Dubai’s Arabtec Q3 profit slumps, below forecasts
Arabtec reports slump almost halves expectations at 6.8 million
November 7, 2010 11:38 by Reuters
Dubai’s Arabtec said on Sunday net profit for the third-quarter slumped 96 percent on rising expenses and a sharp drop in revenues, falling well short of analysts forecasts.
The largest builder in the United Arab Emirates by market value, made a net profit of 6.8 million dirhams ($1.85 million) in the three months to Sep 30, compared with a net profit of 166.6 million dirhams in the same period last year.
The firm’s shares were down 4.2 percent at 0703 GMT, having risen as much as 1.9 percent earlier on Sunday ahead of the release of the results.
Four analysts polled by Reuters had on average expected the builder to post a net profit of 94.8 million dirhams for the third-quarter.
General and administrative expenses for the quarter rose to 155.9 million dirhams from 100.6 million dirhams a year earlier, while revenues dropped to 1.28 billion dirhams against 1.66 billion dirhams the year before.
Profit for the first nine months fell to 252.4 million dirhams, compared with a net profit of 511.7 million dirhams in the same period of 2009.
Arabtec, which is bidding for $8.17 billion of work outside its local markets, may look at new funding sources for its expansion plans, its chief financial officer told the Reuters Middle East Investment Summit in October.
Ziad Makhzoumi had told the summit he expected to see third quarter profit in line with second quarter profit.
Arabtec’s second quarter profit was 111.1 million dirhams.
Arabtec is expanding overseas to diversify its portfolio away from Dubai’s once-booming property sector which has been hit hard by the global financial crisis as developers slow or cancel projects and jobs are slashed.
It is focussing on winning projects in new markets and has tendered for work in Turkmenistan, Azerbeijan and Angola.
Property prices in Dubai have been under pressure since late last year, when the financial crisis and a slump in oil prices ended a six-year economic boom in the Gulf region. (Reporting by Dinesh Nair; Editing by Jason Benham)