“Arkan” incurred 23.2 million dirhams in the first half

Arkan Building Materials Company turned losses in the first half of this year by 23.24 million dirhams, compared to profits of 2.12 million dirhams, which it achieved in the corresponding period of last year.

Arkan announced its consolidated financial results for the first half; The results showed an increase in the group’s revenues by 7.9% to reach 418.08 million dirhams, compared to 387.42 million dirhams during the first half of 2020. The revenue growth is due to the increase in clinker sales to export markets, and the growth of dry mortar sales.

net loss

Looking at the company’s overall results, it recorded a net loss of 23.24 million dirhams during the first half of 2021, compared to a net profit of 2.12 million dirhams during the same period in 2020. The decline in profits during this period is attributed to the slowdown in the construction market activity, which is still It is suffering from the effects of the “Covid-19” pandemic, in addition to the high prices of raw materials, and the decrease in average selling prices.

cost control

Arkan’s senior management continues to implement a series of cost control initiatives, with the aim of adapting to new market drivers and improving the company’s profitability. The cost rationalization program launched by the company during the last quarter of 2020, resulted in savings of 14 million dirhams during the first half of 2021.

On May 9, 2021, the General Holding Company “Senaat” affiliated to the “Holding” (ADQ), announced that it had submitted an offer to the Board of Directors of “Arkan” to unify the business of “Emirates Steel” with “Arkan”. The proposed merger deal will lead to the establishment of a listed company with a leading position locally and regionally in the building and construction materials sector, and will constitute a platform for further growth in the UAE and the GCC in general. Arkan’s board of directors recommends shareholders to vote on approval to proceed with the proposed transaction during the general assembly meeting scheduled to be held on Monday, August 9, 2021.

construction market

Engineer Jamal Salem Al Dhaheri, Chairman of Arkan, said: “The strong effects of the global pandemic continue to cast a shadow over the construction market in Abu Dhabi. The delay in projects led to an increase in competition, and all of these challenges were also exacerbated by the high prices of raw materials, which negatively affected the profit margins. In order to adapt to the local market conditions, our management team continues to do its utmost to enhance the growth of our revenues by entering new markets for exporting products, in addition to developing innovative products in cooperation with local universities, in order to meet the changing requirements of our customers. At the same time, we continue our disciplined approach to lowering operating costs; We managed to make significant savings this year. In light of all these challenges, the Board of Directors believes that the proposed merger with Emirates Steel will create a larger entity for the production of iron and building materials and open the door to broader opportunities for growth and innovation in addition to enhancing the group’s presence in the market and its ability to better adapt to its various cycles. future.”