Shares in Abu Dhabi Ship Building (ADSB) surged to their highest level in more than two years on reports that the company is on the verge of signing a major contract with the federal government.
The company’s shares closed yesterday at Dh2.09 on the Abu Dhabi Securities Exchange (ADX), up 15 per cent on the day, and up 56 per cent for the week.
The shares traded at their highest level since June 2011.
Mohammed Shahid Razzaq, the company’s head of finance, told Bloomberg on Wednesday that the company was on the verge of signing a government contract, said to be worth approximately Dh1 billion.
The contract, for two navy ships, could be signed by the end of the year, he said. He also hinted at a higher priced deal that will be concluded during next year, but declined to give further details.
ADSB is 40 per cent owned by Mubadala Development, a strategic investment company owned by the Abu Dhabi Government, with 10 per cent owned directly by the Abu Dhabi Government and the remainder of the shares traded on the (ADX) itself.
Founded in 1996 to conduct refits and repairs on the UAE navy, the company now provides construction and refitting services to navies throughout the region. A spokeswoman for ADSB yesterday declined to comment further on the prospective deals. Mubadala did not respond to requests for comment.
ADSB struck an agreement in February with the Kuwaiti navy for the construction of a series of landing craft over a 24-month period.
The company signed a memorandum of understanding with the UK-based engineering company Babcock International in September for the provision of support services to regional navies.
ADSB last month announced revenues of Dh224.3 million for the third quarter, a year on year decrease of 17 per cent. Profit for the quarter stood at Dh22.1m, a year on year increase of 148 per cent.
jeverington@thenational.ae
jeverington@thenational.ae
