The company attributes losses to construction business while pointing fingers at a slowing real estate market
Arabtec Holding has announced its financial results for 2019, reporting a net loss of $211 million (AED 774 million), following its $119.1 million loss in the third quarter of 2019, both attributable to Arabtec Construction, its subsidiary.
In an official statement, the company attributed the loss to tight liquidity in the real estate and construction sector; slowing of the real estate sector, resulting in limited new awards; settlement and recoverability of claims; and estimated losses from investment in an unnamed associate company.
The company stated that other core businesses including Target, Arabtec Engineering Services, and EFECO traded profitably and remain well-positioned within their respective sectors. The parent company continues to make good progress on handing over key projects, it added.
Arabtec Holding stated that it remains positive about 2020’s outlook; it has handed over six legacy projects since Q3 FY 2019, and is confident that it will hand over an additional nine legacy projects by the end of 2020. This will significantly reduce the group’s risk around costs and will allowing Arabtec Holding to fully focus on pursuing its contractual entitlements with clients.
Going forward, the Dubai-listed firm added that it will continue to right-size its workforce, reducing manpower and support functions in line with the operational requirements of the business, while reducing cost and improving productivity and efficiency for the group. In 2019, it continued to reduce debt and is working closely with key lenders to align its debt with its business needs, it said.
Meanwhile, in a separate statement, Arabtec Holding announced that Adel Al Wahedi, group chief financial officer has resigned, and that it will announce Al Wahedi’s replacement in the near future.