Dubai contractor Arabtec completes recapitalisation programme

Dubai contractor Arabtec Holding has completed its recapitalisation programme which raised Dhs1.5bn in equity and “extinguished” the company’s accumulated losses of Dhs4.6bn as at December 31, 2016.

The company made the announcement in a bourse statement on Wednesday.

Arabtec’s board launched the recapitalisation programme in April 2017 to “strengthen the company’s capital structure and accelerate its path towards dividends”.

The contractor, which accumulated losses over nine consecutive quarters between 2014-2016, has been struggling because of the depressed construction market in the region. Apart from the dull economic conditions, the company was also hit due to a number of management changes in the past two years.

Last month, Arabtec reported its first quarterly profit since 2014, thanks to new projects and cost savings.

Net profit attributable to shareholders reached Dhs18m in the first quarter, compared to a loss of Dhs46.4m in Q1 2016.

The company also reported higher revenues of Dhs2.17bn in the quarter, up from Dhs1.96bn a year ago.

It said cost savings included a restructuring and cutting jobs.

Arabtec group CEO Hamish Tyrwhitt said: “The recapitalisation programme has now strengthened the group’s financial and liquidity positions but also provided a solid foundation for growth. We have now concluded the main objective in phase 1 of our strategic roadmap, to ‘stabilise’ the business.”

The company will now focus on “profitability”, he added.