UAE construction giant's order book at $8.1bn

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STANDING FIRM: UAE's largest construction group is positive despite global slowdown. (Getty Images)

Al Habtoor Leighton Group’s order book in the Gulf stands at a record high of 30 billion dirhams ($8.16 billion), despite a slowing down in the construction sector in the region, a senior manager for the contractor revealed on Sunday.

The company’s earnings growth may be affected in the short term by delays to construction projects it was involved in, but the contractor was still sticking to its original revenue target for the year, although it refused to disclose the figure, said the spokesman, who asked to remain anonymous.

He said Al Habtoor Leighton, the UAE’s largest construction group, had no plans to launch an IPO this year given the turbulent conditions in the regional markets at present.

He said the company had not made any job cuts outside of shedding staff following the completion of certain projects, in line with the firm’s normal business practice.

The group won a 8.85 billion dirham contract for the Dubai Peal project in November 2008 but the 2.9 billion dirham Trump Tower it had been contracted to build in the emirate was suspended last month.

“Our work in hand at the moment is at a record high,” said the spokesman.

“Our work in hand has continued to grow, particularly with say Dubai Pearl. Yes, Trump Tower stopped but we’ve more than made up for the work we’ve lost.”

Leighton Holdings', the Australian parent company of Leighton International, issued a profit warning in Australia last week saying its first half net profit will be 60 percent lower than previously forecast at $100 million.

But the spokesman said the downturn in the Gulf construction sector hadn’t had any impact on the profit guidance, with write-downs relating to assets in Australia primarily to blame.

“In the Gulf there are some issues with timing as through the accounting process we can only declare profit from a project at the 20 percent complete mark. So if a project is delayed slightly, even by a matter of weeks, we may not reach that 20 percent threshold so we can’t declare profit on it.”

Al Habtoor Leighton Group chairman Khalaf Al Habtoor was reported in August 2008 as saying the firm was planning to float on the region’s stock market in May this year.

But the spokesman said the firm hadn’t any firm plans to list this year and wouldn’t be doing so soon “given the market situation.”

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