Arabtec reports Q2 loss as costs jump
Dubai, August 8, 2012
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 UAE by market value made a net loss of 11.6 million dirhams ($3.16 million) compared to a profit of 29 million dirhams a year earlier.
The earnings missed forecasts by three analysts, who had expected Arabtec to post an average profit of 78 million dirhams.
Revenue for the quarter rose to 1.3 billion dirhams from 1.2 billion dirhams in the prior-year period.
However, contract costs increased to 1.2 billion dirhams from 1 billion dirhams. Administrative expenses jumped 62 percent to 154.2 million dirhams.
The builder said it acquired the remaining 45-percent stake held by three separate partners in its subsidiary Gulf Steel Industries for 18 million dirhams.
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 51.8 million dirhams to the bottom line.
Arabtec, along with Turkey's TAV Insaat and Athens-based Consolidated Contractors Co, won a 10.8 billion dirham 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 percent, 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-percent stake in Arabtec two years ago. Shares of Arabtec have soared 101 percent this year. - Reuters