reach $24.8m (AED91m) during the first quarter of 2017, compared to $10.6m (AED39m) achieved during the same period of last year.
Hamish Tyrwhitt, group chief executive officer of Arabtec Holding, said: “While this is another step towards the turnaround of the group, there is still a lot more work to be done.
“This initial step reinforces our commitment to returning Arabtec to profitability, and solidifies our strategic roadmap to achieving sustainability. The recapitalisation programme is laying the foundation to allow the group to build on its three-stage plan.”
Arabtec stated that it is implementing a series of restructuring measures, including the appointment of a strengthened executive management team.
While the firm emphasised that its turnaround is “still in its infancy”, it said efforts were being complemented by improvements to its consolidated bottom line, attributable to equity holders of the parent, combined with growth in revenue.
“To optimise the delivery of our $4.6bn (AED17bn), we are making key operational improvements [by] embedding enterprise risk management and a performance-driven culture, which is already evident in the increase in our gross profit margin,” added Tyrwhitt. “Resolving legacy claims and collecting receivables is a key action in phase one, which will be achieved through our ability to turn risk into opportunity.
“Vital elements of phase two, ‘Prepare’, are already in progress, including maintaining a leaner organisation with SG&A [selling, general, and administrative expenses] at target benchmark level, already reflected in our Q1 numbers showing a 15% decrease.
“We are now well positioned to address the remaining steps of phase two of our strategic plan, leaving us in a strong position to begin aligning our efforts towards key aspects of phase three. Collectively, these elements contribute to the successful and sustainable future for all our stakeholders as, together with our core values, we continue to work towards building the future of Arabtec,” Tyrwhitt added.