Sunday, Aug 07, 2011
Dubai Arabtec Holding posted a 74 per cent drop in second-quarter net profit yesterday as costs continue to escalate amid a subdued local environment for new construction projects.
The UAE’s largest construction company by market value made a net profit of Dh28.9 million in the three months to June against Dh111 million in the year-ago period, Arabtec said in a statement to Dubai’s bourse.
The company said administrative expenses almost doubled in the period as construction companies continue to feel the impact of a collapse in the UAE’s real estate market.
“I would like to be more pleased with the results but they are not unpleasant. There is a slight improvement in our quarter-on-quarter performance with our second quarter showing in line with what we expected,” said Ziad Makhzoumi, Arabtec’s chief financial officer.
Makhzoumi says there are signs the UAE’s construction sector is picking up again but he also acknowledges that some of the larger, more ambitious projects will not be restarting any time in the near future.
“Of course, I would like the results to be what they were three years ago but the company is cash positive and showing a profit; we should not focus too much on the margins. The global economy is going through a major restructuring and considering the inactivity in the market they are good results in my view,” he added.
Arabtec generated revenue of Dh1.22 billion in the second quarter, slightly down from Dh1.28 billion in the corresponding period last year. The company said general and administrative expenses jumped to Dh94.1 million against Dh49.2 million in the year-ago period.
By Kevin Scott?Staff Reporter
Gulf News 2011. All rights reserved.
