GCC's top 20 construction firms disclose H1 2017 financials
ConstructionWeekOnline rounds up the H1 2017 financials of the Gulf's top developers, contractors, and construction suppliers
Numerous GCC-based construction companies have revealed their financials over the last few weeks.
Developers and contractors listed on regional stock markets, such as Tadawul, Muscat Securities Market, Dubai Financial Market, and Boursa Kuwait, also revealed their operational plans for the year ahead.
Notable financial disclosures about first-half performances have been made by Bahrain's Seef Properties, the UAE's Depa, and Kuwait's Tamdeen Real Estate Company.
The following pages summarise the H1 financial results of construction developers, contractors, and suppliers from across the Gulf.
Editor's note: This list has been compiled in alphabetical order.
Al Jazeera Steel Products
Steel tube and structural products manufacturer, Al Jazeera Steel Products, reported a 12% hike in year-on-year (YoY) sales volumes during the second quarter of 2017.
The group's sales in H1 2017 amounted to $119.4m (OMR46m), 31% higher than H1 2016's sales worth $91.7m (OMR35.3m).
In a statement dated 23 July, 2017, filed on the Muscat bourse, chairman Sulaiman Mohammed Shaheen Al-Rubaie, said the company's Q2 sales growth came on the back of its amplified marketing efforts.
Al-Rubaie continued: "The second quarter was a challenging period as anticipated, due to various reasons.
'The summer months, coupled with reduced working towards the end of the quarter, due to the Holy Month of Ramadan, and various events in the region, led to lower incremental demand."
A downward price correction in China also put pressure on the prices of finished products both, regionally and globally, which Al-Rubaie said "had a direct impact" on the firm's bottom line.
He continued: "Even with a competitive environment, coupled with lower demand growth, the company managed to increase sales volumes and maintain profitability.
"This was achieved predominantly due to cost optimisation and diversification in product mix."
Al-Rubaie said Al Jazeera also acquired the stake of its joint venture (JV) partner in Saudi Arabia during Q2 2017.
Al Mazaya Holding
Al Mazaya Holding’s operating revenues increased by 22% to $104m (KWD31.32m) in H1 2017, the company said in a statement.
Revenues rose to $91m (KWD 27.52m) during the period, showing a growth of nearly 25.5% from $73m (KWD21.9m) in H1 2016.
Rental revenues increased by 3.5% to $12m (KWD3.73m) at the end of the first six months of 2017, against $12m (KWD3.61m) for the same period in 2016.
The company declared $25m (KWD7.41m) operating profits between January and June this year, showing around 22% YoY growth, generated by sales and rentals.
Al Mazaya also reported total assets worth $801m (KWD242.13m) by end of H1, according to the statement.
Group CEO, Ibrahim Al Saq’abi, said that the rental revenues were driven by increased rentals from Al Olia Tower, a project in Riyadh, Saudi Arabia, which the company recently added to its income-generation streams.
Other projects contributing to the financial results include the completion of 25% construction work at Al Mazaya Residence project in Muscat, due for handover in 2018, as well as several projects in Dubai and Saudi Arabia.
Al Mazaya said that it is seeking to explore new market opportunities and currently has several projects across the UAE (pictured), Kuwait, Oman, and Saudi Arabia
Abu Dhabi-headquartered developer, Aldar Properties, announced that its gross profit for H1 2017 reached $351.2m (AED1.29bn), up by 5% compared to H1 2016's gross profit of $334.9m (AED1.23bn).
The sale of its The Bridges development generated $163.3m (AED600m) in new sales.
Aldar achieved occupancy above 90% across its residential and office portfolio, as well as Yas Mall.
Meanwhile, its hospitality portfolio recorded occupancy of 78%, a company statement revealed.
Remarking on the company's financials, Mohamed Khalifa Al Mubarak, CEO of Aldar Properties, said: "Aldar has delivered a solid set of results for the first half of the year.
"Robust occupancy across our portfolio of investments demonstrates our resilience as an asset manager and the success of our most recent residential development, The Bridges, clearly shows there is strength in the Abu Dhabi property market.
"The unprecedented response to The Bridges, which sold out in a matter of weeks, showcases the opportunities presented by the mid-market and supports our strategy to continue to focus on this segment."
Aluminium Bahrain (Alba) reported that its net income for the first half of 2017 was $115.2m (BHD43.3m), a 111% YoY hike over H1 2016's net income of $54.5m (BHD20.5m).
