Atkins reports 27% rise in Middle East profits

Consultant notes increased uncertainty around property and infrastructure projects in the region

PHOTO: The London-listed Atkins said its regional revenues rose by 23.8% to $180.9 million. Credit: Shutterstock

The UK-based Atkins says its Middle East business saw a strong performance in the first half, with operating profits up 27% to £11.3m ($17m) and a 14.1% increase in average staff count.

The London-listed engineering consultant said its regional revenues rose by 23.8% to $180.9 million, up from $146.2 million in 2014, while its operating margins had improved by 9.5%, a slight jump from the 9.3% registered last year.

“Good progress continues on the design delivery for our major metro projects, including Riyadh Metro and Doha Metro Gold Line and Red Line South. Our reputation for delivery and innovation, and the relationships that we have built with contractors, positions us well for future metro opportunities in the region,” Atkins said in a recent results statement.

Client decision-making has however been slower than in previous years, due to increased uncertainty around property and infrastructure projects, Atkins noted. Despite this, it said longer-term needs to invest in infrastructure would continue to drive demand for its services.

“Aside from our metro work in KSA, we are successfully supporting strategic programmes that are driving the Kingdom’s long-term economic growth and diversification, including our partnership with Bechtel to advise the Economic Cities Authority on the development of four new cities,” it said.

Current Atkins projects include the Dubai Opera House, which is scheduled to be completed and opened in 2016.

“In Qatar, we are working with the government towards meeting its National Vision 2030. The success of our advisory work on the Central Planning Office has made an important contribution to the coordination of Qatar’s major transport infrastructure programmes. We continue to work on a significant framework to upgrade Doha’s roads and drainage system,” Atkins said.

The consultant’s project management arm, Faithful+Gould, also had a good first half, with growth across the UAE, Saudi Arabia and Qatar. Particular success was achieved in the property and hospitality sectors, with a notable win being appointed project manager on a new mixed-use development in Riyadh.

“Our order book at 30 September 2015 represented 92% of forecast revenue for the year (2014: 97%). Client caution regarding infrastructure and property commitments is increasing and we are closely monitoring government decision-making and cash liquidity,” Atkins said.

“We continue to see long-term major project opportunities come to the market in our strategic focus areas, although we expect the awarding of contracts to remain slow throughout the second half of the year. We are exploring opportunities to increase our regional footprint.”

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