Dubai’s Arabtec Q3 Profit Drops 10.5%

The Dubai-based contractor said it was looking at equity-linked fundraising options.



Arabtec Holding, Dubai’s largest listed contractor, beat analysts’ expectations despite posting a 10.5 per cent fall in third-quarter profit on Tuesday and said it was looking at equity-linked fundraising options.

The builder made a profit of Dhs35 million ($9.5 million) in the three months to September 30, compared with Dhs39.1 million in the same period in 2011, according to its financial statement posted on the Dubai bourse.

The earnings beat forecasts by six analysts polled by Reuters, who predicted an average net profit of Dhs20.6 million for the quarter.

Revenue for the quarter was Dhs1.4 billion, up 27.3 per cent on the same period last year.

However, Arabtec was forced to book a Dhs19 million deficit as it transferred onto its income statement the shift in value after the sale of a portion of its sukuk holding in state developer Nakheel.

The Islamic bond was part of the Dubai developer’s restructuring agreement, with creditors taking 60 per cent of their owed cash in the form of sukuk.

As part of its expansion plans, the board was considering funding options available to the firm, which could include a capital increase or a convertible bond issue, a separate statement to the bourse said.

Arabtec has previously said it was looking at such equity-linked fundraising but cancelled the plan in March 2011 because of political unrest in the region related to the Arab Spring.

The builder has gradually shifted its focus to Saudi Arabia and Qatar over the last few years as its home market Dubai continued to be impacted by the property market collapse. However, a gradual recovery has prompted some developers to restart stalled projects.

A consortium comprising Arabtec, Turkey’s TAV Insaat and Athens-based Consolidated Contractors Co. won a $2.9 billion contract to build a terminal at Abu Dhabi’s international airport. The group also secured financing for the project.

This contract swelled Arabtec’s backlog to Dhs17 billion.

Arabtec shares – buoyed earlier this year as Abu Dhabi investment firm Aabar built a 21.6 per cent stake – had risen 67.7 per cent year-to-date by Monday’s close, outperforming Dubai’s bourse, which has gained 19.2 per cent.