Arabtec reports net loss of US$ 626 mn for 2015

Posted on 22nd February 2016

UAE-based contractor Arabtec widened its net loss to $626m (AED2.3bn) for the whole year of 2015 as compared to $58.5m (AED215m) in 2014.

Revenues were down to $1.9bn (AED7.3bn) for the year, a drop by 12%, as compared to $2.2bn (AED8.3bn) in 2014, according to Constructionweekonline news report.

The company attributed the reduction in revenue and the resulting net loss as a consequence of the continuing difficult environment that the regional construction market is facing, the challenging economic backdrop, the company's more balanced approach to revenue, cost and profit recognition, in addition to a number of poorly performing projects.

In light of the difficult market conditions, Arabtec continues to implement its restructuing and cost reduction programme, said the company in its bourse statement.

The firm is also seeking to reduce its cost base even further in 2016, in addition to the annualised cost savings previously announced.

Due to the backdrop, the group is even more focused on maintaining its working capital position and ensuring collection of its receivables. Accordingly all the group's entities are vigorously seeking full recovery of all receivables due and where necessary, enforcing the group's rights where payments are not made.

Despite the challenging environment, Arabtec has won new projects, that includes a $544m (AED2bn) award to build 1,017 villas from Aldar Properties as a part of the West Yas development.

In addition to it, in a joint venture with TAV Construction, the contractor received a $1.1bn letter of intent from the Ministry of Transportation and Telecommunications affairs in Bahrain for the main works of the Bahrain International Airport modernisation program.

As till 31 December 2015, the group's backlog stood at $5.2bn (AED19.3bn), excluding the Bahrain International Airport.

Commenting on the results, Eng Saeed al Mehairbi, acting CEO of Arabtec said: "2015 has been a difficult year given for all regional construction companies and given the uncertain economic backdrop. Accordingly the company's continuing cost reduction programme is ensuring the operations are suitably lean without affecting our client service delivery."

He added: "In addition the group is adopting a more selective approach to project tendering, ensuring new project delivers appropriate returns, and, in turn, long term shareholder value."

"In this environment, we are very pleased with the bright start of the year with our recent project awards that demonstrate our client's faith in our project execution expertise and project delivery. We will continue to build a strong platform for 2016."

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