The aluminium giant generated net income worth $47.1m (BHD17.7m) in Q2 2017, up by 8.5% compared to $43.4m (BHD16.3m) in Q2 2016.
The company reported total sales of $476.9m (BHD179.3m) in Q2 2017, versus $441m (BHD165.7m) for the same period in 2016, marking YoY growth of 8%.
Total sales in H1 2017 stood at $983.3m (BHD369.7m), up by 15% compared to $856.8m (BHD322.2m) in H1 2016.
In a press statement on 13 April, 2017, Alba said it experienced a power station outage on 5 April, which led to temporary loss of power in all five of its reduction lines for three hours.
This July, Alba announced its Reduction Line 5 pots have resumed normal operations after the power outage.
Operations commenced following a recovery process that the company's chief executive officer, Tim Murray, described as "one of the most painful experiences in the history of Alba".
In the immediate aftermath of the incident, Alba estimated a loss of 3% to 5% in its total production for 2017.
Remarking on the company's financials, the chairman of Alba’s board of directors, Daij Bin Salman Bin Daij Al Khalifa, said: "Alba improved its bottom-line despite the impact of the power outage.
"I would like to thank our employees and contractors for their efforts in safely restoring Line 5 production to normal operations."
Arabian Cement Company
Tadawul-listed Arabian Cement Company (ACC) reported a quarterly decrease in gross profit, worth $2.6m (SAR10m), "as a result of decrease in sales volume and prices".
Commenting on its H1 2017 results in a filing to Tadawul, ACC stated that its gross profit during the period reduced by $58.1m (SAR218m), to $44.5m (SAR167m) from $102.6m (SAR385m) in H1 2016.
Meanwhile, the company's decrease in net other income this year was valued at $4.2m (SAR16m), in contrast with figures for H1 2016, which "included [an] insurance claim of $4.5m (SAR17m) for business interruption".
The insurance claim was related to a fire that broke out at ACC's cement mill Number 3 in 2012.
Sales revenues for H1 2017 amounted to $131.8m (SAR494.5m), a 35.6% decline over H1 2016's $204.8m (SAR768m).
Arabtec Holding recorded $1.14bn (AED4.2bn) in revenues during the first half of this year, a 2% YoY rise over H1 2016's revenue of $1.11bn (AED4.1bn).
Net profit attributable to Arabtec's parent company for H1 2017 stands at $15.5m (AED57m), compared to a net loss of $63.4m (AED233m) in H1 2016.
The firm also announced that it has successfully completed its recapitalisation programme.
Arabtec's H1 2017 backlog stands at $4.7bn (AED17.4bn), a drop against H1 2016's $6.1bn (AED22.6bn).
However, the company said it has "a strong pipeline of tender opportunities going forward".
Key wins announced by the firm in H1 2017 included a $398m (AED1.46bn) main contract for Wasl Tower; a $31m (AED113m) deal for the Creekside 18 project, located within the Dubai Creek Harbour development; and a $96m (AED353m) contract to build the UAE Pavilion for Expo 2020 Dubai.
The completion of its recapitalisation programme this June has "stabilised the business, enabling the group to look to the future and ensure we can begin capitalising on opportunities", Arabtec said in a filing to the Dubai bourse.
Group chief executive officer, Hamish Tyrwhitt, said the firm is now focusing on its risk management and business transformation aims.
Arkan Building Materials
Arkan Building Materials said that it ended H1 2017 with $125.2m (AED460m) in revenues, a 12.7% increase compared to figures from the same period last year, which stood at $111.9m (AED411m).
Arkan attributed the revenue growth to a rise in the sales volumes of cement, mortar, and concrete products, as its dry mortar plant – launched in May 2016 – reaches maximum available capacity utilisation.
The company, however, saw a dip in its net profit, recorded at $6.8m (AED25m) in H1 2017, lower than last year’s $10.9m (AED40m).
According to Arkan, its financial performance during the first half of the year reflects "continuous improvements in operation efficiencies and costs optimisation, which partly absorbed the increase in gas and electricity tariff impact of $9.5m (AED35m) for the period and a notable decrease in selling prices” over all its range of products.
Arkan pointed out that the decrease in prices was driven by "overcapacity in the local market".
