Dubai’s Arabtec swings to Q2 loss as costs rise

Dubai’s largest listed construction firm Arabtec swung to a second-quarter net loss on Sunday, missing analysts’ estimates as costs rose.

The builder had also reported losses in the preceding two quarters.

Arabtec made a net loss attributable to equity holders of Dhs 718.3m ($195.59m) in the three months to June 30, it said in a statement to Dubai’s bourse.

This compares with a profit of Dhs 102.4m in the corresponding period of 2014.

Two analysts polled by Reuters had forecast Arabtec would make a quarterly net profit of between Dhs 88.4m and Dhs 90.6m.

“The board of directors has undertaken a careful review of its accounting policies in respect of recognising revenue, cost and profit and adopted a more conservative approach than that previously used,” Arabtec said in the statement.

“The benefits of the restructuring programme will be reflected in our Q4 results and fully in 2016.”

The firm said its quarterly revenue from continuing operations was Dhs 1.8bn, down 8.1 per cent year-on-year. Direct costs increased by 31 per cent, Arabtec said without elaborating.

The company has undergone major management upheavals over the past 15 months, culminating in the election of Abu Dhabi businessman Mohamed Thani Murshed Ghannam al-Rumaithi as its chairman in May. He replaced Khadem Abdulla al-Qubaisi, who was not nominated for renewed board membership.