Arabtec swings to Q1 profit, revenue up 11pc
Arabtec Holding, a leading contractor for social and economic infrastructure, has reported its first quarterly bottom line profit in the last three years.
The group is undergoing a series of restructuring measures including the appointment of a strengthened executive management team, in line with its strategic roadmap.
Arabtec's turnaround, whilst still in its infancy, is already being complemented by improvements on the consolidated bottom line, attributable to equity holders of the parent, combined with growth in revenue.
Arabtec recorded a revenue of Dh2.2 billion ($598.83 million), up 11 per cent compared to Dh2 billion in the first quiarter of 2016. The group's gross profit too improved by Dh52 million to Dh91 million compared with Dh39 million for the same period last year.
Gross margin increased to four per cent compared to the last year's two per cent. Net profit attributable to the parent increased by Dh64 million to Dh18 million compared to a net loss of Dh46 million in the first quarter of last year.
Announcing the results, Arabtec Group CEO 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 the company to profitability and solidifies our strategic roadmap to achieving sustainability."
The recapitalisation programme, he stated, was laying the foundation to allow the group to build on its three-pronged strategy.
"To optimise the delivery of our Dh17 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," remarked 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," he added.
According to him, the 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 its Q1 numbers showing a 15 per cent decrease.
The group chief said Arabtec was now well-positioned to address the remaining steps of Phase Two of its strategic plan, leaving it in a strong position to begin aligning 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," he added.
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