Egypt, Elsewedy review progress on Ain Sokhna phosphate complex    US employment cost index 3.6% up in year to June 2025    Egypt welcomes Canada, Malta's decision to recognise Palestinian state    Pakistan says successfully concluded 'landmark trade deal' with US    Sterling set for sharpest monthly drop since 2022    Egypt, Brazil sign deal to boost pharmaceutical cooperation    Modon Holding posts AED 2.1bn net profit in H1 2025    Egypt's Electricity Ministry says new power cable for Giza area operational    Egypt's Al-Sisi, Italian defence minister discuss Gaza, security cooperation    Egypt's FM discusses Gaza, Nile dam with US senators    Aid airdrops intensify as famine deepens in Gaza amid mounting international criticism    Egypt exports first high-tech potato seeds to Uzbekistan after opening market    Health minister showcases AI's impact on healthcare at Huawei Cloud Summit    On anti-trafficking day, Egypt's PM calls fight a 'moral and humanitarian duty'    Egypt strengthens healthcare partnerships to enhance maternity, multiple sclerosis, and stroke care    Egypt keeps Gaza aid flowing, total tops 533,000 tons: minister    Indian Embassy to launch cultural festival in Assiut, film fest in Cairo    Egyptian aid convoy heads toward Gaza as humanitarian crisis deepens    Culture minister launches national plan to revive film industry, modernise cinematic assets    I won't trade my identity to please market: Douzi    Sisi sends letter to Nigerian president affirming strategic ties    Two militants killed in foiled plot to revive 'Hasm' operations: Interior ministry    Egypt, Somalia discuss closer environmental cooperation    Egypt's EHA, Huawei discuss enhanced digital health    Foreign, housing ministers discuss Egypt's role in African development push    Egypt reveals heritage e-training portal    Three ancient rock-cut tombs discovered in Aswan    Sisi launches new support initiative for families of war, terrorism victims    Egypt expands e-ticketing to 110 heritage sites, adds self-service kiosks at Saqqara    Egypt's Irrigation Minister urges scientific cooperation to tackle water scarcity    Palm Hills Squash Open debuts with 48 international stars, $250,000 prize pool    On Sport to broadcast Pan Arab Golf Championship for Juniors and Ladies in Egypt    Golf Festival in Cairo to mark Arab Golf Federation's 50th anniversary    Germany among EU's priciest labour markets – official data    Paris Olympic gold '24 medals hit record value    A minute of silence for Egyptian sports    Russia says it's in sync with US, China, Pakistan on Taliban    It's a bit frustrating to draw at home: Real Madrid keeper after Villarreal game    Shoukry reviews with Guterres Egypt's efforts to achieve SDGs, promote human rights    Sudan says countries must cooperate on vaccines    Johnson & Johnson: Second shot boosts antibodies and protection against COVID-19    Egypt to tax bloggers, YouTubers    Egypt's FM asserts importance of stability in Libya, holding elections as scheduled    We mustn't lose touch: Muller after Bayern win in Bundesliga    Egypt records 36 new deaths from Covid-19, highest since mid June    Egypt sells $3 bln US-dollar dominated eurobonds    Gamal Hanafy's ceramic exhibition at Gezira Arts Centre is a must go    Italian Institute Director Davide Scalmani presents activities of the Cairo Institute for ITALIANA.IT platform    







Thank you for reporting!
This image will be automatically disabled when it gets reported by several people.



Dubai's Arabtec extends reach with giant construction order
Published in Daily News Egypt on 02 - 02 - 2014

Reuters – Dubai construction firm Arabtec clinched a $6.1bn contract on Sunday, its biggest ever by value, as its relationship with Abu Dhabi state fund Aabar, a key shareholder, promised to make the firm one of the region's top builders.
Arabtec said it had signed a memorandum of understanding to build 37 mixed-use, residential and hotel towers for Aabar in Abu Dhabi and Dubai.
The announcement pushed up stock markets, especially cement shares, in Abu Dhabi and Dubai because it was a fresh sign that their real estate markets are recovering strongly after prices halved during the global financial crisis.
The news also suggested that after a few years of caution following the crisis, Abu Dhabi's state funds, backed by the emirate's oil wealth, are again ready to spend actively to develop the economy.
The fortunes of Arabtec, already a major player in the region with a workforce of about 63,000 people, may be transformed by its relationship with Aabar, which is Arabtec's largest shareholder with a 22% stake.
Early last year, in a move supported by the Abu Dhabi fund, Arabtec replaced its founder and chief executive Riad Kamal with Abu Dhabi-based private investor Hasan Abdullah Ismaik and embarked on an ambitious growth strategy.
The new $6.1bn contract dwarfs Arabtec's 2012 revenues of $1.5bn. In addition, Aabar said on Sunday that it would assign all future construction work in its $20bn real estate portfolio around the world to the Dubai firm.
That portfolio includes projects in the United Arab Emirates, the United States, Morocco, Jordan, Serbia and other countries. Coping with this expansion of its business may pose a challenge to the company.
"This is uncharted territory for Arabtec, to do such giant projects across the region with a backlog in excess of 60 billion dirhams ($16.3bn)," said Nishit Lakhotia, head of research at Securities & Investment Co (SICO) in Bahrain.
"Obviously, in countries where Arabtec does not have a presence yet, it can be a bit more risky to execute projects. That cannot be ruled out."
But he added, "They have been preparing for this. The recent strategic partnerships, acquisitions, rights issue and management changes are all part of this preparation."
Shares in Arabtec closed 2.8% higher on the Dubai bourse, though they came well off their highs, having risen 8.2% at one stage. The stock has climbed more than 50%so far this year after a 54% gain in 2013.
Arabtec said it would start work this year on the new buildings for Aabar and that all the projects would be completed by 2020, when Dubai is due to host the World Expo.
It did not say what profit margins it expected. "Margins in the UAE are still very competitive and it's likely that margins are tight on such a major project," said Lakhotia.
Arabtec has won a series of contracts in Abu Dhabi, including high-profile projects such as development of Abu Dhabi's main airport and the Louvre museum there, since Aabar began building a major stake in the firm in 2012.
The firm also secured a $1.55bn contract to build a resort in the Aqaba area of southern Jordan last month.
The UAE's real estate market has been recovering since 2012, partly because of a tourism and trade boom in Dubai, which has attracted foreign money.
"Our growing backlog has now become a major benchmark of the speedy recovery of the sector. We expect to see good results with efforts to diversify into higher-margin sectors in association with international partners," Arabtec's Ismaik said in a statement.
Aabar owns stakes in a range of high-profile companies within the UAE and abroad, including commodities trader Glencore and Italian bank UniCredit.


Clic here to read the story from its source.