Eng Jamal Salem Al Dhaheri, chairman of Arkan, commented: "Our ability to quickly adapt to market changes while continuing to drive operational improvements led to us being profitable despite the significant increase in utility cost.
"We are seeing some recovery in our main markets and signs of prices starting to rise.
"We are well-positioned to increase profits across our operations during the second half of the year and into 2018."
Damac Properties Dubai announced its total revenues during the first half of 2017 amounted to $953m (AED3.5bn).
The developer recorded $435.5m (AED1.6bn) in net profit, with booked sales valued at $1.1bn (AED4bn).
Total cash and bank balances during the first-half amounted to $2.3bn (AED8.6bn), while gross debt amounted to $1.5bn (AED5.4bn), the company stated in a filing to Dubai Financial Market.
Up to 1,071 units were handed over by the company at the Damac Hills master-development in H1 2017, bringing the project's total number of delivered units to 3,100.
The company's Trump International Golf Club Dubai was unveiled this February.
Meanwhile, construction of 5,000 villas is underway at Damac's Akoya Oxygen master community in Dubailand, with works for an additional 1,300 villas scheduled to begin this September.
Dubai-headquartered interior solutions group, Depa Limited, recorded 8% YoY growth in its H1 2017 revenue, worth $227.2m (AED834.6m), compared to $210.2m (AED772.2m) in H1 2016.
Meanwhile, its net profit soared to $30.8m (AED113.3m), up by 484% from last year’s 5.3m (AED19.4m), reportedly generating basic earnings per share of $0.05 (AED0.19).
The company noted that the resolution of material legacy items helped bolster its financial results for H1 2017.
In a statement, the firm said it has completed the reorganisation of its balance sheet, also allowing the payment of dividends.
Remarking on Depa’s results, Hamish Tyrwhitt, group chief executive officer, said: "Depa’s H1 2017 results reflect the group’s continuing progress in executing our clearly defined business strategy.
"The group’s success is a result of sound operational performance, combined with management’s resolution of a number of legacy items.
“This combination has seen the group materially improve its already strong balance sheet and, at the same time, further de-risk the business."
Deyaar Development announced a net profit of $18m (AED67m) in H1 2017, down from $30m (AED111.3m) in H1 2016.
The developer reported a 135% YoY increase in revenues to $86m (AED316.4m) from $37m (AED134.9m) in H1 2016, for the six months ending June 2017.
This year’s net profit figure was a result of the progress in Deyaar’s flagship projects, the company said in a statement.
The rise was driven by sales of its properties and construction progress at The Atria and Mont Rose projects, both of which are currently 75% complete.
Commenting on Deyaar’s performance, chief executive officer, Saeed Al Qatami, said: "We have made progress in 2017, recording growth in terms of revenues in comparison to the same time last year.
"This has been due to the popularity of Mont Rose and The Atria properties, both of which are near completion, with handover anticipated in 2017.
"In the last six months of 2017, our focus will be on delivering our projects and diversifying our portfolio, which includes our new hospitality projects – a critical component of developing our company to be more aligned with the vision of the UAE’s leadership."
Dubai Investments concluded H1 2017 with a net profit of $130.7m (AED480m), down from H1 2016’s net profit of $140.5m (AED516m).
Meanwhile, the company’s total assets in H1 2017 grew to $4.5bn (AED16.4bn), state news agency, WAM, reported.
The company’s total income for the period was $350m (AED1.3bn), with its rental income reaching $125m (AED459m), an 8% increase from H1 2016 figures, the report added.
Remarking on the financial results, Khalid bin Kalban, the company’s managing director and chief executive officer, said: "Dubai Investments has delivered a solid set of financial results.
"Excluding the one-off gain from divestments amounting to $50.6m (AED186m) in the first half of 2016, the company’s net profit has, in fact, grown by $40.9m (AED150m), an increase of 45%, in the first half of this year.
“The positive results are driven by growth in rental income, which has contributed to increase in underlying cash flows."
According to Dubai Investments, it is in the process of completing and handing over the Green Community DIP – West Phase III project.
"Dubai Investments [has a positive] outlook for the remainder of 2017, and [is] progressing on schedule on its various real estate projects across the UAE," Kalban added.
Emaar Malls announced net profits worth $278m (AED1.02bn) in the first half of 2017, a 3% increase over H1 2016's $269m (AED987m).
Revenues during the first half of 2017 amounted to $442m (AED1.62bn), a marginal increase over last year's $441m (AED1.61bn).
