GCC countries most profitable operation for Atkins

Middle East countries were a significant driver of profit for Atkins, with operating margins remaining the highest in the company’s global portfolio, according to preliminary financial results for the year ended 31 March 2012.

Overall the company’s global reported revenue rose 9.4% to $2.7bn, with profit of $212m, up 48.9%. Atkins’ revenue in the Middle East amounted to $269m, 10% of the company’s annual turnover, and up 21.6% on the previous year.

Its operations in the Middle East – comprising Saudi Arabia, Abu Dhabi, Dubai, Qatar, Oman, Bahrain, Kuwait and India – remained the most profitable for the company, with 9.8% operating margin, significantly higher than the UK (6%) and North America (5%), and the energy sector (8.9%).

Nevertheless, the result was down significantly on 2011’s 16.9% return on revenue in its Middle East operations.\

Its operations in the seven Gulf nations also brought “added resilience” to the UK business through its support of projects for the Group’s Middle East operations.

Commenting on the prospects for the Middle East market, chairman Allan Cook said that market sentiment continues to improve.

“We have a good order book and are looking confidently towards the future in this region. We will need to manage the ebb and flow of major projects where timing remains unpredictable and resource planning challenging, and where the close management of ongoing variation orders will be critical to our financial success,” said Cook.

Major projects highlighted in Atkins’ annual report were King Abdulaziz International Airport in Jeddah, a new 30 million passenger a year terminal, where Atkins is the lead designer and programme manager, as well as for the associated buildings and infrastructure.

Also in Saudi, Atkins is progressing the design and supervision of the Makkah Metro, where it believes there are good opportunities for additional work.

“This adds to our portfolio of successful rail design projects in the region, including the concept design of the 1,300km Etihad Rail project in the UAE, the Dubai Metro, where the Green line was opened in September 2011, Lusail Light Rail in Qatar, the Kuwait Metro and support for India’s Kolkata Metro,” said Cook.

Atkins also remains active in the property design market, citing projects such as the Central Market in Abu Dhabi, though it says it expect the sector to represent a reducing proportion of its workload going forward.

According to the report, Atkins had 1,972 staff for its Middle East operations at the end of the financial year, a 26.8% increase on the 1,555 the previous year.