Contrasting 2017 for Arabtec and DSI COMPANIES

Dubai-listed contracting firms Arabtec Holding and Drake & Scull International reported contrasting fortunes with one swinging to full-year profit from a year earlier loss, while the other plunging deeper into losses.

Yesterday, Arabtec, the UAE’s top publicly-traded contractor, said net profit attributable to equity holders in 12 months ending December 31 reached Dh123.1 million compared with a net loss of Dh3.4 billion in 2016. Revenue grew 12 per cent to Dh9.1bn from Dh8.2bn a year earlier, the company said in a statement to the Dubai Financial Market.

“Reinforcing our commitment to return to growth and deliver on our strategic roadmap, we have achieved four consecutive quarters of profitability,” said chief executive Hamish Tyrwhitt.

The construction firm, in which Aabar Investments holds a 37.7 per cent stake, did not provide breakdown of fourth quarter figures in the preliminary results.

The full-year profit beat the mean forecast of Dh102.6m, according to a Bloomberg poll of five analysts. The company’s projects backlog stood at Dh17.2bn at the end of last year. Last year, Arabtec completed a recapitalisation programme by raising Dh1.5bn through a rights issue and a reduction of capital to cancel nearly Dh5bn of accumulated losses from previous years, when construction activity dipped following the global financial crisis.

The company also won a number of contracts in 2017, including for Expo 2020’s UAE Pavilion. In the fourth quarter, it finalised a Dh950m contract with Emaar Properties and Dh1.025bn contract with Dubai Properties.

Drake & Scull, which is seeking to restructure around Dh1bn of debt, said its fullyear net loss widened despite posting a profit in the fourth quarter of 2017. Full-year net loss deepened to Dh1.39bn from Dh815m, it said in a regulatory filing to DFM. Net profit in the three months to the end of December came in at Dh0.7m compared to a net loss of Dh359m in the third quarter.

The company did not provide comparative figures for the fourth quarter of 2016.

Net income in the last three months of 2017 beat estimates of a net loss of Dh115m by NBAD Securities in a Bloomberg poll.

Fourth quarter revenue also recorded a quarter-on-quarter increase of 11 per cent to Dh656m, DSI said.

The construction firm “remains committed towards the realisation of the recovery objectives set forth by the new leadership team appointed in the fourth quarter of 2017 to steer the company back to recovery and growth”, DSI said.

“Several organisational restructuring initiatives were executed in the [last] quarter to streamline operations, reduce cost and improve efficiency.”