Arabtec unit wins Dh424m contract for Damac's Akoya project

Arabtec Construction will build 916 villas at Okoya Oxygen development

Arabtec on Wednesday reported 58.6 per cent rise in its fourth quarter net income. Jeffrey E Biteng / The National

Arabtec Holding, the UAE’s biggest contracting company by market capitalisation, said on Wednesday its main construction arm won a Dh424 million contract from Dubai-listed real estate developer Damac Properties.

Arabtec Construction, a wholly-owned unit of Arabtec, will build 916 villas at the real estate firm's Akoya Oxygen development, it said in a statement to Dubai Financial Market, where its shares are traded.

Emirates Falcon Electromechanical company, another Arabtec subsidiary, will carry out mechanical, electrical and plumbing work for the project.

“The on-boarding of repeat business from our clients is a testament to our strengthened relationships across our core geographies and in our core competencies,” Arabtec’s group chief executive Hamish Tyrwhitt said.

The project entails construction of units in phase six of Damac's Akoya Oxygen master development, comprising a built-up area of approximately 148,000 square metres, according to Arabtec. Work will commence this month and will take 22 months to complete, it said.

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Arabtec last year completed a recapitalisation programme by raising Dh1.5 billion via a rights issue and reduction of capital to cancel nearly Dh5bn of accumulated losses from previous years when construction activity dipped in the wake of the UAE's slowing economic growth.

The construction firm, whose annual losses sank to Dh3.4bn in 2016, returned to profit in 2017, a year which saw it win a number of contracts, including work on Dubai's Expo 2020 pavilion. In the fourth quarter, it also finalised a Dh950m contract with Emaar Properties and a Dh1bn contract with Dubai Properties.

Arabtec's net profit attributable to equity holders for 2017 climbed to Dh123.1m, while revenues grew 12 per cent to Dh9.1bn from Dh8.2bn in 2016.

The project backlog for the company, in which Aabar Investments holds a 37.7 per cent stake, stood at Dh17.2bn at the end of last year.