Third quarter profit at Arabtec Holding, the largest construction firm in the UAE by market capitalisation, plunged by over 80 per cent, the company has announced in its financial statements on the Dubai bourse.
The Dubai Financial Market-listed firm said its Q3 2010 profit stood at Dh41.07m compared with Dh209.15m during the same period of 2009. Analysts in a Reuters survey in October forecast an average profit of Dh94.8m.
Q3 profit attributable to equity holders fell a massive 96 per cent, to Dh6.8m compared with Dh166.6m in Q3 2009.
Arabtec’s nine-month profit declined 43 per cent to Dh342.85m compared with Dh608.1m recorded during the first nine months of 2009. Its basic earnings per share for the nine-month period has halved from Dh0.43 in 2009 to Dh0.21 for the first nine months of 2010, the financial statement showed.
The decline in profits came despite a net reversal of Dh76.8m of allowances for doubtful debts that Arabtec booked on its book for the current quarter. Arabtec also recorded a new allowance for impairment losses on steel inventories of Dh22m for the quarter, the accompanying notes to its financial statement showed.
The company also said that its dispute with Meydan, the owner of the Nad Al Sheba racecourse in Dubai, is ongoing and that it has not taken any additional provisions for the arbitration during the quarter as its management believes “that the prospects of success in the arbitration are good”