Emmar Mall's assets, which include The Dubai Mall, Dubai Marina Mall, Souk Al Bahar, Gold & Diamond Park, and community shopping centres, recorded a footfall of 65 million visitors in H1 2017 – 7% more than H1 2016's 61 million.
Gross leasable area (GLA) occupancy levels "across Emaar Malls' assets averaged 95%" in H1 2017, the company said in a filing to the Dubai bourse.
Q2 2017 net profit amounted to $131m (AED482m), 5% higher than Q2 2016's $125m (AED458m).
The expansion of The Dubai Mall's Fashion Avenue is "in the final stages", the company confirmed.
Upon completion, the expansion will add 9.2ha (1 million sqft) of built-up area, and 5.5ha (600,000sqft) of GLA, to the facility.
Galfar Engineering and Contracting
Oman's Galfar Engineering and Contracting recorded consolidated total revenues worth $397m (OMR152.9m) during the first half of 2017, a drop compared to corresponding figures for H1 2016, worth $452.5m (OMR174.2m).
Meanwhile, Galfar’s parent company recorded total revenues worth $376.6m (OMR145m) in H1 2017.
The figure is lower than total revenues worth $431.2m (OMR166m) in H1 2016.
According to a financial statement posted by Galfar on the Muscat bourse, the parent company’s profit after tax amounted to $1m (OMR395,000) in H1 2017 – notably lower than H1 2016’s profit after tax, worth $3.3m (OMR1.3m).
In documents uploaded to the Muscat bourse on the same day, the Galfar revealed that its parent company "roughly maintained" its order book at $1.5bn (OMR576.4m) in Q2 2017, "down slightly from our previous quarter", worth $1.52bn (OMR585.6m).
The statement added: "The value of new contracts, extensions and variations included for the first six months was $179.5m (OMR69.1m), comprising a new award on the Batinah Expressway for the Ministry of Transport and Communications, grid stations at Birkat Al Mouz and Sumail for Oman Electricity Transmission Company, and additional packages under our Petroleum Development Oman (PDO) contract."
Majid Al Futtaim
Majid Al Futtaim announced its overall group revenues expanded by 4% to $4.27bn (AED15.7bn) in H1 2017.
Meanwhile, Majid Al Futtaim Properties’ revenue rose by 4% to $626.2m (AED2.3bn), during the first half of the year.
The properties arm welcomed 91 million visitors during the period, an 8% hike over H1 2016’s footfall figures. Total occupancy of its shopping malls was calculated at 98%, while its hotels recorded average occupancy of 77%.
Construction has commenced at Majid Al Futtaim Properties’ City Centre Al Zahia in Sharjah, Mall of Oman and City Centre Sohar in Oman, and My City Centre Al Dhait in Ras Al Khaimah.
Additionally, City Centre Al Jazira will be developed following a joint venture between Majid Al Futtaim and Abu Dhabi’s Al Jazira Sports and Cultural Club.
Construction of the $381.2m (AED1.4bn) project is set to begin in October 2017 and is scheduled for completion in early 2021.
Commenting on the company’s financials, Alain Bejjani, chief executive officer of Majid Al Futtaim Holding, said: "Majid Al Futtaim continued demonstrating strength and resilience against a backdrop of regional economic challenges."
Dubai-based developer, Nakheel Properties, finished the first six months of the year with a net profit of $718.76m (AED2.64bn).
Though recent figures reflect a decrease from the company’s net profit for H1 2016, which stood at $803.16m (AED2.95bn), Nakheel said it is confident that it will achieve overall growth in profits for the year.
According to a statement on Nakheel’s website, the company handed over 870 land- and built-form units to customers between 1 January, 2017, and 4 June, 2017.
The first six months of this year also saw the company announcing construction contracts worth more than $2.99bn (AED11bn), including a $1.14bn (AED4.2bn) contract for Deira Mall at Deira Islands and a $408.4m (AED1.5bn) contract for The Palm Gateway at Palm Jumeirah.
The company also released, in April 2017, a construction tender for the $182.45m (AED670m), 800-room RIU resort at Deira Islands.
National Central Cooling Company
Dubai-based National Central Cooling Company (Tabreed) announced a 20% increase in net profit to $52m (AED192.7m) for the first half of 2017, while group revenue increased by 10% to $174m (AED639.2m).
