The rise in expenses, has brought Arabtec a 74% fall in profits for the second quarter, contrary to estimates of analysts.
Arabtec Holding PJSC, is the UAEs largest construction company in terms of market value and six analysts had estimated that there would be a mean profit of 44 million dirhams.
An over view of the company?s current figures:
- From a net income of 111 million dirhams in the previous year, the company?s net income fell to 28.97 million dirhams.
- In second-quarter expenses surged 91%? to 94 million dirhams and revenue dropped to 1.22 billion dirhams, 4 billion dirhams down from1.28 billion dirhams a year earlier.
- The shares plunged by? 7 % to 1.33 dirhams today and the stock has dropped 16% ?this year compared with a 11% decline in the benchmark Dubai Financial Market General Index.
- Additionally the company saw revenue drop by 5.1 percent to $331m, as per a statement released on the Dubai bourse.
A tough Market for Development
In the UAE the price of property greatly slumped during the global recession as demands reduced and banks tightened lending. Needless to say, the construction companies in the region greatly suffered. Developers began to cancel or delay construction plans.
At the moment there is a backlog of projects worth around 15 billion dirhams in all of its markets by the end of the year. But it is hoping to expand overseas to diversify away from Dubai’s once-booming property sector.
Sources: Bloomberg, arabianbusiness.com