By Claire Valdini
UAE's biggest builder posts slight increase in revenue, but rising costs hit profit
Arabtec, the UAE’s largest builder by market value, reported a second quarter loss as costs and expenses increased.
The Dubai-based firm made a net loss of AED11.6m (US$3.16m) compared to a profit of AED29m a year earlier while revenue increased to AED1.3bn billion from AED1.2bn, the company said in a statement to the Dubai stock market Wednesday.
Contracting costs increased to AED1.2bn from AED1bn while administrative expenses rose 62 percent to AED154.2m from AED95m.
The builder said it had acquired the remaining 45 percent stake in Gulf Steel Industries for AED18m.
Arabtec, which along with Turkey’s TAV Insaat and Athens-based Consolidated Contractors Co, secured a AED10.8bn contract to build a terminal at Abu Dhabi Airport in June. Construction is due to begin in the third quarter and is scheduled to be completed in 2017.
Abu Dhabi state fund Aabar recently increased its stake in Arabtec to 21.6 percent, promoting a surge in stock. Shares have increased 99 percent this year compared to 15 percent increase for the benchmark, according to Bloomberg data.
Aabar, which owns stakes in Daimler and Glencore, has been quietly increasing its holding in the builder this year through market purchases. A June statement said Arabtec may secure joint projects from Aabar on the back of a $2bn deal signed between the investment fund and China State Construction Engineering Corp this year.
The deal will develop real estate projects in Abu Dhabi and “identify potential joint projects including those in which Arabtec Holding may be involved”, said the statement.