Dubai's Arabtec swings to loss, blames high expenses
Last year's profits were hit by non-recurring general and administrative expenses
Dubai's largest construction firm, Arabtec, swung to a net loss of 67.4 million dirhams ($18.4 million) in the fourth quarter of last year, missing analysts' estimates as high costs weighed on its bottom line.
The builder, in which Abu Dhabi state fund Aabar Investments owns a 36.11 percent stake, on Sunday reported a net profit of 241.6 million dirhams for full-year 2014 versus 468.3 million dirhams in 2013.
It did not provide quarterly figures in the statement, but Reuters calculations based on its previous financial statements showed the company swung to a fourth-quarter loss from a 122.1 million dirham profit in the prior-year period.
Two analysts polled by Reuters had forecast Arabtec would make a quarterly profit of 107.3 million and 122 million dirhams.
Last year's profits were hit by non-recurring general and administrative expenses, which jumped 75 percent to 749.9 million dirhams, the company said.
Arabtec reorganized itself and laid off some executives and staff after the abrupt departure in June last year of former chief executive Hasan Ismaik, who resigned after differences of opinion with Aabar. The Abu Dhabi fund then raised its stake in Arabtec, which the statement on Sunday said showed government support for the company.
Last year's revenues climbed 46 percent to 8.3 billion dirhams. Because of the higher expenses, dividends attributed to the parent company for 2014 will fall to 214.5 million dirhams from 377.8 million dirhams, but Arabtec said its board was also proposing a 5 percent bonus share issue.
To boost revenues, the company plans to rent out some of its office space at the World Trade Centre in Abu Dhabi, space which was not used in the last two years, it said.
Arabtec said it was in the final stages of concluding a contract, previously estimated at $40 billion, to build one million housing units in Egypt. The project was originally announced early last year but the company has not yet reached final agreement on terms with the Egyptian government.
Meanwhile, the company has suspended its operations in Russia and Pakistan to reduce costs, the statement said.
Arabtec also said it would explore opportunities for acquisitions, especially in fields that served its expansion strategy. It did not name any potential targets; Ismaik frequently talked of acquisitions but the management which replaced him has been more cautious.
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