Dubai’s Arabtec reduces losses by 74%
Builder reports lower second-quarter loss of $50 million after a raft of new project wins
The Dubai-listed builder Arabtec has reported a 74% reduction in its second-quarter losses, according to a bourse statement.
The contractor made a net loss to shareholders of AED 186m ($50.6m) compared to AED 718m the same time last year, with revenues up 20% to AED 2.2 billion.
Arabtec said it had project wins amounting to AED 9 billion during the first half of the year, of which its share stands at AED 7.2bn.
Wins include the Bahrain International Airport Modernisation Program (AED 3.7bn); building 1,100 villas for UAE nationals in Fujairah (AED 1.7bn); 500 villas in Oud Muteena (AED 500m); and a twin tower development in central Dubai for AED 1.1bn. Arabtec Construction also said it recently received a AED 340m award for a hotel development in Dubai Media City.
“As a result, Arabtec’s backlog increased to AED 22.6bn, up 12% from AED 20.2bn in Q2 2015,” the company said in its preliminary unaudited results.
It also said that losses from discontinued operations in Saudi Arabia had been significantly reduced during the period. “The loss from discontinued operations, part of the group’s operations in the Kingdom of Saudi Arabia, amounted to AED 22mn considerably lower than the loss of AED 353mn in Q2 2015. The ongoing cost of the discontinued operations is expected to decrease in H2,” it added in the statement to the Dubai Financial Market.
Arabtec said it completed and handed over a number of major projects in the second quarter, including 1,900 residential villas and townhouses in its Mira project, 121 villas on the Palma project in Arabian Ranches and Najmat Tower in Al Reem.
“Arabtec Construction is also in the final stages of completing Saraya Towers in Abu Dhabi and is close to completing the landmark Louvre Museum, Abu Dhabi,” it said.
Arabtec has undergone two years of upheaval, management changes and restructuring. It posted a $626m loss in 2015, and is pursuing a long-running cost-reduction programme.
Aabar Investments, a major shareholder in Arabtec Holding, earlier this year agreed a $108.9 million debt facility to help the Dubai contractor weather “challenging conditions” in the regional construction market.
“The group’s strong backlog and new wins in 2016 will support the company to build a strong platform for growth, notwithstanding the currently challenging market conditions,” Arabtec said in its Q2 results issued today.
