Dubais Arabtec, the largest publically-traded contracting firm in the UAE, has swung to an annual loss as revenues slumped amid tough market conditions.
The company, whose major shareholders include Abu Dhabi government-owned investment firm Aabar, reported a full-year 2015 net loss of AED2.34bn ($637.6m), compared to AED215m profit at the end of 2014, Arabtec said in a statement to Dubai Financial Market where its shares are traded.
Revenues for 2015 declined to AED7.3bn, a 12 per cent slide from AED8.3bn in 2014. The company recorded a loss per share of AED0.51 compared with earnings per share of AED0.05 in 2014.
The reduction in revenues and resulting net loss for 2015 was primarily a consequence of the continuing difficult environment that regional construction market is facing, the company said in the statement. The challenging economic backdrop and a number of poorly performing projects also contributed to decline in profitability.
Arabtec, which was at the heart of 2014 stock market rout, has suffered from a couple of turbulent years as its chief executive and its chairman left the company and the contractor failed to seal the deal on Egypts $40bn housing project.
The company said it will continue to implement restructuring and cost reduction programmes. Maintaining its working capital position and the collection of receivables will be a priority in 2016.
All of the group entities are vigorously seeking full recovery of receivables and where necessary enforcing the groups rights where payments are not made, according to the statement.
Arabtec in January this year won a AED2bn project to build 1,017 villas for Aldar Properties as part of the West Yas Island development. The companys JV with TAV Construction has also received a $1.1bn letter of intent from the Ministry of transport in Bahrain for modernisation of its airport.
In total, Arabtec was awarded AED6bn worth of projects last year, taking its backlog to AED19.3bn, which doesnt include the Bahrain project. The contractor didnt give comparative figures for project awards and backlog in 2014.