Contractor announces profit of $4.9m for the first quarter of 2017, with turnaround ‘in its infancy’
The Dubai-listed contractor Arabtec posted a small profit in the first quarter of this year – its first since 2014.
Arabtec, which had been previously rocked by management changes and had been undergoing a massive restructuring program, said that the turnaround is still “in its infancy.”
The company reported net profit attributable to the parent of AED 18 million ($4.9m) in the first quarter of 2017, compared to a net loss of AED 46 million the same time last year.
It recorded revenue of AED 2.2 billion, up 11% compared to AED 2.0 billion last year. Gross profit improved by AED 52 million to AED 91 million compared with AED 39 million for the same period last year. Gross margin increased to 4% versus 2% last year.
Group Chief Executive Officer, Hamish Tyrwhitt 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 our three-stage plan.”
“To optimise the delivery of our AED 17 billion backlog, we are making key operational improvements through embedding enterprise risk management and a performance-driven culture, which is already evident in the increase of our gross profit margin. 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,” he added.
“Vital elements of Phase Two, ‘Prepare’, are already in progress, including maintaining a leaner organisation with SG&A 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.”