Arabtec's net profit falls 50%
Dubai-based contracting firm Arabtec Holding has reported 50 per cent fall in net profit at Dh494.9 million for 2009 against Dh958.05m for the corresponding period last year.
The company posted its first ever quarterly loss after a charge of about $80 million (Dh293.6m) for bad debts, missing analysts' forecasts.
"The 2009 result is arrived at after charging Dh294m as allowances for bad debts... in view of the uncertainties affecting certain of the group's contracting receivables," it said.
The UAE's largest contractor by market value made a loss of Dh16.8m in the quarter, compared with a profit of Dh184.81m in the year-earlier period, according to calculations Arabtec did not give a breakdown of its fourth quarter.
It made Dh511.7m in the first nine months of 2009.
Analysts polled by Reuters had on average forecast a fourth-quarter profit of Dh172.43m.
Revenues for the year fell 21 per cent to Dh7.67 billion, while contract receivables — representing the amount due from customers for construction work rendered by the group — stood at Dh2.56bn at the end of 2009, its financial statements showed.
"Results are below expectations after the company took larger than anticipated provisions and turned fourth quarter into a loss," said Roy Cherry, Shuaa Capital Vice-President for Research.
"But this was a conscious decision by management and should be seen as a positive because it reduces uncertainty for the year ahead."
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