UPDATED: Builder swung into loss in Q4 of last year, blaming high expenses; proposes non-cash dividend
Arabtec shares tumbled by 7.25 percent on Sunday morning after the Dubai builder reported a loss of $25.7 million in the final quarter of 2014.
The firm’s shares, which are listed on the Dubai Financial Market, stood at AED 2.43 at 12 noon local time.
It disappointed investors with its 2014 results statement, in which Arabtec blamed high costs for lower-than-expected profits. It also proposed a non-cash dividend.
Arabtec said it made a net profit of AED 241.6 million ($65.77m) in 2014, compared to AED 468.26 million in 2013, due to higher expenses. It did not give a breakdown for the last quarter of the year, but Reuters calculations showed it made a loss of $25.7 million.
Arabtec’s board recommended a 5 percent dividend made up of bonus shares, ahead of a planned annual general meeting (AGM) on April 23.
It says it has suspended operations in Russia and Pakistan in a bid to reduce costs, and has rented out office space at World Trade Centre in Dubai, which it said had not been utilised in two years.
The Dubai firm has been hit by upheaval following the abrupt departure of its chief executive in June. Its share price has also been in decline due to uncertainty over a massive $40 billion housing deal with Egypt that was announced last year.
Arabtec said in a statement it had won new contracts worth AED 9.6 billion in 2014, which did not appear to include the massive Egypt deal. It said however that it is in the “final stages of concluding” the deal to build one million housing units in Egypt.
Abu Dhabi’s government-owned Aabar currently holds a 36.11 percent stake in Arabtec, having gradually increased its holding during 2014.