South Korea’s Samsung Engineering Co. has bagged two deals worth a combined 3.42 trillion won ($3.06 billion) from Abu Dhabi Oil Refining Company, the latest in a string of orders from the United Arab Emirates this year.
The construction unit of Samsung Group said in a regulatory filing on Tuesday it received two separate orders from the Abu Dhabi Oil Refining Company, an affiliate of the state-run oil firm Abu Dhabi National Oil Company (ADNOC). Samsung Engineering will be in charge of the overall engineering, procurement and construction of the plants.
One is a project to increase crude processing flexibility of the UAE’s Ruwais refining complex, which involves building an atmospheric residue desulfurization plant with a daily output of 177,000 barrels of oil and renovating an existing plant by August 2022. The deal is worth 2.9 trillion won, an amount that accounts for more than half of the company’s consolidated revenue last year.
Another is a 526.6-billion-won deal to build a 230-megawatt power station using waste heat from existing facilities and a desalination plant capable of producing 2,600 cubic meters of fresh water. The project is expected to be completed by June 2023.
The latest feat comes just seven months after the company, together with Netherlands-based engineer CB&I, won a crude flexibility project order from the UAE that brought in revenue of 2.8 trillion won from the 3.4-trillion-won deal. In March, it also sealed a waste heat recovery deal worth 510 billion won.
“We were able to successfully complete large projects in the UAE and win the trust of the authorities, which has led to additional orders,” said an official from Samsung Engineering.
For Korean builders, the UAE is the second-most important client in the Middle East after Saudi Arabia, responsible for 20 percent of all orders from the region. They anticipate more projects to come in the following months as the country gears up for the 2020 World Expo in Dubai.
KB Securities Co. in its latest report issued a price target of 21,500 won and maintained its buy position on Samsung Engineering’s stock. “The company has already secured 6.2 trillion won in new orders in the first half, about 73 percent of last year’s,” said the brokerage. “It is expected to outperform the 8.5 trillion won worth of orders achieved in 2017.”
On Wednesday, shares of Samsung Engineering finished at 16,250 won, unchanged from the previous session.
By Yong Hwan-jin and Kim Hyo-jin
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