ALEC Holdings revenue, profits see sharp rise

17/11/2025 03:59 AST

ALEC Holdings, a market-leading diversified engineering and construction group with operations focused on large-scale, complex and iconic buildings and energy projects in the UAE and the KSA, delivered a sharp acceleration in top-line growth during the first nine months of 2025, with revenue rising 66% YoY to a record AED8.9 billion ($2.42 billion) for the period.

The momentum intensified in Q3, where revenue surged 82% YoY to AED3.5 billion, reflecting strong progress across both the UAE and Saudi Arabia.

Net profit more than doubled, growing 116% YoY to AED432 million in 9M, with net margin expanding from 3.7% to 4.8%. Q3 alone saw net profit surge 172% YoY to AED193 million. These gains reflect a combination of robust project delivery, operational efficiencies, and effective working capital and finance cost management.

Following a high-profile listing on DFM, ALEC's results reflect continued execution against a high-quality backlog, disciplined project selection, and operating leverage across the business, the company said.

Building & Construction segment led the way, contributing nearly 48% of total revenue, with 9M revenue increasing 77% YoY to AED4.8 billion and Q3 revenue more than doubling to nearly AED2.0 billion.

Energy Solutions segment, representing 32% of revenue, saw 75% YoY in 9M to AED3.2 billion, with Q3 revenue up 82% YoY to AED1.2 billion, as the group deepened its footprint in major energy infrastructure projects.

Related Businesses - including fitout, MEP, data centre solutions, and modular construction -generated AED2.0 billion in revenue in 9M, growing 45% YoY, with Q3 revenue up 62% YoY to AED 858 million, signalling continued traction for ALEC's integrated, high-margin offerings.

On profitability, ALEC delivered a 56% YoY increase in gross profit to AED859 million during the first nine months of 2025. Gross margins remained healthy at 9.6%, with a slight contraction from 10.2% in the prior-year period reflecting a shift in revenue mix-particularly a comparatively lower contribution from the higher-margin Related Businesses segment. In Q3, gross profit rose 65% YoY to AED323 million, with gross margin at 9.1.

EBITDA rose 83% YoY in 9M to AED706 million, with EBITDA margin expanding to 7.9% - a result of strong operating leverage, tight cost control, and prudent financial management, even as the Company continues to invest in internal capability-building. In Q3, EBITDA increased 88% to AED277 million, equating to a 7.8% margin.

Key operational highlights
ALEC's backlog remained strong and well-balanced, standing at AED32.9 billion as of 30 September 2025, providing a 2.8x coverage of trailing twelve-month revenue. With nearly half of that in mega-projects exceeding AED3 billion, ALEC is well-positioned for multi-year growth. The backlog is almost evenly split between Building & Construction (50.8%) and Energy (47.6%), with 86.5% based in the UAE and 13.5% in Saudi Arabia, the company said.

"Our sustained strong performance in the first nine months of 2025 reflects the strength of ALEC's integrated platform and the success of our focused strategy. We are executing a high-quality backlog with discipline while expanding in sectors that play to our strengths, including energy infrastructure and data centres and airports," said Barry Lewis, Chief Executive Officer of ALEC Holdings.

"Looking ahead, we see a healthy pipeline of mega and nationally critical projects moving from design into execution. In particular, there is a durable, muti-year runway for data centre growth in the UAE and Saudi Arabia. Momentum from national AI strategies and recent hyperscale announcements is already translating into contracted demand. With our one-stop delivery model-and the work underway on Phase 1 of Stargate in Abu Dhabi-ALEC is the go-to partner for hyperscale and AI data-centre projects in the region.

"As we grow, our priorities remain unchanged. We will pursue high-value, complex projects where we have a clear competitive advantage. We will drive operating excellence at every stage of delivery, enabled by the depth of our talent and proven execution expertise. We will operate with agility and leverage our scale to drive efficiencies and support margin expansion. We will preserve a prudent balance sheet through disciplined capital and cash management, keeping leverage low. Together, these priorities are designed to deliver sustainable value creation for our shareholders over the mid to long term," he said.

Growth forecast
ALEC expects to deliver 50-52% revenue growth in 2025, followed by ~50-55% growth in 2026, driven primarily by already secured projects.

· Improving profitability outlook (medium term): Gross profit margin is projected in the range of ~10.3% in 2025 and to gradually improve in the medium term by ~100 basis points, supported by a greater share of high-margin, complex projects and growth in the Related Businesses segment.

EBITDA margin is expected in the range of ~8.5% in 2025 and to gradually expand by ~150 basis points, underpinned by operating leverage and continued cost discipline.

· Strategic Mix Shift: ALEC's focus on complex, higher-margin segments such as data centres and fitout is expected to drive further margin enhancement and strengthen ALEC's competitive position in a consolidated market.

· Reaffirming Commitment to Dividends: As announced during the IPO, ALEC is planning to distribute a cash dividend of AED 200 million in April 2026 and AED 500 million for the financial year 2026, payable in October 2025 and April 2027, and thereafter intends to distribute a minimum of 50% of its net profit for the year, semiannually, subject to Board of Directors' recommendation and shareholders' approval.

Trade Arabia