The Dubai contractor Arabtec posted its seventh successive quarterly loss for the three months to June 30, although an increase in revenue has meant the scale of its losses narrowed.
The company posted a net loss attributable to its parent company of Dh186.4 million — a 74 per cent reduction on the Dh718.4m lost in the same period last year. Revenue for the period increased by 20 per cent year-on-year to Dh2.16 billion (Q2 2015: Dh1.8bn).
Losses for the first six months of 2016 stood at Dh232.8m — 77 per cent lower than the Dh998.2m lost in the same period a year ago. Revenue for the first half increased by 14 per cent to almost Dh4.1bn.
The company is now owed more than Dh1bn from trade creditors — up from Dh895m at the start of the year.
During the period, the company gained permission from its shareholders to use Dh1bn of its statutory reserves to wipe out accumulated losses, which had stood at over Dh2.2bn at the start of the year, but has now reduced to Dh1.46bn. Last month, it was also offered a Dh400m debt facility from its biggest shareholder – Abu Dhabi-based Aabar Investments.
Notes to the accounts show that losses at Arabtec Saudi Arabia — the joint venture with Saudi Binladin Group and Mawrid Holdings — significantly reduced. The business declared a loss of Dh22.4m for the three months to June 30 — a 94 per cent reduction on the Dh352.6m it lost in the same period last year.
Arabtec’s board decided to exit the venture in December 2014 and placed its stake up for sale, but since then the climate in the Kingdom’s construction sector has worsened and Saudi Binladin Group has faced significant financial pressure — laying off about 70,000 of its 200,000 workers.
Speaking to The National last week, Arabtec Construction’s chief executive, Raja Hani Ghanma, admitted that the division has had trouble making payments to some of its staff.
He said that it was “trying to wind down or find some sort of solution” with its partners in Arabtec Saudi Arabia, whose net assets are currently valued at Dh297m.
Despite this, he said Saudi Arabia remained an important market for the company.
“We are focusing primarily on Arabtec Construction in Saudi Arabia, which is basically 100 per cent owned entity by Arabtec Construction UAE,” he said.
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