Arabtec, Dubai's largest listed construction firm, said on Wednesday it had dropped plans for a second phase of a planned $1.3 billion rights issue and capital hike, after reporting a jump in third-quarter net profit.

Arabtec, which is building a branch of France's Louvre museum in Abu Dhabi, made a third-quarter net profit of 100.8 million dirhams ($27.4 million) compared with 35 million dirhams in the corresponding period in 2012, it said in a statement on Dubai's bourse.

The earnings were well ahead of estimate by five analysts polled by Reuters who expected a quarterly profit of 64.9 million dirhams.

Arabtec said its board of directors had decided to cancel the phase 2 of its rights issue and capital increase due to a strong financial position reached by the company.

It had raised $653 million through a rights issue in July and planned to raise an equal amount in the second phase if needed.

“Today’s results, which beat market expectations, demonstrate that the business is performing well and that the contract wins in 2012 are now making a notable contribution to cash flow and earnings. We are also pleased to see growth in our key markets of UAE and Saudi Arabia, which continue to be important drivers across a number of our business segments,” said Hasan Abdullah Ismaik, managing director and CEO of Arabtec Holding.

“The positive results are further supported by the healthy GCC construction market growth and fundamentals, giving us confidence in our growth strategy.  We continue to make significant progress with the realignment of our business and the implementation of our growth strategy.

“We announced the launch of Arabtec Samsung Engineering for the expansion in the oil & gas, power and related infrastructure segments; we signed an MoU to form Arabtec-GS Infrastructure, a business focused on heavy infrastructure; and we also acquired the remaining 45 per cent minority stake in EFECO.

“We are very confident that our growth strategy will help us achieve our aim of growing Arabtec’s existing business and expanding into higher-margin and higher-growth sectors,” Ismaik concluded. – TradeArabia News Service & Reuters