Dubai builder Arabtec swings to surprise net loss in Q1

Dubai’s largest construction firm Arabtec swung to a first-quarter net loss on Wednesday, missing analysts’ estimates, as costs surged.

The builder reported a loss attributable to equity holders in the parent of 279.82 million dirhams ($76.2 million) in the three months to March 31, compared to a 137.89 million dirham profit in the corresponding period of 2014, it said in a statement to Dubai's bourse.

The earnings were well below estimates from two analysts polled by Reuters. Global Investment House had forecast Arabtec would make a quarterly profit of 95 million dirhams, while SICO Bahrain had estimated a profit of 20.2 million dirhams.

Arabtec shares tumbled as much as 7.1 percent to 2.37 dirhams in morning trading on the Dubai Financial Market.

The company has seen major management upheavals over the past year, culminating in the election last week of Abu Dhabi businessman Mohamed Thani Murshed Ghannam al-Rumaithi as its chairman. He replaced Khadem Abdulla al-Qubaisi, who was not nominated for renewed board membership.

The departure of Qubaisi followed the resignation of Hasan Ismaik as chief executive last June after frictions between Ismaik and Arabtec's major shareholder, Aabar Investments.

Arabtec’s direct costs reached 1.93 billion dirhams during the first quarter, up 28 percent from the corresponding period of last year, the statement showed. Revenues rose only marginally, by 0.2 percent to 1.79 billion dirhams.

The company has been negotiating a $36.7 billion scheme to build one million housing units in Egypt, but has not yet announced the signing of a final contract. It has major projects in Saudi Arabia and the United Arab Emirates.