Idex 2015: Abu Dhabi Ship Building to partner with Thales on naval maintenance

The Abu Dhabi-listed firm, which is 40 per cent owned by Mubadala, expects more revenue to come from the services side of business.

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Abu Dhabi Ship Building will partner with the French company Thales to provide maintenance services to naval forces across the region as it diversifies away from vessel construction, its chief executive said yesterday.

“We signed an agreement with Thales group regarding a partnership of repairs, services, and maintenance to ships from different navies – not only in the UAE, but GCC and more,” said Khaled Al Mazrouei. “Abu Dhabi Ship Building wanted to partner with a company that has been doing this for many years, and we realised that Thales is the right partner.”

The Abu Dhabi-listed firm, which is 40 per cent owned by Mubadala, expects more revenue to come from the services side of business. In the nine months to September 30 last year, the company registered a loss of Dh53.5 million compared to a profit of Dh38.9m a year earlier, after delays in securing new contract wins. It won a support services contract with the UAE Navy in the first quarter of last year with hopes to expand its scope, and it also aims to extend its maintenance services beyond that to ships that are built by other companies in both the military and commercial sectors, it said yesterday.

“We are concentrating on services. We are looking that it will be the prime generator of revenue for Abu Dhabi Ship Building in the coming years,” said Mr Al Mazrouei.

“When you have services, you have sustainability of revenues.”

An increase in its services business will help the company overcome the lost revenue from gaps in activity at its new build operations, Mr Al Mazrouei said.

Separately, Thales said it is bullish on the Middle East region, expected to account for 20 per cent of its group order intake this year, up from 15 per cent last year, which was worth about €2 billion (Dh8.31bn).

Thales operates in the aerospace, space, defence, security and transportation sectors and has provided ticketing, telecoms, and supervision systems to Dubai’s green and red metro lines. It has also recently won a deal to develop Doha’s metro, as a part of a consortium.

The French company is currently modernising the signalling system of Egypt’s Cairo-Alexandria railway line. The €109m deal was signed in May 2013.

The first phase of the 220- kilometre project will be completed this summer, while the entire project is due the end of 2017, according to Pascale Sourisse, the Thales senior executive vice president of international development.

Yesterday at Idex, the UAE armed forces announced Dh3.95 billion worth of orders for ammunition, helicopters and assault rifles from defence manufacturers.

The biggest contract went to Tawazun Dynamics, for its ultra-precision guided ammunition, valued at Dh1.53bn. The second biggest deal was a Dh864m contract between the armed forces and Emirates Advanced Research and Technology Holding (Earth) for development and technical support for its Oshkosh all terrain vehicles.

The third biggest went to Caracal International, a subsidiary of Tawazun Group, for 80,000 CAR816 assault rifles, in a deal worth Dh763m.

The Anglo-Italian helicopter manufacturer August Westland won a Dh732m contract for nine of its helicopters. Six will be used for search and rescue purposes and the rest will go for VIP use.

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