Arabtec Holding (Arabtec) reported its headline figures for 4Q2015. Revenue was AED2,063 million (+55.7% Y-o-Y, +28.7% Q-o-Q: +22.5% versus EFGe), with net losses reported in the quarter, at AED403.7 million, versus net losses of AED214.8 million in 4Q2014, AED944.8 million in 3Q2015 and versus our estimate of AED565.2 million, also in losses. 2015 revenue was AED6,877 million (-12.5% Y-o-Y, +5.5% versus EFGe), while the net loss for the year was AED2,347 million, versus AED214 million (in net profits) in 2014 and our estimate of AED2,508 million. Total awards for Arabtec’s unit, Target Engineering, totaled AED1.1 billion in the year, according to the earnings release, which we believe have brought the total number of awards for the group to cAED2.8 billion, adding up two project awards by Emaar Properties and one by Aramco, which were secured in 1Q2015. We had expected AED2.4 billion for the year, down from AED9.6 billion in 2014. Arabtec’s backlog reached AED19.3 billion in December 2015, down from 21.3 billion a year earlier, at its lowest levels since 2011.   Our view: We await the release of Arabtec’s full set of results (expected in March) to be able to get a better view on the company’s performance in 4Q2015. That said, we are pleased to see revenue back above the AED2 billion quarterly mark, for the first time in five quarters, which we view as a reflection of improved execution (same trend seen with DSI in 4Q2015). We had expected a negative gross profit margin of 30.7% in 4Q2015 (4Q2014: -4.0%, 3Q2015: -38.5%), which we believe is likely to have been beaten, driven by the stronger revenue. We expect the company’s normalised G&A expenses to have continued to fall, on the back of the cost cutting measures taken in 2H2015 and expect to see further benefits in 2016, as confirmed by management. On the balance sheet, we await to see the evolution of bank borrowings (+37% in 9M2015) and working capital management (9M2015 trends were encouraging with positive working capital for the period, with the increased management focus on receivable collection – so far – proven to be successful).   We expect Arabtec to swing back to profit in 2016. We note that the company has had a good start for 2016, winning an AED2 billion contract from Aldar Properties and a USD1.1 billion contract in Bahrain, jointly with Turkey-based contractor, TAV Construction. Our numbers incorporate AED4.5 billion in new awards for the year, which may be subject to an upgrade, should the momentum seen YTD prove to be sustainable. We have a Neutral rating on the name, with the stock trading roughly at par with our FV. PER 2017e is at 21.9x, and EV/EBITDA is at 12.0x. (Company disclosure, Mai Attia, Sara Boutos)   Arabtec (DU): AED1.08 as of 18 February 2016, Rating: Neutral, FV: AED1.07 per share, MCap: USD1,358 million, ARTC UH / ARTC.DU