The loss-making contractor hopes it will be able to break even this year
UAE construction company Arabtec expects to break even this year and could return to profitability in 2017.
2015 was a severe year, 2016 is still tough. I am confident of 2017, thats when I see profit, Arabtecs chairman Mohamed al-Rumaithi told reporters on the sidelines of the companys annual annual general meeting. For 2016, maybe we will break even.
Arabtec aims to cut costs and this could include job cuts, although al-Rumaithi did not give details about how many jobs at the loss-making contractor could be lost or how much the company could save with layoffs. Theres some fat to be taken out, he added.
Arabtec, which had diversified its business from core activity of construction before a slowdown hit the construction sector at the start of last year, is now looking to reorganise its business verticals.
We are a construction company, we will concentrate on our core business construction, said Rumaithi. If its not related, were out; if its related were still in.
The company will continue to tap bank finance for growth and fund the ongoing projects, however, it has no plans for a bond issuance.
The Dubai-listed company was at the heart of a sell-off in 2014 after its shares hit a record high on investor bets that Abu Dhabi state fund Aabars increasing influence in the company could lead to government contracts. Its shares have slumped more than 70 per cent from the peak.
Arabtec reported a net loss of AED2.35bn ($640 million) in 2015, citing rising costs and difficult market conditions. Construction sector across the GCC markets is facing a slowdown as the government, which rely heavily on sale of hydrocarbons for the revenues, have capped spending after oil slumped form a mid-2014 peak.
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