UK's Carillion sees MidEast revenues slump in H1
Revenues from construction services in region fall by 21%; sees slowdown in Abu Dhabi
UK-based Carillion saw revenues from its Middle East construction services slump by 21 percent during the first half of the year compared to the same period last year.
Revenue fell to £201.6m while its operating profit from regional activities also fell 27 percent to £13.6m.
The group said it had seen some movement in Middle East infrastructure project bids that have been delayed by financing from Europe's euro zone crisis-hit banks but added that first-half revenue was lower than in 2011 due to the "timing of project awards".
Carillion added that despite the general slow down in contract awards in 2012, notably in Abu Dhabi, it had a number of first-half successes.
Carillion Alawi won a £40m contract to construct Sidab Harbour for the Royal Oman Police and a £42m contract to build the Sultan Qaboos Mosque at Nizwa for Royal Court Affairs.
In Abu Dhabi, Al Futtaim Carillion (AFC) was awarded a £45m contract by Emirates Aluminium to provide infrastructure works for Phase 2 of its new aluminium smelter.
"In line with our strategy of geographical diversification in the Middle East, we also remain positive about our prospects for extending our operations into Saudi Arabia during 2012, where major investment programmes offer significant prospects for growth," the company said.
Its support services unit also said Carillion Alawi was appointed preferred bidder for a three-year facilities management contract for Petroleum Development Oman, worth £75m over three years and with an option to extend the contract period up to eight years.
By the end of June, Carillion's share of the order book plus probable orders of our Middle East businesses was about £900m.
It added that its pipeline of contract opportunities in the Middle East increased to £12.2bn.
"While Middle East revenue is not expected to grow sufficiently to offset the lower operating margin and deliver earnings growth in 2012, the medium-term outlook for profitable growth remains positive and we remain confident of achieving the target we announced in 2010 of doubling our Middle East revenue to around £1bn by 2015," Carillion added.
Carillion chairman, Philip Rogerson, said: "Carillion delivered a robust first-half performance, in line with the Board's expectations, despite market conditions remaining challenging."