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, reported a strong set of results for the first quarter ended March 31, 2026 (Q1 2026).
Supported by a strong order book, ALEC delivered a solid Q1 2026 performance, with revenue reaching AED4.6 billion ($1.25 billion), up 87% YoY, driven by steady project execution and delivery across the UAE and KSA.
Net profit more than doubled to AED230 million ($62.63 million), backed by a conservative balance sheet, strong cash position, sustained execution momentum, and a healthy pipeline supporting future growth.
Chief Executive Officer, Barry Lewis said: “Q1 2026 has been a strong start to the year, with revenues more than doubling year-on-year, reflecting the depth of our secured backlog and the quality of our execution across all segments. We also achieved a key milestone with the opening of Aquarabia in Qiddiya City, KSA’s first and largest open-air water theme park, where ALEC delivered the full scope from construction and installation through to testing, commissioning, and themed fit-out.
"As a newly listed company navigating evolving regional dynamics, this quarter clearly demonstrates ALEC’s capabilities and its ability to convert uncertainty into opportunity. Our integrated platform well-positions us to capture emerging demand, particularly where speed, quality, and execution precision are critical.
"Our pipeline remains active, and our AED26.7 billion backlog is strong and well-diversified, anchored by nationally significant projects across Building & Construction and Energy. We remain focused on disciplined execution and selectively pursuing high-quality opportunities where our integrated delivery model adds the most value, supporting margin resilience and sustained value for our shareholders,” he said.
Chief Financial Officer John Deeb commented: “The first quarter of 2026 demonstrates the operating leverage embedded in our model. Revenue growth of 87% year-on-year translated into net profit more than doubling to AED230 million, a result of scale, disciplined cost management and a high-quality project mix.
"Our liquidity position remains carefully managed, with cash movements in the quarter reflecting the typical seasonal patterns of our business. Q1 typically carries higher working capital outflows as execution ramps up and year-end advance payment cycle normalises. Our approach remains unchanged: prudent contract structuring, active collections management, and investment in capacity only where it supports sustainable growth.
"Our balance sheet is in good health, with modest borrowings and a clear capital allocation framework. The AED 250 million FY 2025 dividend was paid in April as committed, bringing the total FY 2025 dividends to AED 335 million. Our contracted backlog provides strong revenue visibility as we look to deliver on our full-year 2026 guidance," he said.
Segmental Overview
• Building & Construction revenue rose 116% YoY to AED2.9 billion, maintaining its position as the primary revenue driver, supported by the ramp-up of several large-scale projects into advanced stages.
• Energy Services remained a key growth driver, with revenue increasing 74% YoY to AED1.5 billion, reflecting continued progress across infrastructure projects.
• Related Businesses reported revenue of AED1.3 billion, up 155% YoY, underpinned by greater integration across projects and rising demand for specialised capabilities.
Profitability
Gross profit increased 58% YoY to AED410 million in Q1 2026, driven by strong revenue growth, with Gross Profit margin at 8.9%, down 164 basis points YoY, reflecting ALEC’s prudent and transparent approach in accounting for the impact of current geopolitical developments, particularly within Energy Services. Similarly, Q1 2026 EBITDA increased 79% YoY to AED362 million, while EBITDA margin moderated to 7.9% from 8.2% in the prior year. Revenue growth continued to outpace overhead expansion, demonstrating strong operating leverage as the business invests in execution capacity.
Q1 2026 Net Profit increased 101% YoY to AED230 million, representing a net profit margin of 5.0%, up 36bps YoY. The performance reflects higher operating earnings despite the seasonally softer Q1 margin profile, partially offset by higher net finance costs and increased tax expense following the implementation of OECD Pillar II rules in certain jurisdictions.
On March 24, shareholders approved the board’s proposed cash dividend of AED0.05 per share, totaling AED250 million for FY 2025, which was subsequently paid in April 2026, bringing total dividends for 2025 to AED335 million, it said.
Balance sheet analysis
ALEC maintained a strong balance sheet in Q1 2026, reflecting the increased scale of operations. Total assets rose to AED11.5 billion as at 31 March 2026, up from AED10.6 billion as at 31 December 2025, driven primarily by growth in customer and contract receivables. As at 31 March 2026, total liabilities increased to AED10.1 billion, compared to AED9.2 billion at 31 December 2025, reflecting the scale-up in operations and project phasing, with higher contract and other payables and customer advances aligned with increased activity.
Cash and bank balances stood at AED1.0 billion, while total borrowings and lease liabilities decreased to AED890 million, resulting in a net cash position of AED122 million, equivalent to a net cash-to-trailing twelve months EBITDA ratio of 0.1x. As at 31 March 2026, ALEC reported net working capital of AED 811 million, underpinning a balance sheet that supports both growth and resilience.
Key operational highlights
• Backlog supports sustained revenue visibility: As of 31 March 2026, backlog stood at AED26.7 billion, providing 1.8x coverage of trailing 12-month revenue. This reflects disciplined execution progression across large-scale, secured projects, converting a robust order book into revenue at a favorable pace, consistent with the ALEC’s strategy of maintaining strong multi-year visibility.
• Diverse and high-quality backlog: ALEC's backlog remains well-diversified across Energy (50%), Building & Construction (49%), and Related Businesses (1%), and is geographically anchored in the UAE (89%) with a selective and growing presence in KSA (11%). The pipeline of nationally significant opportunities remains active, with management pursuing high-value awards in line with its disciplined commercial approach.
• Aquarabia Opening: Aquarabia at Qiddiya City officially opened to visitors on April 23, marking Saudi Arabia’s first and largest open-air water theme park, with ALEC delivering the full project scope including construction, installation, testing and commissioning, as well as fit-out and architectural theming.
• W Riyadh – KAFD Delivery: ALEC FITOUT delivered the full fit-out scope of the W Riyadh – KAFD, the first W Hotel in the Kingdom, acting as design and build contractor and delivering an integrated scope including architectural, engineering, MEP and high-end fit-out works.
• ilmi Science Discovery and Innovation Center Project Milestone: The ilmi Science Discovery and Innovation Center at Misk City reached structural top-out, marking a key milestone in project delivery and reflecting continued progress on one of the Kingdom’s flagship developments.
• Contractor of the Year Award: ALEC received the Contractor of the Year award at the Construction Innovation Awards KSA 2026, underscoring the Group’s strong execution track record and continued recognition within the Kingdom’s construction sector.
• Industry Ranking Recognition: ALEMCO was ranked second in the 2026 Top MEP Contractors Power List by MEP Middle East, recognising its leadership, innovation, and contribution to advancing the region’s electromechanical contracting sector.
• ESG Recognition: ALEC Holdings was awarded the EcoVadis Silver Medal, placing the Group in the top 15% of companies assessed globally with a score of 73/100, reflecting continued progress in sustainability practices and ESG performance.
• Health & Safety Enhanced Performance: ALEC continues to operate to the highest international standards, certified to ISO 45001/14001/9001 and OSHAD, with a Group Lost-Time-Injury-Frequency-Rate (“LTIFR”) of 0.104 per million manhours worked year-to-date reflecting the discipline of the Group's H&S management framework.
• Growing Workforce: ALEC's total workforce across the UAE and KSA grew 4.7% since the end of December 2025, to approximately 60,300 staff and labour as at 31 March 2026, reflecting the continued ramp-up of execution activity across the Group's expanding project portfolio. - TradeArabia News Service