Dubai's Arabtec Posts $3.1m Q2 Loss
Dubai builder Arabtec, which secured one of its largest contracts to build part of Abu Dhabi’s main airport in June, on Wednesday reported a loss in the second quarter as costs and expenses increased.
The largest builder in the United Arab Emirates by market value made a net loss of Dhs11.6 million ($3.16 million) compared to a profit of Dhs29 million a year earlier.
The earnings missed forecasts by three analysts, who had expected Arabtec to post an average profit of Dhs78 million.
Revenue for the quarter rose to Dhs1.3 billion from Dhs1.2 billion in the prior-year period.
However, contract costs increased to Dhs1.2 billion from Dhs1 billion. Administrative expenses jumped 62 per cent to Dhs154.2 million.
The builder said it acquired the remaining 45-per cent stake held by three separate partners in its subsidiary Gulf Steel Industries for Dhs18 million.
Change in the fair value of available for-sale investments, which include the company’s holdings of Sukuk issued by big real estate developer Nakheel, added Dhs51.8 million to the bottom line.
Arabtec, along with Turkey’s TAV Insaat and Athens-based Consolidated Contractors Co, won a Dhs10.8 billion contract from the Abu Dhabi government to build a terminal at the emirate’s airport.
The builder, in which Abu Dhabi state fund Aabar recently raised its stake to 21.6 per cent, is expected to secure more contracts from the capital city. It also named Aabar’s Khadem Al Qubaisi as chairman of the board in May, a sign of the state fund’s growing influence in the company.
Aabar, which owns stakes in high-profile names such as German carmaker Daimler and commodities trader Glencore, had dropped a $1.7 billion bid for a 70-per cent stake in Arabtec two years ago. Shares of Arabtec have soared 101 per cent this year.