Construction

Arabtec Q3 revenue falls $81.7m

UAE construction giant says board is reconsidering funding options, including the issue of convertible bonds

Arabtec has seen its Q3 2012 revenue fall and its board re-considering funding operations.

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Arabtec’s Q3 revenue has dropped from $381.1mn to $299.4mn YoY and its board is re-considering funding options including the issue of convertible bonds, according to reports by Reuters.

It is the equivalent of a 10.5% fall in profits over the three months to September 30, compared to the same period in 2011, and earlier equity-linked fund raising plans that were shelved in the wake of the Arab Spring are now being considered again.

The largest listed contractor in Dubai, the news comes despite a number of international project signings in H2. The first, for a twin tower project in Cairo is valued at $155.1mn; a further contract for enabling works at the Gazprom Tower, Russia, was awarded for $147.8mn; most recently the contractor was permitted to build 411 villas in Abu Dhabi’s Banyas Residential Development for $115.1mn.

Its most famous contract of the year was awarded to its consortium with CCC and TAV, for the construction of Abu Dhabi International Airport Midfield Terminal Complex, valued at $2.94bn.

There has also been progress in the cases with Nakheel and the contractor has been awarded further work by the developer. However, CFO Ziad Makhzoumi told Big Project Middle East last year that such developments do not necessarily correlate to profit margins.

“Analysts and reporters would say ‘now that Nakheel is paying the bond Arabtec has a lot of cash’. But you can’t jump from one situation to another overnight, you have to look at the balance sheet because the balance sheet doesn’t lie. It’s all facts and figures.”

The company began operations in Sharjah in 1975 with the construction of The Pearl Building and since 2008 has increasingly mobilised operations across the GCC.

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