Dubai’s Arabtec Holding, the largest construction group in the Middle East, has reported a 774 million dirhams ($210,73 million) net loss in 2019, from a net profit of 256 million dirhams in 2018, due to a slowdown in the real estate market.
Arabtec attributes its first annual loss since 2016 to tight liquidity in the real estate and construction sector and limited new awards due to a slowing real estate market.
A Cavendish Maxwell report revealed that average apartment prices in Dubai declined by 15 percent from Q4 2018 to Q4 2019 and villa/townhouse prices were 18 percent lower.
Rental declines for apartments in Dubai averaged 13.4 percent, whilst villas/ townhouses registered a 9 percent drop over the 12-month period, the report noted.
Damac Properties posted a 36.9 million dirhams net loss while Union Properties recorded a 218.8 million dirhams loss and Emaar Properties posted a 1 percent growth in net profit to 6.2 billion dirhams.
Settlement and recoverability claims and estimated losses from an investment in an associate company had an impact on the results, Arabtec said.
The company’s revenue stood at 7.785 billion dirhams in 2019, a 21 percent drop from the 9.853 billion dirhams reached in 2018.
Last week Arabtec announced the resignation of its Group CFO Adel Al Wahedi.
The company’s stock, listed in Dubai, was the worst performer by 11:07 GST on Sunday; trading 4.77 percent lower at 0.719 dirhams.
(Reporting by Gerard Aoun; editing by Seban Scaria)
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