Dubai's Arabtec swings to Q4 loss

2014's profits were hit by non-recurring high costs, which jumped 75% to $204m
Dubai's Arabtec swings to Q4 loss
By Reuters
Sun 22 Mar 2015 09:29 AM

Dubai's largest construction firm, Arabtec, swung to a net
loss of AED94.4 million ($25.7 million) in the fourth quarter of last
year, missing analysts' estimates as high costs weighed on its bottom line.

The builder, in
which Abu Dhabi state fund Aabar Investments owns a 36.11 percent stake, on
Sunday reported a net profit attributable to shareholders of AED214.6 million for full-year 2014 versus AED377.8 million in 2013.

It did not
provide quarterly figures in the statement, but Reuters calculations based on
its previous financial statements showed the company swung to a fourth-quarter
loss from a AED122.1 million profit in the prior-year period.

Two analysts
polled by Reuters had forecast Arabtec would make a quarterly profit of AED107.3
million and AED122 million.

Last year's
profits were hit by non-recurring general and administrative expenses, which
jumped 75 percent to AED749.9 million, the company said.

Arabtec
reorganised itself and laid off some executives and staff after the abrupt
departure in June last year of former chief executive Hasan Ismaik, who
resigned after differences of opinion with Aabar. The Abu Dhabi fund then
raised its stake in Arabtec, which the statement on Sunday said showed
government support for the company.

Last year's
revenues climbed 46 percent to AED8.3 billion. Because of the higher
expenses, dividends attributed to the parent company for 2014 will fall to
AED214.5 million from AED377.8 million, but Arabtec said its board
was also proposing a 5 percent bonus share issue.

To boost
revenues, the company plans to rent out some of its office space at the World
Trade Centre in Abu Dhabi, space which was not used in the last two years, it
said.

Arabtec said it
was in the final stages of concluding a contract, previously estimated at $40
billion, to build one million housing units in Egypt. The project was
originally announced early last year but the company has not yet reached final
agreement on terms with the Egyptian government.

Meanwhile, the
company has suspended its operations in Russia and Pakistan to reduce costs,
the statement said.

Arabtec also
said it would explore opportunities for acquisitions, especially in fields that
served its expansion strategy. It did not name any potential targets; Ismaik
frequently talked of acquisitions but the management which replaced him has
been more cautious.

For all the latest construction news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.

Subscribe to our Newsletter

Subscribe to Arabian Business' newsletter to receive the latest breaking news and business stories in Dubai,the UAE and the GCC straight to your inbox.