The downtrodden UAE construction industry is starting to capture the attention of investors.
After a "dreadful third quarter", Deutsche Bank expects the sector to pick up in the weeks ahead, based on seasonal increases in business.
"Overall, we expect the Mena contractors under our coverage to post an 18 per cent quarter-on-quarter increase in earnings," the bank's analysts Nabil Ahmed and Athmane Benzerroug wrote in a report.
For its top pick Deutsche Bank singled out Drake & Scull International (DSI), which yesterday announced a 2 billion Saudi riyal deal with Saudi Aramco to help build the King Abdullah Petroleum Studies and Research Center project in Riyadh.
Last year DSI won deals worth Dh1.2bn in Saudi Arabia, and the company expects further business from its largest market in the region. Last week DSI said it was bidding on Dh4bn worth of projects in Qatar. Khaldoun Tabari, the DSI chief executive, said at the time the company was also planning to expand through acquisitions.
Deutsche Bank predicts Drake & Scull will post a 15 per cent increase in its backlog in the coming quarter, and an estimated 7 per cent for Arabtec Holding, the largest construction company in the UAE. Arabtec secured more than Dh2.6bn in contracts last quarter, its best performance since the second quarter of 2009, Deutsche Bank estimates.
Last week Alembic HC Securities singled out Depa, the Dubai interior contractor, for an upgrade. Its analyst Majed Azzam cited the company's diversification away from Dubai, low exposure to payment delays and ability to cover many sectors as among the company's positive attributes.
Depa is 36 per cent undervalued, according to Alembic but it downgraded DSI from "overweight" to "neutral", saying "fierce competition and tight liquidity raise concerns about margin compression and working capital deterioration". The company maintained a "neutral" rating on Arabtec.
DSI shares were trading at Dh1.09 at yesterday's close, up from Dh1.08 on Thursday, but still off its recent high of Dh1.13 achieved last month.
Meanwhile, Arabtec closed at Dh1.73 yesterday, up from Dh1.70 but still below its recent high of Dh2.30, which it hit in October.
[ kbrass@thenational.ae ]
SPECS
Engine: 1.5-litre turbo
Power: 181hp
Torque: 230Nm
Transmission: 6-speed automatic
Starting price: Dh79,000
On sale: Now
RedCrow Intelligence Company Profile
Started: 2016
Founders: Hussein Nasser Eddin, Laila Akel, Tayeb Akel
Based: Ramallah, Palestine
Sector: Technology, Security
# of staff: 13
Investment: $745,000
Investors: Palestine’s Ibtikar Fund, Abu Dhabi’s Gothams and angel investors
Honeymoonish
Director: Elie El Samaan
Starring: Nour Al Ghandour, Mahmoud Boushahri
Rating: 3/5
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THE SPECS
Engine: 4.4-litre twin-turbo V8 hybrid
Power: 653hp at 5,400rpm
Torque: 800Nm at 1,600-5,000rpm
Transmission: 8-speed auto
0-100kph in 4.3sec
Top speed 250kph
Fuel consumption: NA
On sale: Q2 2023
Price: From Dh750,000
SPEC SHEET
Processor: Apple M2, 8-core CPU, up to 10-core CPU, 16-core Neural Engine
Display: 13.6-inch Liquid Retina, 2560 x 1664, 224ppi, 500 nits, True Tone, wide colour
Memory: 8/16/24GB
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I/O: Thunderbolt 3 (2), 3.5mm audio, Touch ID
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Battery: 52.6Wh lithium-polymer, up to 18 hours, MagSafe charging
Camera: 1080p FaceTime HD
Video: Support for Apple ProRes, HDR with Dolby Vision, HDR10
Audio: 4-speaker system, wide stereo, support for Dolby Atmos, Spatial Audio and dynamic head tracking (with AirPods)
Colours: Silver, space grey, starlight, midnight
In the box: MacBook Air, 30W or 35W dual-port power adapter, USB-C-to-MagSafe cable
Price: From Dh4,999
Ziina users can donate to relief efforts in Beirut
Ziina users will be able to use the app to help relief efforts in Beirut, which has been left reeling after an August blast caused an estimated $15 billion in damage and left thousands homeless. Ziina has partnered with the United Nations High Commissioner for Refugees to raise money for the Lebanese capital, co-founder Faisal Toukan says. “As of October 1, the UNHCR has the first certified badge on Ziina and is automatically part of user's top friends' list during this campaign. Users can now donate any amount to the Beirut relief with two clicks. The money raised will go towards rebuilding houses for the families that were impacted by the explosion.”