DUBAI: Arabtec, the construction company at the centre of Dubai’s stock market turmoil, reported an 11 percent rise in second-quarter profit yesterday, missing analysts’ estimates.
Net profit climbed to Dh103m ($28.1m) in the three months to June 30 from Dh92m a year earlier, the company said in a statement. Analysts polled had on average forecast Dh111m.
Revenues jumped 51 percent to Dh2.41bn on the back of business growth in the United Arab Emirates and other Gulf markets, said Arabtec, Dubai’s biggest listed builder.
Profit growth slowed from the first quarter; in the first half of this year, net profit rose 55 percent to Dh240m, while revenues rose 45 percent to Dh4.56bn.
Arabtec’s share price more than tripled earlier this year, then plunged by more than two-thirds as tensions emerged between major shareholder Aabar Investments and Chief Executive Hasan Ismaik, leading to Ismaik’s resignation in June.
The stock’s slide triggered margin calls that sent shockwaves through the entire Dubai market, which lost $30bn of value from peak to trough, though it has now recovered about half of those losses. Since Ismaik’s departure Arabtec has launched a restructuring plan, putting some of his expansion plans under review and laying off a “limited” number of staff. It has not described the restructuring in detail, and the statement did not give further information about it.
“All decisions taken by the Board and executed by the management aim at achieving the shareholders’ and investors’ interests, elevating the company’s position, increasing the revenues and achieving potential growth in future,” the statement said.
Meanwhile, Arabtec’s former boss has sold about $4m worth of shares in the group last week, cutting his stake slightly, stock exchange data showed.
Ismaik cut his stake to 28.77 percent from 28.85 percent, the website of the Dubai Financial Market showed. The new data was published on Thursday, implying the shares were sold on Wednesday. The data showed 3.52 million shares were sold, worth Dh14.6m at Wednesday’s closing stock price. Ismaik, who earlier last week declined to comment on his stake, remains the biggest shareholder in Arabtec.
Reuters
