Moving cranes from UAE to KSA pushes Arabtec into loss
Arabtec, one of the UAE’s largest contractors, claims the costs of moving cranes and equipment into the Kingdom of Saudi Arabia has contributed to its registering a loss in the first financial half of 2012. The Saudi Arabian market has one of the most competitive and dynamic equipment supply markets, but Arabtec – one of […]
Arabtec is working on the massive Princess Noura University project
Arabtec, one of the UAE’s largest contractors, claims the costs of moving cranes and equipment into the Kingdom of Saudi Arabia has contributed to its registering a loss in the first financial half of 2012.
The Saudi Arabian market has one of the most competitive and dynamic equipment supply markets, but Arabtec – one of the region’s single largest owner of construction equipment – has made the strategic decision of moving much of its fleet into the Kingdom as it continues to work on a number of high profile projects.
“We see this loss as part of an ongoing move on the part of Arabtec to diversify the geographic project base,” Saleem Khokhar, the head of equities at NBAD’s asset management group, told the National newspaper. “We expect the strategy to have some impact on profits in Q3, too, but to a lesser degree. Analysts have been caught off guard by this as they have been unsure which quarter the hit would fall into.”
According to Arabtec, rising costs ensured that it made a loss of $3 million. The current value of its property, plant and equipment is valued at $86 million down from $93 million at the end of 2011.
The company added in its statement that it is currently negotiating with a Syrian client on the protection of assets relating to a project in the troubled country: “to realise its assets and ensure that any exposure on its financial statements is covered.”
It added: “While it is difficult to quantify the effect of these events on the future financial statements, the significance of this impact will depend on the extent and the length [of time] these events and their effect will last.”
