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24 April 2024

Arabtec shares surge after big Q4 loss

By Vicky Kapur

Shares in Dubai construction firm Arabtec jumped as much as 4.6 per cent to Dh1.13 on Sunday morning, after the firm announced  net losses of Dh2.3 billion for the year 2015.

The shares were trading at Dh1.12, up 3.7 per cent at 11am in the morning.

Arabtec made net loss of Dh360 million ($98m) in three months to December 31, versus year-earlier loss of Dh94.4m.

However, the loss narrows sharply from Dh944.8m shortfall in the third quarter of the year.

The shares have slipped more than 38 per cent in the past six months, falling below Dh1 in December 2015, when it made a 52-week low of Dh0.93 per share. The shares are up more than a fifth (21 per cent) since then.

The construction major announced 2015 full year revenues at Dh7.3bn, down Dh1bn or 12 per cent, from 2014.

It attributed the loss to a “continuing difficult environment that the regional construction market is facing and the challenging economic backdrop.”

Saeed Al Mehairbi, Arabtec’s Acting CEO, said: “2015 has been a difficult year for all regional construction companies, given the uncertain economic backdrop. Accordingly, the company’s continuing cost reduction programme is ensuring the operations are suitably lean.”

He added: “In addition, the group is executing a more selective approach to project tendering, ensuring new projects deliver appropriate returns and, in turn, long-term shareholder value.”

In a statement to the Dubai Financial Market bourse, Arabtec said it will continue to “implement its restructuring and cost reduction programme,” adding that it is “seeking to reduce its cost base even further in 2016 in addition to annualised cost savings previously announced.”

It also added that, despite the challenging environment, it continues to win new projects. “In January 2016, Arabtec Construction announced a Dh2bn project award to build 1,017 villas for Aldar Properties,” it said.