The firm’s revenues from core chilled water increased by 17% to $164m (AED602.3m).
Commenting on Tabreed’s financial results, company chairman, Khaled Abdulla Al Qubaisi, said: "Tabreed has earned a leading position in district cooling, with a clear vision to deliver consistent and sustainable results to investors and shareholders.
"This is reflected in Tabreed’s robust performance in the first half of 2017 with a net profit increase of 20%."
This August, Tabreed CEO Jasim Husain Thabet reportedly said the company is also looking at acquisition opportunities in the UAE and outside the country.
According to Gulf News, he added: "With Engie on-board, we are truly moving in the direction of being an international player.
"Having a strong energy company as a shareholder fits our appetite for growth. Our focus will continue to be on the GCC, but I see us seriously exploring markets outside the GCC and closing on those if they make sense for us."
This June, Engie acquired a 40% stake in Tabreed from the UAE’s Mubadala Investment Company.
Red Sea International Company
The kingdom’s Red Sea International Company recorded a YoY reduction in net profit for H1 2017.
Net profits in H1 2017 amounted to $826,600 (SAR3.1m), a 95% drop compared to H1 2016’s net profit, worth $16.8m (SAR63m).
The company attributed the loss to a $18.7m (SAR70.2m) decrease in gross profit, caused by a reduction in gross profit margin from 26.9% in H1 2016 to 17.6% in the current period.
In a filing to Tadawul, the company said the drop in gross profit margin was caused by an 18.8% drop in rental revenues, and 23% drop in building revenues.
Sales revenues in H1 2017 were recorded at $113.6m (SAR426.1m), 21% lower than H1 2016’s $143.7m (SAR539.1m).
Nevertheless, Red Sea recorded a YoY reduction in operating revenues worth $2.4m (SAR9.1m) in H1 2017, "primarily due to [a] decrease in selling and marketing, and general and administrative expenses by 5.4%".
This August, a subsidiary of Red Sea International Company inked a memorandum of understanding (MoU) with Aecom Middle East.
The MoU, between Aecom and Red Sea Housing Services, will see both firms cooperating on housing projects in the kingdom.
Bahrain-based Seef Properties registered a net profit of $13.7m (BHD5.2m) for the H1 2017, up 16% compared to $11.8m (BHD4.49m) for the corresponding period last year.
Announcing the results for the first six months of the year, Seef Properties said its operating income rose to $23.6m (BHD8.88m) during the period, compared to $18.9m (BHD7.12m) for the same period in 2016, registering an increase of 24.7%.
The real estate firm netted a profit of $7.3m (BHD2.76m) during the second quarter, compared to $6.1m (BHD2.29m) during the same quarter last year.
Commenting on the company’s financials, Essa Najibi, Seef Properties’ chairman, said: "The first half witnessed a net profit increase of 15.9%, which further solidifies the company’s position as one of the leading real estate development companies in Bahrain.
"We are committed to improving our investments by providing high-end products and services in-line with international standards."
The company’s property portfolio includes Seef Mall Manama, Magic Island, and Fraser Suites Seef Bahrain.
Southern Province Cement Company
Southern Province Cement Company’s (SPCC) net profit amounted to $53.3m (SAR200m) at the end of H1 2017.
The figure is a 63% drop compared to H1 2016’s net profit, worth $147m (SAR551m).
According to Al Eqtisadiah, SPCC said its decline in income was caused due to reduced sales during the period.
In addition, sale prices were also lower than last year, thanks to increased market competition.
According to cement.com, SPCC, "Saudi Arabia's largest producer by capacity, […] registered a 37% YoY decline in sales volumes", to 1.29 million tonnes in Q2 2017.
Tamdeen Real Estate Company
Kuwait's Tamdeen Real Estate Company earned $23.2m (KWD7m) in net profit during the first half of this year.
The figure is 1.3% lower than last year's corresponding results.
In a filing to the country's stock market, Boursa Kuwait, Tamdeen said its shareholders' equity was worth $471.3m (KWD142.2m) in H1 2017.
The equity has recorded an increase over H1 2016's $425m (KWD128.2m).
Tamdeen's assets during the period were worth $1.6bn (KWD482m), and its liabilities amounted to $841.5m (KWD254m), state news agency KUNA reported.
Tamdeen Square (pictured) is one of the company's high-profile developments in Kuwait.