Wednesday, Aug 08, 2012
0645 GMT [Zawya Dow Jones]--Arabtec Holding's earnings in the second quarter miss most analysts expectations. The company posted a 2Q net loss of AED11.6 million, compared with a profit of AED29 million a year earlier, missing EFG Hermes' prediction of AED93 million in profit. "SG&A expenses were, in our view, the main reason for earnings disappointment, coming in at AED154 million and much higher than our estimated AED95 million," analysts at EFG say. Also note that the gross profit margin in 2Q reached 9.9%, lower than EFG's forecast of 13.5% and 16.3% in 1Q. "We were expecting higher margin UAE projects to account for the bulk of revenues and only c15% from KSA contracts, after the company's major project in the Kingdom had faced some delays in the previous two quarters." Reckon higher-than-expected KSA project execution might have led to the lower profitability in the quarter. Shares are down 2% at AED2.96. (firstname.lastname@example.org; Twitter: @ZDJnews)
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