ADSB Q1 net profit soars to $7.4m

Abu Dhabi Ship Building (ADSB), a leading builder and integrator of military/paramilitary vessels in the Middle East region, said its first-quarter profit rose to Dh27 million ($7.35 million) from Dh10.7 million ($2.91 million) last year.

Announcing the results on Sunday, ADSB chief executive officer, William S. Saltzer said the growth in profit was attributable in part to increased activity on new contracts that the company had signed with the Critical National Infrastructure Authority (CNIA) and the UAE Navy in the second and third quarter of 2009.

Progress on other existing projects has been in line with expectations and gross profit margin has been fairly consistent at 30 per cent, said a company statement.

Although more work was done in this quarter compared to the same quarter of last year, ADSB had been able to maintain the same level of general and administrative expenses, the statement added.

'This explains the higher net profits, both in terms of amount and in terms of net profit percentage (13 per cent compared to six per cent in the same quarter of last year),' Saltzer noted.

In addition, cost savings and some exchange rate gains were achieved on some projects that completed during late 2009 and early 2010, he added.

According to him, the ADSB is gearing up towards launching the second ‘Baynunah’ Class 72m Naval Corvette in mid-2010 which will mark the completion of another significant milestone in this very important project for both the company and the UAE Navy.

'The first ship was launched in France in June last year. Construction on ships 2-6 in Abu Dhabi is advancing as per planned production schedules.'

Among the other main projects, the company is also building 34 High Speed 16m composite Interceptor boats for the CNIA, 12 aluminum missile patrol boats (26m) for UAE Navy and two 42m Naval Landing Craft for the Bahrain Navy.

ASDB, said Saltzer, had transferred and subcontracted some of its operations to its joint ventures to achieve the full potential of their core competencies.

'At the moment we have two joint ventures set up, namely Abu Dhabi Systems Integration (ADSI) which is a partnership with Selex Systemi Integrati from Italy and Gulf Logistics and Naval Support (GLNS), a partnership with UK-based BAE Surface Fleet.

These investments are expected to contribute positively to our earnings and support our long term growth, he pointed out.

On the 2010 outlook, the ADSB chief said, 'We are looking forward to significant growth in the logistics and long term support business through new contracts and through the performance of our joint venture company Gulf Logistics and Naval Support, which officially began operations in Q4 2009 and is expanding rapidly.'

'While we continue to pursue additional avenues of growth, we are also cognizant of the effects of the international economic downturn and the effects it has on our customers and on our own internal costs,' he added.

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