Dubai-listed builder Arabtec recorded losses for a fourth straight quarter Wednesday as it took provisions, reversed some previously recognised claims and warned the regional construction sector would remain difficult into 2016.
The company, whose largest shareholder is Abu Dhabi state fund Aabar, has seen its share price fall more than 80 percent from a May 2014 peak as a much vaunted project to build 1 million homes in Egypt failed to be agreed and its former chief executive quit following tensions with Aabar.
Arabtec made a net loss attributable to equity holders in the parent of 944.8 million dirhams ($257.26 million) in the three months to Sept. 30, it said in a statement to the Dubai bourse. This compares with a profit of 68.7 million dirhams in the corresponding period of 2014.
SICO Bahrain had forecast Arabtec would make a quarterly net loss of 21.2 million dirhams.
The company’s losses have steadily worsened since falling into the red in the fourth-quarter of 2014. Its combined losses for the past four quarters total 2.06 billion dirhams, Reuters data shows.
Arabtec said its third-quarter loss was partly due to reversing 379 million dirhams of previously recognised claims plus provisions of 136 million dirhams against receivables.
“The regional construction market is currently very challenging, a dynamic that is expected to persist throughout the remainder of 2015 and possibly into early 2016,” Arabtec’s statement said.
The firm’s third-quarter revenue was 1.6 billion dirhams, versus 2.1 billion dirhams a year earlier.
The company has undergone major management and board upheavals over the past two years, including the departure of its former chairman, chief financial officer and ex-CEO Hasan Ismaik.
Ismaik, who left in June 2014, had vowed to make Arabtec one of the 10 top companies globally by 2018 and the company’s backlog multiplied under his charge.
But many of these agreements failed to become firm orders and the company has “introduced a more selective approach to project targeting”, according to Wednesday’s statement.
Arabtec’s shares were down 9.4 percent as of 0614 GMT, versus a decline of 1.7 percent in Dubai’s index.
Source: Reuters
