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Sun 24 Apr 2016 05:59 PM

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Arabtec chairman eyes cost-saving job cuts in 2016

Chairman Mohamed Al Rumaithi of Dubai-based contractor said it will break-even this year and record a profit in 2017

Arabtec chairman eyes cost-saving job cuts in 2016

Dubai contractor Arabtec said it could break even this year and make a profit in 2017 as the company looks to reduce costs through layoffs and streamlining of activities. 

Speaking at Arabtec's annual shareholder meeting, chairman Mohamed Al Rumaithi, said: "2015 was a severe year, 2016 is still tough.

"I am confident of 2017, that's when I see (profit).

"For 2016, maybe we will break even," he said, when asked if that meant the company would record another annual loss this year," according to Reuters

Rumaithi said Arabtec is looking to cut costs, and this could include slashing jobs as well.

He declined to specify how many jobs might go or how much could be made in savings.

"There's some fat to be taken out," he said.

The company also plans to streamline its operations: its most recent financial statement lists more than 50 subsidiaries.

"We are a construction company, we will concentrate on our core business (of) construction," said Rumaithi.

"If it's not related, we're out; if it's related we're still in."

Arabtec's shares peaked to a record high in May 2014 on the influential backing of state fund Aabar, which owns 36% of the contractor. 

However, setbacks such as the delayed $36bn housing scheme with Egypt and $6.1bn property for Aabar in the UAE have slowed down Arabtec's growth in the last year. 

The contractor's share price has dropped 76% since May 2014, with Arabtec reporting a $640m (AED2.35bn) net loss in 2015. 

At the time, rising construction costs and challenging market conditions were blamed for the loss, according to the report.

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