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Sun 19 Jun 2011 10:36 AM

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Atkins recovers $12.9m in debt from Middle East firms

British company plans recruitment drive to target Saudi Arabia, Qatar growth

Atkins recovers $12.9m in debt from Middle East firms
TO GO WITH AFP STORY BY FAISAL BAATOUT: A construction worker digs at a building site while in the background numerous cranes are positioned around high-rise ?apartment buildings under development in the Qatari capital Doha, 01 October 2007. Qatar ?is enjoying dramatic economic growth on the back of surging gas revenues, but the Gulf ?state is battling an increasingly high rate of inflation led by high housing costs, officials ?and analysts say. Around 2,000 housing units were under construction in 2007 and ?another 6,000 should be ready by 2009. AFP PHOTO/KARIM JAAFAR (Photo credit should read KARIM JAAFAR/AFP/Getty Images)

British engineering consultancy WS Atkins has recovered £8m
($12.9m) in outstanding debts from clients in the Middle East, its regional
managing director said.

The debt recovery, which included payment of outstanding
fees from government and semi-government firms, helped the company to a 70
percent rise in regional full-year profit.

"This year we have recovered £8m worth of debt in the
Middle East," said Richard Barrett, managing director, Middle East. “This
includes debt recovered from our property sector clients and debt recovered
from some government bodies.

"In the past, most of our business has been in the UAE
and so most of our debt recovery has come from within the UAE. But we have also
seen debt recovery from [other] parts of the region."

Atkins was one of hundreds of construction firms that faced writedowns
and delayed payments from developers following the collapse of Dubai’s property
bubble in late-2008.

More than half of developments in the emirate were cancelled
or put on hold as project financing dried up and real estate speculators fled the
market.

Nakheel, the real estate arm of state-owned Dubai World, was
among the emirate’s largest defaulters after racking up billions of dirhams in
unpaid fees to trade companies.

Atkins, along with international rivals Halcrow, EC Harris,
Hyder, Mouchel and WSP, were among many firms awaiting payment at the beginning
of this year.

UAE-based Al Habtoor Leighton in April was forced to raise
$800m from its parent company to offset the impact of $1.1m in delayed payments
and safeguard its future projects in the Gulf.

In May, state-backed property group Nakheel said it would
pay trade creditors $1.3bn in the form of Islamic bonds by the end of June, in
an effort to settle 60 percent of its debt.

The global boss of Atkins Keith Clarke said in April he
expected to receive payment in sukuk from debt-laden Nakheel in the next few
months.

Atkins last week reported total underlying pre-tax profit
for the year to end March of £102.7m against £93.9m in 2010. Profit for its
Middle East unit reached £23m.

Barrett said the
firm planned to increase its headcount in the region this year, chiefly in
Saudi Arabia and Qatar, to accelerate its expansion in those markets.

The company lost 16.5 percent of its Middle East staff in
2010 to 1,555 employees as the collapse of Dubai’s property market hurt its
largest regional revenue source.

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Red Snappa 8 years ago

$12.9 million debt recovery, doesn't seem very much for a consultancy of the stature of Atkins, their name was plastered on virtually every project board I've ever read.

I would imagine that $12.9 million is but a small percentage of what they are actually owed and is probably long overdue debt, knowing the payment cycles since the Dubai World debt standstill was sought in November 2009.

Nonetheless, good luck to you sir as the Irish would say, the shamrocks are on me.

tigershark 8 years ago

I agree it is nothing to what they are owed and their profit margin for the region only looks good because they have cut staff numbers especially senior managers hard. Therefore, with less money going out to salaries and money coming in that has already been written off and which goes straight to the bottom line means this year looks great. However, what is the underlying story? That by getting rid of all the guys with any real expereince and market knowledge they are struggling technically especially as they are not cheap and certainly are not any better than other consultants