Arabtec Q3 profit drops, eyes funding options
Dubai, November 6, 2012
Arabtec Holding, Dubai's largest listed contractor, beat analysts' expectations despite posting a 10.5 percent fall in third-quarter profit on Tuesday and said it was looking at equity-linked fundraising options.
The builder made a profit of 35 million dirhams ($9.5 million) in the three months to September 30, compared with 39.1 million dirhams 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 20.6 million dirhams for the quarter.
Revenue for the quarter was 1.4 billion dirhams, up 27.3 percent on the same period last year.
However, Arabtec was forced to book a 19 million dirhams 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 percent 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 17 billion dirhams.
Arabtec shares - buoyed earlier this year as Abu Dhabi investment firm Aabar built a 21.6 percent stake - had risen 67.7 percent year-to-date by Monday's close, outperforming Dubai's bourse, which has gained 19.2 percent. - Reuters