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Arkan strives to play a key role in Abu Dhabi Government diversification drive to deliver the 2030 vision.

Arkan restates 2016 results on closure of Emirates Cement Factory

 

Arkan restates 2016 results on closure of Emirates Cement Factory

 

Abu Dhabi, UAE; [■] March 2017: Arkan Building Materials Co. PJSC (ADX: ARKAN) (“Arkan” or “the Group”), a leading building materials industrial conglomerate, announced on 29 December 2016, that due to significant gas and electricity price increases from 1 January 2017, it would implement a series of mitigating actions across the business including temporarily closing Emirates Cement Factory (‘ECF’), in operation for over 43 years. 

 

Arkan was able to contain the production and sales from the ECF factory at its state of art Al Ain Cement Factory (ACF) which is now running at a near 100% utilisation rate.  The consolidation of production and sales at ACF confirmed Arkan as one of the most efficient cement producers in the UAE by reducing operating costs and thereby saving in excess of AED 45 million on an annual basis, starting 2017 to partly mitigate the utility price increase.

 

Eng. Jamal Al Dhaheri – Arkan’s Chairman stated “Our Cement Operations achieved in 2016 the highest scores in the industry from both revenue and operating profit perspective AED 613 and AED 133 respectively, despite the loss of business for four months incurred as a result of the storm which hit our new plant in March 2016. We are looking forward to maintaining our leadership position in 2017 by being the lowest cost producer in the segment”.

 

Arkan’s Blocks, GRP, PVC and Bags factories continued generating profits.  In addition, Arkan Dry Mortar plant which started operations in June 2016 reached 60% capacity utilization.

 

Following the successful consolidation of the cement business, Arkan’s Board of Directors today announced that it had taken the decision to permanently close ECF.  Consequently, Arkan will write down the full value of the Factory that it holds in its accounts in its 2016 statements. This adjustment is a book entry that does not have any impact on the Group’s actual earnings before interest and depreciation (EBITDA) for 2016, which remains healthy at AED 234 million and sufficient to allow Arkan to fulfil its financial commitments, nor on its cash balance going forward.

 

It means the unaudited net profit of AED 75.7 million disclosed on 14 February 2017 will become an audited net loss of AED 82 million. “This one-off book loss doesn’t change the fundamentals of Arkan business and we are actively exploring ways to dispose of the plant in the near future and realize the highest value possible” Eng. Jamal Al Dhaheri – Arkan’s Chairman said.

 

 

As for 2017 Eng. Jamal Salem Al Dhaheri, Arkan’s Chairman continued “Arkan has made a good start to 2017, especially in the penetration of new markets both locally and overseas. While strengthening our footprint in Dubai market for the second year the newly innovative launched products allowed further export opportunities to new destinations such as South East Asia and Central Africa.”

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For investor relations enquiries, please contact:

Brunswick Group

Phone: +971 (0)2 234 4600 / +971 (0)4 446 6270

Email: arkan@brunswickgroup.com

 

 

About Arkan

Arkan Building Materials Co. PJSC (ADX: ARKAN), is a public joint stock company specialising in manufacturing of building and construction products in the UAE.  Arkan’s vision is to build a large integrated building products business that serves the local and regional construction industries. Arkan’s portfolio companies include Emirates Cement Factory, Emirates Blocks Factories, ANABEEB and Al Ain Cement Factory. The Company is also developing Arkan Dry Mortar, a high-capacity dry mortar plant located in Al Mafraq, which will produce a range of dry mix products. Arkan strives to play a key role in Abu Dhabi Government diversification drive to deliver the 2030 vision. Arkan’s mandate is to grow and expand its product and services offering through Greenfield development and strategic partnership with leading global manufacturers.   For further information, please visit: www.arkan.ae 

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