Arabtec Surges After Full-Year Net Tops Estimates: Dubai MoverSarmad Khan
Arabtec Holding Co., the biggest listed construction contractor in the United Arab Emirates, jumped more than 5 percent after 2013 profit almost tripled, beating estimates.
The shares gained as much as 5.7 percent to 5.58 dirhams, their highest level since August 2008, before closing at 5.55 dirhams. Full-year profit climbed to 377 million dirhams ($103 million) from 139 million dirhams a year earlier, beating the 313 million-dirham mean estimate of 11 analysts compiled by Bloomberg. Arabtec’s board recommended a 10 percent cash dividend and 30 percent bonus shares. Dubai’s benchmark DFM General Index rose 0.5 percent today.
A resurgence in the U.A.E. real-estate market, where prices more than halved from their 2008 peak during the financial crisis, is boosting profits at contractors. Prices for mid-range apartments rose 43 percent in 2013, according to Cluttons LLC data. Arabtec is expanding into international markets, while at home it’s set to benefit as Dubai plans $8 billion of infrastructure spending in preparation for World Expo 2020.
Arabtec’s financial results come “on top of the recent significant upgrade in their backlog,” Akber Naqvi, an executive director at Dubai-based Al Masah Capital Ltd., which manages $545 million, said in e-mailed comments. “It makes for a story that both retailers and institutions alike are appreciating,” and the current valuation remains tempting, he said.
The shares of Arabtec, which helped build the world’s tallest tower, more than tripled in the last 12 months, and have almost doubled this year, while Dubai’s benchmark rose 26 percent.
The company entered an agreement with Egypt’s Defense Ministry to build 1 million affordable homes with a total value of $40 billion, according to a March 9 statement.
On Feb. 2, Arabtec said it won a contract from a unit of Aabar Investments PJSC to build 37 towers in Dubai and Abu Dhabi. It also won a 5.7 billion-dirham resort contract in Jordan and a 2.59 billion-dirham deal for a mixed-use project in Abu Dhabi this year.