Arabtec swings to Dh774.5m loss in 2019

Arabtec Holding reported on Sunday a Dh774.5 million net loss in 2019, citing weaker income from its construction business amid tighter liquidity in the construction sector.
The construction giant, which swung to loss - its first annual loss since 2016 - from a profit of Dh256.3 million in 2018, blamed low liquidity in the real estate sector, settlement, and recoverability claims and estimated losses from an investment in an associate company for the loss.
The Dubai-listed company, while not disclosing the name of the associate company, said its other business units, including industrial and engineering, remained profitable. In a statement to the bourse, Arabtec, said revenue fell 21 per cent to Dh7.78 billion.
In another statement, the construction firm said its group chief financial officer, Adel Al Wahedi, resigned. The company also said it is closely working with its lenders to align its debt with its business needs and is cutting costs by reducing its workforce. Discussions and due diligence of a potential merger with Trojan, announced in September, continue to take place, it said.
"The group continues to right-size its workforce, reducing manpower and support functions in line with the operational requirements of the business, reducing cost and improving productivity and efficiency for the group," Arabtec said. "The group continued to reduce debt in 2019 and is working closely with key lenders to align its debt with its business needs."
Arabtec, which has a workforce of more than 45,000, has been in talks to hire Swiss bank UBS as a financial adviser to assist in its potential merger with Trojan Holding. In August 2019, the company reported a 49 per cent decline in its first-half profit to Dh57.8 million as revenue fell 12 per cent to Dh4.2 billion.
- issacjohn@khaleejtimes.com