Arabtec Posts Record Loss After $100 Million of Claims Reversedby
Third-quarter revenue dropped 24%, while costs surged 21%
Arabtec cites “significant non-recurring charges” for loss
Arabtec Holding Co., the biggest construction company in the United Arab Emirates, reported its biggest ever loss after costs increased, sales dropped and it reversed more than $100 million worth of previously-recognized claims.
The company’s shares plunged 9.4 percent, the most in more than two months, to 1.25 dirhams at 10:02 a.m. in Dubai. That’s the lowest level since May 2013.
Arabtec swung to a net loss of 945 million dirhams ($257 million), compared with a profit of 68.7 million dirhams a year earlier, it said in a statement today. “Significant non-recurring charges” caused the loss, the company said, without being more specific. Revenue slid 24 percent to 1.6 billion dirhams, while direct costs surged 21 percent to 2.2 billion dirhams.
The contractor, controlled by Abu Dhabi’s Aabar Investments PJSC, has been restructuring and cutting costs. Arabtec was at the heart of a selloff in June 2014 after chief executive officer Hasan Ismaik resigned and a number of top managers were dismissed amid speculation that the construction company was losing government backing. Arabtec said today it took “charges against a limited number of challenging projects” and reversed 379 million dirhams of previously recognised claims, without giving more details.
The company, which is building a branch of the Louvre museum in Abu Dhabi, said its backlog is worth more than 18.7 billion dirhams. The contractor said it is currently in advanced discussions with several major clients for a number of “sizable projects” which it hopes to conclude before the end of the year.